9. Yorkville Warrant

On December 4, 2025, prior to the completion of the Merger on June 30, 2026, Brag House Holdings, Inc. issued YA II PN, Ltd. (“Yorkville”) a warrant (the “Yorkville Warrant”) to purchase 10,173,881 shares of common stock in connection with the Yorkville common stock purchase agreement and convertible promissory note. The warrant was immediately exercisable and expires on December 4, 2028. The original exercise price was lower of (i) $1.50 per share or (ii) 130% of the average Nasdaq Official Closing Price of the common stock for the five trading days ending on the tenth trading day following the closing of the Merger, in each case subject to adjustment.

Upon completion of the Merger and the related one-for-eight reverse stock split on June 30, 2026, the original warrant share amount was adjusted to 1,271,735 shares and the $1.50 reference price was adjusted to $12.00. The June 30, 2026 valuation incorporated the warrant’s contractual business-combination adjustment using the specified five-day average Nasdaq closing price of $1.259, resulting in an adjusted aggregate of approximately 6,552,820 warrant shares and an exercise price of $1.6367 per share.

The Yorkville Warrant may be exercised for cash or, when the applicable registration statement or prospectus is unavailable, on a cashless basis. The exercise price and number of warrant shares are subject to customary adjustments for stock dividends, stock splits, reorganizations and similar events. Subject to limited exceptions, Yorkville may not exercise the warrant to the extent its beneficial ownership would exceed 4.99% of outstanding common stock; Yorkville may elect to increase this limitation to no more than 9.99%, subject to the contractual notice period. In certain fundamental transactions, Yorkville may require settlement of the unexercised warrant based on its Black Scholes Value. No portion of the Yorkville Warrant had been exercised as of June 30, 2026.

The Yorkville Warrant is a freestanding derivative within the scope of ASC 815, Derivatives and Hedging. It does not qualify for equity classification under ASC 815-40 because the fundamental transaction provision may require cash settlement in circumstances in which the warrant holder’s rights differ from those of holders of the Company’s common stock. Accordingly, the warrant is included in current liabilities and measured at fair value at each reporting date, with changes in fair value recognized in earnings.

The carrying amount of the Yorkville Warrant was as follows:

No corresponding warrant derivative liability was included in the Company’s March 31, 2026 condensed consolidated balance sheet because the Merger had not been completed as of that date.

The following table presents the change in the warrant derivative liability for the three months ended June 30, 2026:

The fair value measurement is classified within Level 3 of the fair value hierarchy under ASC 820, Fair Value Measurement, because it incorporates significant unobservable inputs. The Company estimated the June 30, 2026 fair value using a Monte Carlo simulation based on geometric Brownian motion with 100,000 iterations. The model incorporated the warrant’s cash and cashless exercise features, the contractual business-combination adjustment and the following significant inputs:

At June 30, 2026, the resulting fair value of the Yorkville Warrant was $2,837,274. Changes in the Company’s stock price, expected volatility, remaining term, risk-free interest rate or contractual share adjustment could materially affect the estimated fair value. See Note 15, Fair Value Measurements, for additional information.