11. Capital Stock

Capital Structure

Capital Structure and reverse recapitalization

On June 30, 2026, the Brag House completed the Merger with House of Doge Inc. (“HOD”). Brag House was the legal acquirer and HOD was identified as the accounting acquirer. Accordingly, the Merger was accounted for as a reverse recapitalization. The historical financial statements before the Merger are those of HOD, and the equity structure presented for all periods has been retrospectively recast to reflect the legal parent’s capital structure. Legacy HOD common shares and Legacy HOD restricted share units (“RSUs”) were converted using the applicable 1.800385 exchange ratio as adjusted for the 1-for-8 reverse stock split.

As a result of the Merger, the Company’s authorized capital consists of 250,000,000 shares of common stock and 25,000,000 shares of preferred stock, each with a par value of $0.0001 per share. The Company has designated 200,000 preferred shares as Series A Convertible Preferred Stock (“Series A Preferred Stock”), 15,000 preferred shares as Series B Convertible Preferred Stock (“Series B Preferred Stock”), and 65 preferred shares as Series C Convertible Preferred Stock (“Series C Preferred Stock”).

March 31, 2026 share and par value amounts have been retrospectively recast to reflect the Merger exchange ratio as adjusted for 1-for-8 reverse stock split.

The Series A Preferred Stock is entitled to one vote per share, has a liquidation preference of $0.50 per share, and automatically converts into one share of common stock upon the consummation of an underwritten public offering of common stock. The Series B Preferred Stock is non-voting, convertible at the holder’s option and classified as permanent equity. No Series A Preferred Stock or Series B Preferred Stock was issued and outstanding as of June 30, 2026.

Each share of Series C Convertible Preferred Stock is convertible into 5,000,000 shares of the Company’s common stock, par value $0.0001 per share, subject to certain beneficial ownership limitations. The Series C Preferred Stock votes together with the common stock on an as-converted basis, including a 4.99% beneficial ownership and voting cap. Holders are entitled to dividends on an as-converted basis when, as and if dividends are paid on the common stock. Upon liquidation, the Series C Preferred Stock ranks senior to the common stock, pari passu with the Company’s existing series of preferred stock, and junior only to securities expressly designated as senior. As of June 30, 2026, 2.051823 Series C preferred shares were outstanding, representing approximately 10,259,115 common-share equivalents before application of the beneficial ownership limitation; no Series C preferred shares were outstanding as of March 31, 2026.

The Series C certificate of designation contains customary anti-dilution adjustments for stock splits, stock dividends, recapitalizations and similar transactions. Series C Preferred Stock may be issued only in accordance with the Merger Agreement or in subsequent rights offerings in which Series C holders are entitled to participate on an as-converted basis.

Common stock activity

Immediately before the Merger, after giving effect to the legal parent’s 1-for-8 reverse stock split and pre-Merger issuances and conversions, Brag House Holdings, Inc. (“Brag House”) had 5,539,281 common shares outstanding. Those legacy Brag House shares remained outstanding at closing and are included in the Company’s June 30, 2026 common shares. Because HOD is the accounting acquirer, the March 31, 2026 comparative equity balances represent HOD’s historical balances retrospectively recast into the legal parent’s capital structure; the legacy Brag House net assets enter the consolidated financial statements on the Merger date through the reverse recapitalization.

At closing, HOD common shareholders received 64,001,726 common shares and 2.049643 Series C preferred shares

Separately, holders of vested HOD RSUs received 6,361,978 common shares and 0.002180 Series C preferred shares at closing. Accordingly, HOD shareholders and vested HOD RSU holders received an aggregate of 70,363,704 common shares and 2.051823 Series C preferred shares. Together with the 5,539,281 legacy Brag House common shares, the Company had 75,902,985 common shares and 2.051823 Series C preferred shares outstanding immediately after the Merger and at June 30, 2026.

Upon consummation of the Merger, the reverse recapitalization resulted in the recognition of $666,253 of legacy legal-parent net assets, including $554 of common stock and $1,234 of common stock subscribed but unissued, and a $900,834 reduction to additional paid-in capital for transaction costs. In connection with the reverse recapitalization, the Company reclassified amounts within stockholders’ equity so that the common stock account equals the number of issued and outstanding common shares multiplied by the $0.0001 par value, with an offsetting adjustment to additional paid-in capital. The reclassification had no effect on total stockholders’ equity.

Restricted share units (“RSUs”)

The Company grants equity-classified RSUs to employees, executives, contractors and consultants. The awards generally vest based on continued service over periods of up to 18 months. Compensation cost is recognized over the requisite service period for each vesting tranche. During the three months ended June 30, 2026, HOD did not grant any new RSUs.

At March 31, 2026, HOD had 39,047,000 predecessor RSUs outstanding, comprising 23,497,000 vested RSUs pending settlement and 15,550,000 nonvested RSUs. During the three months ended June 30, 2026, 7,900,000 predecessor RSUs vested. The Merger did not change the aggregate grant-date fair value or the remaining service conditions of the awards.

Under the Merger settlement schedule, 28,747,000 vested predecessor RSUs were settled at closing. The remaining 2,650,000 predecessor RSUs that had vested by June 30, 2026 were converted into 1,041,892 vested successor RSUs and remained unsettled at period end. The 7,650,000 predecessor RSUs that remained nonvested were consolidated into 1,695,917 nonvested successor RSUs.

The June 30, 2026 balance excludes the 28,747,000 vested predecessor RSUs settled at the Merger through the issuance of 6,361,978 common shares and 0.002180 Series C preferred shares.

The Company recognized RSU compensation expense of $1,657,766 in general and administrative expenses in the unaudited interim condensed consolidated statement of loss and comprehensive loss for the three months ended June 30, 2026, compared with $5,217,014 for the three months ended June 30, 2025. The current-period expense relates to HOD RSUs granted in prior periods. Because the Merger closed on June 30, 2026 and HOD is the accounting acquirer, the legal parent’s pre-Merger share-based compensation is not included in the consolidated results for the three months ended June 30, 2026.

Stock Options

In connection with the Merger completed on June 30, 2026, the Company recognized 34,831 vested and exercisable stock options (the “Options”) to purchase an equal number of shares of common stock that were previously issued by Brag House Holdings, Inc. (“Brag House”) under its 2024 Omnibus Incentive Plan.

The Options were fully vested before the acquisition date and did not require post-combination service, no unrecognized compensation cost related to the Options remained as of June 30, 2026.

The following table summarizes the Options recognized in connection with the Merger.

Warrants

In connection with the Merger completed on June 30, 2026, the Company recognized 3,362,850 vested and exercisable warrants to purchase an equal number of shares of common stock that were previously issued by Brag House.

The following table summarizes the equity-classified warrant balances for the three months ended June 30, 2026: