INTANGIBLE ASSETS |
6 Months Ended | |||||||||||||||||||||||||||||||||||
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Jun. 30, 2026 | ||||||||||||||||||||||||||||||||||||
| Intangible Asset, Goodwill and Other [Abstract] | ||||||||||||||||||||||||||||||||||||
| INTANGIBLE ASSETS | NOTE 5. INTANGIBLE ASSETS
Trademark Acquisition Agreement
On May 31, 2025, the Company entered into a Trademark Acquisition Agreement with Patrick J. Rolfes and Ted Angelo, the owners of the trademark for “World Series of Pickleball”. Pursuant to the Trademark Acquisition Agreement, the Company acquired all rights to, and ownership of, the Trademark, in consideration for $25,000 in cash and warrants to purchase 50,000 shares of the Company’s common stock (with warrants to purchase shares granted to each seller)(the “Sellers Warrants”).
The Trademark Acquisition Agreement includes customary representations and indemnification obligations of the sellers, for a transaction of the size and type, as the Trademark acquisition. As additional consideration payable to each of the sellers, we agreed that during the lifetime of each of the sellers, we would furnish them an aggregate of six (6) VIP tickets to all World Series of Pickleball events produced by or on behalf of the Company. Such tickets are subject to all the rules and regulations, including standards of behavior, applicable to tickets generally.
The Sellers Warrants have an exercise price of $5.75 per share (the closing sales price of the Company’s common stock on the last trading day prior to the entry into the Trademark Acquisition Agreement) and a three year term and are exercisable only on a cash basis. The Sellers Warrants include a 4.999% beneficial ownership limitation, which can be increased to 9.999% by either holder, with at least 61 days prior written notice to the Company.
Cahill Name and Likeness License Agreement
On June 4, 2026, the Company entered into a Name and Likeness License Agreement (the “License Agreement”) with Darren Cahill (“Cahill”), a former professional tennis player and coach, pursuant to which Cahill granted the Company a worldwide license to use his name, likeness and right of publicity in connection with the Company’s business, including its planned digital coaching platform. The License Agreement has an initial term of fifteen (15) years and automatically renews for successive five (5) year periods unless either party elects not to renew.
As consideration for the license, the Company granted Cahill warrants to purchase 250,000 shares of the Company’s common stock at an exercise price of $5.00 per share (the “Cahill Warrants”). The Cahill Warrants have a five-year term, are exercisable on a cashless basis, and are exercisable as to one-half of the underlying shares immediately and as to the remaining one-half beginning on the first anniversary of the grant date. The Company determined the fair value of the Cahill Warrants to be $1,743,829, which was capitalized as a licensed right intangible asset and is being amortized on a straight-line basis over the fifteen-year initial term of the License Agreement.
The Trademark and the licensed right are each amortized over an estimated useful life of 15 years on a straight-line basis. The estimated future amortization expense related to the Company’s intangible assets as of June 30, 2026 is as follows:
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