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SUBSEQUENT EVENTS
6 Months Ended
Jun. 30, 2026
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

NOTE 18. SUBSEQUENT EVENTS

 

In accordance with FASB ASC 855-10, Subsequent Events—Overall, the Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the condensed consolidated financial statements were available to be issued. Based upon this review, the Company identified the following material subsequent events.

 

On May 27, 2026, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Healthy Choice Wellness II Corp., a wholly owned subsidiary of HCWC (“Merger Sub”), and Host Digital Infrastructure LLC (“Host Digital”). The Merger Agreement provides for the merger of Merger Sub with and into Host Digital, with Host Digital surviving as a wholly owned subsidiary of HCWC (the “Merger”). On July 27, 2026, the SEC informed the Company that it had completed its review of the Company’s preliminary proxy statement filed in connection with the Merger and had no comments. On August 6, 2026, the Company filed its definitive proxy statement with the SEC in connection with the special meeting of stockholders to vote on the Merger. The special meeting of stockholders is expected to be held in the third quarter of 2026.

 

On July 24, 2026, the Board of Directors approved the First Amendment to the Second Amended and Restated Certificate of Designations of the Company’s Series A Convertible Preferred Stock (“Series A Stock”), which increased the number of authorized Series A Preferred Shares from 5,250 to 7,000. The amendment was filed with the Secretary of State of the State of Delaware on July 31, 2026.

 

On August 6, 2026, the Company entered into the First Amendment to the Amended and Restated Securities Purchase Agreement (the “SPA Amendment”) with four investors, pursuant to which the Company agreed to issue 1,313 shares of its Series A Convertible Preferred Stock in exchange for the waiver by the investors of certain rights to participate in future equity offerings of the Company. The Shares are convertible into 951,087 shares of the Company’s Class A Common Stock at a conversion price of $1.38 per share. The issuance of the Shares and the shares of Class A Common Stock issuable upon conversion thereof were exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506(b) of Regulation D thereunder.

 

On August 7, 2026, holders of the Company’s outstanding promissory note under the Loan and Security Agreement dated July 18, 2024 elected to convert $692,672 of outstanding principal into 2,565,450 shares of the Company’s Class A common stock, pursuant to the Exchange Agreement dated May 28, 2026. The conversion was effected at a contractual conversion price of approximately $0.27 per share. Upon this conversion, all remaining conversion rights under the May 28, 2026 Exchange Agreement have been fully satisfied, and no further shares remain issuable thereunder. Following this transaction, approximately $2.1 million in principal and accrued interest remains outstanding under the Loan and Security Agreement.

 

On August 7, 2026, subsequent to June 30, 2026, Host Digital Infrastructure LLC (“Host Digital”), which is expected to become a wholly owned subsidiary of the Company upon completion of the Merger described above, entered into a 15-year lease with one of the world’s largest privately held cloud infrastructure companies. Under the lease, Host Digital will provide 43 megawatts (“MW”) of critical information technology load capacity at its existing data center facility in northeast Oklahoma. The lease is structured on a take-or-pay basis and includes renewal options and annual rent escalators.

 

On August 10, 2026, the Company and HCMC entered into a Termination Agreement, which formally terminated the Transition Services Agreement effective as of January 1, 2026. The Termination Agreement provides for a mutual release of any liability or obligation under the TSA from and after the effective date. As a result, no further services will be provided by HCMC to the Company under the TSA, and all outstanding balances thereunder will be settled in the normal course of business. See Note 15 – Related Party Transactions for additional information.