SUBSEQUENT EVENTS |
6 Months Ended |
|---|---|
Jun. 30, 2026 | |
| SUBSEQUENT EVENTS | |
| SUBSEQUENT EVENTS | NOTE 15 – SUBSEQUENT EVENTS
Conversion Notices Under Senior Secured Convertible Note
Subsequent to June 30, 2026, the Holder converted (i) an aggregate of $5,502,500 of outstanding principal under the Senior Secured Notes and (ii) $70,430 of accrued interest, representing an aggregate Conversion Amount of $5,572,930, in exchange for an aggregate of 725,221 shares of the Company’s common stock. .
In addition, pursuant to the terms of the Floor Penalty, the Company incurred damages of approximately $8.2 million under the Floor Penalty subsequent to June 30, 2026.
Subsequent to June 30, 2026 and through the date of this report the Company issued 1,576,983 shares of common stock to settle the remaining original principal balance of $10,000, liquidated damages of $412,000 as described in Note 10, and the Floor Penalty of approximately $8.2 million.
Following the application of such conversions, and the conversion of the remaining balance described above, no principal, liquidated damages or amounts accrued under the Floor Penalty remained outstanding under the Senior Secured Notes as of the date of this Report.
Sale of All Things Dogs
In July 2026, the Company, through its wholly-owned subsidiary Onfolio Assets, LLC, completed the sale of the assets of its All Things Dogs business for gross proceeds of $47,250, with net proceeds of $42,524 received after marketplace fees. The sale was completed subsequent to the balance sheet date and accordingly had no effect on the Company’s financial position or results of operations as of and for the periods ended June 30, 2026. The Senior Secured Noteholder’s right to receive a portion of the net proceeds of the sale was waived pursuant to the Waiver Agreement described in Note 10.
Sale of Digital Assets
In July and August 2026, with the consent of the Senior Secured Noteholder, digital assets with a fair value of approximately $400,000 were released from the control account securing the Senior Secured Notes and sold.
Nasdaq Continued Listing Matters
As previously disclosed, on May 26, 2026, the Company received a notice from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) stating that the Company was not in compliance with the minimum stockholders’ equity requirement of Nasdaq Listing Rule 5550(b)(1), which requires companies listed on The Nasdaq Capital Market to maintain stockholders’ equity of at least $2,500,000. The Company submitted a plan to regain compliance, which remains under review by Nasdaq.
On July 2, 2026, the Company received a notice from Nasdaq stating that the Company was not in compliance with the minimum bid price requirement of Nasdaq Listing Rule 5550(a)(2), as the closing bid price of the Company’s common stock was below $1.00 per share for 30 consecutive business days. The Company has 180 calendar days, or until December 29, 2026, to regain compliance, which requires the closing bid price of the common stock to be at least $1.00 per share for a minimum of ten consecutive business days. On August 10, 2026, the Company completed a 1-for-50 reverse stock split of its common stock as part of its effort to regain compliance with Nasdaq Listing Rule 5550(a)(2).
Annual Meeting of Stockholders
On August 6, 2026, the Company held its annual meeting of stockholders, at which the Company’s stockholders approved, among other matters, (i) the issuance of shares of common stock in excess of applicable exchange caps under the Equity Purchase Facility Agreement for purposes of Nasdaq Listing Rule 5635(d), and (ii) an amendment to the Company’s Certificate of Incorporation to increase the number of authorized shares of common stock from 300,000,000 shares to 600,000,000 shares, which, as of the date of this Report, has not yet been filed with the Secretary of State of the State of Delaware.
Reverse Stock Split
On August 10, 2026, the Company effected a 1-for-50 reverse stock split of its issued and outstanding common stock, pursuant to the authority approved by the Company’s stockholders at the special meeting of stockholders held on April 6, 2026. The total number of shares of stock which the Company shall have authority to issue remains at 305,000,000 shares, consisting of (i) 300,000,000 shares of common stock, par value $0.001 per share, and (ii) 5,000,000 shares of preferred stock, par value $0.001, of which 1,000,000 shares of preferred stock remain designated as series A Preferred Stock. No fractional shares were issued in connection with the reverse stock split; fractional shares were rounded up to the nearest whole share. Proportional adjustments were made to the number of shares underlying the Company’s outstanding equity awards, warrants and convertible notes and to the applicable exercise and conversion prices. Unless otherwise indicated, all share and per-share amounts in these consolidated financial statements and the accompanying notes have been retroactively adjusted, for all periods presented, to give effect to the reverse stock split. |