Transactions with Affiliates and Affiliated Entities |
3 Months Ended |
|---|---|
Jul. 31, 2026 | |
| Related Party Transactions [Abstract] | |
| Transactions with Affiliates and Affiliated Entities | Note 10 — Transactions with Affiliates and Affiliated Entities CEO Transition Agreement On March 16, 2026, the Company, Mr. David Namdar, its Chief Executive Officer, and Abound LLC, a Puerto Rico limited liability company pursuant to which Mr. Namdar performed services for the Company, entered into an agreement ("Transition Agreement"), approved by the Board, that awarded Mr. Namdar (a) a $375,000 consulting fee for services Mr. Namdar performed for the Company since August 5, 2025, but for which the Company had not provided any compensation, (b) a $50,000 monthly consulting fee as compensation for services provided from the date of the Transition Agreement until his separation from the Company in July 2026, and (c) a $538,318 lump sum cash payment ("Cash Incentive Award") in lieu of an equity incentive award. In addition, the Company paid Mr. Namdar $900,000 at the date of separation in July 2026 in exchange for restrictive conditions, including confidentiality, non-compete, non-solicitation, non-disparagement, and non-assistance to litigants restrictions. The Company recorded compensation expense of $135,484 within "Selling, general and administrative expenses" in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) and paid $1,623,802 in cash to Mr. Namdar through Abound LLC during the three months ended July 31, 2026. AMA Controlled by a Former Board Member Mr. Hans Thomas, a member of the Board until March 2026, owns the majority of the Asset Manager. Under the AMA (Note 1), the Company incurred management fees of $1.1 million during the three months ended July 31, 2026, presented as "Management fees to affiliate" in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). At July 31, 2026, the Company accrued unpaid asset management fees of $1.4 million within "Other current related party liabilities" in the Condensed Consolidated Balance Sheets, and the Asset Manager and its affiliates hold all of the Asset Manager Warrants. See Note 11 regarding AMA litigation. Seller Note Payable to Employee The Company issued the Tax Indemnification Note to, and created the Escrow Deposit for the potential benefit of, the Selling Fat Panda Shareholders, one of whom is the President of Fat Panda, a current employee of the Company. In addition, the Company issued the Fat Panda Promissory Notes to the President of Fat Panda (Note 2). During the three months ended July 31, 2026 and the period from June 7, 2025 through July 31, 2025, the Company incurred interest expense totaling $25,813 and $15,516, respectively, presented as "Interest expense to affiliate" in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss), of which the Company paid $12,853 and $7,758. See Note 5 for additional detail regarding these notes payable, which the Company presents as "Related party note payable" in the Condensed Consolidated Balance Sheets. The Company does not reflect the Escrow Deposit in these Unaudited Condensed Consolidated Financial Statements as a third-party administrator controls those funds; however, the release of the Escrow Deposit, which depends upon finalization of working capital adjustments at the Acquisition Date, may impact the purchase price the Company paid for Fat Panda in the Fat Panda Acquisition (Note 2). Agreements and Transaction with a Board Member On June 19, 2024, Mr. Nicholas J. Etten, a former member of the Board, and the Company entered into a consulting agreement (the "2024 Agreement"), which was replaced on July 28, 2025 with a new consulting agreement (the "2025 Agreement"), whereby Mr. Etten would provide advisory services related to acquisition sourcing, strategic consulting, and investor coordination, and would be compensated at a rate of $2,500 per week, subject to downward adjustment based on hours worked. During the period from June 7, 2025 through July 31, 2025, the Company paid $10,250 to Mr. Etten for consulting services under the 2025 Agreement. In January 2026, the Company identified excess payments totaling $6,300 made to Mr. Etten under the 2024 Agreement which Mr. Etten refunded to the Company in April 2026. Mr. Etten terminated the 2025 Agreement with effect from January 1, 2026, and no amounts were payable to him thereunder at July 31, 2026. On June 10, 2026, Mr. Etten resigned from the Board and entered into a separation agreement providing for a payment of $85,000 and reimbursement of up to $50,000 of legal fees, in exchange for a release of claims and customary covenants. He will also assist with the Company's ongoing litigation matters for eighteen months at $450 per hour for time exceeding ten hours per month. No amounts were incurred under that provision during the three months ended July 31, 2026. The Company recognized $85,000 during the three months ended July 31, 2026, $20,750 during the period June 7, 2025 through July 31, 2025, and $10,500 during the period May 1, 2025 through June 6, 2025 of related expense within "Selling, general and administrative expenses," none of which remained unpaid at July 31, 2026 aside from reimbursable legal costs. Severance Agreement with a Former Officer and Board Member On May 4, 2026, Mr. Anthony K. McDonald resigned as the Company's President and as a member of the Board. In connection with his departure, the Company and Mr. McDonald entered into a severance agreement under which, in exchange for a release of claims and customary post-employment covenants, the Company agreed to pay Mr. McDonald $250,000 in substantially equal bi-weekly installments over twelve months and reimbursement for legal fees of $10,000. During the three months ended July 31, 2026, the Company recognized $250,000 of expense within "Selling, general and administrative expenses" related to the foregoing, of which $57,692 was paid. At July 31, 2026, $192,308 remained unpaid and is presented within "Accounts payable and accrued expenses" in the Condensed Consolidated Balance Sheets. All remaining amounts are payable within twelve months of July 31, 2026. Additionally, during the three months ended July 31, 2026, the company paid $10,000 for legal fees on behalf of Mr. McDonald incurred in connection with the negotiation of the severance agreement. Cooperation Agreement with YZILabs On June 23, 2026, the Company entered into a cooperation agreement (the "Cooperation Agreement") with YZi Labs Management Ltd. ("YZILabs") which held 2,150,481 shares of the Company's common stock and 21,215,863 warrants at each of July 31, 2026 and April 30, 2026. Under the Cooperation Agreement, YZILabs terminated its consent solicitation and withdrew its related demands, and the parties exchanged mutual releases of claims arising from events occurring prior to that date. The Company increased the size of the Board to six directors and appointed three directors designated by YZILabs, and agreed to form a chief executive officer search committee. YZILabs agreed to customary standstill restrictions and to vote its shares in accordance with the Board's recommendations, in each case subject to the exceptions set forth in the Cooperation Agreement, which remains in effect until the dates specified therein. Neither party paid any consideration to the other under the Cooperation Agreement, and each party bore its own costs. As a result of the board designation and replacement rights held by YZILabs, the Company considers YZILabs a related party. YZILabs has represented that neither it nor its affiliates has paid or will pay any compensation to any of the directors it designated in respect of their service on the Board.
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