Debt |
12 Months Ended |
|---|---|
Jun. 30, 2026 | |
| Debt [Abstract] | |
| Debt | Note 5 – Debt
Convertible Note’s Payable – Related Party
In June 2016, the Chief Executive Officer of the Company (“CEO”), William Mobley, loaned the Company $111,000, at an interest rate of 12% per annum. The loan matured on December 31, 2017, and the note is convertible into shares of Class B common stock at a conversion price of $0.50 per share.
The note was converted on March 29, 2024. As of March 29, 2024, and June 30, 2023, accrued interest charges related to this loan were $25,020 and $19,003, respectively. The outstanding principal and accrued interest balance on March 29, 2024, of $92,068 was converted into 184,136 shares of Class B common stock. As of June 30, 2026, the outstanding principal and interest due to William Mobley was $0.
On May 3, 2024, the Company signed a convertible promissory note with Nextelligence in the principal amount of $1,000,000. The note accrued interest at 12% per annum and was due and payable no later than May 3, 2025. At Nextelligence’s option, all or part of the outstanding principal and accrued interest may be converted into shares of our Class A common stock at a conversion price of $8.00 per share. On July 1, 2024, the Company repaid $1,075,000 on the convertible promissory note with related party Nextelligence. On December 13, 2024, the Company renewed and modified the original May 3, 2024, note to incorporate additional borrowings. On July 26, 2025, the Company approved the conversion of all outstanding principal and interest into common shares at a conversion price of $8 per share. The conversion was accounted for as settlement of a stock subscription with no gain or loss recognized. The principal of $3,865,555 and accrued interest of $210,496, total of $4,076,051 was converted into 509,507 shares of Class A common stock.
Between October 9, 2025, and November 21, 2025, Nextelligence, a related party, majority owned by our CEO, provided aggregate funding to us totaling $1,500,000. Of this amount, $191,023 was remitted by Nextelligence on behalf of Celebrity Cigars, Inc. and Test Drive Live Inc. to fully satisfy their outstanding accounts receivable balances with the Company. As these entities are under common control, Nextelligence agreed to assume the obligations of both Celebrity Cigars, Inc. and Test Drive Live Inc. The remaining $1,308,977 was recorded as a revolving convertible note payable to Nextelligence, for a total of $1,308,977. The Company and Nextelligence entered into an agreement on November 21, 2025, to place terms on this revolving convertible note payable. The new outstanding revolving convertible note payable has an interest rate of 12%, a maturity date of June 30, 2026, and is convertible at Nextelligence’s discretion for $8 per share of Class A common stock. Additionally, the agreement capitalized all unpaid accrued interest as of November 21, 2025, for $6,575, which resulted in an “original principal balance” of $1,315,552.
On April 20, 2026, the Company renewed and modified its revolving convertible promissory note with Nextelligence, Inc, a related party majority owned by the Company’s Chief Executive Officer. The renewed note bears interest at 12% per annum, matures on June 30, 2027, and is convertible at the holder’s option into shares of the Company’s Class A common stock at a conversion price equal to the closing price of the Company’s Class A common stock on the Nasdaq Global Market on the most recent trading day before conversion. The Company accounted for the renewal as a debt modification. The Company determined that the embedded conversion feature does not require bifurcation as a derivative liability because the feature settles a fixed monetary amount of debt in shares at contemporaneous market value.
Between the date of the executed agreement on November 21, 2025 and June 30, 2026, the Company has received an additional $6,127,951. Additionally, Nextelligence elected to convert a total of $3,764,052 into common stock throughout the period. As of June 30, 2026, the total outstanding principal is $3,679,451 and the accrued interest balance is $256,111 for a total outstanding balance of $3,945,562.
Notes Payable – D&O Insurance Financing
On March 12, 2026, the Company entered into an agreement with Capital Premium Financing to provide financing in an aggregate amount of $143,949 for the insurance premium associated with a D&O policy. The policy commenced March 12, 2026, and provided coverage for the next 12 months, expiring March 12, 2027. The loan bears interest at a 13.95% rate per annum. We are required to pay monthly principal and interest of approximately $24,977 paid over 6 months, with the final payment on September 12, 2026.
Notes Payable – Due to John Francis
During 2026, the Company’s automatic payment for a monthly insurance premium in the amount of $26,232 was returned due to insufficient funds. To prevent a lapse in coverage and avoid potential late fees, John Francis, the Company’s insurance agent, remitted the payment on the Company’s behalf. As a result, the Company recorded a payable to John Francis of $26,232 as of June 30, 2026. The amount is non-interest bearing, unsecured, and due on demand. The full principal balance was recorded as Notes payable – current on the balance sheet. |