FreeCast, Inc. 10-Q

Item 1. Financial Statements FREECAST, INC. CONDENSED BALANCE SHEETS December 31, June 30, 2025 2025 (Unaudited) Current Assets: Cash $ 433,363 $ 549,249 Accounts receivable, net 137,631 131,432 Accounts receivable - related party 14,335 146,303 Prepaid assets – related party 40,000 - Other current assets 80,140 46,314 Total current assets 705,469 873,298 Non-current assets: Property and equipment, net 25,321 26,105 Prepaid assets, net of current portion – related party 60,000 - Security deposits 126,145 126,145 Operating lease, right-of-use asset 317,523 362,968 Total non-current assets 528,989 515,218 Total assets $ 1,234,458 $ 1,388,516 Current liabilities: Accounts payable and accrued expenses $ 1,767,816 $ 1,528,327 Accounts payable and accrued expenses - related party 245,683 330,108 Current portion of operating lease obligation 100,159 91,220 Current portion of deferred revenue 5,327 135,273 Convertible Note Payable - Related Party 2,425,552 3,865,555 Total current liabilities 4,544,537 5,950,483 Long term liabilities: Deferred revenue, net of current portion 1,066 2,705 Operating lease liabilities, net of current portion 236,717 288,836 Total long-term liabilities 237,783 291,541 Total liabilities 4,782,320 6,242,024 Preferred stock, $0.0001 par value, 5,000,000 shares authorized Series A Preferred Stock, par value $0.0001, 4,000,000 and 4,000,000 shares issued and outstanding as of December 31, 2025, and June 30, 2025, respectively 400 400 Class A common stock, $0.0001 par value, 320,000,000 authorized; 26,931,820 and 25,947,813 shares issued and outstanding as of December 31, 2025, and June 30, 2025, respectively 2,695 2,596 Class B common stock, $0.0001 par value, 30,000,000 shares authorized; 13,925,640 and 13,937,640 shares issued and outstanding as of December 31, 2025, and June 30, 2025, respectively 1,393 1,394 Additional paid-in capital 197,329,182 190,377,303 Accumulated deficit (200,881,532 ) (195,235,201 ) Total stockholders’ deficit (3,547,862 ) (4,853,508 ) Total liabilities and stockholders’ deficit $ 1,234,458 $ 1,388,516 The accompanying notes are an integral part of these condensed financial statements 1 FREECAST, INC. UNAUDITED CONDENSED STATEMENTS OF OPERATIONS For the Three Months Ended December 31, For the Six Months Ended December 31, 2025 2024 2025 2024 Net sales Sales $ 15,709 $ 89,200 $ 156,903 $ 128,468 Sales - related parties 46,381 62,345 101,047 141,484 Total revenue 62,090 151,545 257,950 269,952 Cost of revenue: Cost of revenue 39,636 73,943 91,741 176,186 Total cost of revenue 39,636 73,943 91,741 176,186 Gross profit 22,454 77,602 166,209 93,766 Operating costs and expenses: Compensation and benefits 1,310,112 1,724,046 2,497,759 3,028,042 Sales and marketing expense 79,014 90,736 175,102 216,367 General and administrative 1,383,176 2,150,194 3,050,783 4,247,592 Total operating expenses 2,772,302 3,964,976 5,723,644 7,492,001 Loss from operations (2,749,848 ) (3,887,374 ) (5,557,435 ) (7,398,235 ) Other income (expense): Interest income (expense), net (32,156 ) (39,613 ) (84,777 ) (86,142 ) Other (expense) income, net (1,978 ) (2,531 ) (4,119 ) (4,946 ) Total other (expense) income (34,134 ) (42,144 ) (88,896 ) (91,088 ) Net loss before income tax $ (2,783,982 ) $ (3,929,518 ) $ (5,646,331 ) $ (7,489,323 ) Income tax expense (benefit) - - - - Net loss (2,783,982 ) (3,929,518 ) (5,646,331 ) (7,489,323 ) Deemed dividends attributable to accretion of Series A Preferred Stock to redemption value - - - - Net loss attributable to common shareholders (2,783,982 ) (3,929,518 ) (5,646,331 ) (7,489,323 ) Net loss per common share - basic and diluted $ (0.07 ) $ (0.10 ) $ (0.14 ) $ (0.19 ) Weighted average common shares outstanding - basic and diluted 40,491,073 39,157,687 39,552,120 39,167,314 The accompanying notes are an integral part of these condensed financial statements 2 FREECAST, INC. UNAUDITED CONDENSED STATEMENTS OF STOCKHOLDERS’ DEFICIT FOR THREE AND SIX MONTHS ENDED December 31, 2025, AND 2024 Redeemable Series A Preferred Stock Series A Preferred Stock Class A Common Stock Class B Common Stock Common Stock Additional Paid-In Accumulated Total Stockholders’ Shares Amount Shares Amount Shares Amount Shares Amount Subscriptions Capital Deficit Deficit Balance as of June 30, 2025 - $ - 4,000,000 400 25,947,813 2,596 13,937,640 1,394 - 190,377,303 (195,235,201 ) (4,853,508 ) Stock based compensation - - - - - - - - - 88,422 - 88,422 Common stock issued to settle related party notes payable - - - - 509,507 51 - - - 4,076,000 - 4,076,051 Common stock issued for cash - - - - 337,500 34 - - - 2,699,966 - 2,700,000 Common stock issued for services - - - - 125,000 13 - - - (13 ) - - Shares converted - - - - 12,000 1 (12,000 ) (1 ) - - - - Net loss - - - - - - - - - - (2,862,349 ) (2,862,349 ) Balance as of September 30, 2025 4,000,000 400 26,931,820 2,695 13,925,640 1,393 - 197,241,678 (198,097,550 ) (851,384 ) Stock based compensation 87,504 87,504 Net loss (2,783,982 ) (2,783,982 ) Balance as of December 31, 2025 4,000,000 400 26,931,820 2,695 13,925,640 1,393 - 197,329,182 (200,881,532 ) (3,547,862 ) Balance as of June 30, 2024 4,000,000 120,000,000 - - 32,993,283 3,299 6,154,670 616 - 63,495,755 (181,169,253 ) (117,669,583 ) Stock based compensation - - - - - - - - - 105,172 - 105,172 Reclass from Class A common stock to Class B common stock - - - - (7,782,970 ) (778 ) 7,782,970 778 - - - - Warrants issued for services - - - - - - - - - 144,262 - 144,262 Net loss - - - - - - - - - - (3,559,805 ) (3,559,805 ) Balance as of September 30, 2024 4,000,000 120,000,000 - - 25,210,313 2,521 13,937,640 1,394 - 63,745,189 (184,729,058 ) (120,979,954 ) Class A common stock issued for cash 356,250 36 2,849,964 2,850,000 Stock based compensation 135,550 135,550 Warrants issued for services 352,814 352,814 Reclass of Series A preferred stock from mezzanine to permeant equity (4,000,000 ) (120,000,000 ) 4,000,000 400 119,999,600 120,000,000 Class A common stock subscription 500,000 500,000 Net loss (3,929,518 ) (3,929,518 ) Balance as of December 31, 2024 - - 4,000,000 400 25,566,563 2,557 13,937,640 1,394 500,000 187,083,117 (188,658,576 ) (1,071,108 ) The accompanying notes are an integral part of these condensed financial statements 3 FREECAST, INC. UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS For the Six Months Ended December 31, 2025 2024 Cash flows from operating activities: Net loss $ (5,646,331 ) $ (7,489,323 ) Reconciliation of net loss to net cash used in operating activities Depreciation and amortization expense 9,340 12,720 Operating lease expense 45,445 40,719 Stock-based compensation 175,926 737,798 Gain on settlement of accounts payable - - Bad debt expense 453 17,754 Changes in operating assets and liabilities: - Accounts receivable (6,652 ) (277,988 ) Accounts receivable - related party 131,968 136,052 Prepaid assets (100,000 ) - Other current assets (33,826 ) 19,133 Operating lease liability (43,180 ) (35,392 ) Accounts payable and accrued expenses 239,489 237,227 Accounts payable and accrued expenses - related party 126,071 (15,757 ) Deferred revenue (131,585 ) (46,606 ) Net cash used in operating activities (5,232,882 ) (6,663,663 ) Cash flows from investing activities: Purchase of property and equipment (8,556 ) (21,623 ) Net cash used in investing activities (8,556 ) (21,623 ) Cash flows from financing activities: Proceeds from issuance of Class A common stock - 2,850,000 Proceeds from issuance of Class A common stock - related party 2,700,000 - Proceeds from Class A common stock subscriptions 500,000 Payments on finance lease - (546 ) Proceeds from convertible note payable - related party 2,425,552 1,395,000 Repayments on revolving convertible note payable - related party - (1,075,000 ) Net cash provided by financing activities 5,125,552 3,669,454 Net change in cash (115,885 ) (3,015,832 ) Cash, beginning of period 549,249 5,218,413 Cash, end of period $ 433,363 $ 2,202,581 Non-cash investing and financing activities: Shares issued to settle common stock subscriptions $ 4,076,051 $ - The accompanying notes are an integral part of these condensed financial statements 4 FREECAST, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS DECEMBER 31, 2025, and 2024 (Unaudited) Note 1 – Organization and Description of Business FreeCast, Inc. (the “Company”) developed and markets an interactive digital media guide that facilitates access to a virtual library of entertainment media. The Company is based in Orlando, Florida and was founded in 2011 as a Florida Corporation. The Company’s primary products are SmartGuide and Select TV. Both SmartGuide and Select TV utilize the Company-designed proprietary technology that searches, and aggregates internet distributed streaming media into an electronic media guide. SmartGuide is licensable to brands/manufacturers of devices with large online user bases, while Select TV is a retail package that is sold by monthly and/or annual subscriptions. In addition to subscription and product revenues, the Company generates revenue from its ad platform and agency services. FreeCast is a technology-driven streaming entertainment aggregator offering a unified, à la carte service for TV entertainment through a comprehensive Platform-as-a-Service (PaaS) model. The Company also earns revenue from direct client service contracts for marketing and campaign execution, such as the Launch That agreement, which involves discovery, development, and test media distribution services. These ad-related and agency revenues are recognized as distinct revenue streams in accordance with Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers (“ASC 606”). Additionally, we provide Free Ad-Supported Streaming TV (“FAST”) channel buildouts which include post-production editing, motion graphic channel assembly and content acquisitions. We have aggregated over 500 FAST channels, which now provide material operations to the Company. We charge the customers based on time incurred for the services plus a reasonable margin in addition to any additional out of pocket cost incurred that is charged at cost to us. In addition, we split the advertising revenue. Revenue is recognized when services are performed. We charge a monthly platform fee for distributing the FAST channel on its platform. Revenue is recognized at the point in time when the content is available on the digital platform. Going Concern The Company has incurred recurring losses from operations since inception, accumulating a deficit of approximately $200.9 million as of December 31, 2025. For the six months ended December 31, 2025, and 2024, the Company incurred a net loss of approximately $5.6 million and $7.5 million, respectively. The Company may incur additional losses and negative operating cash flows in the future. Failure to generate sufficient revenues, reduce spending or raise additional capital could adversely affect the Company’s ability to achieve its intended business objectives. These matters, among others, raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the issuance of these financial statements. Since the inception of the Company in 2011, the operations of the Company have been funded primarily through sales of Class A common stock to private investors, debt financing and exchange of Class A common stock for services received by the Company. Management cannot be certain that additional funding will be available on acceptable terms, or at all. Management plans include raising additional capital through the sale of equity and debt securities, along with exploring additional avenues to increase revenues. To the extent that the Company raises additional funds by issuing equity securities, the Company’s shareholders may experience significant dilution. Any debt financing, if available, may involve restrictive covenants that impact the Company’s ability to conduct business. The accompanying financial statements for the six months ended December 31, 2025, and 2024, have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. During the remaining 2025 calendar year, management intends to raise additional debt and/or equity financing to fund future operations and to provide additional working capital. Management’s plans to alleviate substantial doubt include pursuing equity and debt financing, expanding strategic partnerships, and enhancing monetization of its ad platform and FAST channel network. However, these plans are not yet finalized, and there is no assurance that such financing will be consummated or obtained in sufficient amounts. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. 5 Note 2 – Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments except those otherwise described herein) considered necessary for a fair presentation have been included, unless otherwise disclosed. Operating results for the current quarter ended December 31, 2025, are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2026. The Condensed Balance Sheet at December 31, 2025, has been derived from the unaudited Financial Statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The financial statements should be read in conjunction with the annual audited Financial Statements and Notes thereto. Use of Estimates The preparation of these financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts in the financial statements and disclosure in the accompanying notes. Actual results may differ from those estimates, and such differences may be material to the financial statements. The Company evaluates expected credit losses in accordance with ASC 326, considering historical loss experience, current conditions, and reasonable and supportable forecasts. The more significant estimates and assumptions by management include among others: accounts receivable realization, the valuation allowance on deferred tax assets, the valuation of the Company’s Class A common stock, redeemable series A preferred stock, options, warrants and revenue recognition. Cash and Cash Equivalents The Company considers all highly liquid investments with original maturities at the date of purchase of three months or less to be cash equivalents. Cash and cash equivalents include bank demand deposits, marketable securities with maturities of three months or less at purchase, and money market funds that invest primarily in certificates of deposits, commercial paper and U.S. government and U.S. government agency obligations. Cash equivalents are reported at fair value. Accounts receivable Accounts receivables are unsecured and are derived from revenue earned from customers. For accounts receivable, the Company performs ongoing credit evaluations of customers to assess the probability of accounts receivable collection based on a number of factors, including past transaction experience with the customer, evaluation of their credit history, and review of the invoicing terms of the contract. Accounts receivables are reported net of an allowance for doubtful accounts when applicable. The allowance for doubtful accounts reflects management’s best estimate of probable losses inherent in the accounts receivable balance at each reporting date. Management determines the allowance based on known troubled accounts, historical experience, and other currently available evidence. The Company recognized bad debt expense for the six months ended December 31, 2025, and 2024, of $453 and $17,754, respectively. The balance of allowance for doubtful accounts as of December 31, 2025, and 2024, was $31,785 and $17,791, respectively. Property and Equipment Property and Equipment are stated at cost, less accumulated depreciation. Depreciation is determined on a straight-line basis over the estimated useful lives of the assets, which generally range from three to five years. Maintenance and repairs are charged against expense as incurred. 6 Leases Effective July 1, 2019, we adopted ASC 842, Leases. Under ASC 842, we determine if a contractual arrangement is, or contains, a lease at the inception date. Right-of-use (“ROU”) assets and liabilities related to operating leases and finance leases are separately reported in the balance sheets. ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of the future lease payments over the lease term. When the rate implicit to the lease cannot be readily determined, we utilize our incremental borrowing rate in determining the present value of the future lease payments. The incremental borrowing rate is derived from information available at the lease commencement date and represents the rate of interest that a lessee would have to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term in a similar economic environment. Operating lease ROU assets also include any cumulative prepaid or accrued rent when the lease payments are uneven throughout the lease term. The ROU assets and lease liabilities may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease liabilities are increased by interest and reduced by payments each period, and the ROU asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the ROU asset result in straight-line rent expense over the lease term. Variable lease expenses are recorded when incurred. Income Taxes The Company accounts for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for temporary differences between the financial reporting and tax bases of assets and liabilities and are measured using enacted tax rates expected to apply when those differences reverse. A valuation allowance is recorded when it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company also evaluates uncertain tax positions and recognizes liabilities for tax positions that do not meet the more-likely-than-not threshold for sustainability upon examination. Modifications to Warrants A change in the terms or conditions of a warrant is accounted for as a modification. For a warrant modification accounted for under ASC 815, the effect of a modification shall be measured as the difference between the fair value of the modified warrant and the fair value of the original warrant immediately before its terms are modified, with each measured on the modification date. The accounting for incremental fair value of the modified warrants over the original warrants is based on the specific facts and circumstances related to the modification. When a modification is directly attributable to an equity offering, the incremental change in fair value of the warrants is accounted for as an equity issuance cost. When a modification is directly attributable to a debt offering, the incremental change in fair value of the warrants is accounted for as a debt discount or debt issuance cost. For all other modifications accounted for under ASC 815, the incremental change in fair value is recognized as a deemed dividend. Revenue Recognition Revenue is recognized upon transfer of control of promised goods or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those goods or services, in accordance with ASC 606. The Company’s contracts include various products or services or a combination of both, which are generally capable of being distinct and are accounted for as separate performance obligations. The Company’s contracts may contain multiple distinct performance obligations. The transaction price of a contract is estimated based on the expected value for which a significant reversal of revenue is not expected to occur. Stand-alone selling prices are generally determined based on prices charged to customers. In arrangements with multiple performance obligations, the estimated transaction price is allocated to each distinct performance obligation based on relative stand-alone selling price (“SSP”). 7 Subscription Revenue The Company no longer generates subscription revenue through renewal sales of Rabbit TV and Rabbit TV Plus, or through Select TV and Streaming TV Kits, which operated as the successor products to Rabbit TV and Rabbit TV Plus. In October 2022, the Company’s SelectTV.com paid subscription service and packaged SelectTV Streaming TV Kits were discontinued. The Company rebranded to the corporate namesake FreeCast.com and relaunched its SmartGuide as a free registration subscription service. SmartGuide is the Company’s internet distributed streaming media guide that searches and aggregates media content on the web and facilitates access to its customers through Wi-Fi-enabled devices that support streaming video. The Company does, however, sell monthly subscriptions for premium content purchased through its SmartGuide for varying fees for different content. Revenue from such premium subscription fees is recognized on a gross basis over the service period as the Company is deemed to be the principal in the relationship with the end user. The Company controls the premium content before transferring it to the end user and has latitude in establishing pricing. The Company both retransmits and “ingests” and distributes this content. Subscription revenue is derived from online sales through search engine optimization, search engine marketing, various marketing advertising services, the utilization of resellers in the form of publishers that promote upcoming retail promotions and packages, as well as direct sales to subscribers of our Value Channels subscription service. Value Channels subscription contains 17 cable channels and sells on a monthly subscription or annual fee. Value Channels is integrated into the initial FreeCast.com free registration and then offered as an upgrade. Both FreeCast.com (free registration) and Value Channels are available in various streaming Smart TV models (Google TV’s, Amazon Fire TV’s, LG, Samsung, TCL, Sony, and others), plus Streaming Devices (Amazon Fire, Google ChromeCast, Apple TV), PC’s/Laptops and mobile apps for Android and iOS devices. Subscription revenue is recognized ratably on a straight-line basis over the duration of the subscription period, generally ranging from one month to five years. If the subscriber renews early, then the expiration date is extended by the renewal period, and the additional subscription fee is deferred and amortized over the additional months purchased by the subscriber. The Company no longer offers SelectTV lifetime subscriptions, which were initially deferred and recognized over a five-year period. All subscription fees are collected at the time of purchase. FAST (Free Ad-Supported TV) We provide FAST channel buildouts that include post-production editing, motion graphics, channel assembly and content acquisitions. We charge the customers based on time incurred for the services plus a reasonable margin in addition to any additional out-of-pocket cost incurred that is charged at cost to us. Revenue is recognized when services are performed. The Company charges a monthly platform fee for distributing the FAST channel on its platform. Revenue is recognized at the point in time when the content is available on the digital platform. Ad Platform Revenue FreeCast is an agent in transactions on its FreeCast Ad Exchange platforms. The Company acts as an intermediary between DSPs and non-owned and operated publishers by providing access to a platform that allows both parties to transact in the buying and selling of ad inventory. The transaction price is determined through a real-time auction, and the Company has no pricing discretion or obligation related to the fulfillment of the advertising delivery. The Company generally invoices buyers at the end of each month for the full purchase price of ad impressions monetized in that month. Accounts receivable are recorded at the amount of gross billings for the amounts the Company is responsible to collect, and accounts payable are recorded at the net amount payable to suppliers. Accordingly, both accounts receivable and accounts payable appear large in relation to revenue reported on a net basis. Ad Agency Revenue (Launch That and Similar Contracts) The Company earns revenue from direct client service contracts for marketing and campaign execution, such as the Launch That agreement. These contracts typically involve two distinct phases: ● Phase 1: Discovery and Development Services (data research, audience analysis, creative development). Revenue is recognized over time using an input method based on the proportion of costs incurred relative to total estimated costs for Phase 1. ● Phase 2: Test Media Distribution Services (media placement, outreach, KPI reporting). Revenue is recognized upon delivery of the performance evaluation report specified in the contract. 8 Revenue from such contracts is presented separately from “Other Revenue” due to its materiality and distinct nature. Deferred Revenue For the Ad Platform revenue stream, the Company provides demand partners with access to the FreeCast Ad Platform, enabling real-time bidding on advertising inventory. Revenue is recognized at a point in time when a transaction is completed—specifically, when a bid is won and the client’s purchase occurs through the platform. Amounts invoiced in advance of the completion of these transactions are recorded as deferred revenue and recognized as revenue when the Company’s performance obligation is satisfied. For the Ad Agency revenue stream (Launch That and similar contracts), the Company provides direct marketing and campaign services, usually with a specified contract. Revenue is recognized over time during Phase 1 (using an input method based on the proportion of costs incurred relative to total estimated costs) and 2 at a point in time during Phase 2 (upon delivery of the performance evaluation report specified in the contract). Amounts paid in advance of the delivery of the specified services are recorded as deferred revenue and recognized as revenue when the Company’s performance obligation is satisfied. O ther Revenue Other revenue includes product, licensing, and referral fee revenue. The Company generates revenue through free registrations of FreeCast.com by partnering with retailers, manufacturers, operators and/or distributors of streaming devices, mobile phones, broadband carriers, broadcasters, property management, multi-dwelling developers, builders, and various mass consumer communities of streaming tv watchers. A FreeCast.com license is freely provided per registered consumer marketed by distributors in exchange for a negotiated revenue sharing percentage with each distributor on a case-by-case basis. Affiliate commissions are earned and then shared from third-party advertisement service providers, pay-per-view movie or series distributors, and live events tickets sales for such things as professional boxing or concerts. These license arrangements have not resulted in significant revenue to date. Beginning in 2024, in conjunction with the release of our new product FreeCast Home, we started recognizing contracts with customers from product sales requiring performance up to delivery, as well as contracts with customers that contain a subscription portion that causes revenue to be allocated or adjusted over time. Shipping and handling activities are performed before the customer obtains control of the goods and therefore represent a fulfillment activity rather than a promised service to the customer. Revenue and costs of sales are recognized when control of the products transfers to our customer, which generally occurs upon shipment from our facilities. For our physical product sales, our performance obligations are satisfied at that time. Referral fee revenue is generated through premium services which are also available on our platform, for an additional fee, to allow single or time-limited use of private, decrypted viewing of movies, sporting events, concerts or other types of events. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and trade accounts receivable. Cash and cash equivalents of the Company are exposed to credit risk, subject to federal deposit insurance, in the event of default by the financial institutions holding their cash and cash equivalents to the extent of amounts recorded on the balance sheet. The cash accounts are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. As of December 31, 2025, the Company’s cash balance exceeded the FDIC insured limit by $183,363. As of December 31, 2025, the Company had one customer, SportX LLC representing 96.21% of the Company’s receivables. As of December 31, 2024, the Company had three customers, SportX, LLC and related party customers Celebrity Cigars, Inc. and Test Drive Live Corp., representing 62.59%, 18.72%, and 13.53%, respectively, of the Company’s receivables (See Note 9). As of December 31, 2025, the Company had three customers, Launch That., related party customer Celebrity Cigars, Inc., and Ignite, representing 46.1%, 29.6%, and 11.86%, respectively, of the Company’s revenues. As of December 31, 2024, the Company had two related party customers, Test Drive Live Inc. and Celebrity Cigars, Inc., representing 21.0% and 29.0%, respectively, of the Company’s revenues. 9 Cost of Revenue Cost of revenue consists primarily of subscription costs and FAST streaming costs such as third-party hosting costs, infrastructure costs and salaries and benefits related to employees for our customer support. The Company makes payments to third-party ad servers in the period in which the advertising impressions are delivered, or click-through actions occur, and accordingly records this as a cost of revenue in the related period. Hosting costs consist of content streaming, maintaining our internet service and creating and serving advertisements through third-party ad servers. Cost of revenue also consists of FAST channel buildout costs such as the salaries and benefits related to employees, facility related expenses and information technology associated with supporting these buildouts. Sales and Marketing Sales and marketing consist primarily of contracts with third-party operators as well as employee-related costs, including commissions related to employees in sales, and sales support and marketing departments. In addition, sales and marketing expenses include external sales and marketing expenses such as third-party marketing, branding, advertising, public relations expenses, commissions, facilities-related expenses, and infrastructure costs. Fair Value of Financial Instruments The Company accounts for financial instruments under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, Fair Value Measurements. This statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements, ASC 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels as follows: Level 1 — quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 — observable inputs other than Level 1, quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, and model-derived prices whose inputs are observable or whose significant value drivers are observable; and Level 3 — assets and liabilities whose significant value drivers are unobservable. The Company applies fair value accounting for all assets and liabilities that are recognized or disclosed at fair value in the financial statements. The carrying amounts reported in the financial statements for cash, accounts receivable, accounts payable and accrued liabilities approximate their fair value due to their short-term nature. Stock-Based Compensation Stock-based compensation issued is measured at the date of grant based on the estimated fair value of the award, net of estimated forfeitures. The grant date fair value of a stock-based award is recognized as an expense over the requisite service period of the award on a straight-line basis. The Company will recognize compensation expense, measured as the fair value of the stock-based compensation on grant date, when a performance condition is considered probable of occurring. For purposes of determining the variables used in the calculation of stock-based compensation issued to employees, the Company performs an analysis of current market data and historical data to calculate an estimate of implied volatility, the expected term of the option and the expected forfeiture rate. With the exception of the expected forfeiture rate, which is not an input, the Company uses these estimates as variables in the Black-Scholes option pricing model. Depending upon the number of warrants granted, any fluctuations in these calculations could have a material effect on the results presented in the Company’s Statements of Operations. In addition, any differences between estimated forfeitures and actual forfeitures could also have a material impact on the Company’s financial statements. In accounting for modifications of equity-classified warrants held by employees, it is the Company’s policy to determine the impact by analogy to the share-based compensation guidance of ASC 718, Compensation - Stock Compensation (“ASC 718”). The model for a modified share-based payment award that is classified as equity and remains classified in equity after the modification is addressed in ASC 718-20-35-3. Pursuant to that guidance, the incremental fair value from the modification is recognized as stock-based compensation expense in the statements of operations to the extent the modified instrument has a higher fair value. 10 Loss Contingencies Certain conditions may exist as of the date financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company’s management and its legal counsel assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company’s legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed. In accordance with ASC 450-20, Loss Contingencies, any probable and reasonable estimates of assessment costs have been included in the accompanying Consolidated Balance Sheet. Earnings (Loss) Per Share Basic earnings (loss) per share is computed by dividing net income (loss) attributable to all classes of common shareholders of the Company by the weighted average number of shares of all classes of Class A common stock outstanding during the applicable period. Diluted earnings (loss) per share is determined in the same manner as basic earnings (loss) per share, except that the number of shares is increased to include restricted stock still subject to risk of forfeiture and to assume exercise of potentially dilutive stock options using the treasury stock method, unless the effect of such increase would be anti-dilutive. The following table provides the number of Class A common stock equivalents not included in diluted income per share, because the effects are anti-dilutive, for the three months ended December 31, 2025, and 2024, respectively. For the Six Months Ended December 31, 2025 2024 Convertible debt and liabilities 305,837 312,960 Options 926,373 993,270 Warrants 8,056,087 8,056,087 Total 9,288,297 9,362,317 Recently Issued Accounting Pronouncements The Company has reviewed the recent accounting pronouncements issued by the Financial Accounting Standards Board (“FASB”), including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the SEC, and determined that these pronouncements do not have a material impact on the Company’s current or anticipated consolidated financial statement presentation or disclosures. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) – Improvements to Income Tax Disclosures (ASU 2023-09). ASU 2023-09 requires that an entity, on an annual basis, disclose additional income tax information, primarily related to the reconciliation rate and income taxes paid. The amendment in the ASU is intended to enhance the transparency and decision usefulness of income tax disclosures. The ASU’s amendments are effective for annual periods beginning after December 15, 2024. The Company is currently evaluating the impact that adoption of ASU 2023-09 will have on its financial statements. In September 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instrument (“ASU 2016-13”). ASU 2016-13 requires entities to use a forward-looking approach based on current expected credit losses (“CECL”) to estimate credit losses on certain types of financial instruments, including trade receivables. This may result in the earlier recognition of allowances for losses. ASU 2016-13 was effective for the Company beginning July 1, 2023. The adoption of ASU 2016-13 did not have a material impact on the Company’s financial position, results of operations and cash flows. 11 In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This ASU enhances reportable segment disclosure requirements, primarily by requiring additional information about significant segment expenses. The standard is effective for annual reporting periods beginning after December 15, 2023, and interim periods beginning after December 15, 2024. The Company has adopted this guidance in the current quarter and has updated its segment disclosures accordingly. ASU 2024-03: Income Statement (Topic 220): Disaggregation of Income Statement Expenses: The amendments in this ASU require public companies to disclose, in interim and year-end reporting periods, additional information about certain expenses in the financial statements. These disclosures are effective beginning with 2027 annual reports, and interim reports beginning with the first quarter of 2028. Early adoption is permitted on either a prospective or retrospective basis. The Company is currently assessing the potential impact of adoption of these provisions on the consolidated financial statements. Note 3 – Segment Reporting The Company operates as a single operating and reportable segment. Management evaluates performance and allocates resources on a consolidated basis. Accordingly, separate segment information is not presented. Note 4 – Property and Equipment Property and equipment, net consisted of the following: December 31, June 30, 2025 2025 Property and equipment $ 183,821 $ 175,264 Less: accumulated depreciation (158,500 ) (149,160 ) Property and equipment, net $ 25,321 $ 26,104 Depreciation expense was $9,340 and $12,174 for the six months ended December 31, 2025, and 2024, respectively, and is classified in general and administrative expenses in the Statements of Operation s. Depreciation expense was $3,700 and $6,596 for the three months ended December 31, 2025, and 2024, respectively, and is classified in general and administrative expenses in the Statements of Operation s. 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. 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, 2025, the outstanding principal and interest due to William Mobley was $0. On May 3, 2024, the Company signed a convertible promissory note with Nextelligence, a related party that is majority owned and controlled by William Mobley, the Company’s CEO, in the principal amount of $1,000,000. The note accrues interest at 12% per annum and is 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 under ASC 470-20 as a debt extinguishment with no gain or loss recognized. The principal of $3,865,555 and accrued interest of $210,496, total of $4,076,000 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 the Company’s CEO, provided aggregate funding to the Company 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. Between the date of the executed agreement and December 31, 2025, the Company has received an additional $1,110,000. As of December 31, 2025, the total outstanding principal is $2,425,552 and the accrued interest balance is $21,144 for a total outstanding balance of $2,446,696. 12 Note 6 – Stockholders’ Deficit and Mezzanine Equity Preferred Stock The Preferred Stock is divided into series, with the first series designated “Series A Preferred Stock” and consisting of 4,000,000 shares (the “Series A Shares”). Our board of directors may designate the remaining 1,000,000 authorized but unissued shares of Preferred Stock with such rights and privileges as the board of directors may determine without notice to our shareholders and without shareholder approval. As of December 31, 2025, and June 30, 2025, there were 4,000,000 shares of Series A Preferred Stock issued and outstanding, respectively. A summary of the powers, preferences, rights, privileges, restrictions, and other matters relating to the Series A Shares are as follows: Dividends . In any fiscal year Series A Shares are outstanding where the Company has revenue of more than $50,000,000, the holder of the Series A Shares (the “Series A Shareholder”) shall be entitled to receive an annual cash dividend equal to ten percent of any revenue above $50,000,000 (the “Annual Dividend Payment”). Subject to meeting the above criteria for such fiscal year, Annual Dividend Payments shall continue until such time as the aggregate amount of all Annual Dividend Payments is equal to the lesser of: (i) $160,000,000; or (ii) the product of the then number of outstanding shares of Series A Preferred Stock and $40 (as may be adjusted for any subdivisions or combinations) (the “Maximum Dividend Payment”). Notwithstanding the above, such dividends shall be payable only to the extent permitted by law out of assets legally available therefore. No dividends shall be paid on any Common Stock during any fiscal year of the Company until the Annual Dividend Payment on the Series A Shares shall have been paid or declared and set apart during that fiscal year. Liquidation Preference . In the event of any liquidation, dissolution or winding up of the Company, either voluntary or involuntary, the Series A Shareholder is entitled to receive, prior and in preference to any distribution of any of the assets of the Company to the holders of Common Stock, or other junior equity security by reason of their ownership thereof, an amount per Series A Share equal to $30 (as may be adjusted for any subdivisions or combinations) (the “Liquidation Amount”). If upon the occurrence of such event, the assets and funds to be distributed to the Series A Shareholder are insufficient to permit the payment to the Series A Holder of the full preferential Liquidation Amount, then the entire assets and funds of the Company legally available for distribution shall be distributed to the Series A Shareholder. After the distribution described above has been paid, the remaining assets of the Company available for distribution to shareholders shall be distributed among the holders of Common Stock pro rata based on the number of shares of Common Stock held by them. Any change in ownership or fundamental change shall be treated as a liquidation, dissolution or winding up of the Company, and shall entitle the Series A Shareholder and the holders of Common Stock to receive at the closing cash, securities or other property as specified above. Whenever the distribution provided for in this section shall be payable in securities or other property other than cash, the value of such distribution shall be the fair market value of such securities or other property as determined in good faith by the board of directors. Redemption by the Company . The Company has the right at any time (the “Call Right”), but not the obligation, to cause the Series A Shareholder to sell some or all of the Series A Shares to the Company at the purchase price per share of $30 (as may be adjusted for any subdivisions or combinations) (the “Call Purchase Price”). If the Company desires to purchase the Series A Shares, the Company shall deliver to the Series A Shareholder a written notice (the “Call Exercise Notice”) exercising the Call Right. The closing of any sale of Series A Shares shall take place on a date (the “Call Right Closing Date”) no later than ten days following receipt by the Series A Shareholder of the Call Exercise Notice. As mentioned above, the redemption feature was removed on September 26, 2024, as part of the amendment to the Company’s articles of incorporation. Voting Rights . Except as otherwise required by law, the Series A Shares have no voting rights or powers on any matter presented to the shareholders of the Company for their action or consideration at any meeting of shareholders of the Company (or by written consent of shareholders in lieu of a meeting). Conversion Rights . Except as otherwise required by law, the Series A Shares have no conversion rights or powers to convert into any other capital stock or security of the Company. 13 Transfers . Except as otherwise required by law, the Series A Shareholder has no rights or powers to enter into and/or consummate any sale, assignment, transfer, conveyance, hypothecation or other transfer or disposition of one or more of the Series A Shares or any legal or beneficial interest in the Series A Shares, whether or not for value and whether voluntary or involuntary, without the prior written consent of the Company, in its sole discretion. The Board of Directors may designate the authorized but unissued shares of the Preferred Stock with such rights and privileges as the board of directors may determine. As such, our board of directors may issue 5,000,000 preferred shares and designate the conversion, voting and other rights and preferences without notice to our shareholders and without shareholder approval. Common Stock As of December 31, 2025, and June 30, 2025, the Company is authorized to issue 320,000,000 shares of Class A common stock and 30,000,000 shares of Class B common stock at a par value of $0.0001 per share. As of December 31, 2025, and June 30, 2025, the Company had shares of Class A common stock outstanding of 26,931,820 and 25,947,813, respectively. As of December 31, 2025, and June 30, 2025, the Company had shares of Class B common stock outstanding of 13,925,640 and 13,937,640, respectively. In general, except with regards to voting rights described below, shares of Class A Common Stock and Class B Common Stock have the same rights and privileges and rank equally, share ratably and are identical in all respects as to all matters. Without limiting the generality of the foregoing: (a) in the event of a merger, consolidation or other business combination requiring the approval of the holders of the Company’s capital stock entitled to vote thereon (whether or not the Company is the surviving entity), the holders of Class A Common Stock shall have the right to receive, or the right to elect to receive, the same form of consideration, if any, as the holders of Class B Common Stock and the holders of Class A Common Stock shall have the right to receive, or the right to elect to receive, at least the same amount of consideration, if any, on a per share basis as the holders of Class B Common Stock; and (b) in the event of (i) any tender or exchange offer to acquire any shares of Common Stock by any third party pursuant to an agreement to which the Company is a party or (ii) any tender or exchange offer by the Company to acquire any shares of Common Stock, pursuant to the terms of the applicable tender or exchange offer, the holders of Class A Common Stock shall have the right to receive, or the right to elect to receive, the same form of consideration as the holders of Class B Common Stock and the holders of Class A Common Stock shall have the right to receive, or the right to elect to receive, at least the same amount of consideration on a per share basis as the holders of Class B Common Stock. With regards to voting rights, the holders of shares of Class A Common Stock and Class B Common Stock vote together as one class on all matters (including the election of directors) submitted to a vote or for the consent of the shareholders of the Company. However, each holder of shares of Class A Common Stock shall be entitled to one (1) vote for each share of Class A Common Stock held as of the applicable date on any matter that is submitted to a vote or for the consent of the shareholders of the Company, and the holder of shares of Class B Common Stock shall be entitled to fifteen (15) votes for each share of Class B Common Stock held as of the applicable date on any matter that is submitted to a vote or for the consent of the shareholders of the Company. Shares of Class B common stock may only be issued to and held by William A. Mobley, Jr., personally or jointly with his spouse, and certain permitted entities owned or controlled by Mr. Mobley, or for which he has sole disposition and voting power over shares held by such entities, other than Nextelligence (each, a “Class B Holder”). Any issuance by us of Class B shares to anyone other than a Class B Holder is immediately null and void, and of no legal validity, force, or effect. Unless a Class B Holder requests to receive Class A shares, any issuance of common stock by us to a Class B Holder will be shares of Class B common stock. If a Class B Holder purchases or otherwise acquires or receives any shares of Class A common stock from a person or entity other than us, upon receipt thereof such shares of Class A common stock shall automatically be reclassified as and become an equal number of shares of Class B common stock. As of December 31, 2025, and June 30, 2025, William A Mobley, Jr. the Company CEO and Majority owner has 13,925,640 and 13,937,640 Class B shares outstanding, respectively, which is 100% of the Class B shares outstanding as of both reporting periods. In August 2025, the Company CEO and majority owner converted 12,000 shares of Class B common stock to 12,000 shares of Class A common stock and subsequently transferred the 12,000 shares of Class A common stock to third parties. 14 On December 8, 2025, the Company entered into an Equity Purchase Agreement (EPA) with Amiens Technology Investments, LLC (the “Investor”), pursuant to which the Company may, from time to time after the direct listing, at its sole discretion, issue and sell up to $50,000,000 in aggregate gross purchase price of newly issued shares of the Company’s Class A common stock, par value $0.0001 per share. Advances under the agreement are conditioned on the Company’s compliance with certain customary conditions, such as timely filing of required reports and maintaining its listing on a national securities exchange. Shares issued pursuant to an advance under the agreement are priced at 95% of the VWAP (volume-weighted average price) for the ten-trading day period immediately following the advance request. The shares will be issued in reliance upon Section 4(a)(2) of the Securities Act of 1933, as amended (which provides an exemption from registration for private offerings), or other applicable exemptions from registration. The Company is required to maintain a registration statement pursuant to which the Investor may resell the shares purchased. The Agreement limits the Investor’s ownership to 4.99% of the then outstanding voting power or issued Class A common stock. The Investor may, upon written notice to the Company, increase or decrease the ownership percentage up to 9.99%. As consideration for the Investor’s commitment to purchase shares of the Company’s Class A common stock in accordance with the EPA, the Company agreed to pay a commitment fee in shares of the Company’s Class A common stock in an amount equal to $750,000 divided by the lower of (i) $10.00; and (ii) the lowest daily VWAP (as defined in the EPA) of the Company’s Class A common stock during the five trading days immediately following the date the Company gives the Investor notice of the Company’s intent to sell them Class A common stock under the EPA. As of December 31, 2025, no issuances have taken place under this Equity Purchase Agreement. Class A common stock Issuance During the three months ended December 31, 2025, the Company received deposits from three third party investors in the amount of $2,700,000 for 337,500 Class A common shares to be issued pursuant to the securities purchase agreement. These common shares were issued in July 2025. On September 25, 2025, the Company issued 125,000 shares of its Class A common stock at $8 per share for a total value of $1,000,000 to Maxim Partners LLC (“Maxim”) in connection with its affiliate’s engagement as a financial advisor to assist with certain aspects of the Company’s direct listing process. The $1,000,000 issuance for services performed was deferred and resulted in a net effect of $0 on the Stockholder’s deficit as of December 31, 2025. The Company recorded an increase in common stock for the par value of the shares of $13 and reduced Additional Paid in Capital for the same amount. The advisory services contracted to be provided by Maxim’s affiliate include strategic guidance on listing objectives, structural planning, and investor communication strategy, with the penultimate service being the official direct listing. As the direct listing has not yet happened, Maxim has not yet performed the contracted services. As a result, the Company deferred the $1,000,000 compensation until the direct listing process is completed, after which the $1,000,000 will be expensed as a professional service fee. Warrants The Company from time-to-time issues warrants in conjunction with equity financing and to employees and non-employees for services. During the year ended June 30, 2024, the Company issued warrants to purchase an aggregate of 100,000 shares of Class A common stock of the Company to Chris Savine, the Company’s Chief Operating Office for services in conjunction with his employment agreement. The warrants vest over a twelve-month term and have an exercise price of $2.00 per share. As a result, the Company recognized stock-based compensation of $144,262 for the years ended June 30, 2025. Under the Black-Scholes-Merton option pricing model the fair value of the warrants at time of issuance was approximately $572,343, the Company will amortize the fair value over 12 months as compensation and benefits expense in the accompanying statement of operations. The significant inputs were as follows: Class A common stock fair value of $7.32, volatility of 61.67%, term of 3 years and risk-free rate of 4.66%. During the year ended June 30, 2025, the Company amended Mr. Savine’s employment agreement on November 15, 2024, to terminate the warrants in consideration for a cash bonus that is contingent upon a Liquidity Event as defined in Note 7. Per ASC 718-20-35-7, the termination of the warrants was treated as a cancellation and all previously unrecognized compensation cost of $352,814 was recognized on November 15, 2024, the date of cancellation. On May 1, 2023, the Company issued warrants to Gary Engel, the Company’s Chief Marketing Officer, to purchase 12,500 shares of our Class A common stock, exercisable at $6.00 per share, issued in connection with entering into an employment agreement, effective May 1, 2023. The warrant vests ratably over 12 months and may be exercised in whole or in part at any time or from time to time from the vesting date up to and including May 1, 2026. Under the Black-Scholes-Merton option pricing model the fair value of the warrants at time of issuance was approximately $7,666. The Company will amortize the fair value over 12 months as compensation and benefits expense in the accompanying statement of operations. The significant inputs were as follows: Class A common stock fair value of $1.80, volatility of 92.1%, term of 3 years and risk-free rate of 3.85%. 15 The following is a summary of outstanding stock warrants as of the six months ended December 31, 2025, and June 30, 2025: Number of Shares Weighted Average Shares Weighted Average Remaining Life (years) Intrinsic Value Warrants outstanding as of June 30, 2024 $ 8,156,087 $ 4.72 $ 1.7 $ 26,716,879 Warrants exercisable as of June 30, 2024 8,069,238 $ 4.75 $ 1.7 $ 26,195,785 Issued (100,000 ) - - - Expired and forfeited - - - - Exercised - - - - Warrants outstanding as of June 30, 2025 $ 8,056,087 $ 4.76 $ 0.7 $ 26,116,879 Warrants exercisable as of June 30, 2025 $ 8,056,087 $ 4.76 $ 0.7 $ 26,116,879 Issued - - - Expired and forfeited - - - Exercised - - - Warrants outstanding as of December 31, 2025 $ 8,056,087 $ 4.76 $ 0.2 $ 26,116,879 Warrants exercisable as of December 31, 2025 $ 8,056,087 $ 4.76 $ 0.2 $ 26,116,879 Exercise Price ($) Warrants outstanding as of December 31, 2025 Warrants outstanding as of June 30, 2025 $ 0.25 137,017 137,017 $ 0.60 675,000 675,000 $ 1.75 2,458,446 2,458,446 $ 3.00 4,718,125 4,718,125 $ 4.00 67,500 67,500 8,056,087 8,056,087 Stock Based Compensation - Stock Options Effective June 25, 2021, the Board of Directors of FreeCast Inc. adopted the 2021 Equity Incentive Plan, (the “Incentive Plan”). The plan provides for both incentive stock options and non-qualified stock options to officers, directors, employees, and consultants of the Company. The plan authorized 3,000,000 awards to be granted under the Incentive Plan of which 2,073,627 remain available to be granted as of December 31, 2025. The Incentive Plan expires on June 25, 2031. The Company recognizes stock-based compensation expense from stock-based payments using the grant date fair-value, including for stock options. The fair value of options awarded to employees is measured on the grant date using the Black-Scholes option-pricing model and is recognized as an expense over the requisite service period on a straight-line basis. All stock options are exercisable into class A common stock except for the 125,004 options granted to the Company CEO, William Mobley, which are exercisable into class B common stock. The following is a summary of outstanding stock options as of December 31, 2025, and June 30, 2025: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Life (years) Intrinsic Value Options outstanding as of June 30, 2025 $ 953,892 $ 4.48 $ 6.53 $ 3,353,616 Options exercisable as of June 30, 2025 $ 860,083 $ 4.11 $ 6.64 $ - Issued - - - - Canceled (27,519 ) (0.07 ) (0.32 ) - Expired - - - - Options outstanding as of December 31, 2025 $ 926,373 $ 4.41 $ 6.21 $ 3,328,272 Options exercisable as of December 31, 2025 $ 883,782 $ 4.17 $ 5.71 $ - 16 The following are the vesting terms associated with those shares: Tranche Shares Granted Vesting Method Vesting Terms Tranche 1 784,236 Graded Vesting 1/6 th vested on July 1, 2021, remainder vests over the next 18 th months using the graded vesting method, until the option is 100% vested. Tranche 2 139,377 Straight-line 1/24 th will vest on a straight-line monthly basis until the option is 100% vested. Tranche 3 2,760 Graded Vesting 1/6 th vests on grant date, remainder vests over the next 30 months using the graded vesting method, until the option is 100% vested. Total 926,373 During the six months ended December 31, 2025, and 2024, the Company recognized stock-based compensation from options of $175,926 and $737,798, respectively. During the three months ended December 31, 2025, and 2024, the Company recognized stock-based compensation from options of $87,504 and $488,364, respectively. Additionally, no options were exercised during the three months ended December 31, 2025. Accordingly, there were no cashflow effects related to stock option exercises. As of December 31, 2025, there was $196,498 in unrecognized stock-based compensation related to unvested restricted stock agreements, net of estimated forfeitures. Note 7 – Commitments and Contingencies In October 2018, the Company entered into a two-year sublease agreement for approximately 3,360 square feet of office space in Orlando, Florida. In August 2020, the Company provided $117,336 in security deposit and entered into a 39-month lease agreement which allowed the Company to expand its office space to 10,080 square feet. On October 31, 2023, we entered into a First Amendment that extended our lease until October 31, 2028 (see Note 8). On November 15, 2024, Chris Savine, the Company Chief Operating Officer employment agreement was amended whereby Mr. Savine is eligible to receive a performance bonus payable in cash only in an amount equal to the fair market value of: (i) 112,500 shares; and (ii) 100,000 warrants for Class A common stock exercised on a cashless basis with an exercise price of $2.00 per share. To be eligible for the bonus, Mr. Savine must be continuously employed during the term of the agreement, and the Company must have successfully completed a liquidity event, which may occur after the employment term. A Liquidity Event is defined in the Savine Employment Agreement as either: (i) (a) a merger, consolidation, reorganization, or business combination; or (b) a sale or other disposition of all or substantially all of our assets in any single transaction or series of related transactions; or (ii) (a) a primary offering of our Class A common stock by us to the general public through an effective registration statement filed with the SEC; (b) simultaneous listing of our Class A common stock on any established stock exchange if such common stock was not already listed at the time of such offering; and (c) we receive net proceeds from the offering of not less than $20 million. If Mr. Savine becomes eligible for the bonus, it will be paid to him no later than five days after the later of: (a) the end of the initial term and (b) a liquidity event. As of December 31, 2025, no liability was recorded within the balance sheets for contingent consideration as the contingency is not probable such that an amount has not been estimated. Note 8 – Leases The Company currently has one active lease, an office lease, under a non-cancellable operating lease with initial terms typically ranging from 1 to 3 years but previously extended the lease for an additional 5 years. At contract inception, the Company reviews the facts and circumstances of the arrangement to determine if the contract is or contains a lease. The Company follows the guidance in Topic 842 to evaluate whether the contract has an identified asset; if the Company has the right to obtain substantially all economic benefits from the asset; and if the Company has the right to direct use of the underlying asset. When determining if a contract has an identified asset, the Company considers both explicit and implicit assets, and whether the supplier has the right to substitute the asset. When determining if the Company has the right to direct the use of an underlying asset, the Company considers if they have the right to direct how and for what purpose the asset is used throughout the period of use and if they control the decision-making right over the asset. The Company’s lease terms may include options to extend or terminate the lease. The Company exercises judgment to determine the term of those leases when extension or termination options are present and include such options in the calculation of the lease term when it is reasonably certain that it will exercise those options. 17 The Company has elected to include both lease and non-lease components in the determination of lease payments. Payments made to a lessor for items such as taxes, insurance, common area maintenance, or other costs commonly referred to as executory costs, are also included in lease payments if they are fixed. The fixed portion of these payments are included in the calculation of the lease liability, while any variable portion would be recognized as variable lease expenses, when incurred. Variable payments made to third parties for these, or similar costs, such as utilities, are not included in the calculation of lease payments. At commencement, lease-related assets and liabilities are measured at the present value of future lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company exercises judgment in determining the incremental borrowing rate based on the information available at when the lease commences to measure the present value of future payments. Operating lease expense is recognized on a straight-line basis over the lease term. Finance lease cost includes amortization, which is recognized on a straight-line basis over the expected life of the leased asset, and interest expense, which is recognized following an effective interest rate method. Operating leases are included in other assets, current operating lease obligations, and operating lease obligations (less current portion) on the Company’s balance sheet. Finance leases are included in financing lease, right-of-use assets and current and long-term portion of finance lease obligations on the Company’s balance sheet. Short-term leases with an initial term of 12 months or less are not presented on the balance sheet with expense recognized as incurred. The following table presents lease assets and liabilities and their balance sheet classification: Classification December 31, 2025 June 30, 2025 Operating Leases: Right-of-use Asset $ 317,523 $ 362,968 Current portion of operating lease obligation $ 100,159 $ 91,220 Operating lease obligation, less current portion $ 236,717 $ 288,836 Finance Leases: Right-of-use Asset $ - $ - Current portion of financing lease obligation $ - $ - Financing lease obligation, less current portion $ - $ - The components of lease expense for the three months ended December 31, 2025, and 2024, are as follows: For the Three Months Ended December 31, Classification 2025 2024 Operating lease cost $ 32,280 $ 33,280 Finance Lease: Amortization of lease assets - 138 Interest on lease liabilities - (2 ) Total finance lease cost $ - $ 136 The components of lease expense for the six months ended December 31, 2025, and 2024, are as follows: For the Six Months Ended December 31, Classification 2025 2024 Operating lease cost $ 66,559 $ 66,539 Finance Lease: Amortization of lease assets - 546 Interest on lease liabilities - (14 ) Total finance lease cost $ - $ 532 18 Supplemental disclosures of cash flow information related to leases for the three months ended December 31, 2025, and 2024, were as follows: For the Three Months Ended December 31, 2025 2024 Cash paid for operating lease liabilities $ 32,674 $ 31,118 Supplemental disclosures of cash flow information related to leases for the six months ended December 31, 2025, and 2024, were as follows: For the Six Months Ended December 31, 2025 2024 Cash paid for operating lease liabilities $ 64,294 $ 61,232 The weighted average lease term and discount rates are as follows: December 31, 2025 Operating Leases: Weighted average remaining lease term (years) 2.84 Weighted average discount rate 12 % Future payments due under leases reconciled to lease liabilities as follows: Operating Lease For the Six Months Ending December 31: 2025 - 2026 133,910 2027 140,602 2028 122,010 Total undiscounted lease payments 396,522 Present value discount, less interest (59,646 ) Lease Liabilities $ 336,876 Note 9 – Related Parties All related party transactions are reviewed and approved by the Company’s Board of Directors or Audit Committee to ensure they are conducted in the best interest of shareholders. On June 30, 2011, we entered into a Technology License and Development Agreement, which was amended and restated on October 19, 2012, amended on July 1, 2013 and amended and restated a second time on July 31, 2014 and further revised to terminate all payments by us pursuant to the agreement, effective June 30, 2016, with Nextelligence, which is majority owned and controlled by William A. Mobley, Jr. The Technology Agreement provides us with an exclusive license for certain technology from Nextelligence and for Nextelligence to provide all further development, improvement, modification, maintenance, management and enhancement services related to such technology. Nextelligence is our largest shareholder with more than 40% of our outstanding Class A common stock prior to the listing of our Class A common stock on Nasdaq. In connection with the Technology Agreement, we issued 10,002,000 shares of our Class A common stock to Nextelligence. The Technology Agreement expires on June 30, 2054, unless it’s terminated earlier based on termination events as defined in the Technology Agreement. 19 On May 3, 2024, the Company signed a convertible promissory note with Nextelligence in the principal amount of $1,000,000. The note accrues interest at 12% per annum and is 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 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 the Company’s CEO, provided aggregate funding to the Company 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. Between the date of the executed agreement and December 31, 2025, the Company has received an additional $1,110,000. As of December 31, 2025, the total outstanding principal is $2,425,552 and the accrued interest balance is $21,144 for a total outstanding balance of $2,446,696. On May 16, 2024, in conjunction with the Reverse Split and Amendment, Nextelligence, Inc. agreed to forfeit and cancel 20,000,000 shares of Class A common stock in exchange for the issuance of 4,000,000 shares of Series A preferred stock (see Note 6). On July 29, 2024, the Company’s largest shareholder and related party Nextelligence distributed 9,623,543 shares of Class A common stock to shareholders of Nextelligence. The Company CEO and majority owner beneficially received 7,782,970 of the shares distributed, which upon receipt, in accordance with the Company’s articles of incorporation, were automatically reclassified as Class B common stock. The Company entered into a Data Services Agreement with Nextelligence, which is effective as of July 1, 2025. Under the agreement, the Company has access to and use of a proprietary marketing database and related analytical services Nextelligence either owns or licenses from Audience Acuity LLC, including customer profiling, audience targeting, and CRM support. The agreement imposes certain restrictions on our use of the data, including prohibitions on resale, reverse engineering and use in certain industries and applications. The Company paid a one-time fee of $120,000 and is required to pay a monthly fee of $10,000 for continued access to the data and services. The fees related to this contract are being recorded as General and administrative expenses. The agreement has an initial three-year term, automatically renewing for successive one-year periods unless terminated in writing by either party not less than 30 days before the end of the initial term or subsequent term extension. On the December 31, 2025 condensed balance sheet, $40,000 of the unamortized license fee is classified as prepaid assets- related party within current assets, while the remaining non-current portion of $60,000 is presented as prepaid assets, net of the current portion – related party. Related Party Revenue In June 2023, the Company entered into verbal arrangements with two related party entities, Test Drive Live Inc. and Celebrity Cigars, Inc., which are not under common ownership control. William A. Mobley, Jr. serves as the President of both companies and is the sole director for Celebrity Cigars. Mr. Mobley’s son, Sean Mobley, is part of the management team of Celebrity Cigars. The Company provided FAST channel buildout services relating to the development and buildout of their respective channels. The Company also provides the platform on an ongoing basis for each company to stream their content. The Company charges each company a monthly fee based on a 15% or 30% markup of the Company’s cost of production, depending on the level of supervision required to provide the Company’s services, which includes labor, rent, etc. The Company also charges for any out-of-pocket costs, which vary from month to month. The Company is currently negotiating with each company on a potential advertising revenue sharing arrangement. The Company recognized related party revenue of $101,047 ($89,047 for FAST channel buildouts and $12,000 for channel streaming) for the six months December 31, 2025. The Company has accounts receivable – related party of $13,625 for the FAST revenue services provided and $700 from Nextelligence, Inc. for the reimbursement of supplies and rent provided during the six months ended December 31, 2025. 20 Note 10 – Disaggregation of Revenues Net sales disaggregated by significant products and services for the three months ended December 31, 2025, and 2024, were as follows: For the three months ended December 31, 2025 2024 Membership (1) $ 15,687 $ 39,063 FAST Revenue – related parties (2) 46,381 62,345 Ad Revenue (3) 22 50,132 Other Revenue - 5 Total $ 62,090 $ 151,545 Net sales disaggregated by significant products and services for the six months ended December 31, 2025, and 2024, were as follows: For the six months ended December 31, 2025 2024 Membership (1) $ 37,807 $ 77,191 FAST Revenue – related parties (2) 101,047 141,484 Ad Revenue (3) 119,036 50,132 Other Revenue 60 1,145 Total $ 257,950 $ 269,952 (1) Membership sales refer to customers purchasing premium content through our SmartGuide for varying fees and recognized on a gross basis over the service period determined. (2) We provide end-to-end software solutions for development of FAST (Free Ad-Supported TV) channels to customers such as content creation, production, video studio rental, etc. to aid in the creation of content for their channels and a platform fee for distributing the channel. Revenue is recognized at the point in time the services are performed for the development of FAST channels. We charge a monthly platform fee for distributing the FAST channel on our platform. We recognized related party revenue of $46,381 and $101,047 ($89,047 for FAST channel buildouts and $12,000 for channel streaming) for the three and six months ended December 31, 2025. (3) During the period from July 1, 2025, through December 31, 2025, we recognized $119,036 of ad revenue from the buying and selling of advertising space on other content platform providers. Of this amount, $125,000 was recognized as Ad Agency Revenue under the Launch That Experimental Media Plan Agreement, representing revenue from the provision of discovery, development, and test media distribution services for a client campaign. The remaining $5,964 was related to discounts and costs for Arbitrage Ad Revenue from the buying and selling of advertising space via the FreeCast Ad Platform. Note 11 – Subsequent Events The Company evaluated subsequent events through March 27, 2026, the date the financial statements were issued, and determined that except for the following subsequent events, there have been no additional subsequent events that would require recognition in the financial statements or disclosure in the notes to the financial statements other than the following: Between December 31, 2025, and March 27, 2026, the Company has received an additional $2,263,500 in advances on the Nextelligence revolving convertible note payable. As of March 27, 2026, the total outstanding principal is $4,689,052 and the accrued interest balance is $120,546 for a total outstanding balance of $4,809,598. 21 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes thereto and other financial information appearing elsewhere in this Report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this prospectus, particularly in the section titled “Risk Factors.” In this Report, unless otherwise stated or the context otherwise requires, references to “FreeCast®,” “Company,” “we,” “us” and “our” or similar references mean FreeCast, Inc. Overview We currently operate exclusively in the U.S., but see opportunities for expansion into international markets, by signing licensing agreements and collaborating with international Consumer Direct Platforms (CDPs). However, we can only take advantage of these opportunities if we have sufficient capital to do so, are able to recruit the necessary staff, and are able to expand our current infrastructure. We may also face additional challenges from new competitors that may be able to launch new businesses at relatively low cost, with consumers easily being able to shift spending from one provider to another. In order to combat this, we must continue to deliver a product that is more advanced than that of competitors. Primarily as a result of our shift to a free registration subscription service, we have been able to increase the number of subscribers during our most recent 12-month period. Our subscriber numbers have increased from 925,270 on December 31, 2024, to 1,006,203 on December 31, 2025. Our revenue excluding Free Ad-Supported TV (FAST) Revenue (FAST Revenue was $101,047 and $141,484 for the six months ended December 31, 2025, and 2024, respectively) and Ad Revenue (Ad Revenue was $119,036 and $50,132 for the six months ended December 31, 2025, and 2024, respectively) per subscriber has decreased from $0.08 for the six months ending December 31, 2024, compared to $0.04 for the six months ending December 31, 2025. Our revenue excluding FAST Revenue (FAST Revenue was $46,381 & $62,345 for the three months ended December 31, 2025, and 2024, respectively) and Ad Revenue (Ad Revenue was $22 & $50,132 for the three months ended December 31, 2025, and 2024, respectively) per subscriber has decreased from $0.04 for the three months ending December 31, 2024, compared to $0.02 for the three months ending December 31, 2025. As of December 31, 2025, we had a cash balance of $433,363 and a working capital deficit of $3,839,068. We plan to raise additional equity financing as well, without which we will not be able to meet our obligations as they become due for the next 12 months. However, we cannot provide any assurance that additional equity financing will be available on terms that are acceptable to us, or at all. Components of our Operating Results Revenue Subscription (Membership) Revenue In light of shifting consumer behaviors and constraints on big-box retail sales (especially during the pandemic), we refined our business model in 2022 to focus on B2B2C distribution. This approach leverages partnerships with multi-dwelling unit operators, hospitality providers, broadband carriers, and device manufacturers, each channel granting us immediate, large-scale user access. We believe that aligning with enterprise-level partners reduces our direct retail marketing costs, stabilizes recurring revenues, and extends the reach of our aggregator platform to tens of thousands of new users at once. As a result, we no longer generate subscription revenue through renewal sales of Rabbit TV and Rabbit TV Plus, or through Select TV and Streaming TV Kits, which operated as the successor products to Rabbit TV and Rabbit TV Plus. In October 2022, our SelectTV.com paid subscription service and packaged SelectTV Streaming TV Kits were discontinued. We rebranded to the corporate namesake FreeCast.com and relaunched our SmartGuide as a free registration subscription service. SmartGuide is our internet distributed streaming media guide that searches and aggregates media content on the web and facilitates access to our customers through Wi-Fi-enabled devices that support streaming video. 22 We do, however, sell monthly subscriptions for premium content purchased through our SmartGuide for varying fees for different content. Revenue from such premium subscription fees is recognized on a gross basis over the service period as we are deemed to be the principal in the relationship with the end user. We control the premium content before transferring it to the end user and have latitude in establishing pricing. We both retransmit and “ingest” and distribute this content. Subscription revenue is derived from online sales through search engine optimization, search engine marketing, various marketing advertising services, the utilization of resellers in the form of publishers that promote upcoming retail promotions and packages, as well as direct sales to subscribers of our Value Channels subscription service. Value Channels subscription contains 17 cable channels and sells on a monthly subscription or annual fee. Value Channels is integrated into the initial FreeCast.com free registration and then offered as an upgrade. Both FreeCast.com (free registration) and Value Channels are available in various streaming smart TV models (Google TV’s, Amazon Fire TV’s, LG, Samsung, TCL, Sony and others), plus Streaming Devices (Amazon Fire, Google ChromeCast, Apple TV), PC’s/Laptops and mobile apps for Android and iOS devices. Subscription revenue is recognized ratably on a straight-line basis over the duration of the subscription period, generally ranging from one month to five years. If the subscriber renews early, then the expiration date is extended by the renewal period, and the additional subscription fee is deferred and amortized over the additional months purchased by the subscriber. We no longer offer SelectTV lifetime subscriptions, which were initially deferred and recognized over a five-year period. All subscription fees are collected at the time of purchase. FAST (Free Ad-Supported TV) We provide FAST channel buildouts that include post-production editing, motion graphics, channel assembly and content acquisitions. We charge the customers based on time incurred for the services plus a reasonable margin in addition to any additional out of pocket cost incurred that is charged at cost to us. In addition, we split the advertising revenue. Revenue is recognized when services are performed. We charge a monthly platform fee for distributing the FAST channel on its platform. Revenue is recognized at the point in time when the content is available on the digital platform. In June 2023, we entered into verbal arrangements with two related party entities, Test Drive Live Inc. and Celebrity Cigars, Inc. William A. Mobley, Jr. serves as the President of both companies and is the sole director for Celebrity Cigars. Mr. Mobley’s son, Sean Mobley, is part of the management team of Celebrity Cigars. We provided FAST channel buildout services relating to the development and buildout of their respective channels. We also provide the platform on an ongoing basis for each company to stream their content. We charge each company a monthly fee based on a 15% or 30% markup of our cost of production, depending on the level of supervision required to provide our services, which include labor, rent, etc. We also charge for any out-of-pocket costs, which vary from month-to-month. We are currently negotiating with each company on a potential advertising revenue-sharing arrangement. Ad Platform Revenue We are an agent in transactions on our Ad Exchange platforms. We act as an intermediary between DSPs and non-owned and operated publishers by providing access to a platform that allows both parties to transact in the buying and selling of ad inventory. The transaction price is determined through a real-time auction, and we have no pricing discretion or obligation related to the fulfillment of the advertising delivery. We generally invoice buyers at the end of each month for the full purchase price of ad impressions monetized in that month. Accounts receivables are recorded at the amount of gross billings for the amounts we are responsible for collecting, and accounts payable are recorded at the net amount payable to suppliers. Accordingly, both accounts receivable and accounts payable appear large in relation to revenue reported on a net basis. 23 Ad Agency Revenue (Launch That and Similar Contracts) We earn revenue from direct client service contracts for marketing and campaign execution, such as the Launch That agreement. These contracts typically involve two distinct phases: ● Phase 1: Discovery and Development Services (data research, audience analysis, creative development). Revenue is recognized over time using an input method based on the proportion of costs incurred relative to total estimated costs for Phase 1. ● Phase 2: Test Media Distribution Services (media placement, outreach, KPI reporting). Revenue is recognized upon delivery of the performance evaluation report specified in the contract. Revenue from such contracts is presented separately from “Other Revenue” due to its materiality and distinct nature. Deferred Revenue – Ad Agency Revenue (Launch That and Similar Contracts) For the Ad Agency revenue stream, we provide demand partners with access to the FreeCast Ad Platform, enabling real-time bidding on advertising inventory. Revenue is recognized at a point in time when a transaction is completed—specifically, when a bid is won and the client’s purchase occurs through the platform. Amounts invoiced in advance of the completion of these transactions are recorded as deferred revenue and recognized as revenue when our performance obligation is satisfied. Other Revenue Other revenue includes product, licensing, and referral fee revenue. We generate revenue through free registrations of FreeCast.com by signing licensing agreements and collaborating with CDPs. A FreeCast.com license is freely provided per registered consumer marketed by distributors in exchange for a negotiated revenue sharing percentage with each distributor on a case-by-case basis. Affiliate commissions are earned and then shared from third-party advertisement service providers, pay-per-view movie or series distributors and live events tickets sales for such things as professional boxing or concerts. These license arrangements have not resulted in significant revenue to date. Beginning in 2024, in conjunction with the release of our new product FreeCast Home, we started recognizing contracts with customers from product sales requiring performance up to delivery, as well as contracts with customers that contain a subscription portion that causes revenue to be allocated or adjusted over time. Shipping and handling activities are performed before the customer obtains control of the goods and therefore represent a fulfillment activity rather than a promised service to the customer. Revenue and costs of sales are recognized when control of the products transfers to our customer, which generally occurs upon shipment from our facilities. For our physical product sales, our performance obligations are satisfied at that time. Referral fee revenue is generated through premium services which are also available on our platform, for an additional fee, to allow single or time-limited use of private, decrypted viewing of movies, sporting events, concerts or other types of events. Deferred Revenue Deferred revenue consists principally of both prepaid but unrecognized subscription revenue and advertising fees received or billed in advance of the delivery or completion of the delivery of services. We may pay sales incentives, in cash or by issuing equity instruments, to distributors of our subscriptions. Such sales incentives are not recognized as deferred revenue. Rather, sales incentives are recognized in current operations when issued, regardless of amounts in deferred revenue, which may have resulted from the distributor’s efforts. Deferred revenue consists primarily of subscriptions for multiple months purchased upfront and recognized ratably over the term of the subscription. Cost of Revenue Cost of revenue consists primarily of subscription costs and FAST streaming costs, such as third-party hosting costs, infrastructure costs and salaries and benefits related to employees for our customer support. We make payments to third-party ad servers in the period in which the advertising impressions are delivered, or click-through actions occur, and accordingly record this as a cost of revenue in the related period. Hosting costs consist of content streaming, maintaining our internet service and creating and serving advertisements through third-party ad servers. Cost of revenue also consists of FAST channel buildout costs such as the salaries and benefits related to employees, facility related expenses and information technology associated with supporting these buildouts. 24 Operating Expenses Compensation and Benefits Compensation and benefits consist primarily of employee-related costs, including salaries and benefits related to employees in finance, accounting, internal information technology and other administrative personnel and stock-based compensation. Sales and Marketing Sales and marketing consist primarily of employee-related costs, including salaries, commissions and benefits related to employees in sales, sales support and marketing departments. In addition, sales and marketing expenses include external sales and marketing expenses such as third-party marketing, TV Infomercials, branding, advertising, public relations expenses, commissions, facilities-related expenses, and infrastructure costs. General and Administrative General and administrative expenses include professional services costs for outside legal and accounting services, facilities-related expenses, travel costs, third party customer support, and credit card fees. Three and Six Months Ended December 31, 2025, Compared to Three and Six Months Ended December 31, 2024 Revenue Our primary sources of revenue are subscription revenue and FAST revenue. Additionally, we have several other revenue streams: product sales revenue, channel streaming, advertising revenue, and other revenue, which encompasses earnings from licensing and referral fees. Subscription revenue decreased by 60%, or $23,376, to $15,687, in the three months ended December 31, 2025, as compared to $39,063 for the three months ended December 31, 2024. Subscription revenue decreased by 51%, or $39,384, to $37,807, in the six months ended December 31, 2025, as compared to $77,191 for the six months ended December 31, 2024. The decrease in subscription revenue is primarily attributable to our shift to a free registration subscription service that is supported with advertising revenue. FAST revenue decreased by 26%, or $15,964, to $46,381, in the three months ended December 31, 2025, as compared to $62,345 for the three months ended December 31, 2024. FAST revenue decreased by 29%, or $40,437, to $101,047, in the six months ended December 31, 2025, as compared to $141,484 for the six months ended December 31, 2024. The decrease was primarily due to lower production activity and reduced related-party channel buildout services compared to the prior year. While we continued to provide platform distribution services, fewer new channel buildouts were completed in the six months ended December 31, 2025, compared to the six months ended December 31, 2024, resulting in lower FAST revenue. Ad revenue decreased by 99.96% or $50,110 to $22, in the three months ended December 31, 2025, as compared to $50,132 for the three months ended December 31, 2024. The decrease was related to the revenue from the “Launch That” contract being recognized in the previous quarter and having minimal demand in the current quarter. Ad revenue increased by 137% or $68,904 to $119,036, in the six months ended December 31, 2025, as compared to $50,132 for the six months ended December 31, 2024. The increase was related to the initial demand partners utilizing the FreeCast Ad platform beginning in October 2024. We are strategically reinvesting in our proprietary Platform-as-a-Service (PaaS) infrastructure and broader ecosystem to enhance long-term enterprise value and deepen monetization opportunities for both us and our partners. 25 Our recent decline in advertising revenue is transitional rather than structural, driven by the migration from Spring Serve/Magnite to our own proprietary, completed and recently launched in-house Zer0Gap Ads platform. The shift introduced temporary delivery inefficiencies, demand disruption and onboarding friction, resulting in short-term monetization gaps. As the platform integration stabilizes, revenue performance is expected to better reflect the underlying economics of a vertically integrated advertising model with early signs of recovery, as we have secured new commercial relationships with major media spenders such as Launch That, NHK and Del-Air. The connected television (CTV) advertising ecosystem led by demand-side platforms like The Trade Desk is under scrutiny for its lack of transparency and complex fee structures. Advertisers struggle to trace how much of their spending actually reaches publishers, with multiple intermediaries taking cuts along the programmatic supply chain. This opacity, combined with concerns about data quality and measurement consistency, has put pressure on traditional ad tech platforms to justify their value. As brands demand clearer attribution and more efficient media buying, the perceived inefficiencies of third-party platforms are becoming a growing point of friction. At the same time, major streaming platforms such as Roku, Netflix and Amazon are building and expanding their own first-party advertising ecosystems. By owning both the content distribution and ad inventory, these companies can offer advertisers more direct access to audiences, better data integration and improved transparency. This vertical integration reduces reliance on external intermediaries and allows streaming providers to capture a greater share of ad revenue while delivering more measurable outcomes for brands. In this shifting landscape, our Zer0Gap Ads strategy positions us to benefit long term by aligning with this broader industry trend. By creating and recently launching our own internal ad platform, we are able to directly serve advertising across our network of content partners while also enabling co-branded telecom and MDU partners to monetize their customer bases within the same ecosystem. This dual-sided approach enhances revenue potential, strengthens partner relationships and provides greater control over data and pricing. As transparency and efficiency become critical differentiators in CTV advertising, our integrated model could offer a more streamlined and scalable alternative to traditional programmatic platforms. Other revenue decreased by 100% or $5, to $0 in the three months ended December 31, 2025, as compared to $5 for the three months ended December 31, 2024. Other revenue decreased by 95% or $1,085, to $60 in the six months ended December 31, 2025, as compared to $1,145 for the six months ended December 31, 2024. Cost of Revenue Cost of revenue decreased by 46%, or $34,307, to $39,636 in the three months ended December 31, 2025, as compared to $73,943 for the three months ended December 31, 2024. Cost of revenue decreased by 48%, or $84,445, to $91,741 in the six months ended December 31, 2025, as compared to $176,186 for the six months ended December 31, 2024. The decrease in cost of revenue is primarily attributed to an inventory write-off during the prior period related to moving away from product sales. Operating Expenses Operating expenses decreased by 30%, or $1,192,674 to $2,772,302 in the three months ended December 31, 2025, as compared to $3,964,976 for the three months ended December 31, 2024. The change in operating expenses is attributed to a $767,018 decrease in general and administrative expenses and a decrease in compensation and benefits expense of $413,934. The decrease in compensation and benefits was primarily the result of a decrease to executive compensation. The decrease in general and administrative expenses was primarily the result of decreased website development and professional fees. Operating expenses decreased by 24%, or $1,768,357 to $5,723,644 in the six months ended December 31, 2025, as compared to $7,492,001 for the six months ended December 31, 2024. The change in operating expenses is attributed to a $1,196,809 decrease in general and administrative expenses and a decrease in compensation and benefits expense of $530,283. The decrease in compensation and benefits was primarily the result of a decrease to executive compensation. The decrease in general and administrative expenses was primarily the result of decreased website development and professional fees. Other (Expense ) Income Other expense was $34,134, for the three months ended December 31, 2025, as compared to other expense of $42,144 for the three months ended December 31, 2024. Other expense was $88,896, for the six months ended December 31, 2025, as compared to other expense of $91,088 for the six months ended December 31, 2024. The change was principally caused by an increase in interest expense of $7,457 and $1,365 for the three and six months, respectively. 26 Liquidity and Capital Resources Since inception, we have financed our operations from a combination of: ● issuance and sales of our Class A common stock; ● issuance of notes payable with related and non-related parties; ● issuance of convertible notes payable with related and non-related parties; ● borrowing under our revolving convertible notes payable with related party; ● cash advances from related parties; and ● cash generated from operations. We have experienced operating losses since our inception and had a total accumulated deficit of $200,881,532 as of December 31, 2025. We expect to incur additional costs and require additional capital as we continue to implement our expansion plan. During the six months ended December 31, 2025, and 2024, our cash used in operations was $5,232,881 and $6,663,663, respectively. Our primary short-term cash requirements are to fund working capital, lease obligations and short-term debt, including current maturities of long-term debt. Working capital requirements can vary significantly from period to period, particularly as a result of additional development expenses. Our ability to fund our cash needs will depend, in part, on our ability to generate cash in the future, which depends on future financial results. Our future results are subject to general economic, financial, competitive, legislative and regulatory factors that may be outside of our control. Our future access to, and the availability of credit on acceptable terms and conditions, is impacted by many factors, including capital market liquidity and overall economic conditions. Our financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. We have incurred recurring losses and as of December 31, 2025, had an accumulated deficit of $200,881,532. For the three months ended December 31, 2025, and 2024, we sustained a net loss of $2,783,982 and $3,929,518, respectively. For the six months ended December 31, 2025, and 2024, we sustained a net loss of $5,646,331 and $7,489,323, respectively. These factors, among others, raise substantial doubt about our ability to continue as a going concern for the next twelve months from the date these financial statements were issued. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that may be necessary should we be unable to continue as a going concern. Our continuation as a going concern is contingent upon our ability to obtain additional financing and to generate revenue and cash flow to meet our obligations on a timely basis. We will continue to seek to raise additional funding through debt or equity financing during the next twelve months. Management believes that actions presently being taken to obtain additional funding provide the opportunity for us to continue as a going concern. There is no guarantee we will be successful in achieving these objectives. We cannot be sure that future funding will be available to us on acceptable terms, or at all. Due to the often-volatile nature of the financial markets, equity and debt financing may be difficult to obtain. We may seek to raise any necessary additional capital through a combination of private or public equity offerings, debt financings, collaborations, strategic alliances, licensing arrangements and other marketing and distribution arrangements. To the extent that we raise additional capital through marketing and distribution arrangements or other collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights or future revenue streams on terms that may not be favorable to us. If we raise additional capital through private or public equity offerings, the ownership interest of our existing shareholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect our shareholders’ rights. If we raise additional capital through debt financing, we may be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. 27 Equity Line of Credit On December 8, 2025, we entered into an Equity Purchase Agreement (EPA) with Amiens Technology Investments, LLC (the “Investor”), pursuant to which the Investor has committed to purchase shares of our Class A common stock. Upon the terms and subject to the satisfaction of the conditions set forth in the EPA, we have the right, but not the obligation, to sell to the Investor, and the Investor is obligated to purchase, up to $50 million (the “Commitment Amount”) in shares of our Class A common stock. Such sales of Class A common stock by us, if any, are subject to certain limitations set forth in the EPA, and may occur from time to time, at our sole discretion, over a period of up to 36 months, commencing on the trading day immediately following the date of the Direct Listing (such period, the “Commitment Period”). The EPA is not necessary to meet the Nasdaq initial listing standards, and our ability to complete the Direct Listing and qualify for initial listing on Nasdaq does not depend on the availability of funds under the EPA. However, completion of the Direct Listing is a condition to our ability to sell shares under the EPA. We entered into the EPA to provide ourselves with a flexible source of potential liquidity following the commencement of public trading of our Class A common stock. The EPA is intended to provide flexibility to raise capital incrementally, if and when we determine it is appropriate to do so, based on market conditions, the trading price and liquidity of our Class A common stock, and our capital needs at the time. The EPA is not intended to serve as a committed financing for any specific purpose, and we have not made any determination to draw on the facility. We are not required to utilize the equity line facility, and the Investor does not have the right to require us to sell any shares under the EPA. We may elect not to draw on the EPA at all. During the Commitment Period, we may from time to time, by written notice delivered by us to the Investor (each, an “Advance Notice”), direct the Investor to purchase a number of shares of our Class A common stock up to the Maximum Advance Amount (as defined in the EPA) as set forth in the Advance Notice, subject to limitations and adjustments as set forth in the EPA. The prices at which such shares will be sold will be based on the applicable Market Price (as defined in the EPA). Unless earlier terminated as provided under the EPA, the term of the facility provided under the EPA terminates automatically on the earliest of (1) the first day of the month following the 36-month anniversary of the trading day immediately following the date of the Direct Listing; (2) the date on which the Investor shall have made payment of Advances pursuant to EPA for Class A common stock equal to the Commitment Amount; (3) the date on which we announce or publicly disclose a material restatement of our financial statements for two (2) or more fiscal quarters; (4) the date a Variable Rate Transaction (as defined in the EPA) has occurred; and (5) the date we have failed to comply with the covenants and obligations contained in Section 6.21 of the EPA regarding the Investor’s right during the Commitment Period to participate in up to 30% of any subsequent capital raising transactions by us during the Commitment Period, on the same terms, conditions and price provided for in such financing. Under the EPA, we will control the timing and amount of sales of our Class A common stock to the Investor, if any. The Investor has no right to require us to sell any shares of our Class A common stock to the Investor, but the Investor is obligated to make purchases as we direct, subject to certain conditions set forth in the EPA. Actual sales of shares of our Class A common stock to the Investor, if any, will depend on a variety of factors to be determined by us from time to time, including, among others, market conditions, the trading prices for the Class A common stock, and determinations by us as to the appropriate sources of funding for us and our operations. Consistent with the applicable Nasdaq listing rules, the aggregate number of shares of our Class A common stock that we may issue to the Investor under the EPA may not exceed 19.99% of the shares of Class A common stock issued and outstanding as of the execution date of the EPA (the “Exchange Cap”), unless we first obtain shareholder approval to issue shares of our Class A common stock in excess of the Exchange Cap in accordance with applicable Nasdaq listing rules. Additionally, we may not direct the Investor to purchase any shares of our Class A common stock under the EPA if such purchase, when aggregated with all other shares of our Class A common stock then owned by the Investor and its affiliates beneficially, would result in the Investor and its affiliates beneficially owning (on an aggregated basis) more than 4.99% of the then outstanding voting power or number of shares of our Class A common stock; provided that, Investor may increase or decrease this ownership limitation, upon notice to us, which notice for any increase will not be effective until the 61st day following the date such notice is delivered, not to exceed 9.99% of the number of shares of our Class A common stock outstanding immediately after giving effect to the issuance of shares of our Class A common stock held by the Investor. 28 The EPA contains customary representations, warranties, conditions and indemnification obligations of the parties. We have the right to terminate the EPA at any time effective five trading days after providing written notice to the Investor, at no cost or penalty, provided that there are no outstanding Advance Notices, the shares of Class A common stock under which have yet to be issued, and we have paid all amounts owed to the Investor pursuant to the EPA. As consideration for the Investor’s commitment to purchase shares of our Class A common stock in accordance with the EPA, we agreed to pay a commitment fee in an amount equal to $750,000, by the issuance to the Investor of a number of shares of Class A common stock (the “Commitment Shares”) as follows: (1) one-third of the Commitment Shares are to be issued to the Investor on the occurrence of the first closing under the EPA; (2) one-third of the Commitment Shares are to be issued to the Investor on the date the Investor has purchased an aggregate of $15.0 million of shares of our Class A common stock under the EPA; and (3) the remaining one-third of the Commitment Shares are to be issued to the Investor on the date the Investor has purchased an aggregate of $30.0 million of shares of our Class A common stock under the EPA. The number of Commitment Shares issued to the Investor on each required date will equal $250,000 divided by the lower of (i) $10.00; and (ii) the lowest daily VWAP (as defined in the EPA) of our Class A common stock during the five trading days immediately following the date we give the Investor notice of our intent to sell them Class A common stock under the EPA. In accordance with the EPA, we are required to file a registration statement with respect to the resale of the shares of our Class A common stock issuable under the EPA, including the Commitment Shares. The EPA requires us to file a registration statement within 30 days following the trading day after the Direct Listing date, and to use commercially reasonable efforts to have such registration statement declared effective within 90 days following the trading day after the Direct Listing date. We are required to use commercially reasonable efforts to continuously maintain the effectiveness of the registration statement until all of the Commitment Shares and the shares of our Class A common stock to be issued from time to time under the EPA pursuant to an Advance Notice have been sold or may be sold without restriction pursuant to Rule 144. Such resale registration statement must be effective before we may begin giving Advance Notices. Convertible Note Payable – Related Party In June 2016, William A. Mobley, Jr., our founder, Chief Executive Officer and Chairman, loaned us $111,000, at an interest rate of 12% per annum, and due and payable at June 30, 2024. The note was convertible into shares of our 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. On March 29, 2024, the outstanding principal and accrued interest balance of $92,068 was converted into 184,136 shares of our Class B common stock. On May 3, 2024, we signed a convertible promissory note with Nextelligence in the principal amount of $1,000,000. Outstanding principal accrued interest at 12% per annum and was due and payable no later than May 3, 2025. In lieu of repayment, at Nextelligence’s option, all or part of the outstanding principal and accrued interest was convertible into shares of our Class A common stock at a conversion price of $8.00 per share. Between May 30, 2024, and June 26, 2024, we borrowed an additional $1,075,000 from Nextelligence. On July 1, 2024, we repaid $1,075,000 on the convertible promissory note with related party Nextelligence. Between October 31, 2024, and December 11, 2024, we borrowed an additional $1,395,000 from Nextelligence. On December 13, 2024, we renewed and modified the May 3, 2024, note to include the additional loans. Between December 31, 2024, and June 3, 2025, we borrowed an additional $1,557,000 and made payments of $150,000 to Nextelligence. On July 26, 2025, Nextelligence converted the outstanding principal and accrued interest balance of $4,076,051 into 509,507 shares of our 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 us. 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. Between the date of the executed agreement and December 31, 2025, we received an additional $1,110,000. As of December 31, 2025, the total outstanding principal is $2,425,552 and the accrued interest balance is $21,144 for a total outstanding balance of $2,446,696. 29 Note Payable – Related Party Between July 2018 and April 2018, a related party, a company owned by William A. Mobley, Jr., Public Wire, loaned us $66,380, at an interest rate of 12% per annum. The notes representing the loan originally matured on dates ranging from April 1, 2019, to January 1, 2020. Effective June 30, 2021, we amended the original promissory note with Public Wire and combined principal and interest from the previous notes under one new loan. In addition, we extended the maturity date to June 30, 2024. On March 29, 2024, we entered into a Debt Conversion Agreement with Public Wire to convert the outstanding principal and interest of the note payable at a conversion price of $4.00 per share. The total outstanding principal of $89,289 and accrued interest of $29,425, total of $118,714, was converted into 29,679 shares of our Class B common stock. The Class B common stock was fair market valued at $8 per share and we recognized a debt extinguishment loss of $118,714. Revolving Convertible Note Payable – Related Party On July 1, 2018, we signed a revolving convertible note agreement with Nextelligence, which is a related party that is majority owned and controlled by William A. Mobley, Jr., which was amended and restated as of July 2, 2018, for an amount up to $1,000,000; with any borrowings on this loan being at our complete discretion. Outstanding principal accrued interest at 12% per annum and was due and payable on July 1, 2020. In lieu of repayment, at Nextelligence’s option, all or part of the outstanding principal and accrued interest was convertible into shares of our Class A common stock at a conversion price of $0.50 per share. The loan matured on July 1, 2020, was in default and remained as an on-demand liability of ours until June 30, 2021. On June 30, 2021, we entered into a new revolving convertible promissory note with Nextelligence for an amount up to $2,500,000; with any borrowings on this loan being at our complete discretion. Outstanding principal accrued interest at 12% per annum. The borrowing limit was increased to $6,000,000 pursuant to a first amendment to the note dated June 13, 2022. Pursuant to a second amendment to the note dated July 17, 2023, the borrowing limit was increased to $10,000,000 and the maturity date extended to June 30, 2025. In lieu of repayment, at Nextelligence’s option, all or part of the outstanding principal and accrued interest was convertible into shares of our Class A common stock at a conversion price of $0.50 per share. On March 29, 2024, Nextelligence converted the principal of $13,139,473 and accrued interest of $1,607,952, a total of $14,747,425, into 29,494,851 shares of our Class A common stock. Notes Payable On September 15, 2016, we entered into an agreement with U.S. Premium Finance to provide financing in an aggregate amount of $1,967,450 for the insurance premium associated with both D&O and Workers Compensation policies. Both policies commenced September 15, 2016, and provided coverage for the next 36 months, expiring September 15, 2019. The loan bears interest at a floating rate per annum equal to the greater of either (i) 4.99% or (ii) 4.99% plus the Wall Street Journal Prime Rate. During the year ended June 30, 2019, and 2018, the interest rate on the loan was 4.99%. We were required to pay monthly principal and interest of approximately $58,957, paid over 36 months, with the final payment on October 15, 2019. The U.S. Premium Finance agreement dated September 15, 2016, was secured against all rights, title, and interest associated with the D&O and Workers Compensation policies. As part of the legal costs associated with obtaining premium financing, on September 19, 2016, we agreed to pay a loan origination fee in the amount of $98,250. The loan origination fee was recorded as a debt discount and amortized over the life on the policy, maturing September 2019. On April 18, 2017, we entered into an additional agreement with U.S. Premium Finance. We received $568,935 in net proceeds from the premium financing agreement. The loan bears interest at a floating rate per annum equal to the greater of either (i) 4.99% or (ii) 4.99% plus the Wall Street Journal Prime Rate. During the year ended June 30, 2019, and 2018, the interest rate on the loan was 4.99%. We were required to pay monthly principal and interest of approximately $29,705, paid over 20 months, with the final payment on December 15, 2018. 30 The U.S. Premium Finance agreement dated April 18, 2017 was secured against all rights, title, and interest associated with the general liability insurance policy. As part of the legal costs associated with obtaining premium financing, on April 18, 2017, we incurred and capitalized a loan origination fee in the amount of $28,348. The loan origination fee was amortized over the life of the policy, maturing December 2018. As of June 30, 2022, and 2021, there were no prepaid loan origination fees as the amount was fully amortized. On November 13, 2019, we settled the outstanding liability with U.S. Premium Finance, in which we agreed to pay $1,000,000 in various installments, with the last payment due on December 5, 2022. During the year ended June 30, 2020, in accordance with the agreement, we reduced the principal on the balance sheet and recognized a $774,009 gain on forgiveness of debt. In adherence to the conditions of the agreement, we paid $275,000 towards the outstanding balance of the loan as of June 30, 2020. In addition, as of November 13, 2019, we had accrued approximately $162,350 in interest, which was reduced to zero based on the settlement amount and we recognized as a gain on forgiveness of debt, of $162,350. As of June 30, 2023, the balance due was $650,000, all of which was current. In January 2024, we paid the entire principal balance and accrued interest to settle the outstanding liability. On October 22, 2019, we entered into a promissory note with an unrelated third party for the amount of $250,000, at an interest at 6% per annum. Effective June 30, 2021, we combined all previous principal ($250,000) and interest ($25,356) related to this loan and extended the maturity date to June 30, 2024, as per the second amendment to the agreement. On March 29, 2024, we came to an agreement with the lender to convert all of the outstanding principal and interest on the note into shares of our Class A common stock at a conversion price of $4.00 per share. The total principal of $275,356 and accrued interest of $45,400, for a total of $320,076, was converted into 80,189 shares of our Class A common stock. The Class A common stock was fair market valued at $8 per share and we recognized a debt extinguishment loss of $320,076. Between March 2022 and June 2022, an unrelated third party loaned us $200,000, at an interest rate of 6% per annum. In August 2022, the unrelated third party loaned us an additional $100,000. The notes matured on March 1, 2023, and were in default until a renewal and consolidating note was entered into as of August 1, 2023, in the principal amount of $320,384. The interest rate under the renewal note is 6% per annum, and it matures on July 31, 2024. On March 29, 2024, we came to an agreement with the lender to convert all of the outstanding principal and interest on the note into shares of our Class A common stock at a conversion price of $4.00 per share. The total principal of $320,384 and accrued interest of $12,692, for a total of $333,076, was converted into 83,269 shares of our Class A common stock. The Class A common stock was fair market valued at $8 per share and we recognized a debt extinguishment loss of $333,076. On November 18, 2022, we entered into a loan agreement with two unrelated parties for the aggregate amount of $200,000, at an interest rate of 6% compounded annually. The loan matured on December 1, 2024. On March 29, 2024, we came to an agreement with the lenders to convert all of the outstanding principal and interest on the notes into shares of our Class A common stock at a conversion price of $4.00 per share. The total principal of $200,000 and accrued interest of $16,340, for a total of $216,340, was converted into 54,086 shares of our Class A common stock. The Class A common stock was fair market valued at $8 per share and we recognized a debt extinguishment loss of $216,340. Warrant Modification Effective as of June 15, 2023, we authorized and approved: (i) the reissuance of 38 expired warrants held by non-employees and 2 expired warrants held by an employee (“Expired Warrants”) to purchase an aggregate of 7,637,962 shares of our Class A common stock, at purchase prices from $0.50 to $8.00 per share, all of which had expired without being exercised; and (ii) the modification of 31 outstanding warrants held by non-employees and 1 warrant held by an employee (“Reissued Warrants”) to purchase an aggregate of 4,105,625 shares of our Class A common stock, at purchase prices from $3.50 to $6.00 per share, that by their terms will expire if not exercised on or prior to dates ranging from February 10, 2024, to September 30, 2025. We reissued the Expired Warrants and modified the Reissued Warrants (collectively “Warrant Modification”) by extending the expiration date to December 31, 2025, and maintaining all other terms in the original warrant agreements. All outstanding warrants expired unexercised at the end of the day on December 31, 2025. 31 The value of the Warrant Modification to purchase an aggregate of 23,487,174 shares was calculated using the Black-Scholes-Merton option pricing model. The incremental fair value attributable to the Expired Warrants and Reissued Warrants, which was measured at the amount equal to the incremental value reflecting in the change in fair value of the warrants before and after the Warrant Modification, was calculated at $9,848,947. The portion of the incremental fair value related to non-employee warrants that were initially issued as part of equity financings was $2,669,175 and was treated as a deemed dividend and is reflected as “Deemed dividend on warrant modification” in the accompanying statement of operations. The portion of the incremental fair value related to employee warrants that were initially issued as awards was $7,179,772 and was treated as stock-based compensation and is reflected in “Compensation and benefits” in the accompanying statement of operations. Accordingly, the Warrant Modification was recorded as an increase in additional paid in capital with a corresponding decrease to retained earnings. We utilized an option pricing model to determine the fair value of our Class A common stock as of June 15, 2023. The significant inputs were as follows: volatility of 71.1%, term of 2 years and risk-free rate of 4.55%. The valuation determined the fair value of a share of our Class A common stock to be $1.8025 as of June 15, 2023. The Black-Scholes-Merton option pricing model includes the following assumptions to determine the fair value attributable immediately before and after the warrant modification effective June 15, 2023: Immediately Before After Assumptions: Class A common stock fair value $ 1.80 $ 1.80 Risk-free interest rate 4.12-5.21 % 4.43 % Expected dividend yield 0 % 0 % Expected volatility 64-83 % 81.55 % Expected life (in years) .66-2.3 2.55 Cash Flows The following tables provide detailed information about our net cash flows for the periods indicated: For the Six Months Ended December 31, 2025 2024 Net cash used in operating activities $ (5,232,331 ) $ (6,663,663 ) Net cash used in investing activities (8,556 ) (21,623 ) Net cash provided by financing activities 5,125,552 3,669,454 Net (decrease) increase in cash and cash equivalents $ (115,885 ) $ (3,015,832 ) Operating Activities For the six months ended December 31, 2025, cash used in operating activities decreased by $1,430,782 or 21.5% due primarily to our decrease in net loss of $1,842,992 and a net increase in working capital of $165,617. These were offset by a decrease in stock-based compensation of $561,872. The change in working capital was made up mainly of an increase in accounts receivable of $271,336, decrease in prepaid assets of $100,000, increase in deferred revenue of $84,979, and decrease in accounts payable and accrued expenses – related party of $141,828. Investing Activities For the six months ended December 31, 2025, cash used in investing activities decreased by $13,067 or 60%. The change was attributed to a decrease in the cash used to purchase property and equipment. Financing Activities For the six months ended December 31, 2025, cash provided by financing activities increased by $1,456,098 or 39.7%. The change was primarily due to an increase in proceeds from convertible notes payable – related party of $1,030,552 and a decrease to payments on revolving note payable – related party of $1,075,000, partially offset by a decrease to proceeds from issuance of Class A common stock of $650,000. 32 Critical Accounting Policies and Estimates Our financial statements and accompanying notes have been prepared in accordance with GAAP applied on a consistent basis. The preparation of these financial statements requires us to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, the application of the stock split accounting as of the date these financial statements are ready to be issued and the reported amounts of revenue and expenses during the periods presented. We evaluate these estimates and assumptions on an ongoing basis. We base our estimates on the information currently available to us and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. As of December 31, 2025, our previous estimates had not materially deviated from our results. An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made; if different estimates reasonably could have been used; or if changes in the estimate that are reasonably likely to occur periodically could materially impact the financial statements. While our significant accounting policies are described in more detail in the notes to our financial statements included in this prospectus, we believe the following accounting policies to be critical to the estimates and assumptions used in the preparation of our financial statements. Revenue Recognition Revenue is recognized upon transfer of control of promised goods or services to customers in an amount that reflects the consideration we expect to receive in exchange for those goods or services, in accordance with ASC 606. Our contracts include various products or services or a combination of both, which are generally capable of being distinct and are accounted for as separate performance obligations. Our contracts may contain multiple distinct performance obligations. The transaction price of a contract is estimated based on the expected value for which a significant reversal of revenue is not expected to occur. Stand-alone selling prices are generally determined based on prices charged to customers. In arrangements with multiple performance obligations, the estimated transaction price is allocated to each distinct performance obligation based on relative stand-alone selling price. Subscription Revenue We no longer generate subscription revenue through renewal sales of Rabbit TV and Rabbit TV Plus, or through Select TV and Streaming TV Kits, which operated as the successor products to Rabbit TV and Rabbit TV Plus. In October 2022, our SelectTV.com paid subscription service and packaged SelectTV Streaming TV Kits were discontinued. We rebranded to the corporate namesake FreeCast.com and relaunched our SmartGuide as a free registration subscription service. SmartGuide is our internet distributed streaming media guide that searches and aggregates media content on the web and facilitates access to its customers through Wi-Fi-enabled devices that support streaming video. We do, however, sell monthly subscriptions for premium content purchased through our SmartGuide for varying fees for different content. Revenue from such premium subscription fees is recognized on a gross basis over the service period as we are deemed to be the principal in the relationship with the end user. We control the premium content before transferring it to the end user and have latitude in establishing pricing. We both retransmit and “ingest” and distribute this content. Subscription revenue is derived from online sales through search engine optimization, search engine marketing, various marketing advertising services, the utilization of resellers in the form of publishers that promote upcoming retail promotions and packages, as well as direct sales to subscribers of our Value Channels subscription service. Value Channels subscription contains 17 cable channels and sells on a monthly subscription or annual fee. Value Channels is integrated into the initial FreeCast.com free registration and then offered as an upgrade. Both FreeCast.com (free registration) and Value Channels are available in various streaming smart TV models (Google TV’s, Amazon Fire TV’s, LG, Samsung, TCL, Sony and others), plus Streaming Devices (Amazon Fire, Google ChromeCast, Apple TV), PC’s/Laptops and mobile apps for Android and iOS devices. 33 Subscription revenue is recognized ratably on a straight-line basis over the duration of the subscription period, generally ranging from one month to five years. If the subscriber renews early, then the expiration date is extended by the renewal period, and the additional subscription fee is deferred and amortized over the additional months purchased by the subscriber. We no longer offer SelectTV lifetime subscriptions, which were initially deferred and recognized over a five-year period. All subscription fees are collected at the time of purchase. FAST (Free Ad-Supported TV) We provide FAST channel buildouts that include post-production editing, motion graphics, channel assembly and content acquisitions. We charge the customers based on time incurred for the services plus a reasonable margin in addition to any additional out-of-pocket cost incurred that is charged at cost to us. Revenue is recognized when services are performed. We charge a monthly platform fee for distributing the FAST channel on our platform. Revenue is recognized at the point in time when the content is available on the digital platform. Ad Platform Revenue We are an agent in transactions on our Ad Exchange platforms. We act as an intermediary between DSPs and non-owned and operated publishers by providing access to a platform that allows both parties to transact in the buying and selling of ad inventory. The transaction price is determined through a real-time auction, and we have no pricing discretion or obligation related to the fulfillment of the advertising delivery. We generally invoice buyers at the end of each month for the full purchase price of ad impressions monetized in that month. Accounts receivables are recorded at the amount of gross billings for the amounts we are responsible for collecting, and accounts payable are recorded at the net amount payable to suppliers. Accordingly, both accounts receivable and accounts payable appear large in relation to revenue reported on a net basis. Ad Agency Revenue (Launch That and Similar Contracts) We earn revenue from direct client service contracts for marketing and campaign execution, such as the Launch That agreement. These contracts typically involve two distinct phases: ● Phase 1: Discovery and Development Services (data research, audience analysis, creative development). Revenue is recognized over time using an input method based on the proportion of costs incurred relative to total estimated costs for Phase 1. ● Phase 2: Test Media Distribution Services (media placement, outreach, KPI reporting). Revenue is recognized upon delivery of the performance evaluation report specified in the contract. Revenue from such contracts is presented separately from “Other Revenue” due to its materiality and distinct nature. Deferred Revenue For the Ad Platform revenue stream, we provide demand partners with access to our Ad Platform, enabling real-time bidding on advertising inventory. Revenue is recognized at a point in time when a transaction is completed—specifically, when a bid is won and the client’s purchase occurs through the platform. Amounts invoiced in advance of the completion of these transactions are recorded as deferred revenue and recognized as revenue when our performance obligation is satisfied. For the Ad Agency revenue stream (Launch That and similar contracts), we provide direct marketing and campaign services, usually with a specified contract. Revenue is recognized over time during Phase 1 (using an input method based on the proportion of costs incurred relative to total estimated costs) and 2 at a point in time during Phase 2 (upon delivery of the performance evaluation report specified in the contract). Amounts paid in advance of the delivery of the specified services are recorded as deferred revenue and recognized as revenue when our performance obligation is satisfied. 34 O ther Revenue Other revenue includes product, licensing, and referral fee revenue. We generate revenue through free registrations on FreeCast.com by partnering with retailers, manufacturers, operators and/or distributors of streaming devices, mobile phones, broadband carriers, broadcasters, property management, multi-dwelling developers, builders, and various mass consumer communities of streaming tv watchers. A FreeCast.com license is freely provided per registered consumer marketed by distributors in exchange for a negotiated revenue sharing percentage with each distributor on a case-by-case basis. Affiliate commissions are earned and then shared from third-party advertisement service providers, pay-per-view movie or series distributors and live events tickets sales for such things as professional boxing or concerts. These license arrangements have not resulted in significant revenue to date. Beginning in 2024, in conjunction with the release of our new product FreeCast Home, we started recognizing contracts with customers from product sales requiring performance up to delivery, as well as contracts with customers that contain a subscription portion that causes revenue to be allocated or adjusted over time. Shipping and handling activities are performed before the customer obtains control of the goods and therefore represent a fulfillment activity rather than a promised service to the customer. Revenue and costs of sales are recognized when control of the products transfers to our customer, which generally occurs upon shipment from our facilities. For our physical product sales, our performance obligations are satisfied at that time. Referral fee revenue is generated through premium services which are also available on our platform, for an additional fee, to allow single or time-limited use of private, decrypted viewing of movies, sporting events, concerts or other types of events. The following table presents our revenue on a disaggregated basis: For the three months ended December 31, 2025 2024 Membership (1) $ 15,687 $ 39,063 FAST Revenue – related parties (2) 46,381 62,345 Ad Revenue 22 50,132 Other Revenue - 5 Total $ 62,090 $ 151,545 For the six months ended December 31, 2025 2024 Membership (1) $ 37,807 $ 77,191 FAST Revenue – related parties (2) 101,047 141,484 Ad Revenue (3) 119,036 50,132 Other Revenue 60 1,145 Total $ 257,950 $ 269,952 (1) Membership sales refer to customers purchasing premium content through our SmartGuide for varying fees and recognized on a gross basis over the service period determined. (2) We provide end-to-end software solutions for development of FAST channels to customers such as content creation, production, video studio rental, etc. to aid in the creation of content for their channels and a platform fee for distributing the channel. Revenue is recognized at the point in time the services are performed for the development of FAST channels. We charge a monthly platform fee for distributing the FAST channel on our platform. We recognized related party revenues of $46,381 and $101,047 ($89,047 for FAST channel buildouts and $12,000 for channel streaming) for the three and six months ended December 31, 2025, respectively. (3) During the period from July 1, 2025, through December 31, 2025, we recognized $119,036 of ad revenue from the buying and selling of advertising space on other content platform providers. Of this amount, $125,000 was recognized as Ad Agency Revenue under the Launch That Experimental Media Plan Agreement, representing revenue from the provision of discovery, development, and test media distribution services for a client campaign. The remaining $5,964 was related to discounts and costs for Arbitrage Ad Revenue from the buying and selling of advertising space via the FreeCast Ad Platform. 35 Concentration of Credit Risk Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash and cash equivalents and trade accounts receivable. Our cash and cash equivalents are exposed to credit risk, subject to federal deposit insurance, in the event of default by the financial institutions holding its cash and cash equivalents to the extent of amounts recorded on the balance sheet. The cash accounts are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 per banking institution. As of December 31, 2025, our cash balance exceeded the FDIC insured limit by $183,363. As of December 31, 2025, we had one customer, SportX LLC, representing 96.21% of our receivables. As of December 31, 2024, we had three customers, SportX LLC and related party customers Celebrity Cigars, Inc. and Test Drive Live Corp., representing 62.59%, 18.72%, and 13.53%, respectively, of our receivables. As of December 31, 2025, we had three customers, Launch That., related party customer Celebrity Cigars, Inc., and Ignite, representing 46.1%, 29.6%, and 11.86%, respectively, of our revenues. As of December 31, 2024, we had two related party customers, Test Drive Live Inc. and Celebrity Cigars, Inc., representing 21.3% and 29.5%, respectively, of our revenues. Fair Value of Financial Instruments We account for financial instruments under Financial Accounting Standards Board (“FASB”) ASC 820, Fair Value Measurements. This statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements, ASC 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels as follows: Level 1 — quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 — observable inputs other than Level 1, quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, and model-derived prices whose inputs are observable or whose significant value drivers are observable; and Level 3 — assets and liabilities whose significant value drivers are unobservable. We apply fair value accounting for all assets and liabilities that are recognized or disclosed at fair value in the financial statements. The carrying amounts reported in the financial statements for cash, accounts receivable, accounts payable and accrued liabilities approximate their fair value due to their short-term nature. Earnings (Loss) Per Share Basic earnings (loss) per share is computed by dividing net income (loss) attributable to all classes of our common stock by the weighted average number of shares of all classes of our common stock outstanding during the applicable period. Diluted earnings (loss) per share is determined in the same manner as basic earnings (loss) per share, except that the number of shares is increased to include restricted stock still subject to risk of forfeiture and to assume exercise of potentially dilutive stock options using the treasury stock method, unless the effect of such increase would be anti-dilutive. The following table provides the number of Class A common stock equivalents not included in diluted income per share, because the effects are anti-dilutive, for the six months ended December 31, 2025, and 2024, respectively. For the Six Months Ended December 31, 2025 2024 Convertible debt and liabilities 305,837 312,960 Options 926,373 993,270 Warrants 8,056,087 8,056,087 Total 9,288,297 9,362,317 36 Stock Based Compensation Stock-based compensation issued is measured at the date of grant based on the estimated fair value of the award, net of estimated forfeitures. The grant date fair value of a stock-based award is recognized as an expense over the requisite service period of the award on a straight-line basis. We recognize compensation expense measured as the fair value of the stock-based compensation on grant date, when a performance condition is considered probable to occur. For purposes of determining the variables used in the calculation of stock-based compensation issued to employees, we perform an analysis of current market data and historical data to calculate an estimate of implied volatility, the expected term of the option and the expected forfeiture rate. With the exception of the expected forfeiture rate, which is not an input, we use these estimates as variables in the Black-Scholes option pricing model. Depending upon the number of warrants granted, any fluctuations in these calculations could have a material effect on the results presented in our Statements of Operations. In addition, any differences between estimated forfeitures and actual forfeitures could also have a material impact on our financial statements. In accounting for modifications of equity-classified warrants held by employees, it is our policy to determine the impact by analogy to the share-based compensation guidance of ASC 718, Compensation - Stock Compensation (“ASC 718”). The model for a modified share-based payment award that is classified as equity and remains classified in equity after the modification is addressed in ASC 718-20-35-3. Pursuant to that guidance, the incremental fair value from the modification is recognized as stock-based compensation expense in the statements of operations to the extent the modified instrument has a higher fair value. We modified certain equity-classified warrants held by employees in the year 2023. Loss Contingencies Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to us, but which will only be resolved when one or more future events occur or fail to occur. Our management and legal counsel assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against us or unasserted claims that may result in such proceedings, our legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in our financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed. Modifications to Equity-classified Instruments A change in the terms or conditions of a warrant is accounted for as a modification. For a warrant modification accounted for under ASC 815, the effect of a modification shall be measured as the difference between the fair value of the modified warrant and the fair value of the original warrant immediately before its terms are modified, with each measured on the modification date. The accounting for incremental fair value of the modified warrants over the original warrants is based on the specific facts and circumstances related to the modification. When a modification is directly attributable to an equity offering, the incremental change in fair value of the warrants is accounted for as an equity issuance cost. When a modification is directly attributable to a debt offering, the incremental change in fair value of the warrants is accounted for as a debt discount or debt issuance cost. For all other modifications accounted for under ASC 815, the incremental change in fair value is recognized as a deemed dividend. 37 Redeemable Series A Preferred Stock We apply the guidance enumerated in ASC 480, when determining the classification and measurement of preferred stock. Preferred stock subject to mandatory redemption, if any, is classified as a liability and is measured at fair value. We classify conditionally redeemable preferred stock, which includes preferred stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control, as mezzanine equity. At all other times, we classify its preferred stock in stockholders’ equity. We subsequently measure mezzanine equity to redemption value when the instrument is currently redeemable or when it is probable the instrument will become redeemable. Initially, the redemption rights were not solely within our control because our Chief Executive Officer (CEO), William Mobley, was able to force us to redeem the shares for cash. Therefore, we classified the Series A Preferred Stock as mezzanine equity pursuant to ASC 480-10-S99. We had adjusted the value of the Series A Preferred shares to its maximum redemption amount as the instrument was redeemable. On December 26, 2024, we amended the terms and conditions of the Series A Preferred Stock to replace the deemed liquidation triggered by a change in control with an ordinary liquidation. In conjunction with this amendment, we reclassified the Series A Preferred Stock from mezzanine equity to permanent equity because the features giving rise to mezzanine equity classification, the redemption right and the deemed liquidation, have been removed as part of the amendment. Recently Issued Accounting Pronouncements From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that we adopt as of the specified effective date. We do not believe that the impact of recently issued standards that are not yet effective will have a material impact on our financial position or results of operations upon adoption. Item 3. Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, we are not required to provide the information required by this Item.