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Item 9A. Controls and Procedures

2026-03-31 compared with 2025-03-31 · 1215 added, 991 removed, 1072 unchanged (67% of the section changed)

7 unchanged sentences

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls or our internal control over financial reporting will prevent or detect all errors and all fraud.

Our management recognizes that any control system, no matter how well designed and operated, is based upon certain judgments and assumptions and cannot provide absolute assurance that its objectives will be met.

Our management recognizes that any control system, no matter how well designed and operated, is based upon certain judgements and assumptions and cannot provide absolute assurance that its objectives will be met.

The design of a control system must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

4 unchanged sentences

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act.

Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles.

Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

This process includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of our management and directors;

and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our consolidated financial statements.

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of our management and directors;

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of the internal control over financial reporting to future periods are subject to risk that the internal control may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate.

Previously Reported Material Weakness

In our Annual Report on Form 10-K for the year ended December 31, 2023, we disclosed a material weakness related to the identification of non-standard and complex transaction disclosure requirements, specifically regarding the exclusion of the calculated noncash value of the effect of the down round feature triggered in August of 2023, on the Company’s Series AA Convertible Preferred Stock, which should have been recorded as a noncash charge directly to accumulated deficit and a noncash reduction to income available to common stockholders in the computation of earnings per share for the third quarter of 2023.

Remediation Actions Taken

Since the date we identified the material weakness in the fourth quarter of 2023, we took steps to ensure that financial statement preparation checklists utilized by the Company to identify non-standard and complex transactions disclosure requirements are completed and reviewed by resources with requisite knowledge in a timely manner for financial reporting purposes, to improve disclosure controls and procedures and internal control over financial reporting in these complex non-standard technical areas.

While we had procedures and processes to apply accounting and disclosure standards to non-standard and complex transactions, we did not have adequate resources to provide for the timely identification of the required treatment of the value of a down round feature in the period in which it is triggered.

This material weakness prevented us from properly including the noncash impact of the down round feature as a noncash reduction to accumulated deficit and a noncash reduction of income available to common stockholders in the computation of earnings per share for the third quarter of 2023.

The remediation steps described above were effective in the fourth quarter of 2023 and in place and operating as of December 31, 2023 and throughout Fiscal Year 2024.

As a result, as previously disclosed in our Fiscal Year 2023 10-K, notwithstanding the material weakness described above, management believes the consolidated financial statements presented in its Fiscal Year 2023 10-K fairly presented, in all material respects, our financial position, results of operations and cash flows for all periods presented therein, in conformity with generally accepted accounting principles.

Based on our assessments as of December 31, 2024 and 2023, we concluded that the previously reported material weakness related to the identification of non-standard and complex transaction disclosure requirements, specifically regarding exclusion of the calculated noncash value of the effect of the down round feature triggered in August of 2023 on the Company’s Series AA Convertible Preferred Stock, has been remediated.

Management ’ s Assessment of the Effectiveness of our Internal Control Over Financial Reporting

5 unchanged sentences

Changes in Internal Control over Financial Reporting

Except as described above, there have been no changes in our internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting during the fiscal quarter ended December 31, 2024.

There have been no changes in our internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting during the fiscal quarter ended December 31, 2025.

OTHER INFORMATION

During the three months ended December 31, 2024, none of our officers (as defined in Rule 16a-1(f) of the Exchange Act) entered into contracts, instructions or written plans (each, a “Rule 10b5-1 Trading Plan” and collectively, the “Rule 10b5-1 Trading Plans”) for the purchase or sale of our securities that are intended to satisfy the conditions specified in Rule 10b5-1(c) under the Exchange Act for an affirmative defense against liability for trading in securities on the basis of material nonpublic information.

During the three months ended December 31, 2025, none of our officers (as defined in Rule 16a-1(f) of the Exchange Act) entered into contracts, instructions or written plans (each, a “Rule 10b5-1 Trading Plan” and collectively, the “Rule 10b5-1 Trading Plans”) for the purchase or sale of our securities that are intended to satisfy the conditions specified in Rule 10b5-1(c) under the Exchange Act for an affirmative defense against liability for trading in securities on the basis of material nonpublic information, other than as described below:

During the fiscal quarter ended December 31, 2025, the following director(s) or officer(s) adopted or terminated a contract, instruction, or written plan for the purchase or sale of securities of the Company intended to satisfy the affirmative defense conditions of Rule 10b5-1(c):

Name and Title:

Clayton Haynes, Chief Financial Officer

Date of Adoption:

October 16, 2025

Two-year vesting period (Terminates December 19, 2027)

Aggregate Number of Securities:

73,959 shares of common stock

The plan provides for the automatic sale of shares to satisfy tax obligations based on specific tax calculations prepared by the Company’s payroll processor, to be provided to the applicable processing broker, intended to comply with Rule 10b5-1(c).

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

21 unchanged sentences

Exhibit 2.3 to the Current Report on Form 8-K, filed on May 9, 2023.

Second Amended and Restated Certificate of Incorporation of Super League Enterprise, Inc., dated November 19, 2018.

Exhibit 3.1 to the Registration Statement, filed on January 4, 2019.

Membership Interest Purchase and Sale Agreement, by and among Super League Enterprise, Inc., InPvP, LLC, and Mineville, LLC

Exhibit 2.1 to the Current Report on Form 8-K, filed on May 22, 2025.

Asset Purchase Agreement by and between the Company and Esports Now, LLC, dated March 16, 2026

Exhibit 2.1 to the Current Report on Form 8-K, filed on March 20, 2026

Third Amended and Restated Certificate of Incorporation of Super League Enterprise, Inc., dated October 20, 2025.

Exhibit 3.1 to the Current Report on Form 8-K, filed on October 22, 2025.

Certificate of Amendment to the Third Amended and Restated Certificate of Incorporation of Super League Enterprise, Inc., dated January 23, 2026.

Exhibit 3.1 to the Current Report on Form 8-K, filed on January 23, 2026

Second Amended and Restated Bylaws of Super League Enterprise, Inc.

19 unchanged sentences

Exhibit 3.11 to the Annual Report on Form 10-K, filed April 15, 2024

Certificate of Cancellation of Designation of Preferences, Rights and Limitations of the Series AA-2 Preferred Stock

Exhibit 3.1 to the Current Report on Form 8-K filed January 28, 2026

Certificate of Designation of Preferences, Rights and Limitations of the Series AA-3 Preferred Stock

Exhibit 3.1 to the Current Report on Form 8-K, filed on May 4, 2023

Certificate of Cancellation of Designation of Preferences, Rights and Limitations of the Series AA-3 Preferred Stock

Exhibit 3.2 to the Current Report on Form 8-K filed January 28, 2026

Certificate of Designation of Preferences, Rights and Limitations of the Series AA-4 Preferred Stock

Exhibit 3.1 to the Current Report on Form 8-K/A, filed on May 9, 2023, as amended on May 10, 2023.

Certificate of Cancellation of Designation of Preferences, Rights and Limitations of the Series AA-4 Preferred Stock

Exhibit 3.3 to the Current Report on Form 8-K filed January 28, 2026

Certificate of Designation of Preferences, Rights and Limitations of the Series AA-5 Preferred Stock

Exhibit 3.1 to the Current Report on Form 8-K, filed on June 2, 2023

Certificate of Cancellation of Designation of Preferences, Rights and Limitations of the Series AA-5 Preferred Stock

Exhibit 3.4 to the Current Report on Form 8-K filed January 28, 2026

Certificate of Amendment to Super League Gaming, Inc.’s Second Amended and Restated Certificate of Incorporation, as amended

4 unchanged sentences

Exhibit 3.1 to the Current Report on Form 8-K, filed on December 6, 2023

Certificate of Cancellation of Designation of Preferences, Rights and Limitations of the Series AAA Preferred Stock

Exhibit 3.5 to the Current Report on Form 8-K filed January 28, 2026

Certificate of Designation of Preferences, Rights and Limitations of the Series AAA-2 Preferred Stock

4 unchanged sentences

Exhibit 3.1 to the Current Report on Form 8-K, filed on July 2, 2024.

Certificate of Correction to Certificate of Designation of Preferences, Rights and Limitations of the Series AAA Junior Preferred Stock

Exhibit 3.2 to the Current Report on Form 8-K, filed on September 23, 2024

Certificate of Cancellation of Designation of Preferences, Rights and Limitations of the Series AAA Junior Preferred Stock

Exhibit 3.6 to the Current Report on Form 8-K filed January 28, 2026

Certificate of Designation of Preferences, Rights and Limitations of the Series AAA-2 Junior Convertible Preferred Stock

Exhibit 3.1 to the Current Report on Form 8-K, filed on July 16, 2024

Certificate of Designation of Preferences, Rights and Limitations of the Series AAA-3 Junior Preferred Stock

Exhibit 3.1 to the Current Report on Form 8-K, filed on September 23, 2024

Certificate of Correction to Certificate of Designation of Preferences, Rights and Limitations of the Series AAA-2 Junior Preferred Stock

Exhibit 3.3 to the Current Report on Form 8-K, filed on September 23, 2024

Certificate of Correction to Certificate of Designation of Preferences, Rights and Limitations of the Series AAA-2 Junior Preferred Stock

Certificate of Cancellation of Designation of Preferences, Rights and Limitations of the Series AAA-2 Junior Preferred Stock

Exhibit 3.7 to the Current Report on Form 8-K filed January 28, 2026

Certificate of Designation of Preferences, Rights and Limitations of the Series AAA-3 Junior Preferred Stock

Exhibit 3.1 to the Current Report on Form 8-K, filed on September 23, 2024

Certificate of Cancellation of Designation of Preferences, Rights and Limitations of the Series AAA-3 Junior Preferred Stock

Exhibit 3.8 to the Current Report on Form 8-K filed January 28, 2026

Certificate of Designation of Preferences, Rights and Limitations of the Series AAA-4 Junior Preferred Stock

Exhibit 3.1 to the Current Report on Form 8-K, filed October 1, 2024

Certificate of Cancellation of Designation of Preferences, Rights and Limitations of the Series AAA-4 Junior Preferred Stock

Exhibit 3.9 to the Current Report on Form 8-K filed January 28, 2026

Certificate of Designation of Preferences, Rights and Limitations of the Series AAAA Jr.

Exhibit 3.1 to the Current Report on Form 8-K filed July 14, 2026

Certificate of Designation of Preferences, Rights and Limitations of the Series B Convertible Preferred Stock

Exhibit 3.1 to the Current Report on Form 8-K filed September 18, 2025

Certificate of Designation of Preferences, Rights and Limitations of the Series C Senior Convertible Preferred Stock

Exhibit 3.2 to the Current Report on Form 8-K filed October 22, 2025

Form of Common Stock Certificate.

31 unchanged sentences

Form of Unsecured Promissory Note, dated November 19, 2024

Exhibit 4.1 to the Current Report on Form 8-K filed on February 14, 2025

Exhibit 4.1 to the Current Report on Form 8-K filed on November 21, 2024

Confessed Judgment Secured Promissory Note, dated February 10, 2025, issued to Agile Capital Funding, LLC, by Super League Enterprise, Inc.

1 unchanged sentence

Form of 2025 Unsecured Convertible Promissory Note to be issued to Belleau Wood Capital, LP, or its assigns

Filed herewith

Exhibit 4.17 to the Annual Report on Form 10-K filed on March 31, 2025

Convertible Promissory Note, dated March 26, 2025, issued by Super League Enterprise, Inc., to 1800 Diagonal Lending LLC, or its registered assigns

Filed herewith

Exhibit 4.18 to the Annual Report on Form 10-K filed on March 31, 2025

Convertible Promissory Note issued by Super League Enterprise, Inc., to 1800 Diagonal Lending, LLC, on May 12, 2025

Exhibit 4.1 to the Current Report on Form 8-K filed on May 16, 2025

Pre-Funded Warrant, dated July 10, 2025, issued to Agile Capital Funding, LLC

Exhibit 4.1 to the Current Report on Form 8-K filed July 14, 2025

Form of Pre-Funded Warrant

Exhibit 4.2 to the Current Report on Form 8-K filed July 14, 2025

Convertible Promissory Note, dated July 10, 2025, issued to Yield Point NY, LLC by Super League Enterprise, Inc.

Exhibit 4.3 to the Current Report on Form 8-K filed July 14, 2025

Common Stock Purchase Warrant, issued to Yield Point NY, LLC by Super League Enterprise, Inc.

Exhibit 4.4 to the Current Report on Form 8-K filed July 14, 2025

Amended and Restated Unsecured Promissory Note issued by Super League Enterprise, Inc.

to Belleau Wood Capital, LP, on August 11, 2025

Exhibit 4.2 to the Quarterly Report on Form 8-Q filed August 14, 2025

Form of October 2025 Pre-Funded Warrant to Purchase Common Stock

Exhibit 4.1 to the Current Report on Form 8-K filed October 22, 2025

Form of October 2025 Common Stock Purchase Warrant

Exhibit 4.2 to the Current Report on Form 8-K filed October 22, 2025

Form of Series B Common Stock Purchase Warrant

Exhibit 4.3 to the Current Report on Form 8-K filed October 22, 2025

Form of Common Stock Purchase Warrant

Exhibit 4.1 to the Current Report on Form 8-K filed March 20, 2026

Form of Pre-Funded Warrant to Purchase Common Stock

Exhibit 4.2 to the Current Report on Form 8-K filed March 20, 2026

Super League Enterprise, Inc.

3 unchanged sentences

Exhibit 10.2 to the Registration Statement, filed on January 4, 2019.

Subscription Agreement, among Nth Games, Inc.

and certain accredited investors.

Exhibit 10.3 to the Registration Statement , filed on January 4, 2019.

Subscription Agreement, among Super League Enterprise, Inc.

and certain accredited investors.

Exhibit 10.4 to the Registration Statement, filed on January 4, 2019.

Form of Theater Agreement, filed herewith.

Exhibit 10.5 to the Registration Statement , filed on January 4, 2019.

Lease between Super League Enterprise, Inc.

and Roberts Business Park Santa Monica LLC, dated June 1, 2016.

Exhibit 10.6 to the Registration Statement, filed on January 4, 2019.

License Agreement between Super League Enterprise, Inc.

and Riot Games, Inc., dated June 22, 2016.

Exhibit 10.7 to the Registration Statement , filed on January 4, 2019.

Amended and Restated License Agreement between Super League Enterprise, Inc.

and Mojang AB, dated August 1, 2016.

Exhibit 10.8 to the Registration Statement , filed on January 4, 2019.

Master Agreement between Super League Enterprise, Inc.

and Viacom Media Networks, dated June 9, 2017.

Exhibit 10.9 to the Registration Statement, filed on January 4, 2019.

Form of Common Stock Purchase Agreement, among Super League Enterprise, Inc.

and certain accredited investors.

Exhibit 10.10 to the Registration Statement , filed on January 4, 2019.

Form of Investors’ Rights Agreement, among Super League Enterprise, Inc.

and certain accredited investors.

Exhibit 10.11 to the Registration Statement, filed on January 4, 2019.

Employment Agreement, between Super League Enterprise, Inc.

and Ann Hand, dated June 16, 2017.

Exhibit 10.12 to the Registration Statement , filed on January 4, 2019.

Employment Agreement, between Super League Enterprise, Inc.

and David Steigelfest, dated October 31, 2017.

Exhibit 10.13 to the Registration Statement, filed on January 4, 2019.

Riot Games, Inc.

Extension Letter, dated November 21, 2017.

Exhibit 10.14 to the Registration Statement, filed on January 4, 2019.

Form of Note Purchase Agreement, among Super League Enterprise, Inc.

and certain accredited investors.

Exhibit 10.15 to the Registration Statement , filed on January 4, 2019.

Form of Security Agreement, between Super League Enterprise, Inc.

and certain accredited investors.

Exhibit 10.16 to the Registration Statement, filed on January 4, 2019.

Form of Intercreditor and Collateral Agent Agreement, among Super League Enterprise, Inc.

and certain accredited investors.

Exhibit 10.17 to the Registration Statement , filed on January 4, 2019.

Form of Investors’ Rights Agreement (9% Secured Convertible Promissory Notes), among Super League Enterprise, Inc.

and certain accredited investors.

Exhibit 10.18 to the Registration Statement , filed on January 4, 2019.

Master Service Agreement and Initial Statement of Work between Super League Enterprise, Inc.

and Logitech Inc., dated March 1, 2018.

Exhibit 10.19 to the Registration Statement , filed on January 4, 2019.

Asset Purchase Agreement, between Super League Enterprise, Inc.

and Minehut, dated June 22, 2018.

Exhibit 10.20 to the Registration Statement, filed on January 4, 2019.

Amended and Restated Employment Agreement, between Super League Enterprise, Inc.

1 unchanged sentence

Exhibit 10.21 to the Registration Statement, filed on January 4, 2019.

Amended and Restated Employment Agreement, between Super League Enterprise, Inc.

and David Steigelfest, dated November 1, 2018.

Exhibit 10.22 to the Registration Statement, filed on January 4, 2019.

Employment Agreement, between Super League Enterprise, Inc.

4 unchanged sentences

Exhibit 10.24 to the Registration Statement, filed on January 4, 2019.

Commercial Partnership Agreement between Super League Enterprise, Inc., and ggCircuit, LLC, dated September 23, 2019.

Exhibit 10.1 to the Quarterly Report on Form 10-Q for the period ended September 30, 2019, filed November 14, 2019.

Form of Registration Rights Agreement, dated March 2021.

Exhibit 10.1 to the Current Report on Form 8-K, filed on March 11, 2021.

Form of Voting Agreement, dated March 2021.

2 unchanged sentences

Exhibit 10.1 to the Current Report on Form 8-K, filed on March 23, 2021.

Equity Distribution Agreement, dated as of September 3, 2021, by and between Super League Enterprise, Inc.

and Maxim Group LLC.

Exhibit 1.3 to the Company’s Registration Statement on Form S-3 (File No.

333-259347, filed September 7, 2021.

Share Purchase Agreement, by and between Super League Enterprise, Inc.

5 unchanged sentences

Exhibit 10.2 to the Current Report on Form 8-K filed January 7, 2022.

Executive Employment Agreement between Super League Gaming, Inc., and David Steigelfest, dated January 5, 2022

Exhibit 10.3 to the Current Report on Form 8-K filed January 7, 2022.

Executive Employment Agreement between Super League Gaming, Inc., and Matt Edelman, dated January 5, 2022

Exhibit 10.4 to the Current Report on Form 8-K filed January 7, 2022.

Executive Employment Agreement between Super League Gaming, Inc., and Michael Wann, dated January 5, 2022

Exhibit 10.5 to the Current Report on Form 8-K filed January 7, 2022.

Common Stock Purchase Agreement, dated March 25, 2022, by and between Super League Enterprise, Inc.

5 unchanged sentences

Exhibit 10.3 to the Current Report on Form 8-K, filed May 16, 2022.

Transition Letter Agreement dated January 13, 2023, between Super League Gaming, Inc.

and Mike Wann.

Exhibit 10.1 to the Current Report on Form 8-K, filed January 20, 2023.

Form of Placement Agency Agreement

2 unchanged sentences

Exhibit 10.33 to the Annual Report on Form 10-K for the year ended December 31, 2022, filed March 31, 2023

Form of Registration Rights Agreement

Exhibit 10.34 to the Annual Report on Form 10-K for the year ended December 31, 2022, filed March 31, 2023

Form of Series AA Subscription Agreement

Exhibit 10.1 to the Current Report on Form 8-K, filed on April 25, 2023

Form of Registration Rights Agreement

Exhibit 10.2 to the Current Report on Form 8-K, filed on April 25, 2023

Placement Agency Agreement by and between Aegis Capital Corp.

61 unchanged sentences

Securities Purchase Agreement, dated March 26, 2025, by and between Super League Enterprise, Inc., and 1800 Diagonal Lending, LLC

Filed herewith.

Exhibit 10.73 to the Annual Report on Form 10-K filed on March 31, 2025.

Note Purchase Agreement, dated March 28, 2025, by and between Super League Enterprise, Inc.

and Belleau Wood Capital, LP++

Filed herewith.

Exhibit 10.74 to the Annual Report on Form 10-K filed on March 31, 2025.

Consulting Agreement, dated June 13, 2023, between Super League Enterprise, Inc., and Diamond Shoals, LLC

Filed herewith.

Exhibit 10.75 to the Annual Report on Form 10-K filed on March 31, 2025.

Amended and Restated Consulting Agreement, effective as of October 6, 2023, by and between Super League Enterprise, Inc., and Diamond Shoals, LLC

Filed herewith.

Exhibit 10.76 to the Annual Report on Form 10-K filed on March 31, 2025.

Amended Consulting Agreement, dated August 1, 2024, by and between Super League Enterprise, Inc., and Diamond Shoals, LLC

Filed herewith.

Exhibit 10.77 to the Annual Report on Form 10-K filed on March 31, 2025.

Amended and Restated Consulting Agreement, dated March 28, 2025, by and between Super League Enterprise, Inc., and Diamond Shoals, LLC

Filed herewith.

Exhibit 10.78 to the Annual Report on Form 10-K filed on March 31, 2025.

1 to the Executive Employment Agreement between the Company and Matthew Edelman, dated April 1, 2025

Exhibit 10.79 to the Current Report on Form 8-K filed on April 3, 2025.

1 to the Executive Employment Agreement between the Company and Ann Hand, dated April 1, 2025

Exhibit 10.80 to the Current Report on Form 8-K filed on April 3, 2025.

1 to the Executive Employment Agreement between the Company and Clayton Haynes, dated April 1, 2025

Exhibit 10.81 to the Current Report on Form 8-K filed on April 3, 2025.

Amendment No.

1 to Convertible Promissory Note, dated April 30, 2025, by and between Super League Enterprise, Inc.

and 1800 Diagonal Lending, LLC

Exhibit 10.1 to the Current Report on Form 8-K filed on May 6, 2025.

Underwriting Agreement dated May 9, 2025 by and between Super League Enterprise, Inc.

and Aegis Capital Corp.

Exhibit 10.1 to the Current Report on Form 8-K filed on May 12, 2025.

Securities Purchase Agreement, dated May 12, 2025, by and between Super League Enterprise, Inc., and 1800 Diagonal Lending, LLC.

Exhibit 10.1 to the Current Report on Form 8-K filed on May 16, 2025.

Super League Enterprise, Inc.

2025 Omnibus Equity Incentive Plan

Annex B to the Definitive Proxy Statement on Schedule 14A filed on May 19, 2025

Underwriting Agreement dated May 29, 2025 by and between and Super League Enterprise, Inc.

and Aegis Capital Corp.

Exhibit 10.1 to the Current Report on Form 8-K filed on May 30, 2025.

Placement Agent Agreement, dated May 30, 2025, between Super League Enterprise, Inc.

and Aegis Capital Corp.

Exhibit 1.1 to the Current Report on Form 8-K filed on June 2, 2025.

Form of Securities Purchase Agreement, dated May 30, 2025, by and among Super League Enterprise, Inc.

and the purchasers named therein

Exhibit 10.1 to the Current Report on Form 8-K filed on June 2, 2025.

Amendment No.

1 to Unsecured Promissory Note, dated June 13, 2025, by and between Super League Enterprise, Inc., and Sam Drozdov.

Exhibit 10.1 to the Current Report on Form 8-K filed on June 20, 2025.

Amendment No.

1 to Unsecured Promissory Note, dated June 13, 2025, by and between Super League Enterprise, Inc., and Ben Khakshoor.

Exhibit 10.2 to the Current Report on Form 8-K filed on June 20, 2025.

Amendment No.

1 to Unsecured Promissory Note, dated June 13, 2025, by and between Super League Enterprise, Inc., and Firepit Partners Co.

Exhibit 10.3 to the Current Report on Form 8-K filed on June 20, 2025.

Amendment No.

1 to Unsecured Promissory Note, dated June 13, 2025, by and between Super League Enterprise, Inc., and the non-employee member of the Board of Directors stated therein.

Exhibit 10.4 to the Current Report on Form 8-K filed on June 20, 2025.

Exchange Agreement, dated July 7, 2025, by and between Super League Enterprise, Inc.

and the Michael Keller Trust

Exhibit 10.1 to the Current Report on Form 8-K filed on July 11, 2025.

Exchange Agreement, dated July 8, 2025 by and between Super League Enterprise, Inc., and Benjamin Khakshoor

Exhibit 10.1 to the Current Report on Form 8-K filed on July 14, 2025.

Exchange Agreement, dated July 8, 2025 by and between Super League Enterprise, Inc., and Samuel Drozdov

Exhibit 10.2 to the Current Report on Form 8-K filed on July 14, 2025.

Exchange Agreement, dated July 8, 2025 by and between Super League Enterprise, Inc., and Firepit Partners Co.

Exhibit 10.3 to the Current Report on Form 8-K filed on July 14, 2025.

Exchange Agreement, dated July 10, 2025 by and among Super League Enterprise, Inc., Agile Capital Funding, LLC, and Agile Lending, LLC.

Exhibit 10.4 to the Current Report on Form 8-K filed on July 14, 2025.

Equity Purchase Agreement dated July 10, 2025 by and between the Company and YieldPoint NY, LLC

Exhibit 10.5 to the Current Report on Form 8-K filed on July 14, 2025.

Registration Rights Agreement dated July 10, 2025 by and between the Company and YieldPoint NY, LLC

Exhibit 10.6 to the Current Report on Form 8-K filed on July 14, 2025.

Securities Purchase Agreement dated July 10, 2025, by and between the Company and Yield Point NY, LLC

Exhibit 10.7 to the Current Report on Form 8-K filed on July 14, 2025.

Registration Rights Agreement, dated July 10, 2025, by and between the Company and Yield Point NY, LLC

Exhibit 10.8 to the Current Report on Form 8-K filed on July 14, 2025.

Security Agreement, dated July 10, 2025, by and between the Company and Yield Point NY, LLC

Exhibit 10.9 to the Current Report on Form 8-K filed on July 14, 2025.

Form of Exchange Agreement by and between Super League Enterprise, Inc., and certain Preferred Stockholders

Exhibit 10.1 to the Current Report on Form 8-K filed on September 18, 2025.

Amendment No.

1 to Secured Convertible Promissory Note, dated September 30, 2025, by and between Super League Enterprise, Inc., and Yield Point NY, LLC

Exhibit 10.1 to the Current Report on Form 8-K filed on September 30, 2025.

Amendment No.

1 to the 2025 Omnibus Equity Incentive Plan

Annex I to the Definitive Proxy Statement on Schedule 14A filed on October 2, 2025

Form of October 2025 Securities Purchase Agreement

Exhibit 10.1 to the Current Report on Form 8-K filed on October 22, 2025.

Form of October 2025 Registration Rights Agreement

Exhibit 10.2 to the Current Report on Form 8-K filed on October 22, 2025.

Exchange Agreement, dated October 22, 2025, by and between Super League Enterprise, Inc., and Yield Point NY, LLC

Exhibit 10.3 to the Current Report on Form 8-K filed on October 22, 2025.

Exchange Agreement, effective October 22, 2025, by and between Super League Enterprise and Belleau Wood Capital, LP

Exhibit 10.4 to the Current Report on Form 8-K filed on October 22, 2025.

Placement Agency Agreement, dated October 22, 2025, by and between Super League Enterprise and Aegis Capital Corp.

Exhibit 10.5 to the Current Report on Form 8-K filed on October 22, 2025.

Placement Agency Agreement, dated October 22, 2025, by and between Super League Enterprise and Aegis Capital Corp.

Exhibit 10.1 to the Current Report on Form 8-K filed on October 28, 2025.

Asset Purchase Agreement by and between the Company and Let’s Bounce, Inc.

dated January 6, 2026

Exhibit 10.1 to the Current Report on Form 8-K filed on January 7, 2026.

Employment Agreement by and between the Company and Matthew Edelman dated January 1, 2026

Exhibit 10.2 to the Current Report on Form 8-K filed on January 7, 2026.

Employment Agreement by and between the Company and Clayton Haynes dated January 1, 2026

Exhibit 10.3 to the Current Report on Form 8-K filed on January 7, 2026.

Form of Registration Rights Agreement

Exhibit 10.1 to the Current Report on Form 8-K filed on March 20, 2026.

Super League Enterprise, Inc.

Code of Business Conduct and Ethics.

Exhibit 14.1 to the Registration Statement, filed on January 4, 2019.

Exhibit 14.1 to the Registration Statement on Form S-1 filed on January 4, 2019.

Super League Enterprise, Inc.

Insider Trading Policy

Filed herewith.

Subsidiaries of Registrant

Filed herewith.

Exhibit 19.1 to the Annual Report on Form 10-K filed on March 31, 2025

Consent of Independent Registered Public Accounting Firm – WithumSmith+Brown, PC

22 unchanged sentences

Certain portions of this exhibit (indicated by “[*****]”) have been omitted as the Company has determined (i) the omitted information is not material and (ii) the omitted information would likely cause harm to the Company if publicly disclosed.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

INDEX TO FINANCIAL STATEMENTS

SUPER LEAGUE ENTERPRISE, INC.

1 unchanged sentence

Whippany, New Jersey;

Consolidated Financial Statements for the Years Ended December 31, 2024 and 2023

PCAOB ID Number 100)

Financial Statements for the Years Ended December 31, 2025 and 2024

Consolidated Balance Sheets as of December 31, 2025 and 2024

8 unchanged sentences

We have audited the accompanying consolidated balance sheets of Super League Enterprise, Inc.

and subsidiaries (the “Company”) as of December 31, 2024 and 2023, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the "consolidated financial statements").

(the “Company”) as of December 31, 2025 and 2024, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the two years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

Substantial Doubt About the Company ’ s Ability to Continue as a Going Concern

The accompanying consolidated financial statements have been prepared assuming that the entity will continue as a going concern.

As discussed in Note 2 to the consolidated financial statements, the entity has recurring and expected future losses and negative cash flows from operations that raise substantial doubt about its ability to continue as a going concern.

Management's plans in regard to these matters are also described in Note 2.

The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

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The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

(1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved especially challenging, subjective, or complex judgments.

The communication of the critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Revenue Recognition- Fixed Fee Revenue

Revenue Recognition- Fixed Fee

Description of the Matter

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A portion of the Company’s contracts with customers are recognized over time on a percentage of completion basis.

In the case of a contract not being completed by year-end, the Company estimates the percentage of contract completion at year-end.

The Company did so by using the input method, measuring the hours incurred against the total hours expected to be incurred throughout the entire contract to be able to calculate the revenue to be recognized in the current period.

We identified the sufficiency of audit evidence over the accounting for revenue recognition as a critical audit matter.

Subjective auditor judgment and an increased extent of effort was required to evaluate the sufficiency of audit evidence over accounting for revenue recognition due to the complexity involved in testing the Company’s total hours expected to be incurred throughout the contract.

In the case of a contract not being completed at period end, the Company estimates the percentage of contract completion at period end.

The Company did so by using the input method, measuring the hours incurred against the total hours expected to be incurred throughout the entire contract to calculate the revenue to be recognized in the current period.

Subjective auditor judgment and an increased extent of effort was required to evaluate the accounting for fixed fee revenue recognition due to the complexity involved in testing the Company’s total hours expected to be incurred throughout the contract.

Audit Response

Our audit procedures to test the estimates and assumptions surrounding the fixed fee revenue recognition included obtaining a report downloaded directly from the Company’s time-tracking software that detailed the hours incurred on a specific job.

We performed a walkthrough of Company’s time-tracking software to gain reasonable assurance over the completeness and accuracy of the software’s reports and tested the completeness and accuracy of the hours incurred to date.

We obtained an understanding of the Company’s system configuration, user access controls, deal lifecycle, and revenue management processes, noting clearly defined roles and permissions, strong deal validation controls, and structured revenue tracking and reporting that support effective operational oversight and reliable financial reporting.

We tested the estimated hours used by management to determine revenue recognition and retrospectively reviewed past fixed fee contracts to ensure total estimated hours were materially accurate.

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We also tested for proper revenue recognition cut-off.

Modification of Additional Investment Rights ( “ AIRs ” )

Fair value/Classification of Equity Instruments - (Capital Raise - Equity Classified Warrants Issued in the $20M PIPE Financing)

Description of the Matter

In connection with the Company’s Junior AAA preferred round closed in June 2024, certain AIRs right holders received modifications to their AIR rights, as disclosed in Note 7 to the consolidated financial statements.

As of the AIR modification date, the Company utilized the Black Scholes option pricing model for the calculation of the fair value of the AIRs immediately before and after the modifications described above, using Level 3 inputs.

We identified the sufficiency of audit evidence over the accounting for the modification to the AIR rights as a critical audit matter.

Subjective auditor judgment and an increased extent of effort was required to evaluate the sufficiency of audit evidence over accounting for modification to the AIR rights due to the complexity involved.

Any changes in the estimates and assumptions used could have a material impact in the amount of change in fair value.

As described in Note 7 to the consolidated financial statements, the Company completed a $20,000,000 private investment in public equity (“PIPE”) financing that included prefunded warrants and warrants to purchase common stock.

This matter was critical because determining whether the warrants met the equity classification criteria under Accounting Standards Codification (“ASC”) 815‑40 required significant auditor judgment, including the evaluation of complex contractual terms and settlement provisions.

A different conclusion could have resulted in liability classification of the warrants and the recognition of changes in fair value through earnings, which would have had a material impact on the consolidated financial statements.

Audit Response

Our audit procedures related to the evaluation of the warrants’ equity classification included, among others, reading and evaluating the warrant agreements;

assessing management’s analysis of the warrants under ASC 815‑40;

evaluating whether the warrants met the equity classification conditions;

involving professionals with specialized accounting knowledge to assist in evaluating the technical accounting conclusions;

and assessing the adequacy of the related disclosures in the consolidated financial statements.

Fair value of convertible debt/conversion - (YP Note/Warrant Exchange to Preferred Stock Series C and New YP Warrant)

Description of the Matter

As described in Note 7 to the consolidated financial statements, during the year ended December 31, 2025, the Company entered into exchange agreements with YP related to its outstanding convertible notes, pursuant to which a portion of the notes was converted into common stock and the remaining balance was exchanged for newly issued Series C Preferred Stock.

In addition, the warrants issued in the original agreement were replaced with new warrants in the exchange agreement.

We identified the accounting for the partial conversion and exchange of the convertible notes as a critical audit matter because the evaluation of whether the transaction qualified as a debt extinguishment under ASC 470 required significant auditor judgment, including the determination of the reacquisition price based on the fair value of the preferred stock issued and the incremental fair value of the replacement warrants, as well as the evaluation of key valuation assumptions.

Audit Response

We obtained and analyzed the technical memo from the Company to ensure it complied with ASC 470 and ASC 815.

We utilized the knowledge, experience and expertise of our internal valuation specialists to execute the planned audit procedures related to the valuation by assessing the reasonableness of the methodologies employed to value the convertible debt, Series C Preferred stock, and both the original and new warrants.

We also tested the underlying assumptions utilized in the Black-Scholes option pricing models.

Fair value/Classification of Equity Instruments - (Down round - deemed dividend)

Description of the Matter

As described in Note 7 to the consolidated financial statements, on July 10, 2025 the Company completed the YP financing transaction at a price below the conversion price of its outstanding convertible preferred stock, which resulted in a downward adjustment to the conversion price pursuant to anti‑dilution provisions and the recognition of a deemed dividend.

We identified the accounting for the down round as a critical audit matter because the determination of the deemed dividend amount required significant auditor judgment, including the use of an option‑pricing model incorporating Level 3 inputs, and because the deemed dividend had a material impact on earnings per share.

Audit Response

We obtained and analyzed the technical memo from the Company to ensure it complied with accounting principles generally accepted in the United States of America.

We utilized the knowledge, experience and expertise of our internal valuation specialist to execute the planned audit procedures related to the valuation by assessing the reasonableness of the methodologies employed to value the AIRs.

We tested the underlying assumptions presented in the black-scholes option pricing models.

We utilized the knowledge, experience and expertise of our internal valuation specialists to execute the planned audit procedures related to the valuation by assessing the reasonableness of the methodologies employed to value the convertible preferred stock before and after the triggering of the down round provision.

We also tested the underlying assumptions utilized in the Black-Scholes option pricing models.

/s/ WithumSmith+Brown, PC

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Deferred taxes

Accrued contingent consideration – long term

Warrant liability

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Total liabilities and stockholders’ equity

(1) Refer to Note 1 for information regarding Reverse Stock Split effective January 23, 2026.

The accompanying notes are an integral part of these consolidated financial statements.

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Contingent consideration

Loss on intangible asset disposal

Impairment of intangible assets

Total operating expense

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Loss on extinguishment of liability - contingent consideration

Loss on exchange of preferred instruments

Change in fair value of warrant liability

Total other income

LOSS BEFORE (PROVISION FOR) BENEFIT FROM INCOME TAXES

(Provision for) benefit from income taxes

Debt issuance costs

Total other income (expense)

LOSS BEFORE BENEFIT FROM (PROVISION FOR) INCOME TAXES

Benefit from (provision for) income taxes

Net loss per share attributable to common stockholders – basic and diluted

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Refer to Note 2 for calculation of net loss attributable to common stockholders

Refer to Note 1 for information regarding Reverse Stock Split effective January 23, 2026.

The accompanying notes are an integral part of these consolidated financial statements.

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Balance, beginning of period

Issuance of Series A preferred stock

Issuance of Series A-2 preferred stock

Issuance of Series A-3 preferred stock

Issuance of Series A-4 preferred stock

Issuance of Series A-5 preferred stock at $1,000 per share

Issuance of Series AA preferred stock at $1,000 per share

Issuance of Series AA-2 preferred stock at $1,000 per share

Issuance of Series AA-3 preferred stock at $1,000 per share

Issuance of Series AA-4 preferred stock at $1,000 per share

Issuance of Series AA-5 preferred stock at $1,000 per share

Issuance of Series AAA preferred stock at $1,000 per share

Issuance of Series AAA-2 preferred stock at $1,000 per share

Issuance of Series AAAA Junior preferred stock at $ 1.00 per share – RP Note Exchange

Issuance of Series AAAA Junior preferred stock at $ 1.00 per share – Super Biz Note Exchange

Issuance of Series B Preferred Stock in exchange for Series AA, AAA and AAA Junior Preferred Stock

Issuance of Series C Preferred Stock – YP Note Exchange

Issuance of Series AAA Junior preferred stock at $ 1,000 per share

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Issuance of Series AAA-4 Junior preferred stock at $ 1,000 per share

Series AAA-1 Issued in Exchange for Series A & AA Preferred

Series AAA-2 Issued in Exchange for Series A & AA Preferred

Exchanged Series A and AA Preferred stock

Conversions of Series A Preferred stock to common stock

Conversions of Series AA Preferred stock to common stock

Conversions of Series AAA Preferred stock to common stock

Conversions of Series AAA Junior Preferred stock to common stock

Balance, end of period

Conversions of Series A Preferred stock into common stock

Conversions of Series AA Preferred stock into common stock

Conversions of Series AAA Preferred stock into common stock

Conversions of Series AAA Junior Preferred stock into common stock

Exchange of Series AA, AAA and AAA Junior Preferred Stock into Series B Preferred Stock

Conversion of Series AAAA Junior preferred stock into common stock

Conversion of Series B Preferred Stock into common stock

Balance, end of year

Preferred stock (Amount, at Par Value):

Balance, beginning of period

Issuance of Series A preferred stock, $0.001 par value, at $1,000 per share

Issuance of Series A-2 preferred stock, $0.001 par value, at $1,000 per share

Issuance of Series A-3 preferred stock, $0.001 par value, at $1,000 per share

Issuance of Series A-4 preferred stock, $0.001 par value, at $1,000 per share

Issuance of Series A-5 preferred stock, $0.001 par value, at $1,000 per share

Issuance of Series AA preferred stock, $0.001 par value, at $1,000 per share

Issuance of Series AA-2 preferred stock, $0.001 par value, at $1,000 per share

Issuance of Series AA-3 preferred stock, $0.001 par value, at $1,000 per share

Issuance of Series AA-4 preferred stock, $0.001 par value, at $1,000 per share

Issuance of Series AA-5 preferred stock, $0.001 par value, at $1,000 per share

Issuance of Series AAA preferred stock, $0.001 par value, at $1,000 per share

Issuance of Series AAA-2 preferred stock, $0.001 par value, at $1,000 per share

Series AAA-1 Issued in Exchange for Series A & AA Preferred

Series AAA-2 Issued in Exchange for Series A & AA Preferred

Exchanged Series A and AA Preferred stock

Conversions of Series A Preferred stock

Conversions of Series AA Preferred stock

Conversions of Series AAA Preferred stock

Balance, end of period

Issuance of Series AAAA Junior preferred stock at $ 1.00 per share – RP Note Exchange

Issuance of Series AAAA Junior preferred stock at $ 1.00 per share – Super Biz Note Exchange

Issuance of Series B Preferred Stock in exchange for Series AA, AAA and AAA Junior Preferred Stock

Issuance of Series C Preferred Stock – YP Note Exchange

Issuance of Series AAA Junior preferred stock at $ 1,000 per share

Issuance of Series AAA-2 Junior preferred stock at $ 1,000 per share

Issuance of Series AAA-3 Junior preferred stock at $ 1,000 per share

Issuance of Series AAA-4 Junior preferred stock at $ 1,000 per share

Conversions of Series A Preferred stock into common stock

Conversions of Series AA Preferred stock into common stock

Conversions of Series AAA Preferred stock into common stock

Conversions of Series AAA Junior Preferred stock into common stock

Exchange of Series AA, AAA and AAA Junior Preferred Stock into Series B Preferred Stock

Conversion of Series AAAA Junior preferred stock into common stock

Conversion of Series B Preferred Stock into common stock

Balance, end of year

Common stock (Shares):

Balance, beginning of period

Issuance of common stock at $ 0.88 per share, net of issuance costs

Issuance of common stock at $ 2.60 per share, net of issuance costs

Exercise of prefunded common stock warrants at $ 2.60 per share, net of issuance costs

Issuance of common stock, net of issuance costs

Issuance of October PIPE Shares, net of issuance costs

Exercise of October PIPE Prefunded Warrants

Exercise of YP ELOC Prefunded Warrants -commitment shares

Common stock issued in connection with Hudson ELOC

Commitment Shares – Hudson ELOC

Conversion of Belleau Wood Note into common stock

Conversion of YP Note into common stock

Issuance of common stock - Agile II Exchange

Conversion of 1800 Diagonal Note I and Diagonal Note II

Common stock issued for Melon Acquisition

Common stock issued for Bannerfy Acquisition

Common stock issued for Super Biz Acquisition

Stock-based compensation

Conversion of Series A preferred stock

Conversion of Series AA preferred stock

Conversion of Series AAA preferred stock

Conversion of Series AAA Junior preferred stock

Conversion of Series A preferred stock into common stock

Conversion of Series AA preferred stock into common stock

Conversion of Series AAA preferred stock into common stock

Conversion of Series AAA Junior preferred stock into common stock

Conversion of Series AAAA Junior preferred stock into common stock

Conversion of Series B Preferred Stock into common stock

Preferred stock dividends paid – common stock

Balance, end of period

Issuance of common stock in settlement of legal matter

Consulting fees

Balance, end of year

Common stock (Amount, at Par Value):

Balance, beginning of period

Issuance of common stock at $ 0.88 per share, net of issuance costs

Issuance of common stock at $ 2.60 per share, net of issuance costs

Exercise of prefunded common stock warrants at $ 2.60 per share, net of issuance costs

Preferred stock dividends paid

Conversion of Series A, AA, AAA and AAA Junior preferred stock

Stock-based compensation

Common stock issued for Super Biz Acquisition

Issuance of common stock, net of issuance costs

Issuance of October PIPE Shares, net of issuance costs

Exercise of October PIPE Prefunded Warrants

Exercise of YP ELOC Prefunded Warrants -commitment shares

Common stock issued in connection with Hudson ELOC

Commitment Shares – Hudson ELOC

Conversion of Belleau Wood Note into common stock

Conversion of YP Note into common stock

Issuance of common stock - Agile II Exchange

Conversion of 1800 Diagonal Note I and Diagonal Note II

Common stock issued for Melon Acquisition

Common stock issued for Bannerfy Acquisition

Balance, end of period

Common stock issued for Super Biz Acquisition

Stock-based compensation

Conversion of Series A preferred stock into common stock

Conversion of Series AA preferred stock into common stock

Conversion of Series AAA preferred stock into common stock

Conversion of Series AAA Junior preferred stock into common stock

Conversion of Series AAAA Jr.

Preferred Stock into common Stock

Conversion of Series B Preferred Stock into common stock

Preferred stock dividends paid – common stock

Issuance of common stock in settlement of legal matter

Reverse stock split

Balance, end of year

Additional paid-in capital:

Balance, beginning of period

Issuance of Series A preferred stock at $1,000 per share, net of issuance costs

Issuance of Series A-2 preferred stock at $1,000 per share, net of issuance costs

Issuance of Series A-3 preferred stock at $1,000 per share, net of issuance costs

Issuance of Series A-4 preferred stock at $1,000 per share, net of issuance costs

Issuance of Series A-5 preferred stock at $1,000 per share, net of issuance costs

Issuance of Series AA preferred stock at $1,000 per share, net of issuance costs

Issuance of Series AA-2 preferred stock at $1,000 per share, net of issuance costs

Issuance of Series AA-3 preferred stock at $1,000 per share, net of issuance costs

Issuance of Series AA-4 preferred stock at $1,000 per share, net of issuance costs

Issuance of Series AA-5 preferred stock at $1,000 per share, net of issuance costs

Series AA Preferred additional investment rights

Issuance of Series AAA preferred stock at $1,000 per share, net of issuance costs

Issuance of Series AAA-2 preferred stock at $1,000 per share, net of issuance costs

Issuance of common stock, net of issuance costs

Issuance of October PIPE Shares, net of issuance costs

Issuance of October PIPE Prefunded Warrants, net of issuance costs

Issuance of October 2025 PIPE Warrants, net of issuance costs

Conversion of 1800 Diagonal Note I and Diagonal Note II

Exercise of YP ELOC Prefunded Warrants

Common stock issued in connection with Hudson ELOC

Commitment Shares – Hudson ELOC

Conversion of Belleau Wood Note

Conversion of YP Note to Common Stock

Issuance of Series C Preferred Stock – YP Note Exchange

Issuance of Series AAAA Junior preferred stock at $ 1.00 per share – RP Note Exchange

Issuance of Series AAAA Junior preferred stock at $ 1.00 per share – Super Biz Note Exchange

Issuance of common stock - Agile II Exchange

Reclassification of Original YP Warrant to Equity

Issuance of Series AAA Junior preferred stock at $ 1,000 per share, net of issuance costs

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Common stock purchase warrants issued – Series AAA-3 and Series AAA-4 Junior preferred stock

Issuance of common stock at $ 0.88 per share, net of issuance costs

Issuance of common stock at $ 2.60 per share, net of issuance costs

Exercise of prefunded common stock warrants at $ 2.60 per share, net of issuance costs

Conversion of Series A, AA and AAA preferred stock

Exchange of Series AA, AAA, AAA Junior Preferred Stock to Series B Preferred Stock – issuance costs

Conversion of Series A, AA and AAA preferred stock into common stock

Preferred stock dividends paid – common stock

Deemed dividend on Series AA Preferred Stock

Deemed dividend on exchange of Series AA, AAA and AAA Junior Preferred Stock for Series B Preferred Stock

Deemed dividend on Series AAA and AAA Junior Preferred Stock – down round

Deemed dividend on issuance of Series B Warrants

Common stock purchase warrants issued to placement agent

Common stock issued for Melon Acquisition

Common stock issued for Bannerfy Acquisition

Common stock issued for Super Biz Acquisition

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Issuance of common stock and incremental fair value in connection with modifications to certain existing AIRs in settlement of legal matters

Prepaid consulting fees

Balance, end of period

Consulting fees

Reverse stock split

Issuance of common stock in settlement of legal matter

Balance, end of year

Accumulated Deficit:

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( 249,014,000

Deemed dividend on Series AA Preferred Stock

Deemed dividend on exchange of Series AA, AAA and AAA Junior Preferred Stock for Series B Preferred Stock

Deemed dividend – Issuance of Series B Warrants

Deemed dividend on Series AA, AAA and AAA Junior preferred stock – down round

Preferred stock dividends paid – common stock

Balance, end of period

Balance, end of year

( 289,962,000

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Change in fair value of contingent consideration

Change in fair value of debt at fair value

Change in fair value of debt

Gain on sale of intangible assets

Loss on extinguishment of liability – contingent consideration

Loss on exchange of placement agent warrants

Impairment of intangible assets and goodwill

Fair value of noncash legal settlement and other noncash charges

Loss on intangible asset disposal

Amortization of convertible notes discount

Changes in assets and liabilities:

Debt issuance costs

Changes in operating assets and liabilities:

Accounts receivable

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CASH FLOWS FROM INVESTING ACTIVITIES

Cash paid in connection with Melon Acquisition, net

Proceeds from sale of Mineville Assets

Proceeds from sale of Minehut Assets

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Acquisition of other intangible and other assets

Net cash used in investing activities

Net cash provided by (used in) investing activities

CASH FLOWS FROM FINANCING ACTIVITIES

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Payments on notes payable

Payments on convertible notes

Proceeds from accounts receivable facility

Payments on accounts receivable facility

Contingent consideration payments – Melon Acquisition

Contingent consideration payments

Net cash provided by financing activities

INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS

CHANGE IN CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS – beginning of year

CASH AND CASH EQUIVALENTS – end of year

SUPPLEMENTAL NONCASH INVESTING ACTIVITIES

Cash paid for interest

SUPPLEMENTAL NONCASH INVESTING AND FINANCING ACTIVITIES

Issuance of equity securities in exchange for debt, net

Commitment shares issued in connection with YP ELOC

Commitment shares issued in connection with Hudson ELOC

Issuance of common stock in connection with legal settlement

Issuance of common stock in connection with Melon Acquisition

Common stock issued in connection with Super Biz Note

Issuance of common stock in connection with the payment of Super Biz Contingent Consideration

Series AAA Junior preferred stock noncash issuance costs – incremental fair value in connection with modifications to certain AIRs

Issuance of common stock in connection with Bannerfy Acquisition

Issuance of Super Biz Note in connection with extinguishment of accrued contingent consideration liability

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Super League Enterprise Inc.

SLE) (“Super League,” the “Company,” “we,” “us” or “our”) is redefining how brands connect with consumers through the power of playable media.

Through solutions within mobile games and the world’s largest immersive gaming platforms, Super League provides global brands with ads, content, and experiences that are not only seen – they are played, felt, and remembered.

Boasting an award-winning development studio, a vast network of native creators, and proprietary engagement technology, Super League is a one-of-a-kind partner for brands looking to stand out in culture, spark loyalty, and drive meaningful impact.

In a world where attention is earned, Super League makes brands relevant - by making them playable.

(“Super League” or the “Company”) (Nasdaq:

SLE) is an audience intelligence and media activation company operating at the intersection of a 3.5- billion-person global gaming population and a $ 1 trillion global advertising market.

The Company connects brands with consumers who play video games by leveraging an emerging data and activation platform that utilizes behavioral and psychographic signals to drive marketing outcomes.

By combining differentiated insights, scaled media distribution, and interactive ad formats, Super League enables marketers to reach gamers—one of the largest and most influential audiences in modern culture—across gaming environments, digital video, social media, and connected television.

Super League was incorporated on October 1, 2014 as Nth Games, Inc.

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on September 11, 2023.

On September 7, 2023, the Company filed a Certificate of Amendment (the “2023 Second Amendment”) to the Charter, which Second Amendment became effective as of September 11, 2023, to change the name of the Company from Super League Gaming, Inc.

to Super League Enterprise, Inc.

(the “Name Change”) and to effect a reverse stock split of the Company’s issued and outstanding shares of common stock at a ratio of 1-for- 20 (the “Reverse Split”).

The Name Change and the Reverse Split were approved by the Company’s Board of Directors (the “Board”) on July 5, 2023, and approved by the stockholders of the Company on September 7, 2023.

Refer to Note 7 below for additional information regarding the Reverse Split.

In connection with the Name Change, the Company also changed its Nasdaq ticker symbol to “SLE” from “SLGG.”

All references to common stock, warrants to purchase common stock and other rights, options to purchase common stock, restricted stock, share data, per share data and related information contained in the consolidated financial statements (hereinafter, “financial statements”) have been retroactively adjusted to reflect the effect of the Reverse Split for all periods presented.

All references to “Note,” followed by a number reference from one to twelve herein, refer to the applicable corresponding numbered footnotes to these consolidated financial statements.

Sale of Minehut

On February 29, 2024, the Company sold its Minehut related assets (“Minehut Assets”) to GamerSafer, Inc.

(“GamerSafer”), in a transaction approved by the Board.

Pursuant to the Asset Purchase Agreement entered into by and between GamerSafer and the Company on February 26, 2024 (the “GS Agreement”), the Company will receive $ 1.0 million of purchase consideration (“Minehut Purchase Consideration”) for the Minehut Assets, which amount will be paid by GamerSafer in revenue and royalty sharing over a multiple-year period, as described in the GS Agreement (the “Minehut Sale”).

Other than with respect to the GS Agreement, there is no relationship between the Company or its affiliates with GamerSafer or its affiliates.

The transaction allows Super League to streamline its position in partnering with major brands to build, market, and operate 3D experiences across multiple immersive platforms, including open gaming powerhouses like Minecraft, and aligns with the Company’s cost improvement initiatives.

Super League and GamerSafer will maintain a commercial relationship which ensures that Minehut can remain an ongoing destination available to Super League’s partners.

Smaller Reporting Company Status and Disclosure of Critical Accounting Matters In the Auditors Opinion

On January 16, 2026, the Company filed an amendment (the “2026 Amendment”) to the Company’s Third Amended and Restated Certificate of Incorporation, to effect a reverse stock split of the Company’s issued and outstanding shares of common stock, par value $ 0.001 per share (“Common Stock”) at a ratio of 1-for- 12 (the “2026 Reverse Split”).

The Amendment became effective on January 23, 2026.

As a result of the 2026 Reverse Split, every 12 shares of the Company’s issued and outstanding common stock was automatically combined and converted into one issued and outstanding share of Common Stock.

Refer to Note 7 for additional information on reverse stock splits.

As a result of the 2026 Reverse Split, all references to Common Stock, warrants to purchase common stock and other rights, options to purchase common stock, restricted stock, share data, per share data and related information contained in the consolidated financial statements (hereinafter, “financial statements”) have been retroactively adjusted to reflect the effect of the 2026 Reverse Split for all periods presented.

References to “financial statements,” “balance sheets,” “statements of operations,” “statements of cash flows,” and “statements of stockholders’ equity,” refer to the “consolidated financial statements,” “consolidated balance sheets,” “consolidated statements of operations,” “consolidated statements of cash flows” and “consolidated statements of stockholders’ equity,” respectively, of the Company, including the accounts of the Company and its wholly owned subsidiaries, if any.

As of December 31, 2025, there were no wholly owned subsidiaries of the Company.

The legal entity Mobcrush Streaming, Inc.

was dissolved effective May 14, 2025.

InPvP, LLC was sold in May 2025 as described at Note 4.

All references to “Note,” followed by a number reference, refer to the applicable corresponding numbered footnotes to these financial statements.

Liquidity and Capital Resources

As of December 31, 2025, the Company had cash and cash equivalents, working capital and an accumulated deficit as reflected on the balance sheet provided herein.

For the years ended December 31, 2025 and 2024, the Company incurred net losses, and cash outflows from operating activities as reflected in the accompanying statements of operations and cash flows, respectively.

Improved Liquidity Due to Third and Fourth Quarter 2025 Restructuring Activities and Equity Financing

Equity Financing

The Company completed an equity financing, defined below as the October 2025 PIPE, totaling $ 20.0 million in gross proceeds ($ 18.5 million in proceeds net of offering costs), as described at Note 7.

The proceeds provide significant working capital and liquidity to fund operations and meet the Company’s obligations as they arise.

The Company intends to use the proceeds from the October 2025 PIPE for repayment of existing indebtedness totaling $ 1.5 million (refer to Note 6), implementation of a new corporate strategy, general corporate purposes and working capital.

Additional Conversions of Debt to Equity

During the third and fourth quarters of 2025, holders of an aggregate of approximately $ 7.4 million of the Company’s outstanding promissory notes exchanged or converted such notes into either common stock or preferred stock of the Company pursuant to (i) executed exchange agreements, or (ii) the existing conversion terms set forth in the underlying promissory note agreements.

As a result, the Company eliminated approximately $ 7.4 million of principal and accrued interest obligations that would otherwise have required cash settlement in future periods, eliminating the Company’s debt obligations and related future cash commitments.

Refer to Notes 5 and Note 6 for additional information regarding the exchange or conversion of debt for equity during the year ended December 31, 2025.

Operating Cost Reductions

Since approximately May 2024, the Company implemented a number of operating expense reduction initiatives designed to decrease future operating cash outflow requirements.

These actions included workforce optimization, vendor contract renegotiations, reduced discretionary spending, and restructuring of non-core activities.

Excluding noncash charges, these operating expense reductions resulted in a decrease in operating expense of approximately 31 % for the year ended December 31, 2025 compared to the year ended December 31, 2024.

Considerations as of the Date of Issuance of Financial Statements

In connection with preparing the Company’s financial statements as of and for the year ended December 31, 2025, management evaluated whether conditions and events raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date the financial statements are issued, in accordance with Accounting Standards Codification ("ASC") 205-40, “Presentation of Financial Statements”—Going Concern (“ASC 205-40”).

Based on, (i) cash and cash equivalents on hand as of the issuance date of these financial statements, (ii) net proceeds from the equity financings completed as of December 31, 2025, (iii) elimination of future cash obligations resulting from the conversion of debt into equity, and (iv) realized reductions in operating expense, management believes that the Company will have sufficient liquidity to meet its obligations as they become due for at least the twelve-month period following the issuance date of these financial statements as contemplated by ASC 205-40.

Accordingly, management has concluded that substantial doubt about the Company’s ability to continue as a going concern has been alleviated.

Smaller Reporting Company Status and Disclosure of Critical Audit Matters in the Auditors ’ Opinion

We are a “smaller reporting company” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended.

Upon the completion of our initial public offering in February 2019, we elected to report as an “emerging growth company” (as defined in the JOBS Act) under the reporting rules set forth under the Exchange Act, which allowed us to take advantage of certain exemptions from various reporting requirements that are applicable to other Exchange Act reporting companies that are not “emerging growth companies,” including but not limited to:

Upon the completion of the Company’s initial public offering in February 2019, the Company elected to report as an “emerging growth company” (as defined in the JOBS Act) under the reporting rules set forth under the Exchange Act, which allowed the Company to take advantage of certain exemptions from various reporting requirements that are applicable to other Exchange Act reporting companies that are not “emerging growth companies,” including but not limited to, the following:

not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act;

taking advantage of extensions of time to comply with certain new or revised financial accounting standards;

being permitted to comply with reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements;

being permitted to comply with reduced disclosure obligations regarding executive compensation in the Company’s periodic reports and proxy statements;

being exempt from the requirement to hold a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

We were eligible to remain an “emerging growth company” for five years from the date of our initial public offering, and as such, ceased being an “emerging growth company” as of Fiscal Year 2024.

However, as described above we continue to be a “smaller reporting company.”

As a result of no longer qualifying for “emerging growth company” status, our independent auditors, commencing with their audit of our consolidated financial statements as of and for the year ended December 31, 2024, are required by the Public Company Accounting Oversight Board (“PCAOB”) to include a description of Critical Accounting Matters (“CAMs”) as a component of their audit opinion commencing with the audit of our consolidated financial statements for Fiscal Year 2024.

A CAM is defined as any matter arising from the audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee, as a component of typical and customary matters required to be communicated to the audit committee each year and that:

We were eligible to remain an “emerging growth company” for five years from the date of the Company’s initial public offering, and as such, ceased being an “emerging growth company” as of Fiscal Year 2024.

However, as described above the Company continues to be a “smaller reporting company.”

As a result of no longer qualifying for “emerging growth company” status, the Company’s independent auditors, commencing with their audit of the Company’s financial statements as of and for the years ended December 31, 2025 and 2024, are required by the Public Company Accounting Oversight Board (“PCAOB”) to include a description of Critical Audit Matters (“CAMs”) as a component of their audit opinion commencing with the audit of the Company’s financial statements for the year ended December 31, 2024.

A CAM is defined as any matter arising from the audit of the financial statements that was communicated or required to be communicated to the audit committee, as a component of typical and customary matters required to be communicated to the audit committee each year and that:

Relates to accounts or disclosures that are material to the financial statements;

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Further, the purpose of CAMs is to shed light on certain matters in an audit that involved especially challenging, subjective, or complex auditor judgment.

Our auditors have included descriptions of CAMs surrounding their audit strategy and procedures for their audit of revenue recognition and their audit of the modification of certain AIRs related to preferred stock outstanding during Fiscal Year 2024.

For the years ended December 31, 2025 and 2024, the Company’s auditors have included descriptions of CAMs as described in their audit opinion under “Critical Audit Matters.”

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The consolidated financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.

The financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries.

All intercompany accounts and transactions have been eliminated in consolidation.

The financial statements include the accounts of the Company and its wholly owned subsidiaries, if any.

All intercompany accounts and transactions have been eliminated in consolidation, if any.

As of December 31, 2025, the Company had no wholly owned subsidiaries.

Mobcrush Streaming, Inc.

was dissolved effective May 14, 2025.

InPvP, LLC was sold in May 2025, as described at Note 4.

Use of Estimates

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Actual results could differ from these estimates.

The Company believes that, of the significant accounting policies described herein, the accounting policies associated with revenue recognition, impairment of intangibles, stock-based compensation expense, accounting for business combinations and related contingent consideration, derecognition of assets, accounting for debt, including estimates and assumptions used to calculate the fair value of debt instruments, accounting for derivatives, including estimates and assumptions used to calculate the fair value of derivative instruments, accounting for convertible preferred stock, including modifications and exchanges of equity and equity-linked instruments, accounting for warrant liabilities and accounting for income taxes and valuation allowances against net deferred tax assets, require its most difficult, subjective, or complex judgments.

Going Concern

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

The Company incurred net losses as reported in the accompanying consolidated statements of operations for the periods presented, and had an accumulated deficit of $ 270.0 million as of December 31, 2024.

Noncash stock compensation, amortization and impairment charges for the years ended December 31, 2024 and 2023 totaled $ 3.9 million and $ 17.3 million, respectively.

For the years ended December 31, 2024 and 2023, net cash used in operating activities totaled $ 11.5 million and $ 15.5 million, respectively.

The Company had cash and cash equivalents of $ 1.3 million and $ 7.6 million as of December 31, 2024 and 2023, respectively.

To date, our principal sources of capital used to fund our operations and growth have been the net proceeds received from equity and debt financings.

The Company has and will continue to use significant capital for the growth and development of its business, and, as such, expects to seek additional capital either from operations, or that may be available from future issuance(s) of common stock, preferred stock and / or debt financings, to fund planned operations.

Accordingly, the Company's results of operations and the implementation of its long-term business strategies have been and could continue to be adversely affected by general conditions in the global economy, including conditions that are outside of the Company's control.

The most recent global financial crisis caused by severe geopolitical conditions, including conflicts abroad, and the threat of other outbreaks or pandemics, have resulted in extreme volatility, disruptions and downward pressure on stock prices and trading volumes across the capital and credit markets in which the Company traditionally operate.

A severe or prolonged economic downturn could result in a variety of risks to our business and could have a material adverse effect on us, including limiting our ability to obtain additional funding from the capital and credit markets.

In management’s judgement, these conditions raise substantial doubt about the ability of the Company to continue as a going concern as contemplated by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”), Topic 205-40, “Presentation of Financial Statements - Going Concern,” (“ASC 205”).

Management ’ s Plans

During the current and prior fiscal year, the Company continued its focus on the expansion of its service offerings and revenue growth opportunities through internal development, collaborations, and through opportunistic strategic acquisitions, as well as management and reduction of operating costs.

Management continues to explore alternatives for raising capital to facilitate the Company's growth and execute our business strategy, including strategic partnerships and/or other forms of equity or debt financings.

The Company considers historical operating results, costs, capital resources and financial position, in combination with current projections and estimates, as part of its plan to fund operations over a reasonable period.

Management’s considerations assume, among other things, that the Company will continue to be successful implementing its business strategy, that there will be no material adverse developments in the business, liquidity or capital requirements, and the Company will be able to raise additional equity and / or debt financing on acceptable terms.

If one or more of these factors do not occur as expected, it could cause a reduction or delay of the Company’s business activities, sales of material assets, default on its obligations, or forced insolvency.

The accompanying consolidated financial statements do not contain any adjustments which might be necessary if the Company were unable to continue as a going concern.

No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company.

The Company may continue to evaluate potential strategic acquisitions.

To finance such strategic acquisitions, it may be necessary to raise additional equity capital, incur debt, or both.

Any efforts to seek additional funding could be made through issuances of equity or debt, or other external financing.

However, additional funding may not be available on favorable terms, or at all.

The capital and credit markets have experienced extreme volatility and disruption periodically and such volatility and disruption may occur in the future.

If the Company fails to obtain additional financing when needed, the Company may not be able to execute its business plans which, in turn, would have a material adverse impact on the Company's financial condition, ability to meet our obligations, and ability to pursue our business strategies.

Entry into Financing Agreements

Agile II Promissory Note .

On February 10, 2025, the Company entered into a Business Loan and Security Agreement, with Agile Capital Funding, LLC as collateral agent, and Agile Lending, LLC (“Agile”), pursuant to which the Company issued to Agile a Confessed Judgment Secured Promissory Note for an aggregate value of $ 2.5 million (the “Agile II Note”) as described at Note 12.

$ 1.5 million of the Agile II Note was used to repay the remaining balance under the Agile Note (as defined below), with net proceeds to the Company of approximately $ 875,000 .

Refer to Note 12 below.

1800 Diagonal Lending, LLC Securities Purchase Agreement .

On March 26, 2025, the Company and 1800 Diagonal Lending, LLC, a Virginia limited liability company, or registered assigns (“Diagonal”) entered into a Securities Purchase Agreement (the “Diagonal Agreement”), pursuant to which the Company issued a Convertible Promissory Note (the “Diagonal Note”) in the principal amount of $ 300,000 (the “Diagonal Principal”), for which the Diagonal Note, among other things, (a) matures on December 30, 2025, (b) accrues interest at a rate of 10 % per annum on the unpaid principal balance from the date the Diagonal Note was issued until the principal and interest becomes due and payable, and (c) interest begins to accrue on the Diagonal Issuance Date but shall not be payable until the Diagonal Note becomes payable.

Refer to Note 12 below.

Belleau Note Purchase Agreement .

On March 28, 2025, we entered into a note purchase agreement with Belleau Wood Capital, LP, or its assigns (“Belleau”).

Pursuant to the note purchase agreement, the Company will issue to Belleau a total of three Unsecured Promissory Notes (each, a “Belleau Note” and collectively, the “Belleau Notes”) with an aggregate principal amount of $ 1,500,000 .

The consummation of the sale of the initial Belleau Note was consummated on March 27, 2025, with gross proceeds to the Company of $ 300,000 .

The consummation of the sale of the two remaining Belleau Notes will occur in the amounts and on the dates as follows:

(a) $ 600,000 on April 14, 2025;

and (b) $ 600,000 on April 28, 2025.

Each of the Belleau Notes:

(x) matures on the date that is 12 months from the date of the issuance of each respective Belleau Note;

(y) may be prepaid in part or in full at any time by the Company without penalty;

and (z) accrues interest at a rate of 20 % simple interest per annum.

Refer to Note 12 below.

Entry into Equity Purchase Agreement

On February 14, 2025, the Company entered into an equity purchase agreement with Hudson Global Ventures, LLC.

Pursuant to the Equity Purchase Agreement, the Company has the right, but not the obligation, to sell to Hudson, and Hudson is obligated to purchase, up to $ 2.9 million of newly issued shares of the Company’s common stock, from time to time during the term of the equity purchase agreement, subject to certain limitations and conditions (the “Hudson Offering”), as described at Note 12.

The Company intends to use the net proceeds, if any, from the Hudson Offering for working capital and general corporate purposes, including sales and marketing activities, product development and capital expenditures.

The Company believes that, of the significant accounting policies described herein, the accounting policies associated with revenue recognition, impairment of intangibles, stock-based compensation expense, accounting for business combinations and related contingent consideration, derecognition of assets, accounting for debt, including estimates and assumptions used to calculate the fair value of debt instruments, accounting for debt modifications, exchanges and extinguishments, accounting for derivatives, including estimates and assumptions used to calculate the fair value of derivative instruments, accounting for convertible preferred stock, including modifications and exchanges of equity and equity-linked instruments, accounting for warrant liabilities and accounting for income taxes and valuation allowances against net deferred tax assets, require its most difficult, subjective, or complex judgements.

Revenue Recognition

Revenue is recognized when the Company transfers promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods and services and when the customer obtains control of the good or service.

In this regard, revenue is recognized when:

(i) the parties to the contract have approved the contract (in writing, orally, or in accordance with other customary business practices) and are committed to perform their respective obligations;

In this regard, revenue is recognized when (i) the parties to the contract have approved the contract (in writing, orally, or in accordance with other customary business practices) and are committed to perform their respective obligations;

(ii) the entity can identify each party’s rights regarding the goods or services to be transferred;

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and (v) it is probable that the entity will collect substantially all of the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer.

Transaction prices are based on the amount of consideration to which we expect to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties, if any.

We consider the explicit terms of the revenue contract, which are typically written and executed by the parties, our customary business practices, the nature, timing, and the amount of consideration promised by a customer in connection with determining the transaction price for our revenue arrangements.

Transaction prices are based on the amount of consideration to which the Company expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties, if any.

The Company considers the explicit terms of the revenue contract, which are typically written and executed by the parties, the Company’s customary business practices, the nature, timing, and the amount of consideration promised by a customer in connection with determining the transaction price for the Company's revenue arrangements.

Refunds and sales returns historically have not been material.

The Company generates revenue from (i) innovative advertising including immersive game world and experience publishing and in-game media products, (ii) content and technology through the production and distribution of our own, advertiser and third-party content, and (iii) direct to consumer offers, including in-game items, e-commerce and digital collectibles.

The Company generates revenue from brands and agencies by executing programs targeting U.S.

audiences that include (i) mini-games and experiences within Roblox, Minecraft, and Fortnite, (ii) playable and rewarded video ads in mobile and immersive environments, (iii) in-game ads across mobile and PC, (iv) connected TV gaming applications and sponsorships, (v) custom integrations within games, (vi) interactive characters, and (vii) influencer content across social and digital video platforms.

An additional emerging revenue source includes participation in revenue generated by select game properties.

The Company reports revenue on a gross or net basis based on management’s assessment of whether the Company acts as a principal or agent in the transaction and is evaluated on a transaction-by-transaction basis.

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The determination of whether the Company acts as a principal or an agent in a transaction is based on an evaluation of whether the Company controls the goods or services prior to transfer to the customer.

Where applicable, the Company has determined that it acts as the principal in all of its media and advertising, publishing and content studio and direct to consumer revenue streams, except in situations where we utilize a reseller partner with respect to media and advertising sales arrangements.

In the event a customer pays us consideration, or we have a right to an amount of consideration that is unconditional, prior to our transfer of a good or service to the customer, we reflect the contract as a contract liability when the payment is made or the payment is due, whichever is earlier.

In the event we perform by transferring goods or services to a customer before the customer pays consideration or before payment is due, we reflect the contract as a contract asset, excluding any amounts reflected as a receivable.

Depending on the complexity of the underlying revenue arrangement and related terms and conditions, significant judgments, assumptions and estimates may be required to determine each parties rights regarding the goods or services to be transferred, each parties performance obligations, whether performance obligations are satisfied at a point in time or over time, estimates of completion methodologies, the timing of satisfaction of performance obligations, whether we are a principal or agent in the arrangement and the appropriate period or periods in which, or during which, the completion of the earnings process and transfer of control occurs.

Depending on the magnitude of specific revenue arrangements, if different judgments, assumptions and estimates are made regarding revenue arrangements in any specific period, our periodic financial results may be materially affected.

Where applicable, the Company has determined that it acts as the principal in all of its media and advertising, publishing and content studio and direct to consumer revenue streams, except in situations where the Company utilizes a reseller partner with respect to media and advertising sales arrangements.

In the event a customer pays the Company consideration, or the Company has a right to an amount of consideration that is unconditional, prior to the Company’s transfer of a good or service to the customer, the Company reflects the contract as a contract liability when the payment is made or the payment is due, whichever is earlier.

In the event the Company performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, the Company reflects the contract as a contract asset, excluding any amounts reflected as a receivable.

Depending on the complexity of the underlying revenue arrangement and related terms and conditions, significant judgements, assumptions and estimates may be required to determine each party’s rights regarding the goods or services to be transferred, each party’s performance obligations, whether performance obligations are satisfied at a point in time or over time, estimates of completion methodologies, the timing of satisfaction of performance obligations, whether we are a principal or agent in the arrangement and the appropriate period or periods in which, or during which, the completion of the earnings process and transfer of control occurs.

Depending on the magnitude of specific revenue arrangements, if different judgements, assumptions and estimates are made regarding revenue arrangements in any specific period, the Company’s periodic financial results may be materially affected.

Media and Advertising

Media and advertising revenue primarily consists of direct and reseller sales of our on-platform media (including off-platform media) and analytics products, and influencer marketing campaign sales to third-party brands and agencies (hereinafter, “Brands”).

Media and advertising revenue primarily consists of direct and reseller sales of the Company’s on-platform media (including off-platform media) and analytics products, and influencer marketing campaign sales to third-party brands and agencies (hereinafter, “Brands”).

On Platform Media

On platform media revenue is generated from third party Brands advertising in-game on Roblox or other digital platforms, and prior to the Minehut Sale, on our Minehut Minecraft platform.

On platform media revenue is generated from third party Brands advertising in-game on Roblox or other digital platforms, and prior to the Minehut Sale, on the Company’s Minehut Minecraft platform (Refer to Note 4, “Sale of Mineville” and “Sale of Minehut” below for information concerning the sale of the related digital properties in May 2025 and February 2024, respectively).

Media assets include static billboards, video billboards, portals, 3D characters, Pop Ups and other media products.

We work with Brands to determine the specific campaign media to deploy, target ad units and target demographics.

We customize the media advertising campaign and media products with applicable branding, images and design and place the media on the various digital platforms.

Media is delivered via our Super Biz Roblox platform, the Roblox Immersive Ads platform, other platforms, and prior to the Minehut Sale, on our owned and operated Minehut platform.

The Company works with Brands to determine the specific campaign media to deploy, target ad units and target demographics.

The Company customizes the media advertising campaign and media products with applicable branding, images and design and place the media on the various digital platforms.

Media is delivered via the Company’s Super Biz Roblox platform, the Roblox Immersive Ads platform, other platforms, and prior to the Minehut Sale, on the Company’s owned and operated Minehut platform.

Media placement can be based on a cost per thousand, other cost per measure, or a flat fee.

Media and advertising arrangements typically include contract terms for time periods ranging from one week to two or three months in length.

For on-platform media campaigns, we typically insert media products on-platform (in-game) to deliver to the Brand a predetermined number of impressions identified in the underlying contract.

The benefit accrues to the Brand at the time that we deliver the impression on the platform, and the media product is viewed or interacted with by the on-platform user.

For on-platform media campaigns, the Company typically inserts media products on-platform (in-game) to deliver to the Brand a predetermined number of impressions identified in the underlying contract.

The benefit accrues to the Brand at the time that the Company delivers the impression on the platform, and the media product is viewed or interacted with by the on-platform user.

The performance obligation for on-platform media campaigns is each impression that is guaranteed or required to be delivered per the underlying contract.

Each impression is considered a good or service that is distinct under the revenue standard, and the performance obligation under our on-platform media contracts is the delivery of a series of impressions.

Each impression required to be delivered in the series that we promise to transfer to the Brand meets the criteria to be a performance obligation satisfied over time, due to the fact that (1) our performance does not create an asset with an alternative use to the Company, and (2) we have an enforceable right to payment for performance completed to date per the terms of the contract.

Further, the same method is used to measure our progress toward complete satisfaction of the performance obligation to transfer each distinct impression, as in the transfer of the series of impressions to the customer, which is based on actual delivery of impressions.

As such, we account for the specified series of impressions as a single performance obligation.

Each impression is considered a good or service that is distinct under the revenue standard, and the performance obligation under the Company’s on-platform media contracts is the delivery of a series of impressions.

Each impression required to be delivered in the series that the Company promises to transfer to the Brand meets the criteria to be a performance obligation satisfied over time, due to the fact that (1) the Company’s performance does not create an asset with an alternative use to the Company, and (2) the Company has an enforceable right to payment for performance completed to date per the terms of the contract.

Further, the same method is used to measure the Company’s progress toward complete satisfaction of the performance obligation to transfer each distinct impression, as in the transfer of the series of impressions to the customer, which is based on actual delivery of impressions.

As such, the Company accounts for the specified series of impressions as a single performance obligation.

The delivery of the impression on platform represents the change in control of the good or service, and therefore, the Company satisfies its performance obligations and recognizes revenue based on the delivery of impressions under the contract.

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For influencer marketing campaigns that include multiple influencers, the customer can benefit from the influencer posts either on its own or together with other resources that are readily available to the customer.

Our influencer marketing campaigns for Brands (1) incorporate a significant service of integrating the goods or services with other goods or services promised in the contract (typically additional influencer posts) into a bundle of goods or services that represent the combined output that the customer has contracted for, and (2) the goods or services are interdependent in that each of the goods or services is affected by one or more of the other goods or services in the contract which combined, create an influencer marketing campaign to satisfy the Brand’s specific campaign objectives.

The Company’s influencer marketing campaigns for Brands (1) incorporate a significant service of integrating the goods or services with other goods or services promised in the contract (typically additional influencer posts) into a bundle of goods or services that represent the combined output that the customer has contracted for, and (2) the goods or services are interdependent in that each of the goods or services is affected by one or more of the other goods or services in the contract which combined, create an influencer marketing campaign to satisfy the Brand’s specific campaign objectives.

The interdependency of the performance obligations is supported by an understanding of what a customer expects to receive as a final product with respect to an influencer marketing campaign, which is an integrated influencer marketing advertising campaign that the influencer posts create when they are combined into an overall integrated campaign.

Our customers receive and consume the benefits of each influencer’s post as the content is posted on the influencers respective social media outlet.

Our customers receive and consume the benefits of each influencer’s post as the content is posted on the influencer’s respective social media outlet.

In addition, the influencer marketing campaigns and videos created by influencers are highly customized advertising engagements, where Brand specific assets and collateral are created for the customer based on specific and customized specifications, and therefore, does not create an asset with an alternative use.

Further, based on contract terms, we typically have an enforceable right to payment for performance to date during the term of the arrangement.

Further, based on contract terms, the Company typically has an enforceable right to payment for performance to date during the term of the arrangement.

We recognize revenues for influencer marketing campaigns based on input methods which recognize revenue on the basis of the entity’s efforts or inputs to the satisfaction of a performance obligation relative to the total expected inputs to the satisfaction of that performance obligation.

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Publishing and Content Studio

Publishing and content studio revenue consists of revenue generated from immersive game development and custom game experiences within our owned and affiliate game worlds, and revenue generated in connection with our production, curation and distribution of entertainment content for our own network of digital channels and media and entertainment partner channels.

Publishing and content studio revenue consists of revenue generated from immersive game development and custom game experiences within the Company’s owned and affiliate game worlds, and revenue generated in connection with the Company’s production, curation and distribution of entertainment content for the Company’s own network of digital channels and media and entertainment partner channels.

Custom builds are highly customized branded game experiences created and built by Super League for customers on existing digital platforms such as Roblox, Fortnite, Decentraland and others.

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Custom integrations will often include the creation of highly customized and branded game integration elements to be integrated into the existing Roblox gaming experience to the customers specifications and other campaign-specific media or products.

Prior to the Minehut Sale, we also created custom integrations on the digital property “Minehut” for Brands.

Prior to the Minehut Sale, the Company also created custom integrations on the digital property “Minehut” for Brands.

Refer to Note 4, “Sale of Mineville” and “Sale of Minehut” below for information concerning the sale of the related digital properties in May 2025 and February 2024, respectively.

Our custom builds and custom integration (hereinafter, “Custom Programs”) campaign revenue arrangements typically include multiple promises and performance obligations, including requirements to design, create and launch a platform game, customize and enhance an existing game, deploy media products, and related performance measurement.

Custom Programs offer a strategically integrated advertising campaign with multiple integrated components, and we provide a significant service of integrating the goods or services with other goods or services promised in the contract into a bundle of goods or services that represent the combined output or outputs that the customer has contracted for.

As such, Custom Program revenue arrangements are combined into a single performance unit, as our performance does not create an asset with an alternative use to the entity and we typically have an enforceable right to payment for performance to date during the term of the arrangement.

Custom Programs offer a strategically integrated advertising campaign with multiple integrated components, and the Company provides a significant service of integrating the goods or services with other goods or services promised in the contract into a bundle of goods or services that represent the combined output or outputs that the customer has contracted for.

As such, Custom Program revenue arrangements are combined into a single performance unit, as the Company’s performance does not create an asset with an alternative use to the entity and the Company typically has an enforceable right to payment for performance to date during the term of the arrangement.

We recognize revenues for Custom Programs based on input methods, that recognize revenue based upon estimates of progress toward complete satisfaction of the contract performance obligations, utilizing primarily costs or direct labor hours incurred to date to estimate progress towards completion.

Content Production

Content production revenue is generated in connection with our production, curation and distribution of entertainment content for our own network of digital channels and media and entertainment partner channels.

We distribute three primary types of content for syndication and licensing, including:

(1) our own original programming content, (2) user generated content (“UGC”), including online gameplay and gameplay highlights, and (3) the creation of content for third parties utilizing our remote production and broadcast technology.

Content production revenue is generated in connection with the Company’s production, curation and distribution of entertainment content for the Company’s own network of digital channels and media and entertainment partner channels.

The Company distributes three primary types of content for syndication and licensing, including (1) the Company’s own original programming content, (2) user generated content (“UGC”), including online gameplay and gameplay highlights, and (3) the creation of content for third parties utilizing the Company’s remote production and broadcast technology.

Content production arrangements typically involve promises to provide a distinct set of videos, creative, content creation and/or other live or remote production services.

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Further, promises to provide one-off or monthly content production services are typically separately identifiable as the nature of the promises, within the context of the contract, is to transfer each of those goods or services individually.

Each month’s content production services are separate and not integrated with a prior month’s or subsequent months services and do not represent a combined output;

Each month’s content production services are separate and not integrated with a prior month’s or subsequent month’s services and do not represent a combined output;

each month’s content production services do not modify any other prior period content production services, and the monthly services are not interdependent or highly interrelated.

As a result, each one-off or monthly promise to provide content production services is a distinct good or service that we promise to transfer and are therefore performance obligations.

In general, content production contracts do not meet the criteria for recognition of revenues over time as the customer typically does not simultaneously receive and consume the benefits provided by our performance as we perform, our performance does not typically create or enhance an asset that the customer controls, and while our performance does not create an asset with an alternative use, we typically have a right to payment upon completion of each distinct performance obligation.

As a result, each one-off or monthly promise to provide content production services is a distinct good or service that the Company promises to transfer and are therefore performance obligations.

In general, content production contracts do not meet the criteria for recognition of revenues over time as the customer typically does not simultaneously receive and consume the benefits provided by the Company’s performance as the Company performs, the Company’s performance does not typically create or enhance an asset that the customer controls, and while the Company’s performance does not create an asset with an alternative use, the Company typically has a right to payment upon completion of each distinct performance obligation.

A performance obligation is satisfied at a point in time if none of the criteria for satisfying a performance obligation over time are met.

For content production arrangements, we have a right to payment and the customer has control of the good or service at the time of completion and delivery of the one-off or monthly content production services in accordance with the terms of the underlying contract.

For content production arrangements, the Company has a right to payment and the customer has control of the good or service at the time of completion and delivery of the one-off or monthly content production services in accordance with the terms of the underlying contract.

As such, revenue is recognized at the time of completion of the one-off or monthly content production services.

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Payments are typically due from customers at the point of sale.

Refer to Note 4, “Sale of Mineville” and “Sale of Minehut” below for information concerning the sale of the related digital properties in May 2025 and February 2024, respectively.

InPvP Platform Generated Sales Transactions

Through a relationship with Microsoft, the owner of Minecraft, we operate a Minecraft server world for players playing the game on consoles and tablets.

We are one of seven partner servers with Microsoft that, while “free to play,” monetize the players through in-game micro transactions.

We generate in-game platform sales revenue from the sale of digital goods, including cosmetic items, durable goods, player ranks and game modes, leveraging the flexibility of the Microsoft Minecraft Bedrock platform, and powered by the InPvP cloud architecture technology platform.

Revenue is generated when transactions are facilitated between Microsoft and the end user, either via in-game currency or cash.

InPvP revenues are generated from single transactions for various distinct digital goods sold to users in-game.

Microsoft processes sales transactions and remits the applicable revenue share to us pursuant to the terms of the Microsoft agreement.

Revenue for digital goods sold on the platform is recognized when Microsoft (our partner) collects the revenue and facilitates the transaction, including delivery of digital goods, on the platform.

Revenue for such arrangements includes all revenue generated, make goods, and refunds of all transactions managed via the platform by Microsoft.

Payments are made to the Company monthly based on the sales revenue generated on the platform.

Revenue was comprised of the following for the years ended December 31:

Through a relationship with Microsoft, the owner of Minecraft, the Company operated a Minecraft server world for players playing the game on consoles and tablets.

The Company was one of seven partner servers with Microsoft that, while “free to play,” monetize the players through in-game micro transactions.

The Company generated in-game platform sales revenue from the sale of digital goods, including cosmetic items, durable goods, player ranks and game modes, leveraged the flexibility of the Microsoft Minecraft Bedrock platform, and powered by the InPvP cloud architecture technology platform.

Revenue was generated when transactions were facilitated between Microsoft and the end user, either via in-game currency or cash.

InPvP revenues were generated from single transactions for various distinct digital goods sold to users in-game.

Microsoft processed sales transactions and remitted the applicable revenue share to the Company pursuant to the terms of the Microsoft agreement.

Revenue for digital goods sold on the platform were recognized when Microsoft (our partner) collected the revenue and facilitates the transaction, including delivery of digital goods, on the platform.

Revenue for such arrangements included all revenue generated, make goods, and refunds of all transactions managed via the platform by Microsoft.

Payments were made to the Company monthly based on the sales revenue generated on the platform.

Revenues were comprised of the following for the years ended December 31:

Media and advertising

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For the fiscal years ended December 31, 2025 and 2024, 46 % and 47 % of revenues were recognized at a single point in time, and 54 % and 53 % of revenues were recognized over time, respectively.

Contract assets totaled $ 372,000 at December 31, 2024, $ 546,000 at December 31, 2023, and $ 1,013,000 at December 31, 2022.

Contract liabilities totaled $ 50,000 at December 31, 2024, $ 339,000 at December 31, 2023, and $ 111,000 at December 31, 2022.

Contract assets totaled $ 107,000 at December 31, 2025, and $ 372,000 at December 31, 2024, and are included in prepaids and other assets on the accompany balance sheets.

Contract liabilities totaled $ 566,000 at December 31, 2025 and $ 50,000 at December 31, 2024.

Revenue recognized during the year ended December 31, 2025 relating to contract liabilities as of December 31, 2024 totaled $ 50,000 .

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Cost of Revenues

Cost of revenues includes direct costs incurred in connection with the satisfaction of performance obligations under our revenue arrangements, including internal and third-party engineering, creative, content, broadcast and other personnel, talent and influencers, internal and third-party game developers, content capture and production services, direct marketing, cloud services, software, prizing, and revenue sharing fees.

Advertising costs include the cost of ad production, social media, print media, marketing, promotions, and merchandising.

The Company expenses advertising costs as incurred.

Advertising costs are included in selling, marketing and advertising expense in the consolidated statements of operations.

Advertising expense for the fiscal years ended December 31, 2024 and 2023 was $ 101,000 and $ 134,000 , respectively.

Cost of revenues includes direct costs incurred in connection with the satisfaction of performance obligations under the Company’s revenue arrangements, including internal and third-party engineering, creative, content, broadcast and other personnel, talent and influencers, internal and third-party game developers, third-party ad-platform, content capture and production services, direct marketing, cloud services, software, prizing, and revenue sharing fees.

Engineering, Technology and Development Costs

Components of our platform are available on a “free to use,” “always on basis,” and are utilized and offered as an audience acquisition tool, as a means of growing our audience, engagement, viewership, players and community.

Engineering, technology and development related operating expense includes the costs described below, incurred in connection with our audience acquisition and viewership expansion activities.

Engineering, technology and development related operating expense includes (i) allocated internal engineering personnel expense, including salaries, noncash stock compensation, taxes and benefits, (ii) third-party contract software development and engineering expense, (iii) internal use software cost amortization expense, and (iv) technology platform related cloud services, broadband and other platform expense, incurred in connection with our audience acquisition and viewership expansion activities, including tools and product offering development, testing, minor upgrades and features, free to use services, corporate information technology and general platform maintenance and support.

Components of the Company’s platform are available on a “free to use,” “always on basis,” and are utilized and offered as an audience acquisition tool, as a means of growing the Company’s audience, engagement, viewership, players and community.

Engineering, technology and development related operating expense includes the costs described below, incurred in connection with the Company’s audience acquisition and viewership expansion activities.

Engineering, technology and development related operating expense includes (i) allocated internal engineering personnel expense, including salaries, noncash stock compensation, taxes and benefits, (ii) third-party contract software development and engineering expense, (iii) internal use software cost amortization expense, and (iv) technology platform related cloud services, broadband and other platform expense, incurred in connection with the Company’s audience acquisition and viewership expansion activities, including tools and product offering development, testing, minor upgrades and features, free to use services, corporate information technology and general platform maintenance and support.

Cash and Cash Equivalents

The Company considers all highly-liquid, short-term investments with original maturities of three months or less when purchased to be cash equivalents.

At December 31, 2025 and 2024, cash balances totaled $ 5,377,000 and $ 1,310,000 , respectively.

At December 31, 2025 and 2024 cash equivalent balances totaled $ 9,013,000 and $ 0 , respectively.

At December 31, 2025, cash equivalents were comprised solely of investments in highly-liquid U.S.

treasury money market funds, valued based on quoted market prices, a Level 1 input.

Accounts Receivable

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Certain liabilities are required, or elected, to be recorded at fair value on a recurring basis in accordance with applicable guidance.

As described in the notes below, certain promissory notes, contingent consideration, warrant liabilities and contingent interest derivatives outstanding during the periods presented are recorded at fair value.

As described in the notes below, certain promissory notes, convertible notes, contingent consideration, warrant liabilities and contingent interest derivatives outstanding during the periods presented are recorded at fair value.

Transfers to/from Levels 1, 2, and 3 are recognized at the beginning of the reporting period.

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Certain long-lived assets may be periodically required to be measured at fair value on a nonrecurring basis, including long-lived assets that are impaired.

The fair value for other assets and liabilities such as cash, restricted cash, accounts receivable, other receivables, prepaid expense and other current assets, accounts payable and accrued expense, and liabilities to customers have been determined to approximate carrying amounts due to the short maturities of these instruments.

The fair value for other assets and liabilities such as cash, accounts receivable, other receivables, prepaid expense and other current assets, accounts payable and accrued expense, and contract liabilities have been determined to approximate carrying amounts due to the short maturities of these instruments.

Derivative Financial Instruments

The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives.

For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations.

The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period.

Equity instruments that are initially classified as equity that become subject to reclassification are reclassified to a liability at the fair value of the instrument on the reclassification date.

Derivative instrument liabilities are classified in the consolidated balance sheets as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date.

Derivative instrument liabilities are classified in the balance sheets as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date.

In circumstances where the embedded conversion option in a convertible instrument is required to be bifurcated, and there are also other embedded derivative instruments in the convertible instrument that are required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument.

Equity-linked instruments that are deemed to be freestanding instruments issued in conjunction with preferred stock are accounted for separately.

For equity linked instruments classified as equity, the proceeds are allocated based on the relative fair values of the preferred stock and the equity-linked instrument following the guidance in FASB ASC Topic 470, “Debt,” (“ASC 470”).

Equity-linked instruments that are deemed to be freestanding instruments issued in conjunction with convertible debt, common stock or preferred stock are accounted for separately.

For equity linked instruments classified as equity, the proceeds are allocated based on the relative fair values of the common stock or preferred stock and the equity-linked instrument following the guidance in Financial Accounting Standards Board (“FASB”) ASC Topic 505, “Equity” (when issued in conjunction with common stock), and ASC Topic 470, “Debt” (“ASC 470”) (when issued in conjunction with debt).

Property and Equipment

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Maintenance and repairs are charged against the results of operations as incurred.

When these assets are sold or otherwise disposed of, the asset and related depreciation are relieved, and any gain or loss is included in the consolidated statements of operations for the period of sale or disposal.

When these assets are sold or otherwise disposed of, the asset and related depreciation are relieved, and any gain or loss is included in the statements of operations for the period of sale or disposal.

Depreciation and amortization are computed on a straight-line basis over the estimated useful lives of the assets, typically over a three to five -year period.

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The application of the acquisition method of accounting requires management to make significant estimates and assumptions in the determination of the fair value of assets acquired and liabilities assumed in connection with the allocation of the purchase price consideration to the assets acquired and liabilities assumed.

Transaction costs associated with business combinations are expensed as incurred and are included in general and administrative expense in the consolidated statements of operations.

Transaction costs associated with business combinations are expensed as incurred and are included in general and administrative expense in the statements of operations.

Contingent consideration, representing an obligation of the acquirer to transfer additional assets or equity interests to the seller if future events occur or conditions are met, is recognized when probable and reasonably estimable.

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Depreciation and/or amortization of adjusted assets are recognized as a cumulative catch-up adjustment, as if the additional amount of consideration that is no longer contingent had been accrued from the outset of the arrangement.

Contingent consideration that is paid to sellers that remain employed by the acquirer and linked to future services is generally considered compensation cost and recorded in the consolidated statements of operations in the post-combination period.

Contingent consideration that is paid to sellers that remain employed by the acquirer and linked to future services is generally considered compensation cost and recorded in the statements of operations in the post-combination period.

Intangible Assets

Intangible assets primarily consist of (i) internal-use software development costs, (ii) domain name, copyright and patent registration costs, (iii) commercial licenses and branding rights, (iv) developed technology acquired, (v) partner, customer, creator and influencer related intangible assets acquired and (vi) other intangible assets, which are recorded at cost (or in accordance with the acquisition method or cost accumulation methods described above) and amortized using the straight-line method over the estimated useful lives of the assets, ranging from three to 10 years.

Intangible assets primarily consist of (i) internal-use software development costs, (ii) domain name, copyright and patent registration costs, (iii) commercial licenses, (iv) developed technology acquired, (v) partner, customer, creator and influencer related intangible assets acquired and (vi) other intangible assets, which are recorded at cost (or in accordance with the acquisition method or cost accumulation methods described above) and amortized using the straight-line method over the estimated useful lives of the assets, ranging from 3 to 10 years.

Software development costs incurred to develop internal-use software during the application development stage are capitalized and amortized on a straight-line basis over the software’s estimated useful life, which is generally three years.

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The Company assesses the recoverability of long-lived assets whenever events or changes in circumstances indicate that their carrying value may not be recoverable.

Factors we consider important, which could trigger an impairment review, include the following:

Factors the Company considers important, which could trigger an impairment review, include the following:

significant underperformance relative to expected historical or projected future operating results;

significant changes in the manner of our use of the acquired assets or the strategy for our overall business;

significant changes in the manner of the Company’s use of the acquired assets or the strategy for the Company’s overall business;

significant negative industry or economic trends;

significant adverse changes in legal factors or in the business climate, including adverse regulatory actions or assessments;

and significant decline in our stock price for a sustained period.

and significant decline in the Company’s stock price for a sustained period.

In the event the sum of the expected undiscounted future cash flows resulting from the use of the asset is less than the carrying amount of the asset, an impairment loss equal to the excess of the asset’s carrying value over its fair value is recorded.

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The Company currently has one reporting unit.

The following table presents the changes in the carrying amount of goodwill as of December 31:

Beginning Balance

Acquisitions (See Note 5)

Ending Balance

As of December 31, 2025 and 2024, goodwill totaled $ 1,864,000 .

There were no changes in the carrying amount of goodwill for the periods presented.

Goodwill represents the excess of the purchase price of the acquired business over the acquisition date fair value of the net assets acquired.

Goodwill is tested for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis (December 31) and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value.

We consider our market capitalization and the carrying value of our assets and liabilities, including goodwill, when performing our goodwill impairment tests.

We operate in one reporting segment.

The Company considers its market capitalization and the carrying value of the Company’s assets and liabilities, including goodwill, when performing the Company’s goodwill impairment tests.

The Company operates in one reporting segment.

If a potential impairment exists, a calculation is performed to determine the fair value of existing goodwill.

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Third-party appraised values may also be used in determining whether impairment potentially exists.

In assessing goodwill impairment, significant judgment is required in connection with estimates of market values, estimates of the amount and timing of future cash flows, and estimates of other factors that are used to determine the fair value of our reporting unit.

If these estimates or related projections change in future periods, future goodwill impairment tests may result in charges to earnings.

When conducting the Company’s annual or interim goodwill impairment assessment, we have the option to initially perform a qualitative evaluation of whether it is more likely than not that goodwill is impaired.

When conducting the Company’s annual or interim goodwill impairment assessment, the Company has the option to initially perform a qualitative evaluation of whether it is more likely than not that goodwill is impaired.

The Company is also permitted to bypass the qualitative assessment and proceed directly to the quantitative test.

In evaluating whether it is more likely than not that the fair value of our reporting unit is less than its carrying amount, we consider the guidance set forth in ASC 350, which requires an entity to assess relevant events and circumstances, including macroeconomic conditions, industry and market considerations, cost factors, financial performance and other relevant events or circumstances.

In evaluating whether it is more likely than not that the fair value of the Company’s reporting unit is less than its carrying amount, the Company considers the guidance set forth in ASC 350, which requires an entity to assess relevant events and circumstances, including macroeconomic conditions, industry and market considerations, cost factors, financial performance and other relevant events or circumstances.

At December 31, 2025 and 2024, the Company bypassed the optional qualitative assessment and performed a quantitative goodwill impairment test.

We utilized the market capitalization of the Company as of December 31, 2024 and 2023, a Level 1 input, to estimate the fair value of the Company’s single reporting unit.

Based on the analysis, the estimated fair value of our reporting unit at December 31, 2024 and 2023 was approximately $ 27.0 million and $ 29.1 million, respectively, compared to a carrying value of our single reporting unit of approximately $ 0.17 million and $ 10.0 million as of December 31, 2024 and 2023, respectively.

Based on the analysis, the fair value of our single reporting unit exceeded its carrying value as of December 31, 2024 and 2023, and therefore, the Company concluded that goodwill was not “more likely than not” impaired as of December 31, 2024 and 2023, respectively.

The Company utilizes an estimate of the market capitalization of the Company as of December 31, 2025 and 2024, a Level 1 input, based on the 30-day volume weighted average of the Company’s stock price immediately prior to December 31, 2025, to estimate the fair value of the Company’s single reporting unit.

Based on the analysis, as of December 31, 2025 and 2024, the estimated fair value of the Company’s reporting unit totaled $ 29.0 million and $ 27.0 million, respectively, compared to a carrying value of the Company’s single reporting unit of approximately $ 17.5 million and $ 0.17 million, respectively.

Based on the analysis, the fair value of the Company’s single reporting unit exceeded its carrying value as of December 31, 2025 and 2024, and therefore, the Company concluded that goodwill was not “more likely than not” impaired as of December 31, 2025 and 2024.

Stock-Based Compensation

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The fair value of restricted stock and restricted stock unit awards is determined by the product of the number of shares or units granted and the grant date market price of the underlying common stock.

The fair value of stock option and common stock purchase warrant awards is estimated on the date of grant utilizing the Black-Scholes-Merton option pricing model.

The fair value of stock option and common stock purchase warrant awards is estimated on the date of grant utilizing the Black-Scholes-Merton option pricing model (“Black-Scholes”).

The Company utilizes the simplified method for estimating the expected term for options granted to employees due to the lack of available or sufficient historical exercise data for the Company for the applicable options terms.

The Company accounts for forfeitures of awards as they occur.

Estimates of expected volatility of the underlying common stock for the expected term of the stock option used in the Black-Scholes-Merton option pricing model are determined by reference to historical volatilities of the Company’s common stock and historical volatilities of similar companies.

Estimates of expected volatility of the underlying common stock for the expected term of the stock option used in the Black-Scholes option pricing model are determined by reference to historical volatilities of the Company’s common stock and historical volatilities of similar companies.

Grants of equity-based awards (including warrants) to non-employees in exchange for consulting or other services are accounted for using the grant date fair value of the equity instruments issued.

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In the event that the proposed or actual equity financing is not completed, or is deemed not likely to be completed, such costs are expensed in the period that such determination is made.

Deferred equity financing costs, if any, are included in other current assets in the accompanying consolidated balance sheets.

Deferred equity financing costs, if any, are included in other current assets in the accompanying balance sheets.

For the years ended December 31, 2025 and 2024, financing costs charged against gross proceeds in connection with equity financings totaled $ 1,670,000 and $ 343,000 , respectively.

Deferred financing costs, included in prepaid expense and other current assets, at December 31, 2025 and 2024, totaled $ 888,000 and $ 64,000 , respectively.

Specific incremental costs directly attributable to a proposed or actual debt offering are reported in the consolidated balance sheets as a direct deduction from the face amount of the debt instrument.

Specific incremental costs directly attributable to a proposed or actual debt offering are reported in the balance sheets as a direct deduction from the face amount of the debt instrument.

In the event that the proposed or actual debt financing is not completed, or is deemed not likely to be completed, such costs are expensed in the period that such determination is made.

In the event that the Company elects to use the fair value option to account for debt instruments, all costs directly attributable to the debt offering are expensed as incurred in the consolidated statements of operations.

For the years ended December 31, 2025 and 2024, debt financing costs expensed as incurred in connection with debt financings totaled $ 554,000 and $ 180,000 , respectively.

Fair Value Option (“ FVO ” ) Election

The Company accounted for certain promissory notes issued, as described at Note 6, under the fair value option election pursuant to ASC 825, “Financial Instruments,” (“ASC 825”) as discussed below.

The Company accounted for certain promissory notes and convertible notes issued, as described at Note 6, under the fair value option election pursuant to ASC 825, “Financial Instruments” (“ASC 825”), as discussed below.

The promissory notes accounted for under the FVO election are each debt host financial instruments containing embedded features which would otherwise be required to be bifurcated from the debt-host and recognized as separate derivative liabilities subject to initial and subsequent periodic estimated fair value measurements under ASC 815.

Notwithstanding, ASC 825 provides for the “fair value option” election, to the extent not otherwise prohibited by ASC 825, to be afforded to financial instruments, wherein bifurcation of an embedded derivative is not necessary, and the financial instrument is initially measured at its issue-date estimated fair value and then subsequently remeasured at estimated fair value on a recurring basis at each reporting period date.

The estimated fair value adjustments, subsequent to the issuance date, as required by ASC 825, are recognized as a component of other comprehensive income (“OCI”) with respect to the portion of the fair value adjustment attributed to a change in the instrument-specific credit risk, with the remaining amount of the fair value adjustment recognized as other income (expense) in the accompanying consolidated statements of operations.

With respect to the promissory notes described at Note 6, as provided for by ASC 825, the estimated fair value adjustments are presented in a respective single line item within other income (expense) in the accompanying consolidated statements of operations, since the change in fair value of the convertible notes payable was not attributable to instrument specific credit risk.

The estimated fair value adjustment is included in interest expense in the accompanying consolidated statements of operations.

With respect to the promissory notes described at Note 6, as provided for by ASC 825, the estimated fair value adjustments are presented in a respective single line item within other income (expense) in the accompanying statements of operations, since the change in fair value of the convertible notes payable was not attributable to instrument specific credit risk.

The estimated fair value adjustment is included in interest expense in the accompanying statements of operations.

The fair value of the promissory notes described at Note 6 was estimated based on a calculation of the present value of the related cash flows (i.e.

payments of principal and interest based on contractual agreement terms) using a discount rate that reflected market rates and related credit risk.

payments of principal and interest based on contractual agreement terms) using a discount rate that reflected market rates and related credit risk (Level 3 inputs).

The FVO was elected for the promissory notes described at Note 6 due to the short-term nature of the promissory notes and to provide relevant and timely information regarding the current market value of the debt, which is marked to market at each balance sheet date reflecting the effects of market fluctuations and other factors.

Debt Modifications

Modifications to debt obligations are initially analyzed to determine whether the modification qualifies as a troubled debt restricting (TDR).

Significant judgements and estimates may be required in connection with the determination of whether or not to elect the FVO for specific assets and/or liabilities.

In addition, significant judgements and estimates may be required in connection with the determination of appropriate discount rates utilized in connection with present value related valuation techniques.

Discount rate assumptions typically reflect the estimated yield to maturity of the debt instrument, incorporating the estimated market-implied rate of return an investor would receive if they held the debt until maturity, and taking into account all future cash flows and the current market price;

adjusted for credit risk and market conditions.

In addition, judgements and estimates are required in connection with the determination of the portion of subsequent fair value adjustments relate to instrument-specific credit risk, which are reflected in OCI, and the portion of subsequent fair value adjustments that relate to changes in interests rates or other variables, which are reflected in the statements of operations.

Variations in any of these judgements and estimates could have a material impact on the Company’s financial results.

The Company may issue convertible debt instruments that include detachable common stock purchase warrants.

The Company evaluates the terms of each instrument to determine the appropriate accounting treatment under ASC 825-10, “Fair Value Option,” ASC 480, “Distinguishing Liabilities from Equity,” and ASC 815-40, “Contracts in Entity’s Own Equity” (“ASC 815-40”).

The Company has elected the FVO for certain convertible debt instruments, as described at Note 6.

Under the FVO, the entire debt instrument, including any embedded conversion feature, is initially recognized and subsequently measured at fair value, with changes in fair value recognized in earnings within other income (expense) in the statement of operations each reporting period.

The fair value election eliminates the need to separately account for the embedded conversion feature under ASC 815-40.

Detachable warrants issued in connection with convertible debt are evaluated separately from the debt instrument.

If the warrants meet the criteria for equity classification under ASC 815-40 (including the fixed-for-fixed equity scope exception and no cash-settlement provisions), the warrants are recorded in additional paid-in capital and are not subsequently remeasured.

If the warrants do not meet the criteria for equity classification, they are accounted for as derivative liabilities at fair value with changes in fair value recognized in earnings.

The classification equity-linked instruments is reassessed at each balance sheet date.

If the classification changes as a result of events during the applicable period, the equity linked instrument shall be reclassified as of the date of the event that caused the reclassification.

If an equity-linked instrument is reclassified from an asset or a liability to equity, gains or losses recorded to account for the equity-linked instrument at fair value during the period that the contract was classified as an asset or a liability are not reversed.

The equity-linked instrument is marked to fair value immediately before the reclassification.

At issuance, proceeds are allocated between the fair-value-option debt instrument and any separately issued equity-classified warrants based on their relative fair values.

Transaction costs related to fair-value-option debt instruments are expensed as incurred.

For equity-classified warrants, issuance costs are recorded as a reduction to additional paid-in capital.

Changes in the fair value of convertible debt for which the FVO has been elected may reflect changes in the Company’s credit risk, market interest rates, and the value of the conversion feature.

Debt Modifications and Extinguishments

Modifications to debt obligations are initially analyzed to determine whether the modification qualifies as a troubled debt restructuring (“TDR”).

A modification is a troubled debt restructuring if both (1) the borrower is experiencing financial difficulty, and (2) the lender grants the borrower a concession.

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A lender is granting a concession when the effective borrowing rate on the restructured debt is less than the effective borrowing rate on the original debt.

The recognition and measurement of the impact of a TDR on the financial statements depends on whether the future undiscounted cash flows specified by the new terms are greater (gain is recorded in the consolidated statements of operations for the difference) or less (no gain is recorded in the consolidated statements of operations for the difference) than the carrying value of the debt.

The recognition and measurement of the impact of a TDR on the financial statements depends on whether the future undiscounted cash flows specified by the new terms are greater (gain is recorded in the statements of operations for the difference) or less (no gain is recorded in the statements of operations for the difference) than the carrying value of the debt.

For an exchange of debt instruments or a modification of a debt instrument by a debtor and a creditor in a nontroubled debt situation, the Company initially evaluates whether the modified debt terms are "substantially different" from the original debt.

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If the modification is not deemed to be substantially different, the modification is accounted for as an adjustment to the carrying amount of the debt, with a recalculated effective interest rate.

If the modification is deemed to be substantially different, then the modification is accounted for as an extinguishment of the original debt and issuance of new debt, requiring the recognition of a gain or loss on the extinguishment in the consolidated statements of operations.

In an early extinguishment of debt for which the fair value option has been elected, the net carrying amount of the extinguished debt is determined to be equal to its fair value at the reacquisition date.

As such, there is no difference between the carrying amount of the debt and its reacquisition price for which to recognize a gain or loss.

Upon extinguishment the Company includes in net income only the cumulative amount of the gain or loss previously recorded in other comprehensive income for the extinguished debt that resulted from changes in instrument-specific credit risk, if any.

Debt or Other Liabilities Exchanged for Equity or Equity-Linked Instruments - Fair Value Option

The Company may settle or exchange debt instruments by issuing equity securities (i.e., common stock or preferred stock).

Upon settlement or exchange of FVO-elected debt for the Company’s equity securities, the carrying amount of the debt immediately prior to settlement represents its fair value at the settlement date.

Any difference between the fair value of the equity instruments (or other assets) issued and the carrying amount of the debt extinguished is recognized as a gain or loss in earnings within other income (expense) in the statements of operations at the time of the exchange.

Equity instruments issued in settlement of debt are recorded in stockholders’ equity at their fair value on the settlement date.

Any incremental direct costs associated with issuing equity securities are accounted for as a reduction to additional paid-in capital.

The exchange of a liability (for example a liability-classified common stock purchase warrant) for an equity-classified instrument (for example an equity classified common stock purchase warrant) is accounted for as an extinguishment of the liability and issuance of a new equity-linked instrument at fair value.

Any difference between the fair value of the equity instruments issued and the carrying amount of the liability extinguished is recognized as a gain or loss in other income (expense) in the statements of operations, as described above.

Transfers of Financial Assets

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Whether control has been relinquished requires, among other things, an evaluation of relevant legal considerations and an assessment of the nature and extent of the Company’s continuing involvement with the assets transferred.

Gains and losses stemming from transfers reported as sales, if any, are included in the consolidated statements of operations.

Assets obtained and liabilities incurred in connection with transfers reported as sales are initially recognized in the consolidated balance sheets at fair value.

Gains and losses stemming from transfers reported as sales, if any, are included in the statements of operations.

Assets obtained and liabilities incurred in connection with transfers reported as sales are initially recognized in the balance sheets at fair value.

Transfers of financial assets that do not qualify for sale accounting are reported as collateralized borrowings.

Accordingly, the related assets remain on the Company’s consolidated balance sheets and continue to be reported and accounted for as if the transfer had not occurred.

Accordingly, the related assets remain on the Company’s balance sheets and continue to be reported and accounted for as if the transfer had not occurred.

Cash proceeds from these transfers are reported as liabilities, with attributable interest expense recognized over the life of the related transactions.

Commitment fees charged irrespective of drawdown activity are recognized as expense on a straight line basis over the commitment period and included in other income (expense) in the consolidated statements of operations.

Refer to Note 6 for additional information.

Concentration of Credit Risks

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Number of vendors > 10% of accounts payable / percent of accounts payable

Net Loss Per Share

Basic net loss per share is computed by dividing the income or loss by the weighted-average number of outstanding shares of common stock for the applicable period.

Net Earnings (Loss) Per Share

Basic net earnings (loss) per share is computed by dividing the income or loss by the weighted-average number of outstanding shares of common stock for the applicable period.

Diluted earnings per share is computed by dividing the income or loss by the weighted-average number of outstanding shares of common stock for the applicable period, including the dilutive effect of common stock equivalents.

Potentially dilutive common stock equivalents primarily consist of common stock potentially issuable in connection with the conversion of outstanding preferred stock, convertible notes payable, employee stock options, warrants issued to employees and non-employees in exchange for services and warrants issued in connection with financings.

Common stock underlying all outstanding stock options, restricted stock units and warrants, totaling 3,652,000 and 2,250,000 at December 31, 2024 and 2023, respectively, have been excluded from the computation of diluted loss per share because the effect of inclusion would have been anti-dilutive.

Common stock potentially issuable in connection with the conversion of outstanding preferred stock totaling 10,117,000 and 12,127,000 at December 31, 2024 and 2023, respectively, have been excluded from the computation of diluted loss per share because the effect of inclusion would have been anti-dilutive.

Common stock potentially issuable in connection with the exercise of outstanding additional investment rights, as described at Note 7, totaling 8,414,000 and 1,682,000 at December 31, 2024 and 2023, respectively, have been excluded from the computation of diluted loss per share because the effect of inclusion would have been anti-dilutive.

A reconciliation of net loss to net loss attributable to common stockholders is as follows as of December 31:

During the periods presented, potentially dilutive common stock equivalents primarily consist of common stock potentially issuable in connection with the conversion of outstanding preferred stock including related AIRs, convertible notes payable, employee stock options, warrants issued to employees and non-employees in exchange for services and warrants issued in connection with financings.

A reconciliation of net loss to net loss attributable to common stockholders is as follows for the periods presented:

Fiscal Year Ended

Deemed dividend on Series AA Preferred Stock – down round feature

Preferred Dividends paid in shares of common stock

Net loss attributable to common stockholders

Deemed dividend on exchange of Series AA, AAA and AAA Junior Preferred Stock for Series B Preferred Stock

Deemed dividend – Issuance of Series B Warrants

Preferred stock dividends paid or accrued– common stock

Net loss attributable to common stockholders - basic

Fiscal Year Ended

Anti-dilutive shares excluded from diluted earnings per share calculation:

Preferred Stock, as converted basis

Options, warrants (employee and non-employee issued for services), restricted stock units

PIPE Warrants

Other warrants

The Company issued certain prefunded warrants with a nominal exercise price, as described in Note 7.

Due to the fact that the holders of prefunded warrants to purchase Common Stock have the present ability to obtain common shares of the Company for little or effectively no additional consideration, the prefunded warrants are treated as common shares outstanding for purposes of basic and diluted earnings per share.

Modifications and Exchanges of Preferred Stock and Preferred Stock Instruments

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In addition, transfers of value are recognized as an adjustment to earnings available to common shareholders for purposes of calculating earnings per share.

In December 2023, the Company entered into certain Series A Exchange Agreements (the “ Series A Agreements ”) and Series AA Exchange Agreements (the “Series AA Agreements”, and collectively with the Series A Agreement, the “Exchange Agreements”), with certain holders (the “Holders”) of the Company’s Series A Preferred Stock, and Series AA Preferred Stock.

The difference between the fair value of the new or modified preferred stock and the carrying value of the original preferred stock totaled $ 0 , resulting in no impact on retained earnings for the periods presented.

Refer to Note 7 for additional information.

Preferred Stock Instruments

For preferred stock instruments classified as liabilities under ASC 480 (see placement agent and AAA Junior Preferred related warrants described at Note 7), the Company follows the accounting models for the modification or extinguishment of debt, which require that modifications or exchanges of preferred stock instruments classified as liabilities are considered extinguishments, with gains or losses recognized in current earnings if the terms of the new instrument and/original instrument are substantially different.

Preferred Stock Dividends

Dividends on preferred stock paid in another class of stock are recorded at the fair value of the shares issued as a charge to retained earnings.

Dividends declared on preferred stock that are payable in the Company’s common shares are deducted from earnings available to common shareholders when computing earnings per share.

Dividends on preferred stock that are due, but unpaid, are reflected in accrued liabilities in the consolidated balance sheets until paid.

Dividends on preferred stock that are due, but unpaid, are reflected in accrued liabilities in the balance sheet until paid.

Certain of the Company’s outstanding preferred stock contain a conversion price down round feature subject to a contractual floor pursuant to the underlying rights in the applicable certificate of designation.

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The value of the effect of a down round feature that is triggered is recognized as a charge to retained earnings and a reduction to income available to common stockholders in the computation of earnings per share.

For the years ended December 31, 2024 and 2023, total charges to retained earnings as a result of the triggering of down round features related to Series AA Preferred stock totaled $ 0 and $ 7,567,000 , respectively.

Refer to Note 7 for additional information.

Income taxes are accounted for using an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company’s consolidated financial statements or income tax returns.

Refer to the statements of stockholders’ equity for total charges to accumulated deficit as a result of the triggering of down round features related to outstanding preferred stock for the periods presented.

A valuation allowance is established to reduce deferred tax assets if all, or some portion, of such assets will more than likely not be realized, or if it is determined that there is uncertainty regarding future realization of such assets.

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The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may require periodic adjustments, and which may not accurately forecast actual outcomes.

Management believes the Company has no uncertain tax positions for the years ended December 31, 2024 and 2023.

The Company has elected to include interest and penalties related to its tax contingences as a component of income tax expense.

There were no accruals for interest and penalties related to uncertain tax positions for the periods presented.

Income tax returns remain open for examination by applicable authorities, generally three years from filing for federal and four years for state.

The Company is not currently under examination by any taxing authority nor has it been notified of an impending examination.

Management believes the Company has no uncertain tax positions for the periods presented.

On July 4, 2025, H.R.1 – 119th Congress (2025-2026) (“H.R.1”) was signed into law.

H.R.1 introduces changes to United States tax policy, trade regulations, and federal spending priorities.

Key provisions include the extension and modification of tax provisions from the 2017 Tax Cuts and Jobs Act, modification of certain energy-related tax credits and incentives, and timing of deductions related to certain domestic expenses.

The enactment of H.R.1 did not have a material impact on the Company’s statements of operations, financial position or cash flows for the periods presented herein.

Contingencies

Certain conditions may exist as of the date the consolidated 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.

Certain conditions may exist as of the date the 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, in consultation with its legal counsel as appropriate, assesses 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, in consultation with 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 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 consolidated financial statements.

If the assessment indicates 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.

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Recently Adopted Accounting Pronouncements.

Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures

(ASU 2023-07)

This ASU requires that an entity report segment information in accordance with Topic 280, Segment Reporting.

The amendment in the ASU is intended to improve reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses.

The adoption of this standard did not have a material impact on the Company's consolidated financial statements.

Refer to Note 11 for related disclosures.

December 31, 2024

Recently Issued Accounting Pronouncements.

Accounting standards updates ("ASU") applicable to the Company that were recently issued are summarized below.

Effective Date

Accounting Standards Updates ("ASU") applicable to the Company that were recently adopted are summarized below.

Income Taxes (Topic 740):

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The amendment in the ASU is intended to enhance the transparency and decision usefulness of income tax disclosures.

The Company adopted this guidance on a prospective basis for annual periods beginning after December 15, 2024.

Accordingly, the financial statements for prior periods have not been adjusted to reflect the adoption of this standard.

January 1, 2025

Recently Issued Accounting Pronouncements – Not yet adopted.

ASUs applicable to the Company that were recently issued are summarized below.

Effective Date

Interim Reporting (Topic 270):

Narrow-Scope Improvements

(ASU 2025-11)

The amendments in this update are intended to enhance clarity and consistency in interim reporting disclosures.

The update improves the navigability of interim reporting guidance, provides a comprehensive list of required disclosures, and includes a new disclosure principle for reporting material events occurring after the most recent annual period.

The Company is currently evaluating the effect of adoption of this update on the Company’s financial statements.

Fiscal years beginning after December 15, 2027, and interim periods within those fiscal years

Debt—Debt with Conversion and Other Options (Subtopic 470-20):

Induced Conversions of Convertible Debt Instruments

(ASU 2024-04)

This ASU clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion.

Under the amendments, to account for a settlement of a convertible debt instrument as an induced conversion, (1) an inducement offer is required to preserve the form and amount of consideration issuable upon conversion in accordance with the terms of the existing debt instrument, (2) the assessment of the form and amount of consideration in the inducement offer should be performed as of the date the inducement offer is accepted by the holder, and (3) issuers that have exchanged or modified a convertible debt instrument within the preceding 12 months should use the terms that existed 12 months before the inducement offer was accepted when determining whether induced conversion accounting should be applied.

Early adoption is permitted.

The Company is currently evaluating the impact this standard will have on our Consolidated Financial Statements and related disclosures.

Fiscal years beginning after December 15, 2024

The Company is currently evaluating the impact this standard will have on its financial statements and related disclosures.

Fiscal years beginning after December 15, 2025, and interim reporting periods within those annual reporting periods

Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

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This ASU requires that an entity disaggregate relevant expense captions presented on the face of the income statement into natural expense categories within the footnotes of the financial statements.

In addition, a separate disclosure of selling expenses is required to be presented.

In addition, a separate disclosure of selling expense is required to be presented.

The ASU is intended to allow stakeholders to better understand the components of an entity’s expenses.

Early adoption is permitted.

The Company is evaluating the impact this standard will have on its Consolidated Financial Statements and related disclosures.

The Company is currently evaluating the impact this standard will have on its financial statements and related disclosures.

Fiscal years beginning after December 15, 2026

Financial Instruments—Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets

(ASU 2025-05)

This standard allows entities to apply a practical expedient when estimating expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers.

Early adoption is permitted, and the standard is to be applied prospectively.

The Company is currently evaluating the impact of the adoption of this standard.

Fiscal years beginning after December 15, 2025, including interim periods within those fiscal years

Intangibles - Goodwill and Other – Internal - Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software

(ASU 2025-06)

This standard updates the recognition model for internal-use software by eliminating the project stage framework and requiring capitalization once projects are approved and completion is probable, and also clarifies related disclosure requirements.

Early adoption permitted.

The Company is currently evaluating the impact of the adoption of this standard.

Fiscal years beginning after December 15, 2027, including interim periods within those years

PROPERTY AND EQUIPMENT

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Total amortization expense included in operating expense for the fiscal years ended December 31, 2025 and 2024 totaled $ 2,176,000 and $ 2,544,000 , respectively.

Amortization expense included in cost of revenues for the fiscal years ended December 31, 2024 and 2023 totaled $ 0 and $ 53,000 , respectively.

Sale of Mineville

On May 19, 2025, the Company entered into a Membership Interest Purchase and Sale Agreement (the “Mineville Purchase Agreement”) with Mineville, LLC, a Delaware limited liability company (“Purchaser”), pursuant to which the Company agreed to sell, and Purchaser agreed to purchase, 100 % of the membership interests (the “Interests”) of InPvP, LLC (“InPvP”).

Prior to the consummation of the transactions (the “Mineville Closing”) contemplated by the Mineville Purchase Agreement (the “Mineville Sale”), InPvP was a wholly owned subsidiary of the Company that operated the Company’s Mineville digital property.

The closing of the Mineville Sale occurred simultaneously with the execution of the Mineville Purchase Agreement.

The Purchaser paid cash consideration totaling $ 350,000 at the Mineville Closing to acquire the Interests.

The parties also agreed upon separate terms for an ongoing commercial relationship whereby the Company was granted the rights to ad sales and brand integration to all of Purchaser’s Microsoft servers for a term of two years.

The Company will have exclusive Sales Rights for the first year of the Sales Term, and during the second year the Sales Rights will be non-exclusive.

During the Sales Term, the revenue generated from the Sales Rights will be allocated among the Company and Purchaser as follows:

(i) the Company will retain 60 % of the net revenue until gross sales revenue exceeds $ 1.0 million;

(ii) after gross sales revenue exceed $ 1.0 million, the Company will retain 50 % of the net revenue through the remainder of the Sales Term;

and (iii) if gross sales revenue exceeds $ 1.5 million during the Sales Term, the Sales Term shall renew automatically for one additional year on the same terms as the second year of the Sales Term.

The net carrying value of Mineville assets sold totaled $ 350,000 as of May 19, 2025, which historically were included in intangible assets, net in the balance sheets, resulting in no gain or loss in connection with the Mineville Sale.

Sale of Minehut

On February 29, 2024, the Company sold its Minehut Assets to GamerSafer in a transaction approved by the Board.

Pursuant to the GS Agreement entered into by and between Super League and GamerSafer, the Company will receive $ 1.0 million of purchase consideration for the Minehut Assets, which amount will be paid by GamerSafer in revenue and royalty sharing over a multiple-year period, as described in the GS Agreement.

On February 29, 2024, the Company sold its Minehut related assets (“Minehut Assets”) to GamerSafer, Inc.

(“GamerSafer”), in a transaction approved by the Company’s Board of Directors (the “Board”).

Pursuant to the Asset Purchase Agreement entered into by and between GamerSafer and the Company on February 26, 2024 (the “GS Agreement”), the Company received $ 1.0 million of purchase consideration (“Minehut Purchase Consideration”) for the Minehut Assets, which amount was paid by GamerSafer in revenue and royalty sharing over a multiple-year period, as described in the GS Agreement (the “Minehut Sale”).

Other than with respect to the GS Agreement, there is no relationship between the Company or its affiliates with GamerSafer or its affiliates.

Super League and GamerSafer will maintain a commercial relationship which ensures that Minehut can remain an ongoing destination available to Super League’s partners.

The carrying value of Minehut related assets totaled $ 475,000 as of February 26, 2024, comprised of total carrying costs of $ 1,671,000 , net of accumulated amortization of $ 1,196,000 , and historically were included in intangible assets, net in the consolidated balance sheets.

The Company recorded a receivable for the total estimated Minehut Purchase Consideration totaling $ 619,000 and recognized an initial gain on sale of the Minehut Assets totaling $ 144,000 , which is included in other income in the consolidated statements of operations.

The Minehut Purchase Consideration in the GS Agreement is variable pursuant to the guidance set forth in ASC 606.

The transaction allowed Super League to streamline its position in partnering with major brands to build, market, and operate 3D experiences across multiple immersive platforms, including open gaming powerhouses like Minecraft, and aligns with the Company’s cost improvement initiatives.

Super League and GamerSafer maintain a commercial relationship which ensures that Minehut can remain an ongoing destination available to Super League’s partners.

The Minehut Purchase Consideration in the GS Agreement was variable pursuant to the guidance set forth in FASB ASC Topic 606, “Revenue from Contracts with Customers” (“ASC 606”).

Under ASC 606, purchase consideration is variable if the amount the Company will receive is contingent on future events occurring or not occurring, even though the amount itself is fixed.

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Amounts collected in excess of the estimated purchase consideration recorded at contract inception, up to the $ 1.0 million stated contractual amount of purchase consideration, are recognized as additional gains on the sale of Minehut Assets when realized.

Additional gains on the sale of the Minehut Assets subsequent to the initial accounting for the transaction through December 31, 2024, totaled $ 39,000 .

For the year ended December 31, 2024, the Company calculated royalties due from GamerSafer, applied against the Minehut Purchase Consideration receivable pursuant to the GS Agreement, totaling $ 658,000 .

In the event GamerSafer does not make royalty or shortfall payments in the amount of $ 1.0 million by December 31, 2028 (“Payment Deadline”), GamerSafer shall assign and transfer all of the purchased assets back to the Company.

In the event that GamerSafer determines in good faith that the acquisition of the assets and the operation of GamerSafer’s related Minehut business becomes operationally unsustainable for any reason, GamerSafer reserves the right, at its sole discretion, to terminate operations (the “Termination”).

In the event a Termination occurs prior to the Minehut Purchase Consideration being paid in full, then in such event GamerSafer shall promptly assign all Minehut Assets back to the Company.

Impairment Charges

In the fourth quarter of 2023 we recorded a non-cash impairment charge related to our partner relationship related intangible assets, comprised of our Microsoft Minecraft server and InPvP developed technology intangible assets originally acquired in connection with the acquisition of Mobcrush, Inc.

in June 2021.

The Company assesses the recoverability of long-lived assets whenever events or changes in circumstances indicate that their carrying value may not be recoverable.

Factors we consider important, which could trigger an impairment review, include significant underperformance relative to expected historical or projected future operating results, and significant changes in the manner of our use of the acquired assets or the strategy in the context of our overall business.

Due to underperformance relative to historical and projected future operating results and a decision to deploy resources in other areas of the business, we performed an impairment analysis and determined that the sum of the expected undiscounted future cash flows resulting from the use of the intangible assets was less than the carrying amount of the assets, resulting in an impairment loss totaling $ 7,052,000 , which is recorded in the consolidated statements of operations for the year ended December 31, 2023.

The fair value was determined using a discounted cash flow approach (using Level 3 inputs), with cash flow projections over the remaining life of the intangible assets of 5 years and a discount rate of 16 % based on the Company’s estimated cost of capital.

The impairment charge was based on the difference between the calculated fair value of the intangible assets totaling $ 860,000 and the carrying value of the applicable intangible assets which totaled $ 7,912,000 as of December 31, 2023.

In June 2023 , the Company assigned the intangible assets originally acquired in connection with the Company’s acquisition of Bannerfy in fiscal year 2021, to the original sellers.

The assets were disposed of in connection with management’s review of operations and decision to allocate resources elsewhere.

As a result, the Company recorded a disposal of net developed technology related intangible assets acquired in connection with the acquisition of Bannerfy totaling $ 2,284,000 , which is included in “ Loss on intangible asset disposal ” in the accompanying consolidated statements of operations for the year ended December 31, 2023.

Developed technology related intangibles asset acquisition costs were reduced $ 3,069,000 , and related accumulated depreciation was reduced $ 785,000 , in connection with the disposal of the intangible asset.

Additional gains on the sale of the Minehut Assets subsequent to the initial accounting for the transaction for the years ended December 31, 2025 and 2024, totaled $ 343,000 and $ 39,000 , respectively.

From the date of sale of the Minehut Assets through December 31, 2025, the Company calculated royalties due from GamerSafer, applied against the Minehut Purchase Consideration receivable pursuant to the GS Agreement, totaling $ 1,000,000 .

The Company expects to record aggregate amortization expense for each of the five succeeding fiscal years as follows:

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Acquisition of Melon, Inc.

– Contingent Consideration

On May 4, 2023 (“Melon Acquisition Date”), Super League entered into an Asset Purchase Agreement (the “Melon Purchase Agreement”) with Melon, Inc., a Delaware corporation (“Melon”), pursuant to which the Company acquired substantially all of the assets of Melon (the “Melon Assets”) (the “Melon Acquisition”).

The consummation of the Acquisition (the “Melon Closing”) occurred simultaneously with the execution of the Melon Purchase Agreement.

Melon is a development studio building innovative virtual worlds in partnership with powerful consumer brands across music, film, TV, sports, fashion and youth culture.

The acquisition of Melon further strengthens the Company’s position as a one-stop solutions provider and strategic operating partner for brands and businesses seeking to expand and activate communities throughout the gaming metaverse.

At the Melon Closing, the Company paid an aggregate total of $ 900,000 to Melon (the “Melon Closing Consideration”), of which $ 150,000 was paid in cash, and the remaining $ 750,000 was paid in the form of shares of the Company’s common stock (with a closing date fair value of $ 722,000 ), valued at $ 9.64 (the “Melon Closing Share Price”), the VWAP, as quoted on the Nasdaq Capital Market, for the five (5) trading days immediately preceding May 4, 2023.

Refer to the table below for calculation of the fair value of consideration paid.

Pursuant to the terms and subject to the conditions of the Melon Purchase Agreement, up to an aggregate of $ 2,350,000 (the “Melon Contingent Consideration”) was payable to Melon in connection with the achievement of certain revenue milestones for the period from the Melon Closing until December 31, 2023 (the “Melon First Earnout Period”) in the amount of $ 1,000,000 , and for the year ending December 31, 2024 (the “Melon Second Earnout Period) in the amount of $ 1,350,000 (the “Melon Second Earnout Period” and the “Melon First Earnout Period” are collectively referred to as the “Melon Earnout Periods”).

The Melon Contingent Consideration is payable in the form of cash and common stock, with $ 600,000 of the aggregate Melon Contingent Consideration being payable in the form of cash, and $ 1,750,000 payable in the form of common stock, valued at the greater of (a) the Melon Closing Share Price, and (b) the VWAP for the five trading days immediately preceding the end of each respective Melon Earnout Period.

Additionally, pursuant to the Melon Purchase Agreement, the Company entered into employment agreements with two former key Melon employees (“Key Melon Employees”), pursuant to which the Key Melon Employees were granted inducement awards consisting of restricted stock unit awards (“RSUs”) to acquire an aggregate of 103,780 shares of the Company’s common stock.

The awards were granted pursuant to terms and conditions fixed by the Compensation Committee of the Board and as an inducement material to each new employee entering employment with Super League in accordance with Nasdaq Listing Rule 5635I(4).

Of the 103,780 RSUs:

(A) 41,512 of the RSUs will vest in 25 equal monthly installments beginning on May 4, 2023, and on the first of each calendar month, subject to the applicable employee’s continued service with Super League on each such vesting date;

and (B) 62,268 of the RSUs will vest as follows:

(i) 25 % will vest upon the achievement of certain net revenue targets for the fiscal year ending December 31, 2024, to be determined by the Board in its discretion;

(ii) 25 % upon the achievement of certain net revenue targets for the fiscal year ending December 31, 2025, to be determined by the Board in its sole discretion;

(iii) 25 % upon Super League’s common stock maintaining a minimum closing price of at least $ 30.00 over a rolling 30 consecutive trading day period, as quoted on the Nasdaq Capital Market;

and (iv) 25 % upon Super League’s common stock maintaining a minimum closing price of at least $ 50.00 over a rolling 30 consecutive trading day period, as quoted on the Nasdaq Capital Market.

The vesting of the RSUs will accelerate upon a change of control of the Company.

In addition, upon (Y) the Company’s termination of the employment of the respective employee without cause, or (Z) the respective employees resignation for good reason, the RSUs will continue to vest as if (Y) or (Z) had not occurred.

The RSUs are subject to the terms and conditions of the RSU agreement covering each grant.

The Acquisition was approved by the board of directors of each of the Company and Melon and was approved by the sole stockholder of Melon.

In accordance with the acquisition method of accounting, the financial results of Super League presented herein include the financial results of Melon subsequent to the Melon Closing Date.

Disclosure of revenue and net loss for Melon on a stand-alone basis for the applicable periods presented is not practical due to the integration of Melon activities, including sales, products, advertising inventory, resource allocation and related operating expense, with those of the consolidated Company upon acquisition, consistent with Super League operating in one reporting segment.

The Company determined that the Melon Acquisition constitutes a business acquisition as defined by ASC 805.

Accordingly, the assets acquired, and liabilities assumed in the transaction were recorded at their estimated acquisition date fair values, while transaction costs associated with the acquisition, totaling approximately $ 47,000 , were expensed as incurred pursuant to the acquisition method of accounting in accordance with ASC 805.

Super League’s preliminary purchase price allocation was based on an evaluation of the appropriate fair values of the assets acquired and liabilities assumed and represents management’s best estimate based on available data.

Fair values are determined based on the requirements of ASC 820.

The following table summarizes the determination of the fair value of the purchase price consideration paid in connection with the Melon Acquisition, as of the Melon Closing Date:

Cash consideration

Equity consideration– shares of common stock

Super League closing stock price per share on the Melon Closing Date

Fair value of equity consideration issued

Fair value of contingent consideration

Fair value of total consideration paid

The purchase price allocation was based upon an estimate of the fair value of the assets acquired and the liabilities assumed by the Company in connection with the Melon Acquisition, as of the Melon Closing Date, as follows:

Assets Acquired and Liabilities Assumed:

Accounts receivable and other assets

Liabilities assumed

Identifiable intangible assets

Identifiable net assets acquired

Total purchase price

The following table presents details of the fair values of the acquired intangible assets of Melon:

Useful Life (in

Developed technology

Developer relationships

Customer relationships

Trade names / trademarks

Total intangible assets acquired

Contingent consideration is recorded as a liability in the accompanying consolidated balance sheets in accordance with ASC 480, which requires freestanding financial instruments where the Company must or could settle the obligation by issuing a variable number of its shares, and the obligation’s monetary value is based solely or predominantly on variations in something other than the fair value of the Company’s shares, to be recorded as a liability at fair value and re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations.

The fair value of the Melon Contingent Consideration on the respective valuation dates was determined utilizing a Monte Carlo simulation model and measured using Level 3 inputs, as described at Note 2.

Contingent consideration related to the Melon Acquisition was recorded as a liability in the accompanying balance sheets in accordance with ASC 480, which requires freestanding financial instruments where the Company must or could settle the obligation by issuing a variable number of its shares, and the obligation’s monetary value is based solely or predominantly on variations in something other than the fair value of the Company’s shares, to be recorded as a liability at fair value and re-valued at each reporting date, with changes in the fair value reported in the statements of operations.

The fair value of the Melon Contingent Consideration on the respective valuation dates through to the end of fiscal year 2024 final earn out period was determined utilizing a Monte Carlo simulation model and measured using Level 3 inputs, as described at Note 2.

Assumptions utilized in connection with utilization of the Monte Carlo simulation model for the periods presented included risk-free interest rates ranging from 4.04 % to 5.35 %, volatility rates ranging from 70 % to 85 %, and discount rate of 30 %.

The change in accrued Melon Contingent Consideration, which is included in contingent consideration expense in the consolidated statements of operations for the years ended December 31, 2024 and 2023, was comprised of the following:

The change in fair value, which is included in contingent consideration expense in the statements of operations for the applicable periods presented was comprised of the following:

Beginning balance

Contingent Consideration – Initial accrual – May 2023

Change in fair value (3)

Current period accrued contingent consideration

Post closing adjustments (2)

Contingent consideration payments (2)

Accrued contingent consideration (1)

As of December 31, 2024, the accrual for the Melon Second Earn Out Period included 35,775 shares of common stock valued at $ 0.62 , the closing price of our common stock as of December 31, 2024.

As of December 31, 2023, the accrual for the Melon First Earn Out Period totaling $ 333,000 , included 72,118 shares of common stock valued at $ 1.52 , the closing price of our common stock as of December 31, 2023.

The Melon Purchase Agreement provided for adjustments to the calculated Melon Contingent Consideration amounts to account for advanced payments made to Melon from customers prior to the Melon Acquisition Date, for which the corresponding work was not performed as of the Melon Acquisition Date.

In May 2024, the Company paid accrued Melon Contingent Consideration related to the Melon First Earn Out Period, comprised of $ 32,000 of cash payments and payment of 72,118 shares of our common stock valued at $ 90,000 on the date of issuance.

Reflected in the consolidated statements of operations for the applicable period.

Aggregated amortization expense for the years ended December 31, 2024 and 2023, related to intangible assets acquired in connection with the Melon Acquisition, totaled $ 107,000 and $ 90,000 , respectively.

Goodwill represents the excess of the purchase price of the acquired business over the acquisition date fair value of the net assets acquired.

Goodwill recorded in connection with the Melon Acquisition is primarily attributable to expected synergies from combining the operations and assets of Super League and Melon, and also includes residual value attributable to the assembled and trained workforce acquired in the acquisition.

Management is primarily responsible for determining the fair value of the tangible and identifiable intangible assets acquired and liabilities assumed as of the Melon Closing Date.

Management considered a number of factors, including reference to a preliminary independent analysis of estimated fair values solely for the purpose of allocating the purchase price to the assets acquired and liabilities assumed.

The analysis included a discounted cash flow analysis which estimated the future net cash flows expected to result from the respective assets acquired as of the Melon Closing Date.

A discount rate consistent with the risks associated with achieving the estimated net cash flows was used to estimate the present value of future estimated net cash flows.

The fair values of the acquired intangible assets, as described above, was determined using the following methods:

Valuation Method

Valuation Method Description

Customer relationships

Multi-Period Excess Earnings Method “MPEE”) under the Income Approach

MPEEM is an application of the DCF Method, whereby revenue derived from the intangible asset is estimated using the overall business revenue, adjusted for attrition, obsolescence, cost of goods sold, operating expense, and taxes.

Required returns attributable to other assets employed in the business are subtracted.

The “excess” earnings are attributable to the intangible asset and are discounted to present value at a rate of return to estimate the fair value of the intangible asset.

Discount rate:

Forecast period:

Attrition Rate:

Trade names / trademarks

Relief-from-Royalty Method under the Income Approach

Under the Relief-from-Royalty method, the royalty savings is calculated by estimating a reasonable royalty rate that a third-party would negotiate in a licensing agreement.

Such royalties are most commonly expressed as a percentage of total revenue involving the technology.

Forecast period:

Royalty Rate:

Discount Rate:

Non-Compete agreements

Differential Cash Flows

The Differential Cash Flows Approach is a version of the income approach that values an intangible asset as the present value of the cash flows that a company would lose if they did not have the asset in place.

The differential cash flow is calculated as the difference between the cash flow assuming competition and the cash flow without competition.

Competition Probability:

Revenue impact:

Discount Rate:

Term 2.16 years.

Developed technology

Replacement Cost Method

In the Replacement Cost Method, value is estimated by determining the current cost of replacing an asset with one of equivalent economic utility.

The premise of the approach is that a prudent investor would pay no more for an asset than the amount for which the utility of the asset could be replaced.

Rate of Return:

Discount rate:

Replacement period:

For tax purposes, consistent with the accounting for book purposes, the Melon Closing Consideration was allocated to the assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date, with the excess purchase price allocated to goodwill.

As a result, no deferred tax assets or liabilities were recorded with the acquisition and all of the goodwill is expected to be deductible for tax purposes.

The following unaudited pro forma combined results of operations for the periods presented are provided for illustrative purposes only.

The unaudited pro forma combined statements of operations assume the acquisition occurred as of January 1, 2022.

The unaudited pro forma combined financial results do not purport to be indicative of the results of operations for future periods or the results that actually would have been realized had the entities been a single entity during these periods.

Pro forma adjustments primarily relate to the amortization of identifiable intangible assets acquired over the estimated economic useful life as described above, the exclusion of nonrecurring transaction costs, the exclusion of depreciation related to tangible and intangible assets of Melon existing immediately prior to the Melon Acquisition Date, and adjustments related to administrative redundancies.

As of December 31, 2024, the accrual for the Melon Second Earn Out Period included 75 shares of common stock valued at $ 297.60 , the closing price of the Company’s common stock as of December 31, 2024.

During the year ended December 31, 2025, the Company paid Melon Accrued Contingent Consideration related to the Melon Second Earn Out Period, comprised of $ 116,000 of cash and 75 shares of the Company’s common stock valued at $ 8,000 .

During the year ended December 31, 2024, the Company paid accrued Melon Contingent Consideration related to the Melon First Earn Out Period, comprised of $ 32,000 of cash payments and payment of 151 shares of the Company’s common stock valued at $ 90,000 on the date of issuance.

Reflected in the statements of operations for the applicable period.

Acquisition of Super Biz – Contingent Consideration

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and the founders of Super Biz (the “Founders”), pursuant to which the Company acquired (i) substantially all of the assets of Super Biz (the “Super Biz Assets”), and (ii) the personal goodwill of the Founders regarding Super Biz’s business (the “Super Biz Acquisition”).

The consummation of the Super Biz Acquisition (the “Super Biz Closing”) occurred simultaneously with the execution of the Super Biz Purchase Agreement on the Super Biz Closing Date.

Pursuant to the terms and subject to the conditions of the Super Biz Purchase Agreement, up to an aggregate amount $ 11.5 million would be payable to Super Biz and the Founders in connection with the achievement of certain revenue milestones for the period from the Super Biz Closing Date until December 31, 2022 (“Initial Earn Out Period”) and for the fiscal year ending December 31, 2023 (the “Super Biz Contingent Consideration”) (“Super Biz Earn Out Periods”).

The Super Biz Contingent Consideration is payable in the form of both cash and shares of the Company’s common stock, in equal amounts, as more specifically set forth in the Super Biz Purchase Agreement.

The Company hired the Founders of Super Biz in connection with the Super Biz Acquisition.

Pursuant to the provisions of the Super Biz Purchase Agreement, in the event that a Founder ceases to be an employee during any of the Super Biz Earn Out Periods, as a consequence of his resignation without good cause, or termination for cause, the Super Biz Contingent Consideration will be reduced by one-half ( 50 %) for the respective Super Biz Earn Out Periods, if and when earned.

Under ASC 805, a contingent consideration arrangement in which the payments are automatically forfeited if employment terminates is considered to be compensation for post-combination services, and not acquisition consideration.

As such, the Super Biz Contingent Consideration is accounted for as post-combination services and expensed in the period that payment of any amounts of contingent consideration is determined to be probable and reasonably estimable.

Contingent consideration is recorded as a liability in the accompanying consolidated balance sheets in accordance with ASC 480, which requires freestanding financial instruments where the company must or could settle the obligation by issuing a variable number of its shares, and the obligation’s monetary value is based solely or predominantly on variations in something other than the fair value of the company’s shares, to be recorded as a liability at fair value and re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations.

The change in accrued Super Biz Contingent Consideration and the related income statement impact was comprised of the following for the years ended December 31:

Beginning balance

Change in fair value (3)

Current period accrued contingent consideration

Contingent consideration payments (2)

Issuance of Super Biz Note (as described below) (1)

Accrued contingent consideration (1)

As of December 31, 2024, reflects the cash portion of the Super Biz Second Earn Out Period related contingent consideration payable.

As of December 31, 2023, included 27,968 shares of common stock valued at $ 1.52 , the closing price of our common stock as of December 31, 2023.

In May 2024, the Company paid accrued contingent consideration related to the Super Biz Second Earn Out Period, comprised of 30,330 shares of our common stock valued at $ 38,000 .

In April 2023, the Company paid accrued contingent consideration related to the Initial Earn Out Period, comprised of $ 2.9 million of cash payments and payment of 49,399 shares of our common stock valued at $ 548,000 .

Reflected in the consolidated statements of operations for the applicable period

The Super Biz Contingent Consideration was payable in the form of both cash and shares of the Company’s common stock, in equal amounts, as more specifically set forth in the Super Biz Purchase Agreement.

The Super Biz Contingent Consideration was accounted for as post-combination services and expensed in the period that payment of any amounts of contingent consideration is determined to be probable and reasonably estimable.

Contingent consideration is recorded as a liability in the accompanying balance sheets in accordance with ASC 480, which requires freestanding financial instruments where the Company must or could settle the obligation by issuing a variable number of its shares, and the obligation’s monetary value is based solely or predominantly on variations in something other than the fair value of the Company’s shares, to be recorded as a liability at fair value and re-valued at each reporting date, with changes in the fair value reported in the statements of operations.

As described below, in August 2024 the accrued Super Biz Contingent Consideration, comprised solely of the cash portion of the continent consideration for the final earn out period, was converted into an unsecured promissory note.

The net change in fair market value related to accrued Super Biz Contingent Consideration for the years ended December 31, 2025 and 2024 totaled $ 0 and $ 9,000 , respectively.

Payments related to accrued Super Biz Consideration for the years ended December 31, 2025 and 2024 totaled $ 0 and $ 38,000 ( 64 shares of Common Stock), respectively.

Issuance of Promissory Note.

In August 2024, the Company issued an unsecured promissory note to the Founders in connection with the remaining Super Biz Second Earn Out Period accrued contingent consideration outstanding, with a principal amount totaling approximately $ 1.8 million, whereby the Company is obligated to pay the outstanding contingent consideration on the following repayment terms (“Super Biz Note”):

upon receipt of new equity funding in the aggregate amount of $ 3.0 million or more subsequent to the date of the Super Biz Note, in one transaction or series of transactions, the Super Biz Note shall be repaid with interest in four (4) equal monthly installments commencing on the initial closing date of such equity funding;

upon receipt of new equity funding in the aggregate amount of $ 5.0 million or more subsequent to the date of the Super Biz Note, in one transaction or series of transactions, the Super Biz Note shall be repaid with interest in three (3) equal monthly installments commencing on the initial closing date of such equity funding;

upon new equity funding received by the Company in the aggregate amount of $ 7.0 million or more subsequent to the date of the Super Biz Note, in one transaction or series of transactions, the Super Biz Note shall be repaid with interest in two (2) equal monthly installments commencing on the initial closing date of such equity funding;

in the event none of subsections 2(i)-(iii) occur, then the Super Biz Note shall be repaid in full on June 1, 2025 (the “Maturity Date”).

Interest accrues on the outstanding principal at the rate of 8.5 % per annum, and accrues until the earlier of (i) repayment of the Super Biz Note in full, or (ii) the Maturity Date;

provided, however, during the existence of an event of default, as defined in the Super Biz Note, interest shall accrue on all outstanding principal at the contractual default rate, as defined in the Super Biz Note.

Super Biz Note related interest expense for the year ended December 31, 2024 totaled $ 64,000 .

All outstanding principal and accrued interest may be prepaid by the Company prior to the Maturity Date at the election of the Company.

Upon the occurrence of any event of default, as defined in the Super Biz Note, the Founders may at any time declare all unpaid obligations to be immediately due and payable.

In August 2024, the Company issued an unsecured promissory note to the Founders in connection with the accrued contingent consideration outstanding related to the final earn out period, with a principal amount totaling $ 1,765,000 (the “Super Biz Note”).

Interest accrued on the outstanding principal at the rate of 8.5 % per annum, and accrued until the earlier of (i) repayment of the Super Biz Note in full, or (ii) the Maturity Date;

provided, however, during the existence of an event of default, as defined in the Super Biz Note, interest would accrue on all outstanding principal at the contractual default rate, as defined in the Super Biz Note.

Super Biz Note related interest expense for the years ended December 31, 2025 and 2024 totaled $ 36,000 and $ 64,000 , respectively.

Restricted Common Stock Issuance.

In addition, in connection with the issuance of the Super Biz Note, in January 2025, the Company issued 262,501 shares of the Company’s common stock to the Founders.

In addition, in connection with the August 2024 issuance of the Super Biz Note, the Company issued 547 shares of the Company’s common stock to the Founders in January 2025.

The issuance of the Super Biz Note in exchange for the related accrued contingent consideration balance was accounted for as an extinguishment of the original liability due to the fact that the present value of the cash flows under the terms of Super Biz Note was determined to be at least 10 percent different from the present value of the remaining cash flows under the terms of the original obligation.

As a result, a loss on extinguishment totaling $ 336,000 was recorded in the consolidated statements of operations, and credited to additional paid-in capital (included in “Other” in the consolidated statements of stockholder’s equity), for the year ended December 31, 2024, primarily comprised of the fair value of the 262,501 shares of restricted stock (based on closing price of our common stock on the date of issuance of the Super Biz Note) to be issued, as described above.

The default interest provision included in the Super Biz Note represents an embedded derivative with an initial fair value of $ 171,000 as of August 1, 2024, the date of issuance of the Super Biz Note.

The fair value of the derivative liability is included in the December 31, 2024 consolidated balance sheets under the caption “Promissory note – contingent consideration,” and is required to be marked to market at each balance sheets.

As of December 31, 2024 the fair value of the default interest provision derivative liability was $ 77,000 .

The change in fair value of the default interest provision derivative liability for the year ended December 31, 2024 totaled $ 94,000 , and is included in other income (expense) in the consolidated statements of operations.

As a result, a loss on extinguishment totaling $ 336,000 was recorded in the statements of operations for the year ended December 31, 204, primarily comprised of the fair value of the 547 shares of restricted stock (based on closing price of the Company’s common stock on the date of issuance of the Super Biz Note) issued, as described above.

On June 13, 2025, the Company entered into (a) Amendment No.

1 to Super Biz Note (the “Drozdov Amendment”), originally issued on August 1, 2024, to Sam Drozdov (“Drozdov”)(the “Drozdov Note”);

(b) Amendment No.

1 to Super Biz Note (the “Khakshoor Amendment”), originally issued on August 1, 2024, to Ben Khakshoor (“Khakshoor”) (the “Khakshoor Note”);

and (c) Amendment No.

1 to Super Biz Note (the “Firepit Amendment”, and collectively with the Drozdov Amendment and the Khakshoor Amendment, the “Super Biz Note Amendments”), originally issued on August 1, 2024, to Firepit Partners Co.

(f/k/a Bloxbiz Co.) (“Firepit”, and collectively with Drozdov and Khakshoor, the “Super Biz Lenders”) (the “Firepit Note”, and collectively with the Drozdov Note and the Khakshoor Note, the “Super Biz Amended Notes”).

Pursuant to the Super Biz Note Amendments, (a) the maturity date for each of the Super Biz Amended Notes was extended to August 1, 2025 (the “Amended Maturity Date”);

and (b) beginning on June 1, 2025, through the Amended Maturity Date, the interest rate on each of the Super Biz Amended Notes was increased to 20 %.

As consideration for entering into the Super Biz Note Amendments, the Company agreed to pay (x) two payments of $ 18,750 to each of Drozdov and Khakshoor;

and (y) two payments of $ 12,500 to Firepit (collectively, the “Consideration Payments”).

The first Consideration Payment was paid on June 15, 2025.

The June 13, 2025 modification of the Super Biz Note was accounted for as a modification as the lender did not grant any concessions and the debt terms were not determined to be “substantially different” from the original debt, as described at Note 2.

On July 8, 2025, the Company entered into exchange agreements with (i) Khakshoor, pursuant to which the Company and Khakshoor agreed that in exchange for the surrender and forgiveness of that certain promissory note issued to Khakshoor, dated August 1, 2024, and amended on June 13, 2025, with the principal and interest thereon being equal to $ 711,361 , Khakshoor will be issued 711,361 shares of the Company’s Series AAAA Jr.

Convertible Preferred Stock (the “Khakshoor Agreement”);

(ii) Drozdov, pursuant to which the Company and Drozdov agreed that in exchange for the surrender and forgiveness of that certain promissory note issued to Drozdov, dated August 1, 2024, and amended on June 13, 2025, with the principal and interest thereon being equal to $ 711,361 , Drozdov would be granted 711,361 shares of the Company’s Series AAAA Jr.

Convertible Preferred Stock (the “Drozdov Agreement”);

and (iii) Firepit, pursuant to which the Company and Firepit agreed that in exchange for the surrender and forgiveness of that certain promissory note issued to Firepit, dated August 1, 2024, and amended on June 13, 2025, with the principal and interest thereon being equal to $ 474,242 , Firepit would be granted 474,242 shares of the Company’s Series AAAA Jr.

Convertible Preferred Stock (the “Firepit Agreement”, and collectively with the Khakshoor Agreement and Drozdov Agreement, the “SB Exchange Agreements”).

The July 8, 2025 exchange of the Super Biz Amended Notes for shares of the Company’s Series AAAA Junior Preferred Stock was accounted for as an extinguishment of the related promissory notes, resulting in a loss on extinguishment of liability of $ 161,000 , included in the statement of operations for the year ended December 31, 2025.

Promissory Notes Accounted for at Fair Value

Agile Capital - Debt Financing

On November 8, 2024 (the “Agile Effective Date”), the Company entered into a loan agreement with Agile Capital Funding, LLC, as collateral agent (“Agile”)(“ the Agile Loan Agreement”), pursuant to which the Company issued to Agile a Confessed Judgment Secured Promissory Note for an aggregate value of $ 1.85 million (the “Agile Note”).

Pursuant to the Agile Loan Agreement:

(i) the Agile Note matures 28 weeks from the Agile Effective Date;

(ii) carries an aggregate total interest payment of approximately $ 0.78 million (the “Applicable Rate”), and (iii) immediately upon the occurrence and during the continuance of an Event of Default (as defined in the Agile Loan Agreement), interest shall accrue at a fixed per annum rate equal to the Applicable Rate plus five percent.

The Company is required to repay all the obligations due under the Agile Loan Agreement and the Agile Note in 28 equal payments of $ 93,821 with the first payment being made to Agile on November 14, 2024, and every seven days thereafter until the Maturity Date.

The proceeds received from the Agile Note were used to fund general working capital needs.

Pursuant to the Agile Loan Agreement, upon the occurrence of certain events, including (a) a change in the Company’s business other than the business engaged in by the Company on the Agile Effective Date, (b) cause or permit, voluntarily or involuntarily, any Key Person to cease being actively engaged in the management of the Company without prior notice to Agile, (c) a change in control of the Company (expressly excluding the pending transactions with Infinite Reality, Inc.) or otherwise approve the liquidation or dissolution of the Company or its Subsidiary (collectively, a “Change in Business, Management, or Ownership”), or (d) the Term Loan is accelerated upon the occurrence of an Event of Default, the Company shall be required to immediately pay to Agile an amount equal to the sum of:

(i) all outstanding principal of the Agile Note plus accrued and unpaid interest thereon through the prepayment date, (ii) a fee equal to the aggregate and actual amount of interest (at the contract rate of interest) that would be paid through the Maturity Date (the “Prepayment Fee”), plus (iii) all other obligations that are due and payable, including, without limitation, interest at the Default Rate with respect to any past due amounts.

The Company is allowed to make a full or partial prepayment of any or all of the obligations arising under the Agile Loan Agreement and the Agile Note, provided, the Company shall be obligated to pay a contractual prepayment fee.

The Agile Loan Agreement imposes various restrictions on the activities of the Company, including, subject to certain exceptions set forth in the Agile Loan Agreement (including, without limitation, the pending transactions with Infinite Reality, Inc.), a prohibition on:

(i) creating, incurring, assuming, or being liable for any indebtedness, or allow the Subsidiary to do so (expressly excluding up to $ 3,000,000 of unsecured loans through one or more third parties);

On November 8, 2024 (the “Agile I Effective Date”), the Company entered into a loan agreement with Agile Capital Funding, LLC, as collateral agent (“Agile”) (the “Agile I Loan Agreement”), pursuant to which the Company issued to Agile a Confessed Judgment Secured Promissory Note for an aggregate value of $ 1.85 million (the “Agile I Note”).

Pursuant to the Agile I Loan Agreement, (i) the Agile I Note matured 28 weeks from the Agile I Effective Date;

(ii) carried an aggregate total interest payment of approximately $ 0.78 million (the “Applicable Rate”), and (iii) immediately upon the occurrence and during the continuance of an Event of Default (as defined in the Agile I Loan Agreement), interest accrued at a fixed per annum rate equal to the Applicable Rate plus five percent, or 42 %.

The Company was required to repay all the obligations due under the Agile I Loan Agreement and the Agile I Note in 28 equal payments of $ 93,821 with the first payment being made to Agile on November 14, 2024, and every seven days thereafter until the Maturity Date.

The proceeds received from the Agile I Note were used to fund general working capital needs.

Pursuant to the Agile I Loan Agreement, upon the occurrence of certain events, including (a) a change in the Company’s business other than the business engaged in by the Company on the Agile I Effective Date, (b) cause or permit, voluntarily or involuntarily, any Key Person to cease being actively engaged in the management of the Company without prior notice to Agile, (c) a change in control of the Company or otherwise approve the liquidation or dissolution of the Company or its Subsidiary (collectively, a “Change in Business, Management, or Ownership”), or (d) the Term Loan is accelerated upon the occurrence of an Event of Default, the Company would be required to immediately pay to Agile an amount equal to the sum of (i) all outstanding principal of the Agile I Note plus accrued and unpaid interest thereon through the prepayment date, (ii) a fee equal to the aggregate and actual amount of interest (at the contract rate of interest) that would be paid through the Maturity Date (the “Prepayment Fee”), plus (iii) all other obligations that are due and payable, including, without limitation, interest at the Default Rate with respect to any past due amounts.

The Company was allowed to make a full or partial prepayment of any or all of the obligations arising under the Agile I Loan Agreement and the Agile I Note, provided the Company would be obligated to pay a contractual prepayment fee.

The Agile I Loan Agreement imposed various restrictions on the activities of the Company, including, subject to certain exceptions set forth in the Agile I Loan Agreement, a prohibition on (i) creating, incurring, assuming, or being liable for any indebtedness, or allow the Subsidiary to do so (expressly excluding up to $ 3,000,000 of unsecured loans through one or more third parties);

(ii) any Change in Business, Management, or Ownership;

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(v) enter into certain transactions with the Company’s affiliates;

(vi) make or permit any payment on any debt that is subordinate to the obligations under the Agile Loan Agreement and the Agile Note (expressly excluding up to $ 3,000,000 of unsecured loans through one or more third parties);

(vi) make or permit any payment on any debt that is subordinate to the obligations under the Agile I Loan Agreement and the Agile I Note (expressly excluding up to $ 3,000,000 of unsecured loans through one or more third parties);

and (vi) other than in the ordinary course of business, entering into any material agreement, or terminating or materially amending a material agreement.

As security for the full and prompt payment and performance of any obligations arising under the Agile Loan Agreement and the Agile Note, the Company and its Subsidiary granted to Agile a continuing first priority security interest in all the assets of the Company and its Subsidiary;

As security for the full and prompt payment and performance of any obligations arising under the Agile I Loan Agreement and the Agile I Note, the Company and its Subsidiary granted to Agile a continuing first priority security interest in all the assets of the Company and its Subsidiary;

provided, however, the filing of a financing statement and/or the taking of any action required to perfect Agile’s security interest in the collateral may only occur upon an event of default.

The Agile Loan Agreement also provides for standard Events of Default, customary provisions, including representations, warranties and covenants, indemnification, waiver of jury trial, arbitration, and the exercise of remedies upon a breach or default.

In connection with entering into the Agile Loan Agreement, the Company was required to pay an administrative fee of $ 92,500 to the Collateral Agent, which was paid at the closing out of proceeds of the issuance of the Agile Note.

The Agile I Loan Agreement also provides for standard Events of Default, customary provisions, including representations, warranties and covenants, indemnification, waiver of jury trial, arbitration, and the exercise of remedies upon a breach or default.

In connection with entering into the Agile I Loan Agreement, the Company was required to pay an administrative fee of $ 92,500 to the Collateral Agent, which was paid at the closing out of proceeds of the issuance of the Agile I Note and expensed in “other income (expense)” in the statements of operations.

On February 10, 2025, in connection with entering into the Agile II Loan Agreement as described below, the Company paid the remaining balance of the Agile I Note, including interest for the remaining term, totaling $ 1.5 million.

On February 10, 2025 (the “Agile II Effective Date”), the Company entered into a Business Loan and Security Agreement (the “Agile II Loan Agreement”), with Agile Capital Funding, LLC as collateral agent (“Collateral Agent”), and Agile Lending, LLC (collectively, “Agile”), pursuant to which the Company issued to Agile a Confessed Judgment Secured Promissory Note for an aggregate value of $ 2.5 million (the “Agile II Note”).

Pursuant to the Agile II Loan Agreement, (i) the Agile II Note matures 32 weeks from the Agile II Effective Date;

(ii) carried an aggregate total interest payment of approximately $ 1.05 million, and (iii) immediately upon the occurrence and during the continuance of an Event of Default (as defined in the Agile II Loan Agreement), interest would accrue at a fixed per annum rate equal to the applicable rate plus five percent, or 42 %.

The Company was required to repay all the obligations due under the Agile II Loan Agreement and the Agile II Note in 32 equal payments of $ 110,937 , with the first payment being made to Agile on February 17, 2025, and every seven days thereafter until the maturity date.

The proceeds received from the Agile II Note will be used to fund general working capital needs.

Pursuant to the Agile II Loan Agreement, upon the occurrence of certain events, including (a) a change in the Company’s business other than the business engaged in by the Company on the Aigle II Effective Date, (b) cause or permit, voluntarily or involuntarily, any Key Person to cease being actively engagement in the management of the Company without prior notice to Agile, (c) a change in control of the Company (expressly excluding pending transactions) or otherwise approve the liquidation or dissolution of the Company (collectively, a “Change in Business, Management, or Ownership”), or (d) the RP Note is accelerated upon the occurrence of an Event of Default, the Company would be required to immediately pay to Agile an amount equal to the sum of (i) all outstanding principal of the Agile II Note plus accrued and unpaid interest thereon through the prepayment date, (ii) a fee equal to the aggregate and actual amount of interest (at the contract rate of interest) that would be paid through the maturity date (the “Prepayment Fee”), plus (iii) all other obligations that are due and payable, including, without limitation, interest at the Default Rate with respect to any past due amounts.

The Company was allowed to make a full or partial prepayment (and receive a discount thereon if repaid in full within sixty days of note issuance) of any or all of the obligations arising under the Agile II Loan Agreement and the Agile II Note, provided the Company shall be obligated to pay the Prepayment Fee.

The Agile II Loan Agreement imposed various restrictions on the activities of the Company consistent with the Agile I Loan Agreement described above under the heading “ Agile I.

As security for the full and prompt payment and performance of any obligations arising under the Agile II Loan Agreement and the Agile II Note, the Company granted to Agile a continuing first priority security interest in all the assets of the Company;

provided, however, the filing of a financing statement and/or the taking of any action required to perfect Agile’s security interest in the collateral may only occur upon an event of default.

The Agile II Loan Agreement also provided for standard Events of Default, customary provisions, including representations, warranties and covenants, indemnification, waiver of jury trial, arbitration, and the exercise of remedies upon a breach or default.

In connection with entering into the Agile II Loan Agreement, the Company was required to pay an administrative fee of $ 125,000 to the Collateral Agent, which was paid at the closing out of proceeds of the issuance of the Agile II Note and expensed in “other income (expense)” in the statements of operations.

$ 1.5 million of the Agile II Note was used to repay the remaining balance of principal and interest under the Agile I Note, with net proceeds to the Company of approximately $ 875,000 .

On July 10, 2025, the Company entered into an exchange agreement (the “Agile Exchange Agreement”) with Agile, pursuant to which the Company and Agile agreed that in exchange for the surrender and forgiveness of the Agile II Note, dated February 7, 2025, with the remaining amount of principal and interest thereunder being $ 1,331,250 , Agile received (a) 3,678 shares of common stock (the “Agile Exchange Shares”), (b) pre-funded warrants to purchase 14,419 shares of common stock (the “Agile Pre-Funded Warrants”, and collectively with the Agile Exchange Shares, the “Agile Exchange Securities”), with the Agile Exchange Securities valued at a price of $ 68.04 , such amount above the Nasdaq Minimum Price, and (c) four equal cash payments of $ 25,000 to Agile, totaling $ 100,000 .

The July 10, 2025 exchange of the balance of the Agile II Note for shares of the Company’s Common Stock was accounted for as an extinguishment of the Agile II Note, resulting in the derecognition of the related liability and the recording of the fair value of the equity securities and other assets exchanged on the date of settlement.

The Agile II Note was accounted for under the FVO, and therefore, the carrying amount of the Agile II Note immediately prior to settlement represented its fair value at the settlement date.

The fair value of the common stock and cash payments exceeded the fair value of the Agile II Note on the date of the exchange resulting in a loss on extinguishment of a liability totaling $ 256,000 , which is included in other income (expense) in the statements of operations.

1800 Diagonal Lending I

On March 26, 2025 (the “Diagonal Effective Date”), the Company and 1800 Diagonal Lending, LLC, a Virginia limited liability company, or registered assignees (“Diagonal”) entered into a Securities Purchase Agreement (the “Diagonal Agreement”), pursuant to which the Company issued a Convertible Promissory Note (the “Diagonal Note”) in the principal amount of $ 300,000 (the “Diagonal Principal”), for which the Diagonal Note, among other things, (a) matured on December 30, 2025 (unless otherwise accelerated upon an Event of Default (as defined below)) (the “Diagonal Maturity Date”), (b) accrued interest at a rate of 10 % per annum on the unpaid principal balance from the date the Diagonal Note was issued (the “Diagonal Issuance Date”) until the principal and interest became due and payable, whether on the Maturity Date or upon acceleration by prepayment or otherwise, (c) began to accrue interest on the Diagonal Issuance Date but would not be payable until the Diagonal Note became payable, and (d) interest accrued at a rate of 22 % per annum for any amount of principal or interest which was not paid as required under the Diagonal Note, or during an Event of Default.

Pursuant to the Diagonal Note, Diagonal had the right, from time to time, and at any time, during the period beginning on the date which is 180 days from the Diagonal Effective Date and ending on the earlier of (a) the Diagonal Maturity Date, or (b) the date of payment of the Default Amount, each in respect of the remaining outstanding amount of the Diagonal Note into fully paid and non-assessable shares of common stock at a price equal to 75 % multiplied by the Market Price (as defined below) (the “Conversion Price”).

For purposes of the Diagonal Note (x) the “Market Price” means the lowest Trading Price for the Company’s common stock during the 10 trading ending on the latest complete trading day prior to the Diagonal Conversion Date;

(y) the “Trading Price” means the closing price (or bid, if applicable) of the Company’s common stock as listed (or quoted, as applicable) on the principal securities exchange or trading market where it is listed or traded;

and (z) the “Diagonal Conversion Date” means the date specified in the applicable notice of conversion, delivered to the Company by Diagonal in accordance with the Diagonal Note.

Pursuant to the Diagonal Note, the following events, among other things, constituted an Event of Default:

(i) failure to pay principal and interest when due;

(ii) the Company fails to issue shares of common stock upon exercise of Diagonal’s conversion rights under the Diagonal Note;

(iii) the Company’s breach of any material covenant or other material term or condition in the Diagonal note or the Diagonal Agreement, and such breach continues for a period of 20 business days after written notice from Diagonal;

(iv) any breach of the representations and warranties set forth in both the Diagonal Agreement and the Diagonal Note;

(v) the Company institutes any assignment for the benefit of creditors, or applies for or consents to the appointment of a receiver or trustee for it or for a substantial part of its property or business;

(vi) the Company institutes, or any proceeding is instated against the Company, relating to any bankruptcy, insolvency, reorganization, or liquidation proceedings;

(vii) the Company fails to maintain the listing of its common stock on Nasdaq or on the Over The Counter boards or an equivalent exchange;

(viii) the Company failing to comply with the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or ceases to be subject to the reporting requirements of the Exchange Act;

(ix) the Company institutes any dissolution, liquidation, or winding up of the Company or any substantial portion of its business;

(x) the restatement of any financial statements filed by the Company with the Securities and Exchange Commission (“SEC”), if the result of such restatement would have constituted a material adverse effect on the rights of Diagonal;

(xi) the Company proposes to replace its transfer agent and fails to provide a fully executed irrevocable transfer agent instructions signed by the successor transfer agent;

and (xii) a breach or default by the Company of any covenant or other term or condition contained in any other agreement by the Company, after the passage of all applicable notice and cure or grace periods (each individually an “Event of Default”, and collectively, “Events of Default”).

Upon the occurrence and during the continuation of any Event of Default, the Diagonal Note would become immediately due and payable, and the Company would pay to Diagonal an amount equal to the Default Amount (as defined below), multiplied by two.

For other Events of Default, the Diagonal Note would become immediately due and payable in an amount equal to 150 % times the sum of (a) the then outstanding principal amount of the Diagonal Note, plus (b) accrued and unpaid interest on the unpaid principal amount of the Diagonal Note to the date of payment, plus (c) Default Interest, if any, on the amounts referred to in clauses (a) and/or (b), plus (d) any amounts owed to Diagonal pursuant to the Diagonal Note (the then outstanding principal amount of this Note to the date of payment plus the amounts referred to in clauses (b), (c) and (d) shall collectively be known as the “Default Amount”) and all other amounts payable under the Diagonal Note would immediately become due and payable, together with all costs, including, without limitation, legal fees and expenses, of collection, and Diagonal would be entitled to exercise all other rights and remedies available at law or in equity.

The Diagonal Note further contained provisions that (a) limited Diagonal’s beneficial ownership upon conversion of the Diagonal Note to a maximum of 4.99 % of the Company’s issued and outstanding common stock;

(b) prohibited the Company from entering selling, leasing or otherwise disposing of any significant portion of its assets outside the ordinary course of business;

and (c) adjusted the Conversion Price (and number of shares deliverable upon conversion) upon (i) the event of merger, consolidation, or similar transactions, and (ii) the Company declaring or making any distribution of assets to holders of its common stock as a dividend, stock repurchase, return of capital, or otherwise.

The Diagonal Agreement also provided for customary provisions, including, without limitation, representations, warranties, covenants, conditions to closing, indemnification, waiver of jury trial, and exercise of remedies upon a breach of the Diagonal Agreement.

The Diagonal Note was issued with an Original Issue Discount of 4.75 % (the “OID”), with net proceeds to the Company of approximately $ 279,000 after deducting the OID, reimbursement of Diagonal’s expenses in an amount equal to $ 7,000 (expensed in the statements of operation for the year ended December 31, 2025), and other estimated offering expenses.

The Company used the net proceeds from the offering for working capital and general corporate purposes.

During the year ended December 31, 2025, Diagonal converted an aggregate principal and interest amount under the Diagonal Note of $ 320,000 into shares of the Company’s Common Stock at an average price of $ 28.44 per share, resulting in the issuance of 11,334 shares of Common Stock to Diagonal.

As of December 31, 2025, the Diagonal Note was fully extinguished.

1800 Diagonal Lending II

On May 12, 2025 (the “Diagonal II Effective Date”), the Company and Diagonal entered into a Securities Purchase Agreement (the “Diagonal II Agreement”), pursuant to which the Company issued a Convertible Promissory Note (the “Diagonal II Note”) in the principal amount of $ 145,200 (the “Diagonal II Principal”), for which the Diagonal II Note, among other things, (a) matured on February 15, 2026 (unless otherwise accelerated upon an Event of Default (as defined below)) (the “Diagonal II Maturity Date”), (b) accrued interest at a rate of 10 % per annum on the unpaid principal balance from the date the Diagonal II Note was issued (the “Diagonal II Issuance Date”) until the principal and interest becomes due and payable, whether on the Maturity Date or upon acceleration by prepayment or otherwise, (c) interest began to accrue on the Diagonal II Issuance Date but would not be payable until the Diagonal II Note became payable, and (d) interest would accrue at a rate of 22 % per annum for any amount of principal or interest which is not paid as required under the Diagonal II Note, or during an Event of Default.

Pursuant to the Diagonal II Note, Diagonal had the right, from time to time, and at any time, during the period beginning on the date which is 180 days from the Diagonal II Effective Date and ending on the earlier of (a) the Diagonal II Maturity Date, or (b) the date of payment of the Default Amount, each in respect of the remaining outstanding amount of the Diagonal II Note into fully paid and non-assessable shares of common stock at a price equal to 75 % multiplied by the Market Price (as defined below) (the “Conversion Price”).

For purposes of the Diagonal II Note (x) the “Market Price” means the lowest Trading Price for the Company’s common stock during the 10 trading ending on the latest complete trading day prior to the Diagonal II Conversion Date;

and (z) the “Diagonal II Conversion Date” means the date specified in the applicable notice of conversion, delivered to the Company by Diagonal in accordance with the Diagonal II Note.

Pursuant to the Diagonal II Note, the following events, among other things, constituted an Event of Default:

(i) failure to pay principal and interest when due;

(ii) the Company fails to issue shares of common stock upon exercise of Diagonal’s conversion rights under the Diagonal II Note;

(iii) the Company’s breach of any material covenant or other material term or condition in the Diagonal II Note or the Diagonal II Agreement, and such breach continues for a period of 20 business days after written notice from Diagonal;

(iv) any breach of the representations and warranties set forth in both the Diagonal II Agreement and the Diagonal II Note;

(vi) the Company institutes, or any proceeding is instated against the Company, relating to any bankruptcy, insolvency, reorganization, or liquidation proceedings;

(vii) the Company fails to maintain the listing of its common stock on Nasdaq or on the Over The Counter boards or an equivalent exchange;

(ix) the Company institutes any dissolution, liquidation, or winding up of the Company or any substantial portion of its business;

(x) the restatement of any financial statements filed by the Company with the SEC, if the result of such restatement would have constituted a material adverse effect on the rights of Diagonal;

(xi) the Company proposes to replace its transfer agent and fails to provide a fully executed irrevocable transfer agent instructions signed by the successor transfer agent;

Upon the occurrence and during the continuation of any Event of Default that is enumerated in Section 3.2 of the Diagonal II Note, the Diagonal II Note would become immediately due and payable, and the Company would pay to Diagonal an amount equal to the Default Amount (as defined below), multiplied by two.

For other Events of Default not enumerated in Section 3.2 of the Diagonal II Note, the Diagonal II Note would become immediately due and payable in an amount equal to 150 % times the sum of (a) the then outstanding principal amount of the Diagonal II Note, plus (b) accrued and unpaid interest on the unpaid principal amount of the Diagonal II Note to the date of payment, plus (c) Default Interest, if any, on the amounts referred to in clauses (a) and/or (b), plus (d) any amounts owed to Diagonal pursuant to Sections 1.3 and 1.4(g) of the Diagonal II Note (the then outstanding principal amount of this Note to the date of payment plus the amounts referred to in clauses (b), (c) and (d) shall collectively be known as the “Default Amount”) and all other amounts payable under the Diagonal II Note would immediately become due and payable, together with all costs, including, without limitation, legal fees and expenses, of collection, and Diagonal shall be entitled to exercise all other rights and remedies available at law or in equity.

Pursuant to the Diagonal II Note, Diagonal was prohibited from converting any portion of the Diagonal II Note that, if such conversion was effectuated, would cause the Company to issue to the Lender shares of the Company’s common stock in excess of 19.99 % of the issued and outstanding shares of common stock immediately prior to the issuance of the Diagonal II Note.

The Diagonal II Note was issued with an Original Issue Discount of 4.75 % (the “OID”), with net proceeds to the Company of $ 125,000 after deducting the OID, reimbursement of Diagonal’s expenses in an amount equal to $ 7,000 (expensed in the statement of operations for the year ended December 31, 2025), and other estimated offering expenses.

The Company used the net proceeds from the offering for working capital and general corporate purposes.

During the year December 31, 2025, Diagonal converted an aggregate principal and interest amount under the Diagonal II Note of $ 157,000 into shares of the Company’s Common Stock at an average price of $ 9.72 per share, resulting in the issuance of 13,084 shares of Common Stock to Diagonal.

As of December 31, 2025, the Diagonal II Note was fully extinguished.

Belleau Note Purchase Agreement

On March 28, 2025 (the “Belleau Effective Date”), the Company entered into a Note Purchase Agreement (the “Belleau Purchase Agreement”) with Belleau Wood Capital, LP, or its assignees (“Belleau”).

Pursuant to the Belleau Purchase Agreement, the Company will issue to Belleau a total of three Unsecured Promissory Notes (each, a “Belleau Note” and collectively, the “Belleau Notes”) with an aggregate principal amount of $ 1,500,000 (the “Belleau Principal”).

Each of the Belleau Notes (x) matured on the date that was 12 months from the date of the issuance of each respective Belleau Note (collectively, the “Belleau Maturity Date”);

(y) may be prepaid in part or in full at any time by the Company without penalty;

and (z) accrued interest at a rate of 20 % simple interest per annum (the “Belleau Interest Rate”, and the dollar value of the accrued interest, the “Belleau Interest”).

The Company used the proceeds from the sale of the Belleau Notes for working capital and general corporate purposes.

The Belleau Interest that accrued on each respective Belleau Note was payable on each respective Belleau Maturity Date in the form of restricted shares of the Company’s common stock equal to 20 % of the Belleau Principal, calculated at a price per share of $ 168.00 .

In the event of a prepayment of any Belleau Note by the Company, the Belleau Interest would be payable in full at the time of such prepayment.

The Belleau Note also provided for (i) standard events of default, including (a) any default in the payment of the Belleau Principal or Belleau Interest on their respective due dates, (b) the occurrence of a Bankruptcy Event (as defined in the Belleau Note), or (c) the Company commits any material breach or default of any material provision of the Belleau Note, if not cured within 20 days following the written notice from Belleau specifying in reasonable detail such breach or default (sections (a) through (c), the “Belleau Events of Default”);

and (ii) customary provisions, including representations, warranties and covenants, indemnification, waiver of jury trial, arbitration, and the exercise of remedies upon a breach or default.

Upon the occurrence of an Event of Default, the Belleau Note would bear interest at the default interest rate of 20 % per annum, payable in cash, and upon Belleau’s written notice to the Company, all payments of Belleau Principal and Belleau Interest would become immediately due and payable.

On August 11, 2025, the Company and Belleau entered into an Amended & Restated Unsecured Promissory Note, pursuant to which the Belleau Principal was reduced to $ 1,250,000 .

The Company used the proceeds from the sale of the Belleau Notes for working capital and general corporate purposes.

During the three months ended September 30, 2025, the Company repaid $ 250,000 of principal on the Belleau Note.

Effective October 22, 2025, the Company and Belleau Wood Capital, LP (“Belleau”) entered into an exchange agreement (the “Belleau Exchange Agreement”), pursuant to which the Company and Belleau agreed (a) to convert the remaining principal amount of $ 1.0 million due under the Belleau Note into 83,334 shares of Common Stock, valued at $ 12.00 per share, simultaneous with the close of the October 2025 PIPE (the “Note Exchange Consideration”), and (b) issue Belleau a common stock purchase warrant to purchase the sum of 10,417 shares of Common Stock, in form similar to the PIPE Warrants (the “Belleau Warrants”), except the warrants will be exercisable for a period of two (2) years.

The exchange of the remaining balance of the Belleau Note for common stock and common stock purchase warrants, as described above, was accounted for as an exchange of debt for equity, resulting in a loss on exchange totaling $ 1,871,000 , reflected in other income (expense) in the statement of operations for the year ended December 31, 2025.

The Belleau Note was accounted for under the FVO, and therefore, the carrying amount of the Belleau Note immediately prior to the exchange represented its fair value at the exchange date.

The fair value of the Belleau Warrants was estimated utilizing Black-Scholes, with inputs including term of 2 years, stock price of $ 31.20 , volatility of 93 % and risk-free interest rate of 3.45 %.

Related Party Promissory Note

On November 19, 2024 (the “RP Effective Date”), we entered into a Note Purchase Agreement (the “RP Purchase Agreement”) with a non-employee member of the Board (the “Purchaser”).

Pursuant to the RP Purchase Agreement, the Company issued to the Purchaser an Unsecured Promissory Note (the “RP Note”) in the amount of $ 1,500,000 (the “RP Principal”), for which the RP Note (i) matures on the date that is 12 months from the RP Effective Date (the “RP Maturity Date”), (ii) may be pre-paid at any time by the Company without penalty, and (iii) accrues interest on the RP Principal at a rate of 40 % simple interest per annum (the “RP Interest”).

The RP Interest is payable on the RP Maturity Date.

In the event of a prepayment of the RP Note by the Company, the RP Interest will be pro-rated for the period the RP Note is outstanding.

The Company intends on using the proceeds for working capital and general corporate purposes.

The RP Note also provides for:

(i) standard events of default, including (a) any default in the payment of the RP Principal or RP Interest on their respective due dates, (b) the occurrence of a Bankruptcy Event (as defined in the Note), or (c) the Company commits any material breach or default of any material provision of the Note, if not cured within 20 days following the written notice from the Purchaser specifying in reasonable detail such breach or default (sections (a) through (c), the “Events of Default”);

On November 19, 2024 (the “RP Effective Date”), the Company entered into a Note Purchase Agreement (the “RP Purchase Agreement”) with a non-employee member of the Board (the “Purchaser”).

Pursuant to the RP Purchase Agreement, the Company issued to the Purchaser an Unsecured Promissory Note (the “RP Note”) in the amount of $ 1,500,000 (the “RP Principal”), for which the RP Note (i) matured on the date that was 12 months from the RP Effective Date (the “RP Maturity Date”), (ii) may be pre-paid at any time by the Company without penalty, and (iii) accrued interest on the RP Principal at a rate of 40 % simple interest per annum (the “RP Interest”).

The RP Interest was payable on the RP Maturity Date.

In the event of a prepayment of the RP Note by the Company, the RP Interest would be pro-rated for the period the RP Note is outstanding.

The Company utilized the proceeds for working capital and general corporate purposes.

The RP Note also provided for (i) standard events of default, including (a) any default in the payment of the RP Principal or RP Interest on their respective due dates, (b) the occurrence of a Bankruptcy Event (as defined in the RP Note), or (c) the Company commits any material breach or default of any material provision of the RP Note, if not cured within 20 days following the written notice from the Purchaser specifying in reasonable detail such breach or default (sections (a) through (c), the “Events of Default”);

and (ii) customary provisions, including representations, warranties and covenants, indemnification, waiver of jury trial, arbitration, and the exercise of remedies upon a breach or default.

Upon the occurrence of an Event of Default, the RP Note will bear interest at the default interest rate of 45 % per annum, and upon Purchaser’s written notice to the Company, all payments of RP Principal and RP Interest will become immediately due and payable.

The Agile Note and the RP Note are accounted for at fair value as described in Note 2, measured using Level 3 inputs with the following impact on the consolidated financial statements as of and for the year ended December 31, 2024:

Upon the occurrence of an Event of Default, the RP Note would bear interest at the default interest rate of 45 % per annum, and upon Purchaser’s written notice to the Company, all payments of RP Principal and RP Interest would become immediately due and payable.

On June 13, 2025, the Company entered into an amendment to the RP Note (the “RP Amendment”).

Pursuant to the Amendment, (a) the maturity date of the RP Note was extended to November 19, 2026;

(b) beginning on November 19, 2025, interest no longer accrued on the remaining Principal outstanding;

and (c) the Company agreed to make monthly payments of $ 175,000 , with such payments to start on November 19, 2025, and continue thereafter for twelve months, at which time the RP Note would be paid in full.

On July 7, 2025, the Company entered into an exchange agreement with the Michael Keller Trust (the “Trust”) (“RP Exchange Agreement”), pursuant to which the Company and the Trust agreed that in exchange for the surrender and forgiveness of RP Note, with the principal and interest thereon being equal to $ 1,878,082 , the Trust would be granted (a) 1,500,000 shares of Series AAAA Jr.

Convertible Preferred Stock, and (b) cash payments totaling $ 378,000 , such payments to be made in equal monthly installments of approximately $ 63,000 , commencing on October 15, 2025, and concluding on March 15, 2026 (the “Trust Agreement”).

The July 7, 2025 exchange of the balance of the RP Note for shares of the Company’s Series AAAA Junior Preferred Stock was accounted for as an extinguishment of the RP Note, resulting in the derecognition of the related liability and the recording of the fair value of the Series AAAA Jr.

Preferred Stock exchanged on the date of settlement.

The RP Note was accounted for under the FVO, and therefore, the carrying amount of the RP Note immediately prior to settlement represented its fair value at the settlement date, resulting in a loss on extinguishment totaling $ 26,000 .

The $ 378,000 of accrued cash payments were included as a component of the change in fair value of the RP Note for the year ended December 31, 2025, which is included in other income (expense) in the statement of operations.

Yield Point Convertible Note

On July 10, 2025, the Company and Yield Point NY, LLC (the “Yield Point”) entered into a Securities Purchase Agreement, pursuant to which the Company agreed to sell up to (i) an aggregate principal amount of $ 4,494,382 in 8 % Senior Secured Convertible Notes, maturing eighteen ( 18 ) months after the issue date, with original issue discount of 11 %, convertible into shares of the Company’s common stock at a conversion price of $ 81.78 per share, and if not converted then amortized over the final twelve (12) months concluding on the maturity date (“YP Notes”), and (ii) common stock purchase warrants to purchase 54,998 shares of common stock at an exercise price of $ 64.33 per share (the “Original YP Warrant”) (the “Offering”) (the YP Purchase Agreement”).

The Company received $ 4,000,000 in gross proceeds from the Offering.

The Company used the proceeds from the sale of the YP Notes for working capital and general corporate purposes.

The Purchase Agreement contained customary covenants on the Company’s part that are typical for transactions of this type, as well as the following additional covenants:

(i) for as long as the YP Notes remain outstanding, the Company agreed not to effect or enter into an Equity Line of Credit or agreement to effect any issuance by the Company or any of its subsidiaries involving a variable rate transaction;

(ii) the Company agreed to offer to Yield Point, for so long as any amount in excess of $ 1,500,000 remains outstanding on the YP Note, the opportunity to participate in an amount equal to 25 % in any subsequent securities offerings by the Company;

(iii) the Company agreed to hold a stockholder meeting within 90 days of the date of the Agreement at which the Company will solicit the stockholders’ affirmative vote for approval of the anti-dilution provisions described in the transaction documents in accordance with the applicable law and rules and regulations of the Nasdaq.

The YP Purchase Agreement obligated the Company to indemnify Yield Point and various related parties for certain losses including those resulting from (i) any misrepresentation or breach of any representation or warranty made by the Company, (ii) any breach of any obligation of the Company, and (iii) certain claims by third parties.

The YP Notes were senior secured obligations of the Company and were secured by certain personal property of the Company, pursuant to a security agreement.

Unless earlier converted, the YP Notes would mature in January 2027.

The YP Notes bore interest at a rate of 8 % per annum, subject to increase in the event of default to the lesser of 18 % per annum or the maximum rate permitted under applicable law.

The YP Notes, including interest accrued thereon, were convertible at any time until a convertible note is no longer outstanding, in whole or in part, at the option of the holders into shares of common stock at a conversion price of $ 81.78 per share, subject to adjustment as set forth therein.

The YP Notes had a beneficial ownership limitation such that none of Yield Point have the right to convert any portion of their YP Notes if Yield Point (together with its affiliates or any other persons acting together as a group with Yield Point) would beneficially own in excess of 4.99 % of the number of shares of common stock outstanding immediately after giving effect to the issuance of common stock issuable upon conversion of such YP Notes, or, upon 61 days’ prior written notice to the Company, 9.99 % of the number of shares of common stock outstanding immediately after giving effect to the issuance of common stock issuable upon conversion of such YP Notes.

Commencing on the six-month anniversary of the date of the issuance of the YP Note, and on the same date every month thereafter, the Company would make 12 equal amortization payments, with each payment being equal to one-twelfth of the initial principal amount, plus all accrued but unpaid interest.

The YP Notes also contained certain negative covenants, including prohibitions on the incurrence of indebtedness, liens, amendments to the Company’s organizational documents, dividends, redemption, related party transactions and entry into any equity line of credit agreement or variable rate transactions.

The YP Notes also contained standard and customary events of default including, but not limited to, failure to make payments when due, failure to observe or perform covenants or agreements contained in the YP Notes, existence of a default or event of default under any of the Transaction Documents (as defined in the YP Notes), the bankruptcy or insolvency of the Company or any of its subsidiaries and unsatisfied judgements against the Company.

The Original YP Warrant entitled the holders to purchase 54,998 shares of common stock, respectively.

The Original YP Warrant was exercisable immediately and had a term of four years.

The Original YP Warrant had an exercise price of $ 64.33 per share, subject to adjustment as set forth therein.

The terms of each of the YP Notes and the Original YP Warrant provided for anti-dilution protection for issuances of common stock at a price per share less than the price equal to the conversion price or exercise price, as applicable, subject to approval by the Company’s stockholders.

In connection with the YP Purchase Agreement, the Company and Yield Point entered into the PIPE Registration Rights Agreement, pursuant to which the Company agreed to register the Underlying Shares on the Registration Statement, to be filed with the SEC within 30 days after the date of the issuance of the YP Notes and Original YP Warrant and to cause the Registration Statement to be declared effective under the Securities Act no later than 90 days after the date of the Purchase Agreement.

The Company also entered into a Security Agreement (the “YP Security Agreement”) with Yield Point and such holders of the YP Notes as may be issued in the future (together with Yield Point, the “Secured Parties”).

Pursuant to the YP Security Agreement, the Secured Parties were granted a security interest in certain of the Company’s personal property to secure the payment and performance of all of the Company’s obligations under the YP Notes, Original YP Warrant, Purchase Agreement, Registration Rights Agreement and Security Agreement.

On September 30, 2025, the Company and Yield Point, entered into Amendment No.

1 to the YP Note (the “YP Note Amendment”), originally issued on July 10, 2025, pursuant to that certain YP Purchase Agreement, dated therewith.

Pursuant to the YP Note Amendment, (i) the “Conversion Price” was amended to $ 71.40 , subject to adjustment as set forth in the YP Note;

and (ii) the “Floor Price” was amended to $ 14.28 .

All other terms and conditions of the YP Note remain in full force and effect.

The initial fair value of the Original YP Warrant, totaling $ 1,935,000 , was classified as a liability in the balance sheets, and remeasured at fair value at each balance date.

The change in fair value of the Original YP Warrant for the year ended December 31, 2025 totaled $ 1,070,000 which is reflected in other income (expense) in the statements of operations.

The fair value of the Original YP Warrant was estimated using the Black-Scholes option pricing model and the following weighted-average assumptions:

expected volatility of 40 %;

risk free interest rate range of 3.66 % - 3.88 %;

and expected life range of 3.83 - 4.0 years.

The fair value of the conversion feature embedded in the YP Note was estimated using the Black-Scholes option pricing model and the following weighted-average assumptions:

expected volatility of 40 %;

risk free interest rate range of 3.66 % - 3.97 %;

and expected life range of 1.30 - 1.53 years.

In conjunction with the Company’s October 2025 shareholder meeting, shareholders approved the issuance of the shares underlying the Original YP Warrant as required by Nasdaq Listing Rule 5635(d).

As such, the fair value of the Original YP Warrant on the approval date totaling $ 1,679,000 was reclassified to equity.

Effective October 22, 2025, the Company and Yield Point entered into an exchange agreement (the “YP Exchange Agreement”), pursuant to which the Company and Yield Point would, on a date no earlier than ten (10) business days after the effectiveness of the YP Exchange Agreement, exchange up to 100% of unconverted and unpaid principal and interest under the YP Note, for (i) that number of shares of the Company’s Series C Preferred Stock;

(ii) common stock purchase warrants to purchase 166,667 shares of Common Stock, on terms substantially similar to the PIPE Warrants, at an initial exercise price of $ 12.00 per share subject to adjustment as set forth therein (the “YP Exchange Warrant”);

and (iii) the cancellation of all remaining common stock purchase warrants previously issued to Yield Point in connection with the sale to Yield Point of the YP Note, dated July 10, 2025 (“YP Note Exchange”).

In addition, during the 10-day period from the effective date of the YP Exchange Agreement, Yield Point converted $ 1,953,000 of the outstanding principal balance under the YP Note, resulting in the issuance of 136,834 shares of common stock to Yield Point upon conversion, and the Company repaid in cash and additional $ 1,500,000 of outstanding principal on the YP Note.

As a result, the remaining balance under the YP Note as of the YP Note Exchange date was $ 1,153,000 .

The exchange of the remaining balance of the YP Note for Series C Preferred stock, as described above, was accounted for as an exchange of debt for equity, resulting in a loss on exchange totaling $ 196,000 , reflected in other income (expense) in the statement of operations for the year ended December 31, 2025.

The exchange of the Original YP Warrant for the YP Exchange Warrant, as described above, was accounted for as a modification of the Original YP Warrant, resulting in a loss on extinguishment totaling $ 1,459,000 reflected in other income (expense) in the statement of operations for the year ended December 31, 2025.

The fair value of the Original YP Warrant and the YP Exchange Warrant, on the date of the exchange was estimated utilizing Black-Scholes, with inputs including, Term of 4 years, stock price of $ 14.04 , volatility of ranging from 40 % to 103 % and risk-free interest rate of 3.58 %.

Debt Accounted for Under the Fair Value Option

The Agile I Note, Agile II Note, Diagonal I Note, Diagonal II Note, Belleau Note, RP Note and the YP Note were accounted for at fair value as described in Note 2, and measured using Level 3 inputs.

Gross Proceeds

Proceeds net of original issue discount

Fair Value at issuance date

Fair Value allocated to Original YP Warrant liability

Difference between proceeds and fair value at issuance (2)

1 unchanged sentence

Fair value – December 31, 2024

Interest paid during the period

Accrued interest at period end

Change in fair value subsequent to issuance (2)

Debt issue costs expensed immediately in the consolidated statements of operations (1)

Interest Rate (Discount rate used in present value calculation)

Note balance – December 31, 2025

Fair value – December 31, 2025

Conversion to equity / payments on notes payable during the year ended December 31, 2025

Interest paid during the year ended December 31, 2025

Change in fair value - year ended December 31, 2025 (2)

Debt issue and extinguishment costs (1)

Interest Rate / Discount rate

Debt issue costs incurred in connection with the YP Note included legal fees and advisor fees.

Debt issue costs incurred in connection with the Agile Loan included administrative fee of $ 92,500 to the collateral agent and advisor fees.

Reflected in interest expense in the consolidated statements of operations.

Debt issuance costs are reflected in “other income (expense)” in the statements of operations.

Reflected in interest expense in the statements of operations.

Accounts Receivable Financing Facility

2 unchanged sentences

Pursuant to the SLR Agreement, Lender may, from time to time and in its sole discretion, make certain cash advances to the Company (each an “Advance”, and collectively, “Advances”), against the face amounts of certain uncollected accounts receivable of the Borrowers on an account-by-account basis (each, a “Financed Account”, and collectively, the “Accounts”), at a rate of 85 % multiplied by the face value of such Account (the “Advance Rate”), less any reserved funds and any other amounts due to Lender from Borrowers, up to a maximum aggregate Advance amount of $ 4,000,000 (the “Maximum Amount”)(collectively, the “AR Facility”).

Upon receipt of any Advance, Borrowers will have assigned all of its rights in such receivables and all proceeds thereof.

Upon receipt of any Advance, Borrowers assigned all of its rights in such receivables and all proceeds thereof.

The proceeds received from the Facility will be used to fund general working capital needs.

The SLR Agreement is effective for 24 months from the Facility Effective Date (the “Term”), automatically extends for successive Terms (each, a “Renewal Term”), and the Borrowers’ are obligated to pay the Lender an early termination fee in the event the SLR Agreement is terminated under certain circumstances prior to the end of any Term or Renewal Term, as more specifically set forth in the SLR Agreement.

On June 10, 2025, the AR Facility was terminated.

In connection with the AR Facility, the Company agreed to, among other things, (i) pay a finance fee equal to 2 % of the Maximum Amount, payable in 24 equal monthly installments on the last day of each month of the Term until paid in full, (ii) pay a servicing fee equal to 0.30 % multiplied by the actual average daily amount of Advances outstanding at the time of determination (the “Outstanding Amount”) for the applicable month, on the last day of each calendar month during the Term (or so long as any obligations arising under the SLR Agreement are outstanding);

2 unchanged sentences

In the event that Borrower’s monthly utilization is less than the applicable Minimum Utilization for any month, the Financing Fee for such month shall be calculated as if the applicable Minimum Utilization has been satisfied.

The SLR Agreement imposes various restrictions on the activities of the Borrowers, including a prohibition on fundamental changes to the Company or its subsidiaries (including certain consolidations, mergers and sales and transfers of assets, and limitations on the ability of the Borrowers to grant liens upon their property or assets).

The SLR Agreement includes standard Events of Default (as defined in the SLR Agreement), and provide that, upon the occurrence of certain events of default, Lender may, among other things, immediately collect any obligation owing to Lender under the SLR Agreement, cease advancing money to the Borrowers, take possession of any collateral, and/or charge interest at a rate equal to the lesser of (i) 6 % above the Facility Rate, and (ii) the highest default rate permitted by applicable law.

As security for the full and prompt payment and performance of any obligations arising under the SLR Agreement, the Borrowers granted to Lender a continuing first priority security interest in all the assets of the Borrowers.

The SLR Agreement also provides for customary provisions, including representations, warranties and covenants, indemnification, waiver of jury trial, arbitration, and the exercise of remedies upon a breach or default.

Transfers of financial assets that do not qualify for sale accounting are reported as collateralized borrowings.

Financing and servicing fees calculated with reference to amounts advanced under the AR Facility are included in interest expense.

The commitment fee, based on the maximum facility amount and payable irrespective of drawdowns, is expensed on a straight line basis over the term of the AR Facility and included in other income (expense) in the consolidated statements of operations.

Total amounts advanced and repaid under the AR Facility for the years ended December 31, 2024 and 2023 are reflected in financing activities in the consolidated statements of cash flows.

The commitment fee, based on the maximum facility amount and payable irrespective of drawdowns, is expensed on a straight-line basis over the term of the AR Facility and included in other income (expense) in the statements of operations.

Total amounts advanced and repaid under the AR Facility for the applicable periods presented are reflected in financing activities in the statements of cash flows.

Interest expense for the years ended December 31, 2025 and 2024 totaled $ 10,000 and $ 63,000 , respectively.

Commitment fee expense for the years ended December 31, 2025 and 2024 totaled $ 40,000 and $ 40,000 , respectively.

Convertible Notes Payable at Fair Value

On May 16, 2022, the Company entered into a Securities Purchase Agreement (the “SPA”) with three institutional investors (collectively, the “Note Holders”) providing for the sale and issuance of a series of senior convertible notes in the aggregate original principal amount of $ 4,320,000 , of which 8 % is an original issue discount (“OID”) (each, a “Note,” and, collectively, the “Notes,” and such financing, the “Note Offering”).

The Notes accrued interest at a guaranteed annual rate of 9 % per annum, were set to mature 12 months from the date of issuance, and were convertible at the option of the Note Holders into that number of shares of the Company’s common stock, equal to the sum of the outstanding principal balance, accrued and unpaid interest, and accrued and unpaid late charges (the “Conversion Amount”), divided by $ 80.00 (the “Conversion Price”), subject to adjustment upon the occurrence of certain events as more specifically set forth in the Note, as amended.

In the event of the occurrence of an event of default, the Note Holders may, at the Note Holder’s option, convert all, or any part of, the Conversion Amount into shares of common stock at 90 % of the lowest volume weighted average price of the ten trading days preceding the date for which the price is being calculated.

Amortization of original issue discount for the years ended December 31, 2024 and 2023 totaled $ 0 and $ 40,000 , respectively.

Interest paid during the years ended December 31, 2024 and 2023 totaled $ 0 and $ 180,000 , respectively.

At December 31, 2022, the remaining principal balance of the Notes totaled $ 539,000 , and accrued interest totaled $ 180,000 , both of which were paid in full during the three months ended March 31, 2023.

As of March 31, 2023, all amounts of principal and interest under the Notes were fully paid, resulting in a Convertible note payable and accrued interest balance of $ 0 .

STOCKHOLDERS ’ EQUITY AND EQUITY-LINKED INSTRUMENTS

Reverse Stock Split

On September 7, 2023, the Company filed the 2023 Second Amendment to the Company’s Charter, to effect a reverse stock split of the Company’s issued and outstanding shares of common stock at a ratio of 1-for- 20 (the “Reverse Split”).

The Reverse Split was approved by the Board on July 5, 2023, and approved by the stockholders of the Company on September 7, 2023.

The 2023 Second Amendment became effective on September 11, 2023.

The Company’s shares began trading on a Reverse Split-adjusted basis on the Nasdaq Capital Market on September 11, 2023.

Each holder of common stock is entitled to one vote for each share of common stock held at all meetings of stockholders.

The Company’s initial certificate of incorporation authorized 5,000,000 shares of preferred stock, par value $ 0.001 per share.

In October 2016, the Board and a majority of the holders of the Company’s common stock approved an amendment and restatement of the certificate of incorporation which, in part, eliminated the authorized preferred stock (“First Amended and Restated Charter”).

In August 2018, the Board approved a second amendment and restatement of the Company’s amended and restated certificate of incorporation (the “Second Amended and Restated Charter”) to, in part, increase the Company’s authorized capital to a total of 110.0 million shares, including 10.0 million shares of newly created preferred stock, par value $ 0.001 per share (“Preferred Stock”), remove the deemed liquidation provision, as such term is defined in the First Amended and Restated Charter, authorize the Board to fix the designation and number of each series of Preferred Stock, and to determine or change the designation, relative rights, preferences, and limitations of any series of Preferred Stock.

The Second Amended and Restated Charter was approved by a majority of the Company’s stockholders in September 2018, and was filed with the State of Delaware in November 2018.

On May 30, 2023, the Company filed an amendment to its Second Amended and Restated Charter (“2023 Amendment”), increasing the number of authorized shares of common stock from 100,000,000 to 400,000,000 .

The Company’s Board approved the amendment on March 17, 2023, and the Company obtained the approval of the 2023 Amendment by written consent of its stockholders holding greater than 50% of the voting securities of the Company on April 5, 2023.

On October 20, 2025, the Company filed the Third Amended and Restated Certificate of Incorporation of Super League Enterprise, Inc.

(the “Third Amended Certificate”).

The Third Amended Certificate amended the Company’s Second Amended and Restated Charter to (i) increase the number of authorized shares of Common Stock from 400,000,000 to 750,000,000 ;

and (ii) to allow the vote of the holders of the Company’s preferred stock to amend their respective preferred stock certificates of designations, without requiring the approval of the holders of all voting securities of the Company.

The Third Amended Certificate was also restated to include all amendments to the prior charters made pursuant to Certificates of Amendment after the filing of the Second Amended and Restated Charter.

As of December 31, 2025, 3,517,835 shares of Common Stock were reserved for future issuance pursuant to outstanding unvested RSUs and stock options under the Company’s 2025 Plan, common stock purchase warrants and convertible preferred stock outstanding, as disclosed at Note 2.

Reverse Stock Splits

On January 16, 2026, the Company filed an amendment to the Company’s Third Amended Certificate, to effect a reverse stock split of the Company’s issued and outstanding shares of Common Stock at a ratio of 1-for- 12 (the “2026 Reverse Split”) (the “2026 Amendment”).

The 2026 Amendment became effective on January 23, 2026.

No fractional shares of common stock were issued as a result of the Reverse Split.

Instead, in lieu of any fractional shares to which a stockholder of record would otherwise be entitled as a result of the Reverse Split, the Company paid cash (without interest) equal to the value of such fractional share.

The Reverse Split did not modify the rights or preferences of the common stock.

All references to common stock, warrants to purchase common stock, options to purchase common stock, restricted stock, share data, per share data and related information contained in the consolidated financial statements have been retroactively adjusted to reflect the effect of the Reverse Split for all periods presented.

The 2026 Reverse Split was approved by the Company’s Board on January 2, 2026, and approved by the stockholders of the Company on June 9, 2025.

On June 17, 2025, the Company filed a certificate of amendment (the “June 2025 Amendment”) to its Second Amended and Restated Certificate of Incorporation, which became effective as of June 23, 2025, to effect a reverse stock split of the Company’s issued and outstanding shares of common stock at a ratio of 1-for- 40 (the “2025 Reverse Split”).

As a result of the 2025 Reverse Split, every 40 shares of the Company’s issued and outstanding common stock was automatically combined and converted into one issued and outstanding share of common stock.

The 2025 Reverse Split was approved by the Company’s Board on June 2, 2025, and approved by the stockholders of the Company on June 9, 2025.

All references to common stock, warrants to purchase common stock, options to purchase common stock, restricted stock, share data, per share data and related information contained in the financial statements have been retroactively adjusted to reflect the effect of the 2026 Reverse Split (and all other reverse splits described herein) for all periods presented.

Bylaw Amendment

5 unchanged sentences

The change to the quorum requirement was made to improve the Company’s ability to hold Meetings when called.

Common Stock Issuances - Fiscal Year Ended December 31, 2025

October 2025 PIPE Transaction

On October 22, 2025, October 24, 2025 and October 27, 2025, the Company entered into Securities Purchase Agreements (the “PIPE Purchase Agreements”) with certain accredited investors (the “Purchasers”), relating to the Company’s offering of an aggregate of (a) 332,084 shares (the “PIPE Shares”) of the Company’s Common Stock, at a price per share equal to $ 12.00 and (b) Pre-Funded Warrants to purchase 1,334,584 shares of Common Stock (the “PIPE Pre-Funded Warrants”) at a price per PIPE Pre-Funded Warrant equal to same price as that for PIPE Shares minus $ 0.00001 , and the remaining exercise price of each PIPE Pre-Funded Warrant will equal $ 0.00001 per share, for gross proceeds to the Company of approximately $ 20,000,000 , before deducting offering costs and expenses (“October 2025 PIPE”).

For each one PIPE Share or PIPE Pre-Funded Warrant purchased in the Offering, each Purchaser also received Common Stock Purchase Warrants (“PIPE Warrants”), to purchase one share of Common Stock (“PIPE Warrant Shares”), with an exercise price of $ 144.00 per share.

The PIPE Shares, PIPE Pre-Funded Warrants and PIPE Warrants sold in the Offering are sometimes hereafter referred to as, the “PIPE Securities.” The October 2025 PIPE, which was comprised of three separate closings, had a final close date of October 27, 2025.

The Company intends to use the proceeds from the Offering for repayment of existing indebtedness totaling $ 1.5 million, implementation of a new corporate strategy, general corporate purposes and working capital.

In connection with the consummation of the October 2025 PIPE, as described below, the Company issued additional warrants to purchase an aggregate of 766,667 shares of common stock to certain designees of the Lead Investor (as defined in the PIPE Placement Agreement) (“PIPE Lead Warrants”), as approved by the Company’s stockholders at the Company’s 2025 Annual Meeting of Stockholders.

Under the PIPE Pre-Funded Warrants, a holder will not be entitled to exercise any portion of any Pre-Funded Warrant that, upon giving effect to such exercise, would cause (i) the aggregate number of shares of Common Stock beneficially owned by such holder (together with its affiliates) to exceed 4.99 % of the number of shares of Common Stock outstanding immediately after giving effect to the exercise;

or (ii) the combined voting power of the Company’s securities beneficially owned by such holder (together with its affiliates) to exceed 4.99 % of the combined voting power of all of the Company’s securities outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the PIPE Pre-Funded Warrant, which percentage may be changed at the holder’s election to a higher or lower percentage not in excess of 9.99 % upon 61 days’ notice to the Company.

In addition, in certain circumstances, upon a fundamental transaction, a holder of PIPE Pre-Funded Warrants will be entitled to receive, upon exercise of the PIPE Pre-Funded Warrants, the kind and amount of securities, cash or other property that such holder would have received had they exercised the PIPE Pre-Funded Warrants immediately prior to the fundamental transaction.

As of December 31, 2025, PIPE Pre-Funded Warrants to purchase 1,187,500 shares of Common Stock were outstanding.

The Company and the Purchasers also executed a registration rights agreement (the “PIPE RRA”), pursuant to which the Company agreed to file a registration statement covering the resale of the PIPE Shares, the shares of Common Stock underlying the Pre-Funded Warrants (the “PFW Shares”), and the PIPE Warrant Shares within thirty (30) days following the date of the issuance of the PIPE Securities, and to cause the PIPE RRA to be declared effective under the Securities Act of 1933, as amended (the “Securities Act”), no later than 90 days after the date on which the Purchase Agreements were entered.

The related registration statement was declared effective on December 12, 2025.

The PIPE Warrants entitle the holders to purchase that number of shares of Common Stock equal to the number of shares of Common Stock (or PIPE Pre-Funded Warrants) purchased in the Offering.

The PIPE Warrants are exercisable immediately upon issuance, expire five years from the date of issuance, and have an initial exercise price of $ 12.00 (the “Initial Exercise Price”), subject to adjustment in the event of any Warrant Dilutive Issuance (as defined below), or any stock splits, stock dividends, recapitalizations, and similar events (the Initial Exercise Price as adjusted from time to time pursuant to the terms of the PIPE Warrant is referred to as, the “Exercise Price”).

The anti-dilution adjustments to the Exercise Price set forth that if the Company sells any shares of Common Stock or any securities of the Company that would entitle the holder thereof to acquire at any time Common Stock, for effective consideration per share (the “New Issuance Price”) less than a price equal to the Exercise Price in effect immediately prior to such sale (the foregoing a “Warrant Dilutive Issuance”), then simultaneously with the consummation (or, if earlier, the announcement) of such Warrant Dilutive Issuance, the Exercise Price then in effect shall be reduced to an amount equal to the higher of (i) the New Issuance Price or (ii) the Warrant Floor Price (as defined below), provided, however, that no Exempt Issuance (as defined in the PIPE Warrants) shall be considered a Warrant Dilutive Issuance.

The “Warrant Floor Price” means $ 6.84 , such amount representing 20% of the Nasdaq Minimum Price of $34.20 on the date the Purchase Agreements were executed (the “PIPE Purchase Date”) (which price shall be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction).

The PIPE Warrants also contain a call feature, whereby, after the Company has registered the PIPE Warrant Shares on an effective registration statement filed with the SEC, the Company has the option, but not the obligation, and in the Company’s sole and absolute discretion, to purchase the PIPE Warrant from the Holder at a price of $ 0.001 per share of Common Stock underlying the PIPE Warrant (the “Call Option”), in the event the closing price of the Company’s Common Stock, as listed on the Nasdaq Capital Market, is at or above $ 36.00 per share for 20 consecutive trading days (the “Call Trigger”).

The Company’s right to exercise the Call Option will begin on the day immediately following the Call Trigger until the day that is thirty (30) calendar days thereafter, by way of delivery of a notice to exercise the Call Option to the holders of the PIPE Warrants.

On October 22, 2025, the Company and Aegis Capital Corp.

(“Aegis”), entered into a Placement Agency Agreement (the “PIPE Placement Agreement”), pursuant to which Aegis acted as the Company’s exclusive placement agent in connection with the October 2025 PIPE.

Pursuant to the PIPE Placement Agreement, the placement commission will be (I) (a) 2.0 % for investments made by the Lead Investor (as defined in the PIPE Placement Agreement), and (b) 9.0 % for all PIPE Securities placed by Aegis, excluding Lead Investor;

(II) if investments placed by Aegis equal $ 5 million or more, the Company will pay Aegis an additional fee of $ 125,000 ;

(III) Aegis will also receive a fee of 9.0 % of the proceeds from the cash exercise of any warrants purchased by investors, excluding the Lead Investor, in each case payable on exercise;

and (IV) as additional compensation for Aegis’s services, the Company shall issue to Aegis or its designees at the consummation of the October 2025 PIPE, warrants (the “PIPE Placement Agent Warrants”) to purchase that number of shares of Common Stock equal to 5.0 % of the aggregate number of PIPE Shares and PIPE Pre-Funded Warrants sold in the Placement other than to the Lead Investor.

The Placement Agent Warrants will be exercisable at any time beginning and from time to time, in whole or in part, during the five ( 5 ) years commencing on the commencement of sales in the Placement, at a price per share equal to 100.0% of the offering price per share of the PIPE Securities sold in the October 2025 PIPE and such Placement Agent Warrants shall be exercisable on a cash basis or cashless basis.

The Company allocated the proceeds between the PIPE Securities based on the relative fair values of the PIPE Securities in accordance with ASC 505, “Equity.” The fair value of the common stock was based on the Company’s closing stock price on the respective closing dates, ranging from $ 22.20 per share to $ 31.20 per share.

The October 2025 PIPE proceeds, and related offering costs were allocated to the PIPE Securities issued as follows:

Offering Costs

PIPE Shares - Common stock

PIPE Pre-Funded Warrants

PIPE Warrants

Total gross proceeds

The amount allocated to the PIPE Shares was recorded in Common Stock (par value) and Additional Paid-In Capital in the accompanying balance sheet as of December 31, 2025.

The amounts allocated to the PIPE Pre-Funded warrants and PIPE Warrants were recorded in additional paid-in capital as the PIPE Warrants and PIPE Pre-Funded Warrants are equity-classified.

Offering costs, including placement agent fees, legal fees and accountant related expenses were recorded as a reduction to additional paid-in capital in proportion to the allocation of proceeds between the equity instruments issued, as summarized above.

Additional financing costs incurred in connection with the October 2025 PIPE, included the issuance of the following additional common stock purchase warrants.

Classification

PIPE Lead Warrants

Equity / Additional-paid-in capital

PIPE Placement Agent Warrants

Equity / Additional-paid-in capital

The fair value of the PIPE Warrants, PIPE Pre-Funded Warrants, PIPE Lead Warrants and PIPE Placement Agent Warrants was estimated using a Black-Scholes option pricing model with the following assumptions:

Expected volatility

Risk–free interest rate

Dividend yield

Expected life of warrants (years)

May 2025 Equity Financings

On May 30, 2025, the Company entered into a securities purchase agreement (the “May III Purchase Agreement”) with certain investors, which provided for the sale and issuance by the Company in a registered direct offering (the “May III Offering”) of an aggregate of (i) 6,646 shares of the Company’s common stock, at a purchase price of $ 57.60 per share (the “May III Shares”), and (ii) pre-funded warrants to purchase up to 4,987 shares of common stock at a purchase price of $ 57.48 per pre-funded warrant (the “May III Pre-Funded Warrants” and, together with the May III Shares, the “May III Securities”), which represents the per share price for the May III Shares less the exercise price of $ 0.00001 per share.

The May III Offering closed on June 2, 2025.

The aggregate gross proceeds to the Company from the May III Offering were approximately $ 670,000 , before deducting placement agent commissions and other estimated offering expenses.

The Company utilized the net proceeds of the May III Offering for working capital and general corporate purposes, as well as to repay a portion of the Company’s indebtedness.

On May 30, 2025, the Company also entered into a placement agent agreement (the “May III Placement Agent Agreement”) with Aegis Capital Corp.

(the “Placement Agent”).

Pursuant to the terms of the May III Placement Agent Agreement, the Placement Agent agreed to use its reasonable best efforts to arrange for the sale of the securities in the May III Offering.

The Company agreed to pay the Placement Agent a cash fee equal to 8 % of the aggregate gross proceeds from the sale of the May III Securities.

The Company also agreed to reimburse the Placement Agent for certain expenses.

On May 29, 2025, the Company entered into an underwriting agreement (the “May II Underwriting Agreement”) with Aegis Capital Corp.

(the “Underwriter”), relating to the Company’s public offering (the “May II Offering”) of 8,681 shares (the “May II Shares”) of its common stock.

Pursuant to the May II Underwriting Agreement, the Company also granted the Underwriter a 45-day option (“May II Option”) to purchase an additional 869 shares of common stock (the “May II Option Securities”, and together with the Shares, the “May II Securities”).

On May 30, 2025, the Company issued the May II Shares and closed the May II Offering at a public price of $ 57.60 per share, for net proceeds to the Company of approximately $ 380,000 after deducting underwriting discounts and commissions and estimated offering expenses payable by the Company.

The Company utilized the net proceeds of the May II Offering for working capital and general corporate purposes, as well as to repay a portion of the Company’s indebtedness.

On May 29, 2025, the Underwriter delivered notice to the Company that it elected to exercise the May II Option with respect to an aggregate of 869 May II Option Securities.

The closing of the sale of the May II Option Shares occurred on May 30, 2025.

On May 9, 2025, the Company entered into an underwriting agreement (the “May I Underwriting Agreement”) with the Underwriter, relating to the Company’s public offering (the “May I Offering”) of 10,662 shares (the “May I Shares”) of its common stock, par value $ 0.001 per share.

Pursuant to the May I Underwriting Agreement, the Company also granted the Underwriters a 45 -day option (“May I Option”) to purchase an additional 1,600 shares of common stock (the “May I Option Securities”, and together with the Shares, the “May I Securities”).

On May 12, 2025, the Company issued the firm May I Securities and closed the May I Offering at a public price of $ 81.60 per share, for net proceeds to the Company of approximately $ 700,400 after deducting underwriting discounts, commissions and estimated offering expenses payable by the Company.

On May 14, 2025, the Underwriter partially exercised its May I Option and purchased an additional 1,287 shares of common stock at a price of $ 81.60 per share, before deducting underwriting discounts.

The issuance by the Company of the May I Option Securities resulted in total gross proceeds of approximately $ 104,999 , before deducting underwriting discounts, commissions, and other offering expenses payable by the Company.

The Company utilized the net proceeds of the May I Offering for working capital and general corporate purposes, as well as to repay a portion of the Company’s indebtedness.

Common Stock Issuances - Fiscal Year Ended December 31, 2024

On October 24, 2024, the Company entered into a Securities Purchase Agreement (the "Purchase Agreement") with a certain accredited investor for the registered direct offering of an aggregate of 2,368 shares of the Company’s common stock, par value $ 0.001 per share (the “Shares”), at a purchase price of $ 422.40 per Share (the “Registered Direct Offering”).

The Registered Direct Offering closed on October 25, 2024, resulting in gross proceeds to the Company of approximately $ 1.0 million.

Yield Point Equity Line of Credit

On July 10, 2025 (the “YP Execution Date”), the Company, entered into an equity purchase agreement (the “YP Equity Purchase Agreement,” or “YP ELOC”) with Yield Point.

Under the YP Equity Purchase Agreement, the Company has the right, but not the obligation, to direct Yield Point to purchase up to $ 20,000,000 (the “Maximum Commitment Amount”) in shares of common stock of the Company upon satisfaction of certain terms and conditions contained in the YP Equity Purchase Agreement, including, without limitation, an effective registration statement filed with SEC registering the resale of the shares of Put Stock (defined below) and the shares of Commitment Stock (defined below) and additional shares to be sold to Yield Point from time to time under the YP Equity Purchase Agreement.

The term of the YP Equity Purchase Agreement began on the YP Execution Date and ends on the earlier of (i) the date on which Yield Point shall have purchased shares of common stock issued, or that the Company shall be entitled to issue, per any applicable Put Notice in accordance with the terms and conditions of the YP Equity Purchase Agreement (the “Put Stock”) equal to the Maximum Commitment Amount (as defined in the YP Equity Purchase Agreement), (ii) the date that is thirty-six (36) months from the date the registration statement is declared effective, (iii) written notice of termination by the Company to Yield Point (which shall not occur at any time that Yield Point holds any of the shares of Put Stock, or within 30 days of the sale to Yield Point of Put Stock), or (iv) written notice of termination by Yield Point to the Company (the “Commitment Period”).

During the Commitment Period, the Company may direct Yield Point to purchase shares of Put Stock by delivering a notice (a “Put Notice”) to Yield Point.

The Company shall, in its sole discretion, select the number of shares of Put Stock requested by the Company in each Put Notice.

However, such amount may not exceed the Maximum Put Amount (as defined in the YP Equity Purchase Agreement).

The purchase price to be paid by Yield Point for the shares of Put Stock will be ninety-two percent ( 92 %) of the lowest VWAP for a trading day on the Principal Market during the Valuation Period (as defined in the YP Equity Purchase Agreement).

In consideration for Yield Point’s execution and delivery of, and performance under the YP Equity Purchase Agreement, on the Execution Date, the Company issued pre-funded warrants to purchase common stock (the “YP Pre-Funded Warrant”) to Yield Point in a form acceptable to Yield Point in its sole discretion and having an exercise price per share of $ 0.001 (the “Commitment Stock”) having a value of $ 600,000 based on closing price of the common stock on July 9, 2025.

All of the shares of Commitment Stock were fully earned as of the Execution Date, and the issuance of the shares of Commitment Stock is not contingent upon any other event or condition, including, without limitation, the effectiveness of the Initial Registration Statement (defined below) or the Company’s submission of a Put Notice to Yield Point and irrespective of any termination of the YP Equity Purchase Agreement.

The fair value of the Commitment Stock was recorded in Deferred Financing costs included in prepaids and other assets in the Company balance sheet as of December 31, 2025.

Under the YP Equity Purchase Agreement, the Company was obligated to file with the SEC, on or before August 10, 2025, a registration statement on Form S-1 (the “Initial Registration Statement”) covering only the resale of the shares of Put Stock and Commitment Stock and to use its best efforts to have the Initial Registration declared effective no later than October 10, 2025.

The Company filed the Initial Registration Statement on July 17, 2025, which was declared effective on September 30, 2025.

The YP Equity Purchase Agreement contains customary representations, warranties, agreements, and conditions to completing future sale transactions, indemnification rights and obligations of the parties.

Hudson Equity Line of Credit

On February 14, 2025, the Company entered into an equity purchase agreement (the “Hudson Equity Purchase Agreement”) with Hudson Global Ventures, LLC, a Nevada limited liability company (“Hudson”).

Pursuant to the Hudson Equity Purchase Agreement, the Company had the right, but not the obligation, to sell to Hudson, and Hudson is obligated to purchase, up to $ 2.9 million of newly issued shares (the “Hudson Total Commitment”) of the Company’s common stock, from time to time during the term of the Hudson Equity Purchase Agreement, subject to certain limitations and conditions (the “Hudson Offering” or “Hudson ELOC”).

As consideration for Hudson’s commitment to purchase shares of common stock under the Hudson Purchase Agreement, the Company issued to Hudson 625 shares of common stock, valued at $ 159,000 , following the execution of the Hudson Equity Purchase Agreement (the “Hudson Commitment Shares”).

From and after the initial satisfaction of the conditions to the Company’s right to commence sales to Hudson under the Hudson Equity Purchase Agreement (such event, the “Hudson Commencement,” and the date of initial satisfaction of all such conditions, the “Hudson Commencement Date”), the Company was able to direct Hudson to purchase shares of common stock at a purchase price per share equal to the lesser of (i) 92 % of the closing price of the Company’s common stock, as listed on Nasdaq, on the trading day immediately preceding the respective Put Date (the “Hudson Initial Purchase Price”), or (ii) 92 % of the lowest closing price of the Company’s common stock, as listed on Nasdaq, on any trading day during the period beginning on the Put Date (as defined in the Hudson Purchase Agreement) and continuing through the date that is three trading days immediately following the Clearing Date (as defined in the Hudson Purchase Agreement) associated with the applicable Hudson Put Notice (such three trading day period is the “Hudson Valuation Period”, and the price is the “Hudson Market Price”), on such date on which the Hudson Purchase Price is calculated in accordance with the terms of the Hudson Equity Purchase Agreement.

The Company controlled the timing and amount of any such sales of common stock to Hudson.

During the year ended December 31, 2025, the Company sold 1,494 shares of common stock, respectively, under the Hudson ELOC at an average per share price of $ 163.20 , raising net proceeds totaling $ 231,000 .

The Hudson Equity Purchase Agreement was terminated effective May 8, 2025.

The Company utilized the net proceeds from the Hudson Offering for working capital and general corporate purposes, including sales and marketing activities, product development and capital expenditures.

Preferred Stock

The Company’s initial certificate of incorporation authorized 5,000,000 shares of preferred stock, par value $ 0.001 per share.

In August 2018, the Board approved a second amendment and restatement of the Company’s amended and restated certificate of incorporation (the “Amended and Restated Charter”) to, in part, increase the Company’s authorized capital to a total of 110.0 million shares, including 10.0 million shares of newly created preferred stock, par value $ 0.001 per share (“Preferred Stock”), authorize the Board to fix the designation and number of each series of Preferred Stock, and to determine or change the designation, relative rights, preferences, and limitations of any series of Preferred Stock.

The Amended and Restated Charter was approved by a majority of the Company’s stockholders in September 2018, and was filed with the State of Delaware in November 2018.

All references in the accompanying consolidated financial statements to Preferred Stock have been restated to reflect the Amended and Restated Charter.

The Amended and Restated Charter also increased the Company’s authorized capital to include 100.0 million shares of common stock, par value $ 0.001 , and removed the deemed liquidation provision, as such term is defined in the Amended and Restated Charter.

Each holder of common stock is entitled to one vote for each share of common stock held at all meetings of stockholders.

On May 30, 2023, the Company filed a Certificate of Amendment (the “2023 First Amendment”) to its Second Amended and Restated Certificate of Incorporation, as amended (the “Charter”), increasing the number of authorized shares of common stock, par value $ 0.001 per share (“common stock”) from 100,000,000 to 400,000,000 .

The Board previously approved the Amendment on March 17, 2023, and the Company obtained the approval of the 2023 First Amendment by written consent of its stockholders holding greater than 50% of the voting securities of the Company on April 5, 2023.

Equity Financings

Filing of Certificates of Designation of Preferences, Rights and Limitations of Convertible Preferred Stock – For the Year Ended December 31, 2025

Series AAAA Junior Preferred Stock .

On July 11, 2025, the Company filed the Certificate of Designation of Preferences, Rights and Limitations (“COD”) of the Series AAAA Jr.

Preferred Stock (the “AAAA Jr.

COD”), designating 3,775,047 shares of Series AAAA Jr.

Convertible Preferred Stock (the “AAAA Jr.

Preferred Stock”) in connection with the entry into the SB Exchange Agreements.

Each share of AAAA Jr.

Preferred Stock is convertible at the option of the holder, subject to certain beneficial ownership limitations and primary market limitations as set forth in each AAAA Jr.

COD, into such number of shares of the Common Stock, equal to the number of AAAA Jr.

Preferred Stock to be converted, multiplied by the stated value of $ 1.00 , divided by the conversion price in effect at the time of the conversion (the initial conversion price is equal to the Nasdaq Minimum Price, plus $0.01, subject to adjustment in the event of stock splits, stock dividends, and similar transactions).

Holders of the AAAA Jr.

Preferred Stock will be entitled to receive dividends, subject to the beneficial ownership and primary market limitations, payable in the form of that number of shares of Common Stock equal to 60 % of the shares of Common Stock underlying the AAAA Jr.

Preferred Stock upon issuance, provided that the holder holds at least 1 % of the AAAA Jr.

Preferred Stock on January 1, 2026.

In addition, subject to the beneficial ownership and primary market limitations, holders of AAAA Jr.

Preferred Stock will be entitled to receive dividends equal, on an as-if-converted to shares of Common Stock basis, and in the same form as dividends actually paid on shares of the Common Stock when, as, and if such dividends are paid on shares of the Common Stock.

Notwithstanding the foregoing, to the extent that a holder’s right to participate in any dividend in shares of Common Stock to which such holder is entitled would result in such holder exceeding the beneficial ownership and primary market limitations, then such holder shall not be entitled to participate in any such dividend to such extent and the portion of such shares that would cause such holder to exceed the beneficial ownership and primary market limitations shall be held in abeyance for the benefit of such holder until such time, if ever, as such holder’s beneficial ownership thereof would not result in such holder exceeding the beneficial ownership and primary market limitations).

Subject to certain limitations as more specifically set forth in the AAAA Jr.

COD, the holders of Series AAAA Jr.

Preferred Stock are entitled to vote on all matters submitted to the stockholders for a vote together with the holders of the Common Stock as a single class, on an as-converted basis.

Series B Preferred Stock.

On September 12, 2025, the Company filed the COD of the Series B Convertible Preferred Stock (the “ Series B COD ”), designating 16,426 shares of Series B Preferred Stock (the “Series B Preferred Stock”) in connection with the entry into the 2025 AB Exchange Agreements, as described below.

Each share of Series B Preferred Stock is convertible (i) at the sole discretion of the Company at any time, (ii) mandatorily on February 11, 2026, and/or (iii) at the option of the holder, each conversion method being subject to certain beneficial ownership limitations and primary market limitations as set forth in the Series B COD, into such number of shares of the Common Stock, equal to the number of Preferred Stock to be converted, multiplied by the stated value of $ 1,000 , divided by the conversion price in effect at the time of the conversion (the initial conversion price equal to $ 84.00 , subject to adjustment in the event of stock splits, stock dividends, and similar transactions).

Holders of Series B Preferred will be entitled to receive dividends, subject to the beneficial ownership and primary market limitations, on an as-if-converted to shares of Common Stock basis, to and in the same form as dividends actually paid on shares of the Common Stock when, as, and if such dividends are paid on shares of the Common Stock.

Subject to certain limitations as more specifically set forth in the Series B COD, the holders of Series B Preferred Stock are entitled to vote on all matters submitted to the stockholders for a vote together with the holders of the Common Stock as a single class, on an as-converted basis.

The Series B Preferred Stock, with respect to distributions of assets and rights upon the occurrence of any voluntary or involuntary liquidation, dissolution or winding-up of the Company rank senior to the Common Stock, the Series AA Preferred, the Series AAA Preferred, and Series AAA Jr.

Preferred, but junior to any future series of Preferred Stock issued by the Company.

Series C Preferred Stock.

On October 22, 2025, the Company filed the COD of the Series C Senior Convertible Preferred Stock (the “Series C COD”), designating 4,700 shares of Series C Senior Convertible Preferred Stock, par value $ 0.001 per share (“Series C Preferred”), in connection with the YP Exchange Agreement (as defined above).

Pursuant to the Series C COD, the Series C Preferred Stock, among other terms:

(i) ranks, with respect to dividend rights and rights upon liquidation, dissolution or winding up of the Company, senior to all classes of Common Stock and each other class or series of equity security of the Company which is not expressly senior or on parity with the Series C Preferred Stock ;

(ii) the Series C Preferred Stock shall remain outstanding until the Series C Preferred Stock is converted into Common Stock either optionally by the holder or automatically pursuant to its terms described below, and will automatically be converted into Common Stock on the eighteen-month anniversary of effectiveness of the registration statement relating to the shares of Common Stock issuable upon conversion of the Series C Preferred Stock ;

(iii) the shares of Series C Preferred Stock when converted, subject to certain beneficial ownership limitations, into shares of the Company’s Common Stock, will have a conversion price of $ 12.00 , with a stated value of $ 1,000 ;

and (iv) subject to certain limitations set forth in the Series C COD, the holders of Series C Preferred Stock are entitled to vote on all matters submitted to the stockholders for a vote together with the holders of the Common Stock as a single class, on an as-converted basis.

The Series C COD includes a beneficial ownership limitation such that a holder thereof does not have the right to convert any portion of the Series C Preferred if such holder (together with its affiliates or any other persons acting together as a group with such holder) would beneficially own in excess of 4.99 % of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of Common Stock issuable upon conversion of such Series C Preferred, or, upon 61 days’ prior written notice to the Company, 9.99 % of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of Common Stock issuable upon conversion of such shares of Series C Preferred.

Fiscal Year 2024 and Prior Filings of Certificate of Designation of Preferences, Rights and Limitations of Convertible Preferred Stock – General

Certificates of Designation.

In connection with each of the fiscal year 2024 and prior Preferred Stock Offerings in the table below, the Company filed CODs for each series with the State of Delaware.

Use of net proceeds included working capital, general corporate purposes, and certain indebtedness (Series A Preferred only), including sales and marketing activities and product development.

Conversion Feature.

Each share of preferred stock is convertible into such number of shares of the Company’s common stock equal to the number of preferred shares to be converted, multiplied by the applicable stated value, divided by the conversion price in effect at the time of the conversion, subject to adjustment in the event of stock splits, stock dividends, certain fundamental transactions and future issuances of equity securities, as described herein.

The conversion price is equal to the “Minimum Price,” as defined in NASDAQ Rule 5635(d)(1), on the Preferred Stock Offering closing date.

Voting Rights.

Each individual series of preferred stock shall vote together with the common stock on an as-converted basis, and not as a separate class, subject to the primary market limitations, except that holders of each individual series of preferred stock shall vote as a separate class with respect to (a) amending, altering, or repealing any provision of the respective series’ COD in a manner that adversely affects the powers, preferences or rights of the series, (b) increasing the number of authorized shares of the series, (c) authorizing or issuing an additional class or series of capital stock that ranks senior to or pari passu with the existing series with respect to the distribution of assets on liquidation, or (d) entering into any agreement with respect to the foregoing.

In addition, no holder of a series of preferred stock shall be entitled to vote on any matter presented to the Company’s stockholders relating to approving the conversion of such holder’s series of preferred stock into an amount in excess of the primary market limitations.

Holders of preferred stock, excluding holders of the Series AAA, AAA-2, AAA-3 and AAA-4 Junior preferred stock (collectively, “Series AAA Junior Preferred Stock”), were or will be entitled to receive dividends, subject to the beneficial ownership and primary market limitations, payable in the form of that number of shares of common stock equal to 20 % of the shares of common stock underlying the preferred stock then held by such holder on the 12 and 24 month anniversaries of the respective filing date.

Holders of the Series AAA Junior Preferred Stock were entitled to receive dividends, subject to the beneficial ownership and primary market limitations, payable in the form of that number of shares of common stock equal to 20 % of the shares of common stock underlying the Series AAA Junior Preferred Stock then held by such holder on the 30 -day, 60 -day, and 90 -day anniversaries of the filing Date.

In addition, subject to the beneficial ownership and primary market limitations, holders of preferred stock will be entitled to receive dividends equal, on an as-if-converted to shares of common stock basis, and in the same form as dividends actually paid on shares of the common stock when, as, and if such dividends are paid on shares of the common stock.

Liquidation Preferences.

Upon any dissolution, liquidation or winding up, whether voluntary or involuntary, holders of preferred stock (together with any Parity Securities (as defined in the respective Certificates of Designations) will be entitled to first receive distributions out of the Company’s assets in an amount per share equal to the preferred stock applicable stated value plus all accrued and unpaid dividends, whether capital or surplus before any distributions shall be made on any shares of common stock (after the payment to any senior security, if any).

Registration Rights.

The Company and Yield Point in the Preferred Stock Offerings (including the Exchange) also executed separate registration rights agreements, pursuant to which the Company filed applicable registration statements on Form S-3.

The following additional terms vary across the applicable series of Convertible Preferred Stock as follows:

Series AAA and AAA Junior Preferred

Series AA Preferred

Series A Preferred

Voting Rights – Certain Indebtedness

Holders shall vote as a separate class with respect to incurring:

Any indebtedness for borrowed money of any kind outside of certain loans not to exceed $ 5,000,000 and accounts payable in the ordinary course of business, or entering into any agreement with respect to the foregoing.

Any indebtedness for borrowed money of any kind outside of accounts payable in the ordinary course of business, or entering into any agreement with respect to the foregoing.

Any indebtedness for borrowed money of any kind in excess of $ 5 million, or entering into any agreement with respect to the foregoing.

Additional Investment Rights (“AIRs”)

All AIRs outstanding were canceled in connection with the 2025 AB Exchange Agreements.

Not applicable

Down Round Feature

Subject to the effectiveness of the Stockholder Approval, which was obtained on June 9, 2025, for twenty-four ( 24 ) months after the Filing Date, and subject to certain carveouts as described in the Series AAA Certificates of Designation, if the Company conducts an offering at a price per share less than the then effective conversion price (the “Future Offering Price”) consisting of common stock, convertible or derivative instruments, then in such event the conversion price of the Series AAA Preferred Stock shall be adjusted to the Future Offering Price, but not less than the Conversion Price Floor (as defined in the Series AAA Certificate of Designations).

For as long as Series AA Preferred Stock remains outstanding and subject to certain carveouts as described in the Series AA Certificates of Designations, (i) if the Company conducts an offering at a price per share less than the then current conversion price (the “Future Offering Price”) consisting of common stock, convertible or derivative instruments, and undertaken in an arms-length third party transaction, then in such event the conversion price of the Series AA Preferred Stock shall be adjusted to the greater of (a) the Future Offering Price and (b) the Conversion Price Floor (“ Series AA Down Round Feature”);

and (ii) if as of the 24 -month anniversary date of April 19, 2023, the VWAP for the five trading days immediately prior to such 24 -month anniversary date is below the then current conversion price, the holder will receive a corresponding adjustment to the then conversion price, such adjustment not to exceed the Conversion Price Floor.

Not applicable

Convertible Preferred Stock

On the dates set forth in the table below, we entered into subscription agreements with accredited investors in connection with the sale of newly designated Series of Convertible Preferred Stock, each series having a $ 0.001 par value and a $ 1,000 purchase price (“Stated Value”), hereinafter collectively referred to as “Convertible Preferred Stock, and the individual offerings of preferred stock referred to by the combination of “Series” and the specific letter designation of each series (i.e.

“Series A Preferred Stock Offering” refers to the Series A preferred stock offering, and “Series A Preferred Stock” refers to Series A convertible preferred stock), and each series of Convertible Preferred Stock issued, collectively referred to as “Preferred Stock Offerings,” as follows (rounded to the nearest thousands, except preferred share and conversion price data):

On the dates set forth in the table below, the Company entered into subscription agreements with accredited investors in connection with the sale of newly designated Series of Convertible Preferred Stock, each series having a $ 0.001 per share par value and a $ 1,000 per share purchase price (except for Series AAAA Jr.

Preferred Stock and Series C Preferred Stock which have a stated value of $ 1.00 per share), hereinafter collectively referred to as “Convertible Preferred Stock, and the individual offerings of preferred stock referred to by the combination of “Series” and the specific letter designation of each series (i.e., “Series A Preferred Stock Offering” refers to the Series A preferred stock offering, and “Series A Preferred Stock” refers to Series A convertible preferred stock), and each series of Convertible Preferred Stock issued, collectively referred to as “Preferred Stock Offerings,” as follows (rounded to the nearest thousands, except preferred share and conversion price data):

Preferred Stock

Conversion Shares - Common Stock

Conversion Shares – Common

Prices (2)(3)(4)(7)

Outstanding -

December 31, 2025

/Exchanges (5)

November 22, 2022

November 28, 2022

November 30, 2022

December 31, 2025

January 31, 2023

April 19, 2023

$ 4,526.40 /$ 907.20

April 20, 2023

$ 5,006.40 /$ 1,003.20

April 28, 2023

$ 4,560.00 /$ 912.00

1 unchanged sentence

$ 5,088.00 /$ 1,017.60

November 30, 2023

December 22, 2023

June 26, 2024

AAA-Junior - 2

July 10, 2024

AAA-Junior - 3

$ 801.60 /$ 240.96

$ 820.80 /$ 246.24

$ 600.00 /$ 180.00

September 20,

AAA-Junior – 4

$ 600.00 /$ 180.00

September 30,

Pursuant to the terms of the Placement Agent Agreements, we agreed to issue to the Placement Agent, following the final closing under the individual Preferred Stock Offerings (effective as of the respective individual series closing dates), five -year warrants to purchase 14.5 % of the shares of common stock issuable upon conversion of the respective series of Convertible Preferred Stock sold in the respective Preferred Stock Offering, at an exercise price equal to the applicable Preferred Stock Offering conversion price.

$ 600.00 /$ 180.00

AAAA-Junior (8)

September 29,

November 6, 2025

Pursuant to the terms of the Placement Agent Agreements, the Company agreed to issue to the Placement Agent, following the final closing under the individual Preferred Stock Offerings (effective as of the respective individual series closing dates), five -year warrants to purchase 14.5 % of the shares of common stock issuable upon conversion of the respective series of Convertible Preferred Stock sold in the respective Preferred Stock Offering, at an exercise price equal to the applicable Preferred Stock Offering conversion price.

See below for placement agent warrants exchanged in connection with the Exchange.

1 unchanged sentence

The Conversion prices for the Series AA Preferred Stock outstanding as of November 30, 2023, totaling 7,322 shares of Series AA Preferred Stock, were adjusted to the conversion prices shown in the table above, as a result of the Series AA Down Round Feature described below.

The triggering of the Down Round Feature for the Series AA Preferred Stock, occurring in August 2023, resulted in a deemed dividend totaling $ 6,446,000 , which was charged to retained earnings in the September 30, 2023 consolidated balance sheet.

The triggering of the Down Round Feature for the Series AA Preferred Stock, occurring in August 2023, resulted in a deemed dividend totaling $ 6,446,000 , which was charged to retained earnings.

As adjusted to reflect reduction in conversion prices as a result of the Series AA Down Round Feature, described below.

Series AAA and Series AAA-2 totals include 4,011 and 2,356 preferred shares, respectively, issued in connection with the Exchange Agreements described below.

Convertible Preferred Stock Preferences, Rights and Limitations – General

Certificates of Designation.

In connection with each of the Preferred Stock Offerings, the Company filed Certificates of Designation of Preferences, Rights and Limitations of each series with the State of Delaware.

Use of net proceeds included working capital, general corporate purposes, and certain indebtedness (Series A Preferred only), including sales and marketing activities and product development.

Conversion Feature.

Each share of preferred stock is convertible into such number of shares of the Company’s common stock equal to the number of preferred shares to be converted, multiplied by the Stated Value, divided by the conversion price in effect at the time of the conversion, subject to adjustment in the event of stock splits, stock dividends, certain fundamental transactions and future issuances of equity securities, as described herein.

In addition, on the one -year anniversary of the respective filing date, the Company may, in its discretion, convert (y) 50 % of the outstanding shares of Preferred into the Company’s common stock if the VWAP of such common stock over the previous 10 days as reported on the NASDAQ Capital Market equals at least 250% of the conversion price, or (z) 100 % of the outstanding shares of Series AAA Preferred into the Company’s common stock if the VWAP equals at least 300% of the conversion price.

The conversion price is equal to the “Minimum Price,” as defined in NASDAQ Rule 5635(d)(1), on the Preferred Stock Offering closing date.

In addition, Series A Preferred Stock outstanding will automatically convert into shares of common stock at the Conversion Price upon the earlier of (a) the 24 -month anniversary of the effective date or (b) the consent to conversion by holders of at least 51 % of the outstanding shares of Series A Preferred.

Voting Rights.

Each individual series of preferred stock shall vote together with the common stock on an as-converted basis, and not as a separate class, subject to the primary market limitations, except that holders of each individual series of preferred stock shall vote as a separate class with respect to (a) amending, altering, or repealing any provision of the respective series’ Certificate of Designation in a manner that adversely affects the powers, preferences or rights of the series, (b) increasing the number of authorized shares of the series, (c) authorizing or issuing an additional class or series of capital stock that ranks senior to or pari passu with the existing series with respect to the distribution of assets on liquidation, or (d) entering into any agreement with respect to the foregoing.

Holders of preferred stock, excluding holders of the Series AAA, AAA-2, AAA-3 and AAA-4 Junior preferred stock (collectively, “Series AAA Junior Preferred Stock”), will be entitled to receive dividends, subject to the beneficial ownership and primary market limitations, payable in the form of that number of shares of common stock equal to 20 % of the shares of common stock underlying the preferred stock then held by such holder on the 12 and 24 month anniversaries of the respective filing date.

Holders of the Series AAA Junior Preferred Stock will be entitled to receive dividends, subject to the beneficial ownership and primary market limitations, payable in the form of that number of shares of Common Stock equal to 20 % of the shares of Common Stock underlying the Series AAA Junior Preferred Stock then held by such holder on the 30 -day, 60 -day, and 90 -day anniversaries of the filing Date.

Notwithstanding the foregoing, to the extent that a holder’s right to participate in any dividend in shares of common stock to which such holder is entitled would result in such holder exceeding the beneficial ownership and primary market limitations, then such holder shall not be entitled to participate in any such dividend to such extent and the portion of such shares that would cause such holder to exceed the beneficial ownership and primary market limitations shall be held in abeyance for the benefit of such holder until such time, if ever, as such holder’s beneficial ownership thereof would not result in such holder exceeding the beneficial ownership and primary market limitations.

Liquidation Preferences.

Upon any dissolution, liquidation or winding up, whether voluntary or involuntary, holders of preferred stock (together with any Parity Securities (as defined in the respective Certificates of Designations) will be entitled to first receive distributions out of the Company’s assets in an amount per share equal to the preferred stock Stated Value plus all accrued and unpaid dividends, whether capital or surplus before any distributions shall be made on any shares of common stock (after the payment to any senior security, if any).

Registration Rights.

The Company and the investors in the Preferred Stock Offerings (including the Exchange) also executed separate registration rights agreements, pursuant to which the Company filed or will file the applicable registration statements on Form S-3.

Series AAA and Series AAA-2 totals include 4,011 and 2,356 preferred shares, respectively, issued in connection with the Series Exchange Agreements described below.

In July 2025, the conversion prices for the AAA Preferred and the AAA Junior Preferred were adjusted pursuant to the applicable Down Round Feature.

The conversion prices for AAA, AAA-2, AAA Junior, AAA Junior-2, AAA Junior-3 and AAA Junior-4 Preferred stock outstanding were adjusted to the conversion prices shown in the table above on the applicable date that the Down Round Feature was triggered (“July 2025 Down Round”).

The July 2025 Down Round resulted in a deemed dividend totaling $ 308,000 , which was charged to accumulated deficit in the December 31, 2025 balance sheet.

Series AAAA Junior Preferred Stock was issued in exchange for certain outstanding debt, as described at Note 5.

Series B Preferred Stock was issued in exchange for certain preferred stock outstanding, as described below.

Series C Preferred Stock was issued in conjunction with the YP Note Exchange described at Note 6.

Placement Agent Fees.

2 unchanged sentences

With respect to shares of Series AAA Preferred Stock issued in connection with the Exchange, the Placement Agent exchanged previously issued placement agent warrants to purchase 185 shares of common stock of the Company that were issued in connection with the Series A and Series AA Preferred Stock offerings, at exercise prices ranging from $ 3,648.00 to $ 6,436.80 per share, for new placement agent warrants to purchase a total of 724 shares of common stock at an exercise price of $ 803.52 per share and 417 shares of common stock at an exercise price of $ 820.80 per share.

The Company also granted the Placement Agent the right of first refusal, in connection with the Series AA and Series AAA offerings, to serve as the Company’s lead or co-placement agent for any private placement of the Company’s securities (equity or debt) that is proposed to be consummated with the assistance of a registered broker dealer, which expired in July 2024.

The Placement Agent shall also earn fees and be issued additional Placement Agent Warrants with respect to any securities issued pursuant to the Additional Investment Rights described herein.

No further additional investment rights shall be granted to investors that exercise the Additional Investment Rights.

The following additional terms vary across the applicable series of Convertible Preferred Stock as follows:

Series AAA and AAA Junior Preferred

Series AA Preferred

Series A Preferred

Voting Rights – Certain Indebtedness

Holders shall vote as a separate class with respect to authorizing, creating, incurring, assuming, guaranteeing or suffering to exist any indebtedness for borrowed money of any kind outside of certain loans not to exceed $ 5,000,000 and accounts payable in the ordinary course of business, or entering into any agreement with respect to the foregoing.

Holders shall vote as a separate class with respect to authorizing, creating, incurring, assuming, guaranteeing or suffering to exist any indebtedness for borrowed money of any kind outside of accounts payable in the ordinary course of business, or entering into any agreement with respect to the foregoing.

Holders shall vote as a separate class with respect to authorizing, creating, incurring, assuming, guaranteeing or suffering to exist any indebtedness for borrowed money of any kind in excess of $ 5 million, or entering into any agreement with respect to the foregoing.

Additional Investment Rights (“AIRs”)

Subject to the approval by a majority of the voting securities of the Company (the “Stockholder Approval”), pursuant to the Subscription Agreements, Series AAA and AAA Junior Preferred Stock holders shall have the right to purchase shares of a newly designated series of preferred stock of the Company containing comparable terms (except for adjustments to the Conversion Price based on future equity issuances) as the applicable series of preferred stock (the “Series AAA Additional Investment Right”) from the date the SEC declares the related registration statement to be filed with the SEC pursuant to the applicable Registration Rights Agreement (as defined below) effective, to the date that is 18 months thereafter, for an additional dollar amount equal to the applicable initial investment amount at $ 1,000 per share (the “Original Issue Price”), with a conversion price equal to the original conversion price of the applicable series of preferred stock.

No further additional investment rights shall be granted to investors that exercise the Series AAA Additional Investment Rights.

Pursuant to the Subscription Agreements, purchasers that (a) previously held shares of the Company’s Series A Preferred Stock, par value $ 0.001 per share, or (b) purchased at least $ 3.5 million in shares of Series AA Preferred Stock (subject to the acceptance of such lesser amounts in the Company’s sole discretion), shall have the right to purchase shares of a newly designated series of preferred stock of the Company containing comparable terms as the Series AA Preferred Stock (the “Series AA Additional Investment Right”) from the date of each respective closing through the date that is 18 months thereafter as follows:

(i) such investor may purchase an additional dollar amount equal to its initial investment amount at $ 1,000 per share (the “AA Original Issue Price”), with a conversion price equal to the conversion price in effect on the date of original purchase;

and (ii) such investor may purchase an additional dollar amount equal to its initial investment amount at the AA Original Issue Price, with a conversion price equal to 125 % of the respective conversion price in effect on the date of original purchase.

As of December 31, 2024, there were AIRs outstanding to purchase 17,832 shares of preferred stock with underlying conversion shares totaling 8,414,537 , with a weighted average conversion price of $ 2.12 .

Not applicable

Down Round Feature

Subject to the effectiveness of the Stockholder Approval, for twenty-four ( 24 ) months after the Filing Date, and subject to certain carveouts as described in the Series AAA Certificates of Designation, if the Company conducts an offering at a price per share less than the then effective conversion price (the “Future Offering Price”) consisting of common stock, convertible or derivative instruments, then in such event the conversion price of the Series AAA Preferred Stock shall be adjusted to the Future Offering Price, but not less than the Conversion Price Floor (as defined in the Series AAA Certificate of Designations).

For as long as Series AA Preferred Stock remains outstanding and subject to certain carveouts as described in the Series AA Certificates of Designations, if the Company conducts an offering at a price per share less than the then current conversion price (the “Future Offering Price”) consisting of common stock, convertible or derivative instruments, and undertaken in an arms-length third party transaction, then in such event the conversion price of the Series AA Preferred Stock shall be adjusted to the greater of:

(a) the Future Offering Price and (b) the Conversion Price Floor (“ Series AA Down Round Feature”);

Not applicable

Exchange Agreements

In connection with the closing of the Series AAA Preferred rounds described above, the Company entered into certain Series A Exchange Agreements (the “Series A Agreements”) and Series AA Exchange Agreements (the “Series AA Agreements”, and collectively with the Series A Agreements, the “Series Exchange Agreements”), with certain holders (the “Holders”) of the Company’s Series A Preferred Stock, and Series AA Preferred Stock, pursuant to which the Holders exchanged an aggregate of 6,367 shares of Series A Preferred and/or Series AA Preferred, for an aggregate of 6,367 shares of Series AAA Preferred (the “Exchange”).

Exchange of Series AA, AAA and AAA Junior Preferred Stock for Series B Preferred Stock

On September 12, 2025, the Company entered into an Amended & Restated Exchange Agreement, Consent and Waiver (the “2025 AB Exchange Agreements”) with certain holders (the “2025 Exchange Preferred Stockholders”) of the Company’s Series AA, AAA and AAA Junior Preferred Stock, par value $ 0.001 per share (“2025 Exchanged Preferred Stock”), pursuant to which the Company and the 2025 Exchange Preferred Stockholders agreed that in exchange for the shares of 2025 Exchanged Preferred Stock held by the 2025 Exchange Preferred Stockholders, the 2025 Exchange Preferred Stockholders were granted shares of the Company’s newly issued Series B Preferred Stock, par value $ 0.001 per share (“2025 Exchange”).

Up to an aggregate of 16,426 shares of Series B Preferred stock is issuable pursuant to the 2025 AB Exchange Agreements.

In connection with the issuance of the Series B Preferred Stock, the 2025 Exchange Preferred Stockholders, among other things, (i) agreed to terminate their additional investment rights, or AIRs, granted to them in their respective subscription agreements;

(ii) waived any issuances by the Company of securities below the respective prior conversion price floors prior to the Exchange;

(iii) waived any incurrence of indebtedness by the Company prior to the Exchange;

(iv) agreed, for a period of six months following the date of the Exchange Agreements, to attend any annual or special meeting of the Company’s stockholders and vote their shares in accordance with management’s recommendation;

and (v) provided a general release of the Company from any obligations that may exist under the terms of the Preferred Stock.

The 2025 Exchange was accounted for as an extinguishment of the 2025 Exchanged Preferred Stock, and therefore the difference between the fair value of the new / modified preferred stock and the carrying value of the original preferred stock, totaling 7,685,000 , was recognized as a decrease to accumulated deficit and a decrease in additional-paid-in capital in the balance sheet, as a deemed dividend.

On October 20, 2025, the Company issued certain common stock purchase warrants to purchase an aggregate of 194,422 shares of Common Stock (the “Series B Warrants”) to the holders of shares of the Company’s Series B Preferred Stock (the “Series B Holders”) (“Series B Preferred Modification”).

Each Series B Warrant has an exercise price per share equal to $ 12.00 (the “Series B Exercise Price”).

The Series B Warrants will be available for exercise only upon the first trading day following the one year anniversary of the Company’s issuance of the Series B Warrants, unless prior written approval is received from the Company during such one-year period, as may be required by the applicable rules and regulations of the Nasdaq Capital Market (the “Warrant Stockholder Approval” and the first trading day following the one year anniversary of the Company’s receipt of Warrant Stockholder Approval being, the “Series B Warrant Initial Exercise Date”).

Each Series B Warrant offered will become exercisable beginning on the Series B Warrant Initial Exercise Date at the Series B Exercise Price, and will expire on the date that is one year from the Series B Warrant Initial Exercise Date, subject to the right to exercise during such one-year period with the prior written approval of the Company;

provided that holders of the Series B Warrants will have the right to exercise their Series B Warrants during the time beginning on date the Company receives the Warrant Stockholder Approval and the Series B Warrant Initial Exercise Date in the event of a change of Control or other fundamental change (each as defined in the Series B Warrant).

The Series B Preferred Modification was accounted for as an extinguishment of the Series B Preferred Stock outstanding, and therefore the difference between the fair value of the new / modified preferred stock and the carrying value of the original preferred stock, totaling $ 6,296,000 , was recognized as an increase to accumulated deficit and an increase in additional paid-in capital in the balance sheet, as a deemed dividend.

Direct costs incurred in connection with the Series B Preferred Modification included the issuance of 29,167 common stock purchase warrants to the placement agent, with terms and conditions identical to PIPE Warrants, with a fair value of $ 945,000 , which are recorded as a reduction to additional paid-in capital in the accompanying balance sheet as of December 31, 2025.

Exchange of Series A and AA for Series AAA Preferred Stock

In November and December 2023, in connection with the closing of the Series AAA Preferred rounds, the Company entered into certain Series A Exchange Agreements (the “Series A Agreements”) and Series AA Exchange Agreements (the “Series AA Agreements”, and collectively with the Series A Agreements, the “Series Exchange Agreements”), with certain holders (the “Holders”) of the Company’s Series A Preferred Stock, and Series AA Preferred Stock, pursuant to which the Holders exchanged an aggregate of 6,367 shares of Series A Preferred and/or Series AA Preferred, for an aggregate of 6,367 shares of Series AAA Preferred (the “Exchange”).

The Exchange closed concurrently with the closing of the Series AAA Preferred Stock Offerings.

Common Stock Purchase Warrants

Common Stock Purchase Warrants – Liability Classified

Series AAA Junior-3 and Series AAA Junior-4 Warrants.

The Series AAA Junior-3 and Series AAA Junior-4 subscription agreements entered into in September 2024, included the sale of an aggregate of 1,096 units (the “Units”), each Unit consisting of (i) one share of newly designated Series AAA-3 Junior Convertible Preferred Stock or Series AAA-4 Junior Convertible Preferred Stock, as reflected in the table above, and (ii) a warrant to purchase 1,000 shares of the Company’s common stock (the “September 2024 Series AAA Junior Investor Warrants”), at a purchase price of $ 1,000 per Unit, for aggregate gross proceeds to the Company of approximately $ 1,096,000 .

The Series AAA Junior-3 and Series AAA Junior-4 subscription agreements entered into in September 2024, included the sale of an aggregate of 1,096 units (the “Units”), each Unit consisting of (i) one share of newly designated Series AAA-3 Junior Convertible Preferred Stock or Series AAA-4 Junior Convertible Preferred Stock, as reflected in the table above, and (ii) a warrant to purchase three shares of the Company’s common stock (the “September 2024 Series AAA Junior Investor Warrants”), at a purchase price of $ 1,000 per Unit, for aggregate gross proceeds to the Company of approximately $ 1,096,000 .

The Investor Warrants are exercisable at $ 480.00 per share at the option of the holder, subject to adjustment, are exercisable immediately upon issuance and expire three years from the respective issue dates of the Units, subject to certain beneficial ownership limitations.

The Investor Warrants contain customary adjustments in the event of stock splits, stock dividends and other corporate events, and contain price-based anti-dilution protections.

Any price-based anti-dilution adjustments are conditioned on, and subject to, stockholder approval.

Any price-based anti-dilution adjustments were conditioned on, and subject to, stockholder approval, which was received on June 9, 2025.

The September 2024 Series AAA Junior Investor Warrant agreements also contain a provision that states that, upon exercise of the warrant by an investor, if for any reason the Company fails to deliver the shares by the settlement date, the investor can require the Company to make a cash payment (“Buy-In Provision”).

The cash payment would be based on the amount (if any) that the investor lost by having to purchase shares in the open market because of the Company’s failure to deliver the shares.

As a result of the Buy-In Provision, the ability to deliver shares upon exercise of the Investor Warrants in every circumstance is generally not within the control of the Company as contemplated by the accounting standards, and thus, a partial cash settlement may be required outside of the Company’s control.

As such, the September 2024 Series AAA Junior Investor Warrants do not meet the requirements for equity classification, and therefore, the fair value of the September 2024 Series AAA Junior Investor Warrants are recorded as a liability on the consolidated balance sheets and re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations.

As a result of the Buy-In Provision, the ability to deliver shares upon exercise of the Investor Warrants in some circumstances may not be generally within the control of the Company as contemplated by the accounting standards, and thus, a partial cash settlement may be required outside of the Company’s control.

As such, the September 2024 Series AAA Junior Investor Warrants do not meet the requirements for equity classification, and therefore, the fair value of the September 2024 Series AAA Junior Investor Warrants are recorded as a liability on the balance sheets and re-valued at each reporting date, with changes in the fair value reported in the statements of operations.

Refer to the table below.

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Given the existence of multiple classes of voting stock for the Company, as described above, the Fundamental Transaction provisions in the warrant agreements could result in a 50% or more change in ownership of outstanding common stock, without a 50% change in voting interests.

As such, the Placement Agent Warrants are not eligible for the scope exception under ASC 815, and therefore, the fair value of the Placement Agent Warrants are recorded as a liability on the consolidated balance sheets and re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations.

As such, the Placement Agent Warrants are not eligible for the scope exception under ASC 815, and therefore, the fair value of the Placement Agent Warrants are recorded as a liability on the balance sheets and re-valued at each reporting date, with changes in the fair value reported in the statements of operations.

Refer to the table below.

The fair value and change in the fair value of the warrant liability, measured using Level 3 inputs, and the related income statement impact was comprised of the following for the applicable periods presented:

The fair value and change in the fair value of the warrant liabilities related to the September 2024 Series AAA Junior Investor Warrants and the Placement Agent Warrants, measured using Level 3 inputs, and the related income statement impact was comprised of the following for the applicable periods presented, as of December 31:

Series AAA Junior-3 and Series AAA Junior-4 Warrants:

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Estimated fair value on the respective dates of issuance.

Refer to Note 6 for information regarding the Original YP Warrant issued in connection with the YP Note.

The fair value of the warrants described above was estimated using the Black-Scholes-Merton option pricing model and the following weighted-average assumptions for the applicable dates:

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Risk–free interest rate

Dividend yield

Expected life of options (in years)

Preferred Stock Dividends

The Company paid common stock dividends on outstanding preferred stock for periods presented, as follows:

The Company paid or accrued common stock dividends on outstanding preferred stock for the periods presented as follows:

Fiscal Year Ended December 31, 2025:

Series Designation

February 4, 2025

April 28, 2025

Series AAA / AAA-2

October 24, 2025

Fiscal Year Ended December 31, 2024:

Series Designation

Dividend Shares

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December 30, 2024

Fiscal Year Ended December 31, 2023:

Series Designation

Dividend Shares

Fair Value of

Shares Issued (1)

December 26, 2023

December 29, 2023

December 26, 2023

December 29, 2023

December 26, 2023

December 29, 2023

December 22, 2023

December 29, 2023

December 26, 2023

Fair valued based on the closing price of the Company’s common stock on the respective common stock dividend payment date.

Dividend Acceleration

In June and July 2024, certain existing holders of Series A, AA and AAA Preferred Stock executed Series AAA Junior Preferred Stock Offering related dividend acceleration agreements (“2024 Dividend Acceleration Agreements”) pursuant to which, in exchange for participation in the Series AAA Junior Preferred Stock Offering at or above a predefined threshold, all applicable remaining common stock dividends related to their existing Series A, AA and / or AAA Preferred Stock holdings were accelerated.

A total of 1,168,493 shares of common stock dividends (included in the table above) were paid in July 2024 pursuant to the 2024 Dividend Acceleration Agreements, with a fair value of $ 1,589,000 , based on the closing price of the Company’s common stock on the date of issuance, which is reflected as a charge to accumulated deficit for the year ended December 31, 2024.

In December 2023, certain Series A Preferred stockholder year two dividends, as described above, were accelerated and paid in shares of the Company’s common stock, pursuant to consent related dividend acceleration agreements executed during the period.

A total of 114,452 shares of common stock (included in the table above) were paid on an accelerated basis with a fair value of $ 174,000 (included in the table above), which is reflected in accumulated deficit.

Modifications to Series AA and AAA Additional Investment Rights

In connection with the 2025 AB Exchange Agreements, remaining Series AAA and AAA-2 Preferred Stock dividends totaling 7,407 shares of Common Stock, originally payable in November and December 2025, were accelerated as of the date of the exchange.

The fair value of the accelerated dividends totaled $ 190,000 , based on the closing price of the Company’s common stock on October 24, 2025, the date of issuance, which is reflected as a charge to accumulated deficit as of December 31, 2025.

In June 2024, certain existing holders of Series A, AA and AAA Preferred Stock executed Series AAA Junior Preferred Stock Offering related dividend acceleration agreements (“June 2024 Dividend Acceleration Agreements”) pursuant to which, in exchange for participation in the Series AAA Junior Preferred Stock Offering at or above a predefined threshold, all applicable remaining common stock dividends related to their existing Series A, AA and / or AAA Preferred Stock holdings were accelerated.

A total of 1,923 shares of common stock dividends were paid in July 2024 pursuant to the June 2024 Dividend Acceleration Agreements, with a fair value of $ 729,000 , based on the closing price of the Company’s common stock on the date of issuance, which was reflected as a charge to accumulated deficit.

Modifications to Series AA Additional Investment Rights

In June 2024, certain holders of Series AA Preferred Stock with outstanding Additional Investment Rights arising from the Series AA Preferred Stock Offering (“Series AA AIRs”), in exchange for certain Series AAA Junior Preferred Stock Offering related approvals, received (i) a six ( 6 ) month extension of the exercise period of such Series AA AIRs;

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In addition, a three -month extension to the term of the Additional Investment Rights issued to holders of Series AAA Preferred Stock (“Series AAA AIRs”) (the issuance of such Series AAA AIRs being subject to approval of stockholders), such that the Series AAA AIRs shall expire 21 -months from the final closing of Series AAA Preferred Stock Offering.

In connection with the modifications to the Series AA AIRs described above, Series AA AIRs with initial underlying common shares totaling 642,962 , were modified as described above, resulting in an incremental increase in fair value totaling $ 294,000 which was charged to additional paid-in capital as a Series AAA Junior Preferred Stock Offering financing costs in June 2024.

The Company utilized an option pricing model, employing the back solve method for purposes of determining the implied common stock value of the Company for input into a Black Scholes option pricing model to determine the fair value of the AIRs immediately before and after the modifications described above, using Level 3 inputs.

Weighted average assumptions utilized in the Black Scholes option pricing model included a $ 412.80 implied common stock price, conversion prices ranging from $ 905.28 to $ 6,360.00 (based on the applicable original and modified preferred stock conversion prices), risk free interest rates ranging from 5.13 % to 5.36 %, terms ranging from 0.42 years to 0.92 years and volatility assumptions ranging from 79 % to 91 %.

In connection with the modification to the Series AA AIRs described above, Series AA AIRs with initial underlying common shares totaling 1,340 , were modified as described above, resulting in an incremental increase in fair value totaling $ 294,000 which was charged to additional paid-in capital as a Series AAA Junior Preferred Stock Offering financing costs in June 2024.

As a result of the reduction of the Series AA AIRs conversion price, total common shares underlying the modified Series AA AIRs increased to 6,699 shares.

In September 2024, remaining holders of Series AA Preferred Stock with outstanding Additional Investment Rights arising from the Series AA Preferred Stock Offering (“Remaining Series AA AIRs”), received (i) a six ( 6 ) month extension of the exercise period of such Remaining Series AA AIRs;

and (ii) an adjustment to the conversion prices for such Series AA AIRs, to the existing conversion price floors for each respective subseries of Series AA Preferred Stock, as described in the table above.

In addition, a three -month extension to the term of the Additional Investment Rights issued to holders of Series AAA Preferred Stock (“Remaining Series AAA AIRs”)(the issuance of such Series AAA AIRs being subject to approval of stockholders), such that the Remaining Series AAA AIRs shall expire 21 -months from the final closing of Series AAA Preferred Stock Offering.

In connection with the modifications to the Remaining Series AA AIRs described above, Remaining Series AA AIRs with initial underlying common shares totaling 667,289 , were modified as described above, resulting in an incremental increase in fair value totaling $ 70,000 which was charged to other expense in the consolidated statements of operations for the year ended December 31, 2024.

As a result of the reduction of the Remaining Series AA AIRs conversion price, total common shares underlying the modified Remaining Series AA AIRs increased to 3,336,293 shares.

As of each of the applicable AIR modification dates the Company utilized an option pricing model, employing the back solve method for purposes of determining the implied common stock value of the Company for input into a Black Scholes option pricing model to determine the fair value of the AIRs immediately before and after the modifications described above, using Level 3 inputs.

Weighted average assumptions utilized in the Black Scholes option pricing model included implied (derived) common stock prices from $ 0.72 to $ 0.86 , conversion prices ranging from $ 1.856 to $ 13.25 (based on the applicable original and modified preferred stock conversion prices), risk free interest rates ranging from 4.64 % to 5.36 %, terms ranging from .24 years to .92 years and volatility assumptions ranging from 68 % to 91 %.

Common Stock Issuances

Fiscal Year Ended December 31, 2024

On October 24, 2024, the Company entered into a Securities Purchase Agreement (the "Purchase Agreement") with a certain accredited investor for the registered direct offering of an aggregate of 1,136,364 shares of the Company’s common stock, par value $ 0.001 per share (the “Shares”), at a purchase price of $ 0.88 per Share (the “Registered Direct Offering”).

The Registered Direct Offering closed on October 25, 2024, resulting in gross proceeds to the Company of approximately $ 1.0 million.

Fiscal Year Ended December 31, 2023

On August 21, 2023, we entered into an underwriting agreement (the “Underwriting Agreement”) with Aegis Capital Corp.

(the “Underwriter”), relating to the Company’s public offering (the “Common Stock Offering”) of 778,653 shares of its common stock, and pre-funded warrants to purchase 67,500 shares of the Company’s common stock, in lieu of the Company’s common stock (the “Pre-Funded Warrants”, and collectively with the Shares, the “Firm Securities”) to certain investors.

Pursuant to the Underwriting Agreement, the Company also granted the Underwriters a 45 -day option (“Option”) to purchase an additional 126,923 shares of the Company’s common stock and/or Pre-Funded Warrants (the “Option Securities”, and together with the Firm Securities, the “Securities”).

On September 12, 2023, the Underwriter partially exercised its Option and purchased an additional 32,616 shares of common stock at a price of $ 2.60 per share.

The issuance by the Company of the Option Securities resulted in total gross proceeds of approximately $ 84,800 , before deducting underwriting discounts, commissions, and other offering expenses payable by the Company.

On August 23, 2023, the Company issued the Firm Securities and closed the Offering at a public price of $ 2.60 per share, and $ 2.58 per share underlying each Pre-Funded Warrant, for net proceeds to the Company of approximately $ 1.8 million after deducting underwriting discounts and commissions and estimated offering expenses payable by the Company.

Use of net proceeds from the Series AA Offerings for the periods presented included working capital and general corporate purposes, including sales and marketing activities and product development.

Each Pre-Funded Warrant had an exercise price per share of common stock equal to $ 0.001 per share.

The Pre-Funded Warrants were fully exercised as of August 29, 2023.

All AIRs outstanding were canceled in connection with the 2025 AB Exchange Agreements.

STOCK-BASED INCENTIVE PLANS

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Options granted under the 2014 Plan include non-statutory options as well as incentive options intended to qualify under Section 422 of the Internal Revenue Code of 1986, as amended.

Approval of the 2025 Omnibus Equity Incentive Plan

On June 9, 2025, the stockholders of the Company approved the 2025 Omnibus Stock Incentive Plan (the “2025 Plan”) which (i) reserves thereunder 6,250 shares for issuance in the form of restricted stock units (“RSUs”) and stock option grants (“Option Grants”), among other derivative securities, and (ii) provides for the integration of one hundred percent ( 100 %) of the reserved shares available under the Company’s existing 2014 Plan including (a) all shares of common stock reserved and unaffiliated with any issued and outstanding restricted stock units and stock option grants under the 2014 Plan totaling 309 shares, (b) all shares of common stock relating to unvested restricted stock units under the 2014 Plan totaling 267 shares, and (c) all shares of common stock relating to issued and outstanding stock option grants totaling 703 .

In connection with the adoption of the 2025 Plan, the Board also approved the cancellation of all issued and outstanding stock options under the 2014 Plan (2014 Plan Canceled Awards”).

The Board administers the 2025 Plan and determines which eligible individuals are to receive option grants or stock issuances under the 2025 Plan, the times when the grants or issuances are to be made, the number of shares of common stock subject to each grant or issuance, the status of any granted option as either an incentive stock option or a non-statutory stock option under the federal tax laws, the vesting schedule to be in effect for the option grant or stock issuance and the maximum term for which any granted option is to remain outstanding.

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Stock options and restricted shares generally vest on a straight-line basis over four years (generally representing the requisite service period).

The Plan terminates automatically on July 1, 2027.

The 2025 Plan terminates automatically on June 9, 2035.

The 2025 Plan provides for the following programs:

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In May 2021, the Company’s shareholders approved an amendment to the 2014 Plan to increase the number of shares authorized for issuance from 10,764 to 20,834 .

In June 2022, the Company’s shareholders approved an amendment to the Plan to increase the number of shares authorized for issuance from 250,000 to 312,500 .

In September 2023, the Company’s shareholders approved an amendment to the Plan to increase the number of shares authorized for issuance from 312,500 to 750,000 .

In June 2022, the Company’s shareholders approved an amendment to the 2014 Plan to increase the number of shares authorized for issuance from 20,834 to 26,042 shares.

In September 2023, the Company’s shareholders approved an amendment to the 2014 Plan to increase the number of shares authorized for issuance from 26,042 to 62,500 shares.

In June 2025, the Company’s shareholders approved the 2025 Plan reserving 6,250 shares for issuance under the 2025 Plan.

In October 2025, the Company’s shareholders approved an amendment to the 2025 Plan to increase the number of shares authorized for issuance from 6,250 to 580,667 shares.

As of December 31, 2025, 53,000 shares remained available for issuance under the 2025 Plan.

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The following table summarizes non-vested restricted stock unit activity for the year ended December 31, 2025:

2014 Plan Activity

Outside of the 2014 Plan

2025 Plan / 2014 Plan

Outside of the 2025 and

At December 31, 2024

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As of December 31, 2025, the total unrecognized compensation expense related to non-vested restricted stock units was $ 4,535,000 which will be recognized over a weighted-average term of approximately 2.0 years.

During the year ended December 31, 2024 and 2023, the Company issued 640,000 and 39,000 , respectively, restricted stock units (included in the table above) to nonemployees for services (“Nonemployee RSUs”).

The weighted average grant date fair value of the Nonemployee RSUs granted during the year ended December 31, 2024 and 2023 was $ 0.84 and $ 1.67 , respectively.

Compensation expense for Nonemployee RSUs for the year ended December 31, 2024 and 2023 totaled $ 256,000 and $ 89,000 , respectively.

In December 2025, the Company issued 79,112 performance stock units (“2025 PSUs”) to certain employees under the 2025 Plan, which commence vesting in one-eighth (1/8th) increments, on a quarterly basis in arrears, only upon satisfaction of the following vesting conditions during the three-year period ending on December 31, 2028:

(i) 29,334 of the 2025 PSUs will commence vesting on the date that the Company’s stock price closes at $ 36.00 per share or above for twenty or more trading days;

and (ii) 49,778 of the 2025 PSUs will commence vesting on the date that the Company’s stock price closes at $ 60.00 per share or above for twenty or more trading days.

Noncash stock compensation expense related to the 2025 PSUs totaled $ 44,000 for the year ended December 31, 2025.

As of December 31, 2025, total unrecognized compensation expense related to the 2025 PSUs totaled $ 604,000 , which is being recognized over and implied service period of approximately one year.

During the years ended December 31, 2025 and 2024, the Company issued 39,750 and 53,334 , respectively, restricted stock units (included in the table above) to nonemployees for services (“Nonemployee RSUs”).

The weighted average grant date fair value of the Nonemployee RSUs granted during the years ended December 31, 2025 and 2024 was $ 19.44 and $ 10.08 , respectively.

Compensation expense for Nonemployee RSUs for the years ended December 31, 2025 and 2024 totaled $ 988,000 and $ 256,000 , respectively.

As of December 31, 2025, the total unrecognized compensation expense related to Nonemployee RSUs was $ 233,000 .

Warrants Issued to Employees and Nonemployees for Services

A summary of employee and nonemployee warrant activity (outside of the Plan) for the year ended December 31, 2024 is as follows:

A summary of employee and nonemployee warrant activity (outside of the 2014 and 2025 Plan) for the year ended December 31, 2025 is as follows:

Weighted-Average

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Vested and exercisable as of December 31, 2025

The weighted-average grant date fair value of warrants granted during the year ended December 31, 2025 was $ 15.12 .

The aggregate fair value of Warrants that vested during the years ended December 31, 2025 and 2024 was $ 34,000 and $ 0 , respectively.

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Modifications to Equity-Based Awards

On January 1, 2022, the Company issued 67,500 performance stock units (“Original PSUs”) under the Company’s 2014 Amended and Restated Stock Option and Incentive Plan, which vest in five equal increments of 13,500 PSUs, based on satisfaction of the following vesting conditions during the three-year period commencing on January 1, 2022:

(i) the Company’s stock price equaling $ 95.00 per share based on 60-day volume weighted average price (“VWAP”);

(ii) the Company’s stock price equaling $ 120.00 per share based on 60-day VWAP;

(iii) the Company’s stock price equaling $ 140.00 per share based on 60-day VWAP;

(iv) the Company’s stock price equaling $ 160.00 per share based on 60-day VWAP;

and (v) the Company’s stock price equaling $ 180.00 per share based on 60-day VWAP.

The Original PSUs were fully expensed as of June 30, 2023.

Noncash stock compensation expense related to the Original PSUs totaled $ 0 and $ 299,000 for the years ended December 31, 2024 and 2023, respectively.

On April 30, 2023, the Board approved the cancellation of the 67,500 Original PSUs previously granted to certain executives (four plan participants in total) under the 2014 Plan (as described above).

In exchange for the cancelled Original PSUs, the executives were granted an aggregate of 67,500 PSUs, which vest, over a five-year term, upon the Company’s common stock achieving certain VWAP goals as follows:

(i) 20 % upon achieving a 60-day VWAP of $ 16.00 per share, (ii) 20 % upon achieving a 60-day VWAP of $ 20.00 per share;

(iii) 20 % upon achieving a 60-day VWAP of $ 24.00 per share;

(iv) 20 % upon achieving a 60-day VWAP of $ 28.00 per share;

and (v) 20 % upon achieving a 60-day VWAP of $ 32.00 per share, in each case, as quoted on the Nasdaq Capital Market (“Modified PSUs”).

Total incremental compensation cost related to the Modified PSUs totaled $ 540,000 which is recognized prospectively over the implied service period, ranging from .69 years to 1.5 years, calculated in connection with the Monte Carlo simulation model used to determine the fair value of the equity awards immediately before and after the modifications.

Net noncash stock compensation expense related to the Modified PSUs totaled $ 130,000 and $ 351,000 for the years ended December 31, 2024 and 2023, respectively.

On April 30, 2023, the Board approved the cancellation of certain stock options to purchase an aggregate of 58,951 shares of the Company’s common stock previously granted to certain executives and employees (six plan participants in total) under the Company’s 2014 Amended and Restated Employee Stock Option and Incentive Plan (the “2014 Plan”), with an average exercise price of approximately $ 56.40 .

In addition, the Board approved the cancellation of certain warrants to purchase an aggregate of 26,100 shares of the Company’s common stock previously granted to certain executives and employees, with an average exercise price of approximately $ 199.80 .

In exchange for the cancelled options and warrants, certain executives and employees were granted options to purchase an aggregate of 305,000 shares of common stock under the 2014 Plan, at an exercise price of $ 9.80 (the closing price of the Company’s common stock as listed on the Nasdaq Capital Market on April 28, 2023, the last trading day before the approval of the awards), with one-third of the options vesting on the April 30, 2023, the grant date, with the remainder vesting monthly over the thirty-six month period thereafter, subject to continued service (“Executive Grant Modifications”) (collectively, “Modified Executive Grants”).

The grant and exercise of the Modified Executive Grants was contingent upon the Company receiving approval from its stockholders to increase the number of shares available under the 2014 Plan, which was obtained in connection with the Company’s 2023 annual shareholder meeting in September 2023.

As such, the grant date and the commencement of noncash stock compensation amortization for the Modified Executive Grants was September 7, 2023.

Total incremental compensation cost related to the Modified Executive Grants totaled $ 347,000 , $ 112,000 of which related to vested awards as of the modification date and was recognized as expense immediately, and $ 235,000 related to unvested awards which is recognized prospectively over the remaining service period of 3 years.

Net noncash stock compensation expense related to the Modified Executive Grants totaled $ 221,000 and $ 573,000 for the years ended December 31, 2024 and 2023, respectively.

On May 1, 2023, the Board approved the cancellation of options to purchase an aggregate of 29,224 shares of the Company’s common stock previously granted to its employees (68 plan participants in total) under the 2014 Plan, in exchange for newly issued options to purchase an aggregate of 63,900 shares of the Company’s common stock under the 2014 Plan, at an exercise price equal to the closing trading price on May 1, 2023, or $ 9.81 , with a range of zero to one-third of the options vesting on the May 1, 2023, the grant date, dependent upon the tenure of the employee, and the remainder vesting monthly over the forty-eight month period thereafter, subject to continued service (“Employee Grant Modifications”)(collectively, “Modified Employee Grants”).

Unrecognized compensation expense related to the original award as of the date of the Employee Grant Modifications totaled $ 960,000 which is recognized prospectively over the remaining service period of 4 years.

Total incremental compensation cost related to the Modified Employee Grants totaled $ 449,000 , $ 101,000 of which related to vested awards as of the modification date and was recognized as expense immediately, and $ 348,000 related to unvested awards which is recognized prospectively over the remaining service period of 4 years.

Net noncash stock compensation expense related to the Modified Employee Grants totaled $ 158,000 and $ 300,000 for the years ended December 31, 2024 and 2023, respectively.

On March 19, 2024, the Board approved that an equity pool consisting of (i) 1,692,606 shares of common stock, collectively, which amount is equivalent to ten percent of the then existing and outstanding common stock of the Company on an as-converted basis, be issued to executives of the Company in the following form, amounts and vesting conditions:

(a) stock options to purchase 846,303 shares of common stock, with vesting at the rate of 1/36 th per month in arrears, and exercisable at a price per share of $ 1.85 (collectively, the “2024 Options”);

and (b) restricted stock units consisting of 846,303 shares of common stock with vesting of (i) fifty percent in equal one-third increments on the first, second and third anniversaries of the restricted stock unit grant issuances, and (ii) fifty percent to be allocated equally between (a) achievement of a profitable fiscal quarter, on a net income basis, in accordance with U.S.

GAAP, (b) achievement of 85 % of earnings before interest, taxes, depreciation and amortization (“EBITDA”) target for fiscal year 2024, and (c) achievement of 85 % of EBITDA target for fiscal year 2025 (with such fiscal year 2025 target to be approved by the Board as part of the fiscal year 2025 financial plan)(collectively, the “2024 RSUs”).

The issuance of the 2024 Options and 2024 RSUs, as described above, is contingent upon the Company receiving approval from its stockholders to increase the number of shares available under the 2014 Plan at the Company’s next annual meeting of stockholders, and will be subject to cancellation in the event stockholder approval is not obtained.

The components of loss before income taxes consisted of the following for the years ended December 31:

Concurrent with the cancellation of the 2014 Plan Canceled Awards the Board approved the issuance of 7,367 equity awards under the 2025 Plan, comprised of 3,342 stock options and 4,025 RSUs to employees ( 40 participants) with the following general terms:

1) exercise price of $ 60.96 per share for stock options, 2) shares of common stock associated with all RSUs valued at $ 60.96 per share, the closing price of the Company’s common stock on the grant date, and 3) RSU and Option grants to vest at the rate of 1/24th per month in arrears (“2025 Exchanged Awards”).

Unrecognized compensation expense related to the awards cancelled under the 2014 Plan totaled $ 443,000 which is being recognized prospectively over the remaining modified service period of 2 years.

Total incremental compensation cost related to the 2025 Exchanged Awards totaled $ 323,000 , $ 177,000 of which related to vested awards as of the modification date and was recognized as expense immediately in the statement of operations for the year ended December 31, 2025, and $ 146,000 related to unvested awards which is being recognized prospectively over the remaining modified service period of 2 years.

The components of loss before benefit from (provision for) income taxes consisted of the following for the years ended December 31:

United States

Loss from operations before income taxes

The Company’s provision for income taxes consisted of the following for the years ended December 31:

The Company’s (benefit from) provision for income taxes consisted of the following for the years ended December 31:

Federal taxes

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Total deferred

Net provision for income taxes

Net (benefit from) provision for income taxes

The tax effects of temporary differences and carryforwards that give rise to significant portions of deferred tax assets and liabilities consist of the following as of December 31:

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Intangibles – indefinite lived

Contract liabilities

Total deferred tax liabilities

Total net deferred tax assets (liabilities), net of valuation allowance

A reconciliation of the federal statutory income tax rate and the effective income tax rate is as follows:

A reconciliation of the federal statutory income tax rate and the effective income tax rate for the year ended December 31, 2025 is as follows:

Statutory federal– tax rate - (benefit) expense

State tax, net

Change in valuation allowance

Nontaxable or nondeductible items:

Material Nondeductible items – change in fair value of warrant liability

Other items under 5% each

Prior year true-up

(Provision) benefit for income taxes

The rate reconciliation for the year ended December 31, 2025 has been adjusted to be presented in compliance with the guidance under ASU 2023-09.

The Company adopted this guidance on a prospective basis.

As previously reported, prior to the adoption of ASU No.

2023-09, a reconciliation of the federal statutory income tax rate and the effective income tax rate for the year ended December 31, 2024 is as follows:

Statutory federal– tax rate - (benefit) expense

State tax, net

Non-deductible permanent items

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Valuation allowance

For the years ended December 31, 2024 and 2023, the Company recorded full valuation allowances against its domestic net deferred tax assets due to uncertainty regarding future realizability pursuant to guidance set forth in the FASB’s Accounting Standards Codification Topic No.

740, “Income Taxes.” In future periods, if the Company determines it will more likely than not be able to realize these amounts, the applicable portion of the benefit from the release of the valuation allowance will generally be recognized in the consolidated statements of operations in the period the determination is made.

The Company did not maintain a valuation allowance on the activity in the United Kingdom (“UK”) from its acquisition of Bannerfy Ltd due to the deferred tax liability position.

During the year ended December 31, 2023, Bannerfy Ltd sold all of its asset back to the original sellers and ceased operations as described below.

As such, a full valuation was recorded against the remaining foreign deferred tax assets.

Components of net loss before income tax attributable to foreign entities totaled $ 0 and $ 187,000 for the years ended December 31, 2024 and 2023, respectively.

For the years ended December 31, 2025 and 2024, the Company recorded full valuation allowances against its domestic net deferred tax assets due to uncertainty regarding future realizability pursuant to guidance set forth in the FASB ASC Topic No.

740, “Income Taxes.” In future periods, if the Company determines it will more likely than not be able to realize these amounts, the applicable portion of the benefit from the release of the valuation allowance will generally be recognized in the statements of operations in the period the determination is made.

The Company assesses whether a valuation allowance should be recorded against its deferred tax assets based on the consideration of all available evidence, using a “more likely than not” realization standard.

The four sources of taxable income that must be considered in determining whether deferred tax assets will be realized are:

The four sources of taxable income that must be considered in determining whether deferred tax assets will be realized are as follows:

(1) future reversals of existing taxable temporary differences (i.e., offset of gross deferred tax assets against gross deferred tax liabilities);

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At December 31, 2025, the Company had U.S.

federal, state income tax, and foreign net operating loss carryforwards of approximately $ 148.5 million, $ 141.8 million, and $ 1.1 million, respectively, expiring through 2044.

federal, state income tax, and foreign net operating loss carryforwards of approximately $ 163.8 million, $ 150.9 million, and $ 0 , respectively.

Of the federal net operating losses, $ 24.5 million will expire from 2034 to 2037, and $ 139.3 million will carry over indefinitely.

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Of the state net operating losses, $ 149.3 million will expire from 2034 to 2043, and $ 1.6 million will carry over indefinitely.

The $ 1.1 million of foreign net operating losses will carry over indefinitely.

The state and local income taxes which comprise the majority of the state and local income taxes, net of federal effect category are:

(1) California, (2) New York, (3) New York City, (4) Texas, and (5) Florida.

Utilization of the net operating loss carryforwards may be subject to a substantial annual limitation due to ownership change limitations that may have occurred or that could occur in the future, as required by Section 382 of the Internal Revenue Code of 1986, as amended, as well as similar state provisions.

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There were no uncertain tax positions as of December 31, 2025.

The Company is subject to taxation in the United States, various state and local jurisdictions, as well as foreign jurisdictions (primarily the UK) where the Company conducts business (2023 and prior).

The Company is subject to taxation in the United States, and various state and local jurisdictions where the Company conducts business.

As of December 31, 2025, the Company had no outstanding tax audits.

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Federal and state income tax returns are subject to examination for a period of three to four years after filing.

UK income tax returns are subject to examination for a period of four years after filing.

In June 2023, the Company assigned the intangible assets originally acquired in connection with the Company’s acquisition of Bannerfy in fiscal year 2021, to the original sellers, as described at Note 4.

The Bannerfy Acquisition was treated for tax purposes as a nontaxable transaction and, as such, the historical tax bases of the acquired assets and assumed liabilities, net operating losses, and other tax attributes of Bannerfy carried over, with no step-up to fair value of the underlying tax bases of the acquired net assets.

The acquisition method of accounting included the establishment of a net deferred tax liability resulting from book tax basis differences related to assets acquired and liabilities assumed on the date of acquisition.

When an acquisition of a group of assets is purchased in a transaction that is not accounted for as a business combination under ASC 805, a difference between the book and tax bases of the assets arises.

ASC 740, “Income Taxes,” (“ASC 740”) required the use of simultaneous equations to determine the assigned value of the asset and the related deferred tax asset or liability.

As a result of the disposal of the Bannerfy intangible assets, the Company recognized the related remaining net deferred tax liability, resulting in a $ 313,000 tax benefit reflected in the consolidated statements of operations for the year ended December 31, 2023.

For the years ended December 31, 2025 and 2024, respectively, there were no cash amounts paid for income taxes.

On July 4, 2025, H.R.1 – 119th Congress (2025-2026) (“H.R.1”) was signed into law.

H.R.1 introduces changes to United States tax policy, trade regulations, and federal spending priorities.

The main impacts of H.R.1 for the Company are the ability to deduct domestic Sec.

174 R&D costs for tax years 2025 forward, 100% bonus depreciation, and changes to 163(j) interest limitations to remove depreciation and amortization expense from adjusted taxable income.

These changes do not have a material impact on the Company’s taxable position.

The Company is electing under H.R.1 to continue to amortize Sec.

174 costs capitalized in 2022-2024 through the remaining lives of the assets instead of taking a one-time deduction in 2025 for all unamortized amounts.

COMMITMENTS AND CONTINGENCIES

Operating Leases

As of December 31, 2024 we maintain approximately 1,550 square feet of office space, which is on a month-to-month basis, at a rate of approximately $ 7,000 per month.

Rent expense for the years ended December 31, 2024 and 2023 was approximately $ 141,000 and $ 163,000 , respectively, and is included in general and administrative expense in the accompanying consolidated statements of operations.

Rental payments are expensed in the consolidated statements of operations in the period to which they relate.

As of December 31, 2025, the Company maintained approximately 200 square feet of office space which is leased on an annual basis at a rate of approximately $ 3,000 per month.

Rent expense for the years ended December 31, 2025 and 2024 was approximately $ 58,000 and $ 141,000 , respectively, and is included in general and administrative expense in the accompanying statements of operations.

Rental payments are expensed in the statements of operations in the period to which they relate.

Scheduled rent increases, if any, are amortized on a straight-line basis over the lease term.

Pending or Threatened Claims

The Company may periodically be involved in legal proceedings and regulatory matters arising in the ordinary course of business, including contractual disputes, employment-related matters, and other commercial legal matters.

Legal fees and other defense costs incurred in connection with such matters are recorded in operating expenses as incurred in the period incurred, within general and administrative expenses in the statements of operations.

Reimbursements from insurance carriers, if any, related to legal defense costs are recognized when recovery is considered probable and reasonably estimable.

Insurance recoveries, when recognized, are recorded separately from the related legal expense and are not offset against legal costs in the statements of operations.

Existing Pending or Threatened Claims

Global Leisure Partners, LLC, and Blackwatch Advisors, LLC vs.

Super League Enterprise, Inc.

On January 26, 2026, a complaint was filed against the Company in the United States District Court for the Southern District of New York by Global Leisure Partners, LLC and Blackwatch Advisors, LLC (the “Plaintiff”).

Formal service of process on the complaint occurred on February 12, 2026.

The complaint alleges, among other things, breach of contract and related claims arising from the Company’s completion of a series of financing transactions during the fiscal year.

The Plaintiff seeks unspecified damages, together with interest, attorneys’ fees and other relief.

The Company believes the claims are wholly without merit and intends to vigorously defend the action.

Based on the Company’s assessment of the facts currently known, and after consultation with outside legal counsel, the Company believes that the likelihood of a material loss is remote.

Accordingly, no liability has been recorded in the accompanying financial statements as of December 31, 2025.

Litigation is inherently uncertain, and while the Company believes the claims lack merit, an unfavorable outcome could occur.

However, at this time, the Company does not see the need to, nor can it reasonably estimate any possible loss or range of loss associated with this matter.

Settlement of Pending or Threatened Claims

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In order to avoid further expense, costs, and time to litigate the action, the Parties resolved the dispute, resulting in the modification of the conversion price and conversion floor price applicable to the Pioneer AA AIRs from prices ranging from $ 113.16 to $ 156.48 , down to prices ranging from $ 22.63 to $ 31.30 , and the extension of the exercise term for the Pioneer AA AIRs for a period of six ( 6 ) months.

The modifications to the Pioneer AIRs resulted in an incremental increase in fair value totaling $ 213,000 which was included as a noncash legal settlement charge in general and administrative expense in the consolidated statements of operations for the year ended December 31, 2024.

The modifications to the Pioneer AIRs resulted in an incremental increase in fair value totaling $ 213,000 which was included as a noncash legal settlement charge in general and administrative expense in the statement of operations for the year ended December 31, 2024.

As a result of the reduction of the Pioneer AA AIRs conversion price, total common shares underlying the modified Pioneer AA AIRs increased from 777 to 3,882 shares.

In addition, in connection with the settlement, the Company issued to Pioneer 550,000 shares of restricted common stock valued at $ 516,000 on the dates of issuance, which was included as a noncash legal settlement charge in general and administrative expense in the consolidated statements of operations for the year ended December 31, 2024.

In addition, in connection with the settlement, the Company issued to Pioneer 1,146 shares of restricted common stock valued at $ 516,000 on the dates of issuance, which was included as a noncash legal settlement charge in general and administrative expense in the statement of operations for the year ended December 31, 2024.

In connection with the Pioneer Settlement, Pioneer filed a notice of dismissal regarding the Action.

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In consideration for the Note Holder Settlement Agreement, the Company agreed to issue the Parties an aggregate amount of 41,667 shares of common stock (the “Settlement Payment”).

The Company accrued the fair value of the Settlement Payment as of December 31, 2023 (based on the closing price of the Company’s common stock on December 31, 2023) resulting in a settlement expense of $ 760,000 which was included in general and administrative expense in the consolidated statements of operations for the year ended December 31, 2023.

The Company issued the 500,000 shares of common stock on March 19, 2024, which were valued at $ 1.85 per share (the closing price of the Company’s common stock on March 19, 2024), or $ 924,000 , resulting in additional noncash settlement expense of $ 164,000 , which was included in general and administrative expense in the consolidated statements of operations for the year ended December 31, 2024.

The Company accrued the fair value of the Settlement Payment as of December 31, 2023 (based on the closing price of the Company’s common stock on December 31, 2023) resulting in a settlement expense of $ 760,000 which was included in general and administrative expense in the statement of operations for the year ended December 31, 2023.

The Company issued the 41,667 shares of common stock on March 19, 2024, which were valued at $ 22.20 per share (the closing price of the Company’s common stock on March 19, 2024), or $ 924,000 , resulting in additional noncash settlement expense of $ 164,000 , which was included in general and administrative expense in the statement of operations for the year ended December 31, 2024.

Related Party Transactions

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The consulting agreement had an initial term ending December 31, 2019, and was extended for successive one -year periods upon mutual agreement of the board member and the Company through to fiscal year 2024.

Total consulting expense under the agreement totaled $ 90,000 for each of the years ended December 31, 2024 and 2023.

The term of the consulting agreement ended effective December 31, 2024.

Total consulting expense under the agreement totaled $ 90,000 for the year ended December 31, 2024.

SEGMENT REPORTING

The Company utilizes the management approach to identify the Company’s operating segments, based on information reported internally to the Chief Operating Decision Maker (“CODM”) to make resource allocation and performance assessment decisions.

The Company’s chief operating decision-maker (“CODM”) is the Company’s Chief Executive Officer.

The Company’s CODM is the Company’s Chief Executive Officer.

An operating segment of a public entity has all the following characteristics:

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and (3) its discrete financial information is available.

Based on the applicable criteria under the standard, the components of the Company’s operations are its:

(1) media and advertising component, including its publishing and content studio component;

Based on the applicable criteria under the standard, the components of the Company’s operations are its (1) media and advertising component, including its publishing and content studio component;

and (2) the Company’s direct-to-consumer component.

A reportable segment is an identified operating segment that also exceeds the quantitative thresholds described in the applicable standard.

Based on the applicable criteria under the standard, including quantitative thresholds, the Company determined it has one operating segment and one reportable segment, operated primarily in domestic markets for the periods presented, as the CODM regularly reviews and manages the Company’s operations, business activities and financial performance and allocates resources as a single operating and reportable segment at the consolidated level.

Super League’s single reportable segment derives revenues from customers as summarized at Note 2, “ Revenue Recognition.

” The accounting policies of the Company’s single reporting segment are described in the summary of significant accounting policies herein.

The chief operating decision maker assesses performance, establishes management compensation and decides how to allocate resources for the single reporting segment, primarily by monitoring actual consolidated results versus the annual plan, based on consolidated revenues, net operating income (loss) and net income (loss) as reported in the consolidated statements of operations.

The CODM does not evaluate segment performance using consolidated balance sheet information.

The chief operating decision maker assesses performance, establishes management compensation and decides how to allocate resources for the single reporting segment, primarily by monitoring actual results versus the annual plan, based on total revenues, net operating income (loss) and net income (loss) as reported in the statements of operations.

The CODM does not evaluate segment performance using entity level balance sheet information.

The significant expenses reviewed by the CODM are cost of revenue;

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engineering, technology and development expense;

and general and administrative expense, as presented in the consolidated statements of operations.

and general and administrative expense, as presented in the statements of operations, including noncash amortization and noncash stock compensation expense included in the expense categories.

Selling, marketing and advertising expense, engineering, technology and development expense, and general and administrative expense include noncash amortization expense and noncash stock compensation expense, which is disclosed in Note 2 and Note 3, respectively.

Other segment items consist of contingent consideration, loss on intangible asset disposal, impairment of intangible assets, interest expense, changes in the fair value of derivative instruments and other income (expense) items, as presented in the consolidated statements of operations.

All cost and expense line items reported within the Company’s consolidated Statements of operations, as well as amortization, and stock-based compensation expense are significant.

SUBSEQUENT EVENTS

The Company evaluated subsequent events for their potential impact on the consolidated financial statements and disclosures through March 31, 2025, the date the consolidated financial statements were available to be issued, and determined that, except as set forth below, no subsequent events occurred that were reasonably expected to impact the consolidated financial statements presented herein.

Entry into Loan Agreements

On February 10, 2025 (the “Agile II Effective Date”), the Company entered into a Business Loan and Security Agreement (the “Agile II Loan Agreement”), with Agile Capital Funding, LLC as collateral agent (“Collateral Agent”), and Agile Lending, LLC (“Agile”), pursuant to which the Company issued to Agile a Confessed Judgment Secured Promissory Note for an aggregate value of $ 2.5 million (the “Agile II Note”).

Pursuant to the Agile II Loan Agreement:

(i) the Agile II Note matures 32 weeks from the Agile II Effective Date;

(ii) carries an aggregate total interest payment of approximately $ 1.05 million, and (iii) immediately upon the occurrence and during the continuance of an Event of Default (as defined in the Agile Loan Agreement), interest shall accrue at a fixed per annum rate equal to the applicable rate plus five percent.

The Company is required to repay all the obligations due under the Agile II Loan Agreement and the Agile II Note in 32 equal payments of $ 110,937 , with the first payment being made to Agile on February 17, 2025, and every seven days thereafter until the maturity date.

The proceeds received from the Agile II Note will be used to fund general working capital needs.

(i) all outstanding principal of the Agile II Note plus accrued and unpaid interest thereon through the prepayment date, (ii) a fee equal to the aggregate and actual amount of interest (at the contract rate of interest) that would be paid through the maturity date (the “Prepayment Fee”), plus (iii) all other obligations that are due and payable, including, without limitation, interest at the Default Rate with respect to any past due amounts.

The Company is allowed to make a full or partial prepayment (and receive a discount thereon if repaid in full within sixty days of note issuance) of any or all of the obligations arising under the Agile II Loan Agreement and the Agile II Note, provided the Company shall be obligated to pay the Prepayment Fee.

The Agile Loan Agreement imposes various restrictions on the activities of the Company consistent with the Agile Loan Agreement described above under the heading “ Agile Capital - Debt Financing.

provided, however, the filing of a financing statement and/or the taking of any action required to perfect Agile’s security interest in the collateral may only occur upon an event of default.

The Agile II Loan Agreement also provides for standard Events of Default, customary provisions, including representations, warranties and covenants, indemnification, waiver of jury trial, arbitration, and the exercise of remedies upon a breach or default.

In connection with entering into the Agile Loan Agreement, the Company was required to pay an administrative fee of $ 125,000 to the Collateral Agent, which was paid at the closing out of proceeds of the issuance of the Agile II Note.

$ 1.5 million of the Agile II Note was used to repay the remaining balance under the Agile Note, with net proceeds to the Company of approximately $ 875,000 .

1800 Diagonal Lending, LLC

On March 26, 2025 (the “Diagonal Effective Date”), the Company and 1800 Diagonal Lending, LLC, a Virginia limited liability company, or registered assigns (“Diagonal”) entered into a Securities Purchase Agreement (the “Diagonal Agreement”), pursuant to which the Company issued a Convertible Promissory Note (the “Diagonal Note”) in the principal amount of $ 300,000 (the “Diagonal Principal”), for which the Diagonal Note, among other things, (a) matures on December 30, 2025 (unless otherwise accelerated upon an Event of Default (as defined below)) (the “Diagonal Maturity Date”), (b) accrues interest at a rate of 10 % per annum on the unpaid principal balance from the date the Diagonal Note was issued (the “Diagonal Issuance Date”) until the principal and interest becomes due and payable, whether on the Maturity Date or upon acceleration by prepayment or otherwise, (c) interest begins to accrue on the Diagonal Issuance Date but shall not be payable until the Diagonal Note becomes payable, and (d) interest will accrue at a rate of 22 % per annum for any amount of principal or interest which is not paid as required under the Diagonal Note, or during an Event of Default.

Pursuant to the Diagonal Note, Diagonal has the right, from time to time, and at any time, during the period beginning on the date which is 180 days from the Diagonal Effective Date and ending on the earlier of (a) the Diagonal Maturity Date, or (b) the date of payment of the Default Amount, each in respect of the remaining outstanding amount of the Diagonal Note into fully paid and non-assessable shares of Common Stock at a price equal to 75 % multiplied by the Market Price (as defined below) (the “Conversion Price”).

For purposes of the Diagonal Note:

(x) the “Market Price” means the lowest Trading Price for the Company’s Common Stock during the 10 trading ending on the latest complete trading day prior to the Diagonal Conversion Date;

(y) the “Trading Price” means the closing price (or bid, if applicable) of the Company’s Common Stock as listed (or quoted, as applicable) on the principal securities exchange or trading market where it is listed or traded;

and (z) the “Diagonal Conversion Date” means the date specified in the applicable notice of conversion, delivered to the Company by Diagonal in accordance with the Diagonal Note.

Pursuant to the Diagonal Note, the following events, among other things, constitute an Event of Default:

(i) failure to pay principal and interest when due;

(ii) the Company fails to issue shares of Common Stock upon exercise of Diagonal’s conversion rights under the Diagonal Note;

(iv) any breach of the representations and warranties set forth in both the Diagonal Agreement and the Diagonal Note;

(vi) the Company institutes, or any proceeding is instated against the Company, relating to any bankruptcy, insolvency, reorganization, or liquidation proceedings;

(vii) the Company fails to maintain the listing of its Common Stock on the Nasdaq Capital Market or on the Over The Counter boards or an equivalent exchange;

(ix) the Company institutes any dissolution, liquidation, or winding up of the Company or any substantial portion of its business;

(x) the restatement of any financial statements filed by the Company with the Securities and Exchange Commission, if the result of such restatement would have constituted a material adverse effect on the rights of Diagonal;

(xi) the Company proposes to replace its transfer agent and fails to provide a fully executed irrevocable transfer agent instructions signed by the successor transfer agent;

Upon the occurrence and during the continuation of any Event of Default that is enumerated in Section 3.2 of the Diagonal Note, the Diagonal Note shall become immediately due and payable, and the Company shall pay to Diagonal an amount equal to the Default Amount (as defined below), multiplied by two.

For other Events of Default not enumerated in Section 3.2 of the Diagonal Note, the Diagonal Note shall become immediately due and payable in an amount equal to 150 % times the sum of (a) the then outstanding principal amount of the Diagonal Note, plus (b) accrued and unpaid interest on the unpaid principal amount of the Diagonal Note to the date of payment, plus (c) Default Interest, if any, on the amounts referred to in clauses (a) and/or (b), plus (d) any amounts owed to Diagonal pursuant to Sections 1.3 and 1.4(g) of the Diagonal Note (the then outstanding principal amount of this Note to the date of payment plus the amounts referred to in clauses (b), (c) and (d) shall collectively be known as the “Default Amount”) and all other amounts payable under the Diagonal Note shall immediately become due and payable, together with all costs, including, without limitation, legal fees and expenses, of collection, and Diagonal shall be entitled to exercise all other rights and remedies available at law or in equity.

The Diagonal Note further contains provisions that:

(a) limit Diagonal’s beneficial ownership upon conversion of the Diagonal Note to a maximum of 4.99 % of the Company’s issued and outstanding Common Stock;

(b) prohibit the Company from entering selling, leasing or otherwise disposing of any significant portion of its assets outside the ordinary course of business;

and (c) adjust the Conversion Price (and number of shares deliverable upon conversion) upon (i) the event of merger, consolidation, or similar transactions, and (ii) the Company declaring or making any distribution of assets to holders of its Common Stock as a dividend, stock repurchase, return of capital, or otherwise.

The Diagonal Agreement also provides for customary provisions, including, without limitation, representations, warranties, covenants, conditions to closing, indemnification, waiver of jury trial, and exercise of remedies upon a breach of the Diagonal Agreement.

The Diagonal Note was issued with an Original Issue Discount of 4.75 % (the “OID”), with net proceeds to the Company of approximately $ 279,000 after giving deducting the OID, reimbursement of Diagonal’s expenses in an amount equal to $ 7,000 , and other estimated offering expenses.

The Company intends to use the net proceeds from the offering for working capital and general corporate purposes.

Belleau Note Purchase Agreement

On March 28, 2025 (the “Belleau Effective Date”), we entered into a Note Purchase Agreement (the “Belleau Purchase Agreement”) with Belleau Wood Capital, LP, or its assigns, (“Belleau”).

The consummation of the sale of the initial Belleau Note was consummated on the Belleau Effective Date, with gross proceeds to the Company of $ 300,000 .

The consummation of the sale of the two remaining Belleau Notes will occur in the amounts and on the dates as follows:

(a) $ 600,000 on April 14, 2025;

and (b) $ 600,000 on April 28, 2025.

Each of the Belleau Notes:

(x) matures on the date that is 12 months from the date of the issuance of each respective Belleau Note (collectively, the “Belleau Maturity Date”);

(y) may be prepaid in part or in full at any time by the Company without penalty;

and (z) accrues interest at a rate of 20 % simple interest per annum (the “Belleau Interest Rate”, and the dollar value of the accrued interest, the “Belleau Interest”).

The Belleau Interest that accrues on each respective Belleau Note is payable on each respective Belleau Maturity Date in the form of restricted shares of the Company’s Common Stock equal to 20 % of the Belleau Principal, calculated at a price per share of $ 0.35 .

In the event of a prepayment of any Belleau Note by the Company, the Belleau Interest will be payable in full at the time of such prepayment.

The Belleau Note also provides for:

(i) standard events of default, including (a) any default in the payment of the Belleau Principal or Belleau Interest on their respective due dates, (b) the occurrence of a Bankruptcy Event (as defined in the Belleau Note), or (c) the Company commits any material breach or default of any material provision of the Belleau Note, if not cured within 20 days following the written notice from Belleau specifying in reasonable detail such breach or default (sections (a) through (c), the “Belleau Events of Default”);

and (ii) customary provisions, including representations, warranties and covenants, indemnification, waiver of jury trial, arbitration, and the exercise of remedies upon a breach or default.

Upon the occurrence of an Event of Default, the Belleau Note will bear interest at the default interest rate of 20 % per annum, payable in cash, and upon Belleau’s written notice to the Company, all payments of Belleau Principal and Belleau Interest will become immediately due and payable.

The Company intends to utilize the proceeds from the sale of the Belleau Notes for working capital and general corporate purposes.

The initial Belleau Note was issued without registration under the Securities Act, based on the exemption from registration afforded by Section 4(a)(2) of the Securities Act.

The two remaining Belleau Notes, along with the shares of the Company’s Common Stock payable as interest pursuant to the Belleau Notes, when issued according to the Belleau Purchase Agreement, will be issued without registration under the Securities Act, based on the exemption from registration afforded by Section 4(a)(2) of the Securities Act.

Belleau represented that it is an accredited investor, as defined in Rule 501(d) of the Securities Act, and that it has, and will continue to, acquire the applicable securities for investment only and not with a view towards, or for resale in connection with, the public sale or distribution thereof.

Termination of Transactions with Infinite Reality, Inc.

Termination of Binding Term Sheet

On September 30, 2024, the Company entered into a binding term sheet (the “iR Term Sheet”) with Infinite Reality, Inc.

(“Infinite Reality”), whereby, subject to the satisfaction of certain conditions as more specifically set forth in the iR Term Sheet (including receipt of the approval of the Company’s stockholders), and the entry into definitive documentation, the Company will:

acquire from Infinite Reality, (a) a perpetual, royalty free license to name and to create and host events for Drone Racing League, Inc., (b) to be determined esports assets and all related intellectual property, (c) cash in the amount of up to $ 20 million to come from divestiture of certain assets to be determined and/or other sources of capital, (d) TalentX and all related intellectual property, (e) Fearless Media and all related intellectual property, and (f) Thunder Studios and all related intellectual property (each an “Asset” and, collectively, the “Purchased Assets”)(the “Asset Acquisition”), in exchange for the Company issuing that number of shares of a to-be designated class of its preferred stock equal in priority to existing Series A, AA and AAA preferred shares (the “Consideration Shares”), which Consideration Shares will be convertible into 75 % of the then issued and outstanding shares of Super League’s common stock, par value $ 0.001 per share (“Common Stock”), calculated at the time of the consummation of the Asset Acquisition;

issue to Infinite Reality 2,499,090 shares of the Company’s Common Stock, in exchange for 139,592 shares of Infinite Reality’s common stock (the “Share Exchange”), pursuant to an Equity Exchange Agreement, and to appoint a designee of Infinite Reality to the Company’s Board upon the consummation of the Share Exchange (the “Closing”);

receive a credit facility in the amount of $ 30,000,000 from Infinite Reality, to be established in January 2025 (the “Credit Facility”, and the Asset Acquisition, Share Exchange, and Credit Facility are collectively, the “iR Transaction”).

The Term Sheet contemplates that, subject to the satisfaction of the conditions contained therein (including approval of the iR Transaction by the Company’s stockholders), upon the consummation of the iR Transaction, Infinite Reality will beneficially own 84.9 % of the issued and outstanding shares of the Company as of the Closing.

On March 28, 2025, the Company and Infinite Reality mutually agreed to terminate both the Binding Term Sheet and the iR Transactions contemplated thereby in their entirety.

Termination of Equity Exchange Agreement.

On September 30, 2024, in connection with the Term Sheet and the Share Exchange, the Company entered into an Equity Exchange Agreement with Infinite Reality (the “Exchange Agreement”), pursuant to which the Company agreed, subject to the receipt of the approval of the Company’s stockholders and other customary closing conditions, to issue 2,499,090 shares of Common Stock (the “Exchange Shares”) in exchange for 139,592 shares of Infinite Reality common stock of equal value, based on the Company’s Common Stock being valued at $ 1.30 per share.

The Exchange Agreement contains representations, warranties, and covenants of the Company and Infinite Reality that are customary for a transaction of this nature.

The Exchange Shares, once exchanged pursuant to the Exchange Agreement, will be exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Section 4(a)(2) of the Securities Act and/or Rule 506(b) of Regulation D promulgated.

On October 29, 2024, the Company entered into an Amended and Restated Equity Exchange Agreement (the “Amended Exchange Agreement”) with Infinite Reality, which amended and restated the Exchange Agreement.

Pursuant to the Amended Exchange Agreement, the Company will issue an aggregate total of 2,499,090 shares of common stock, par value $ 0.001 per share, in exchange for 216,831 shares of Infinite Reality common stock (“Infinite Reality Common Stock” and collectively, the “Exchange”).

The Exchange will be consummated across two closings:

(i) an initial closing of 1,215,279 shares of Common Stock in exchange for 105,445 shares of Infinite Reality Common Stock (the “Initial Closing”);

and (ii) a second closing, subject to the approval of the Company’s stockholders, of 1,283,811 shares of Common Stock for 111,386 shares of Infinite Reality Common Stock.

All other terms of the Exchange Agreement were not modified.

On March 28, 2025, the Company and Infinite Reality mutually agreed to terminate both the Amended Exchange Agreement and the Exchange contemplated thereby in its entirety.

Entry into Equity Purchase Agreement

On February 14, 2025, the Company entered into an equity purchase agreement (the “Equity Purchase Agreement”) with Hudson Global Ventures, LLC, a Nevada limited liability company (“Hudson”).

Pursuant to the Equity Purchase Agreement, the Company has the right, but not the obligation, to sell to Hudson, and Hudson is obligated to purchase, up to $ 2.9 million of newly issued shares (the “Total Commitment”) of the Company’s common stock, from time to time during the term of the Equity Purchase Agreement, subject to certain limitations and conditions (the “Hudson Offering”).

As consideration for Hudson’s commitment to purchase shares of common stock under the Purchase Agreement, the Company issued to Hudson 300,000 shares of common stock, valued at $ 165,000 , following the execution of the Equity Purchase Agreement (the “Commitment Shares”).

The Equity Purchase Agreement initially precludes the Company from issuing and selling more than 3,319,323 shares of our common stock, including the Commitment Shares, which number equals 19.99 % of our common stock issued and outstanding as of February 14, 2025, unless the Company obtains stockholder approval to issue additional shares, or unless certain exceptions apply.

In addition, a beneficial ownership limitation in the agreement initially limits the Company from directing Hudson to purchase shares of common stock if such purchases would result in Hudson beneficially owning more than 4.99 % of the then-outstanding shares of our common stock.

From and after the initial satisfaction of the conditions to our right to commence sales to Hudson under the Equity Purchase Agreement (such event, the “Commencement,” and the date of initial satisfaction of all such conditions, the “Commencement Date”), the Company may direct Hudson to purchase shares of common stock at a purchase price per share equal to the lesser of (i) 92 % of the closing price of the Company’s Common Stock, as listed on Nasdaq, on the trading day immediately preceding the respective Put Date (the “Initial Purchase Price”), or (ii) 92 % of the lowest closing price of the Company’s Common Stock on the Nasdaq Capital Market on any trading day during the period beginning on the Put Date (as defined in the Purchase Agreement) and continuing through the date that is three trading days immediately following the Clearing Date (as defined in the Purchase Agreement) associated with the applicable Put Notice (such three trading day period is the “Valuation Period”, and the price is the “Market Price”), on such date on which the Purchase Price is calculated in accordance with the terms of the Equity Purchase Agreement.

The Company will control the timing and amount of any such sales of common stock to Hudson.

Unless earlier terminated, the Equity Purchase Agreement will automatically terminate upon the earliest of (i) the expiration of the Commitment Period (as defined in the Equity Purchase Agreement), (ii) Hudson’s purchase or receipt of the Total Commitment worth of common stock, or (iii) the occurrence of certain other events set forth in the Equity Purchase Agreement.

The Company has the right to terminate the Equity Purchase Agreement at any time after Commencement, at no cost or penalty, upon prior written notice to Hudson.

The Company may also use a portion of the net proceeds to acquire or invest in complementary businesses, products and technologies.

The Equity Purchase Agreement contains customary representations, warranties and agreements by the Company, as well as customary indemnification obligations of the Company.

In connection with the Equity Purchase Agreement, the Company entered into a Registration Rights Agreement, pursuant to which the Company agreed to register the Commitment Shares and the shares issuable pursuant to the Equity Purchase Agreement.

Amended and Restated Consulting Agreement

On March 28, 2025 (the “March DS Effective Date”), the Company entered into an Amended and Restated Consulting Agreement (the “March DS Agreement”) with Diamond Shoals, LLC (“DS”), which amended and restated that certain Consulting Agreement dated August 1, 2024, between the Company and DS (the “August DS Agreement”), pursuant to which DS will provide the strategic advisory consultancy services set forth in the March DS Agreement, the consideration for which is to be paid in the form of 857,142 restricted shares of the Company’s Common Stock (the “March DS Shares”).

The March DS Shares are payable on the dates and in the amounts as follows:

(i) 171,428 shares on the March DS Effective Date;

(ii) 342,857 shares on April 14, 2025;

and (iii) 342,857 shares on April 28, 2025.

The March DS Agreement will have a term of 12 months, commencing on the March DS Effective Date, and may be renewed upon mutual agreement of the parties.

All other terms and conditions remained the same as the August DS Agreement.

The August DS Agreement was entered into to extend the term of the initial Consulting Agreement between the Company and DS, dated June 13, 2023, as amended and restated on October 6, 2023.

In January 2025, the Company issued 262,501 shares of the Company’s common stock to the Founders in connection with the Super Biz Note, as described at Note 5.

The Company evaluated subsequent events for their potential impact on the financial statements and disclosures through March 31, 2026, the date the financial statements were available to be issued, and determined that, except as set forth below, no subsequent events occurred that were reasonably expected to impact the financial statements presented herein.

Acquisition of Let’s Bounce, Inc.

In January 2026 the Company acquired Let’s Bounce, Inc.

(“Bounce”), a marketing technology company focused on enabling scalable, measurable brand engagement inside gaming and UGC environments.

The total purchase price for Bounce, which was structured as an asset acquisition, was $ 200,000 , payable as follows:

(a) $ 75,000 at closing;

(b) $ 25,000 on the three-month anniversary of closing;

and (c) $ 100,000 on the six-month anniversary of closing.

In addition, pursuant to the terms and subject to the conditions of the asset purchase agreement, up to $ 325,000 is contingently payable in connection with the achievement of certain net revenue milestones for the Bounce assets acquired during the year ended December 31, 2026.

The Bounce acquisition provides the Company with an existing pipeline of opportunities, enabling more efficient in-game marketing programs, the addition of turnkey loyalty solutions to drive advertiser outcomes, and a roadmap to more automated campaign measurement.

Reverse Stock Split

The 2026 Amendment became effective on January 23, 2026.

All references to common stock, warrants to purchase common stock, options to purchase common stock, restricted stock, share data, per share data and related information contained in the financial statements have been retroactively adjusted to reflect the effect of the 2026 Reverse Split (and all other reverse splits described herein) for all periods presented.

Entry into Asset Purchase Agreement – Misfits Ads Business

On March 16, 2026, the Company, entered into an Asset Purchase Agreement (the “Misfits Purchase Agreement”) with Esports Now, LLC (“Misfits”), pursuant to which Misfits has agreed to sell certain assets strictly constituting the Misfits Ads Business (the “Misfits Purchased Assets”) to the Company, and the Company has agreed to assume certain liabilities related to the Misfits Purchased Assets (the “Misfits Transaction”).

As consideration for the Misfits Purchased Assets, the Company has agreed to pay to Misfits the following guaranteed consideration for the Misfits Purchased Assets:

(A) at the consummation of the transactions contemplated by the Agreement (the “Misfits Closing”):

(i) a cash payment in the amount of $ 1.5 million (the “Misfits Closing Cash Consideration”), (ii) 71,490 shares of common stock (the “Misfits Closing Shares”), (iii) a pre-funded common stock purchase warrant to purchase 456,631 shares of common stock (the “Misfits Pre-Funded Warrant”, and the shares issuable upon exercise of the Misfits Pre-Funded Warrant, the “Misfits PFW Shares”), and (iv) a common stock purchase warrant to purchase 528,121 shares of common stock, with an exercise price of $ 18.00 (the “Misfits Warrant”, and the shares issuable upon exercise of the Misfits Warrant, the “Misfits Warrant Shares”)(the Misfits Closing Shares, the Misfits PFW Shares, and the Misfits Warrant Shares are collectively, the “Misfits Closing Share Consideration”);

and (B) on the one-year anniversary of the Misfits Closing, a cash payment in the amount of $ 300,000 (the “Delayed Cash Payment”).

Pursuant to the terms and subject to the conditions of the Purchase Agreement, up to an aggregate of (i) $ 1.2 million in cash (the “Misfits Earnout Cash”), and (ii) 105,571 shares of common stock, or, upon the election of Misfits, Misfits Pre-Funded Warrants to purchase 105,571 shares of common stock (the “Earnout Shares”, and collectively with the Misfits Earnout Cash, the “Misfits Earnout Consideration”).

The Misfits Earnout Consideration will be payable to Misfits in connection with:

(x) the achievement of certain gross profit milestones for the period beginning on the Misfits Closing until the date that is one (1) year from the date of the Misfits Closing;

and (xi) the Company’s market capitalization as of the one and two year anniversary of the date of Misfits Closing.

The Purchase Agreement contains representations, warranties and covenants of each of the parties thereto that are customary for transactions of this type.

Misfits and the Company have, among other things as set forth in the Purchase Agreement, agreed to take all necessary action such that, as soon as reasonably practicable after the Misfits Closing, the Company will cause a vacant seat on the Company’s Board of Directors to be filled by appointment by a designee of Misfits;

provided, that such designee must be qualified to serve on a public company’s board of directors and meet the requirements of an “independent director” pursuant to the rules and regulations of Nasdaq.

The obligations of the Company and Misfits to consummate the Misfits Transaction are subject to certain closing conditions, including, but not limited to, (i) the receipt of the approval by the affirmative vote of a majority of the voting power of the Company’s shares present in person or represented by proxy at a stockholder meeting, to be held by the Company in order to approve the issuance of the Misfits Closing Share Consideration and, if earned, the Earnout Shares, as required by Nasdaq Listing Rule 5635(a), (ii) receipt of any necessary regulatory approvals, (iii) receipt of all necessary consents to the assignment of certain contracts from Misfits to the Company that make up a part of the Misfits Purchased Assets, and (iv) the execution and delivery of the Registration Rights Agreement (as more specifically set forth below).

The Purchase Agreement contains:

(i) representations, warranties and covenants of the Company and Misfits that are customary for a transaction of this nature, including among others, covenants by Misfits regarding the validity of certain material contracts entered into between Misfits and third-parties being assigned to the Company, title to the Misfits Purchased Assets, the condition and sufficiency of the Misfits Purchased Assets, Misfit’s ownership and rights to its intellectual property, and the investment representations of Misfits;

and (ii) customary indemnification provisions whereby Misfits will indemnify the Company for certain losses arising out of inaccuracies in, or breaches of, the representations, warranties and covenants of Misfits and certain other matters, subject to certain caps and thresholds.

Upon issuance of the Misfits Warrant at the Misfits Closing, the Misfits Warrant will entitle the holders to purchase that number of shares of Common Stock equal to the number of shares of Common Stock (or Misfits Pre-Funded Warrants) issued at the Misfits Closing as Misfits Closing Shares and shares underlying the Misfits Pre-Funded Warrant.

The Misfits Warrants are exercisable immediately upon issuance, expire two years from the date of issuance, and have an initial exercise price of $ 18.00 (the “Initial Exercise Price”), subject to adjustment for any stock splits, stock dividends, recapitalizations, and similar events.

The Misfits Warrants also contain a call feature, whereby, after the Company has registered the Misfits Warrant Shares on an effective registration statement filed with the SEC, the Company has the option, but not the obligation, and in the Company’s sole and absolute discretion, to purchase the Misfits Warrant from the Holder at a price of $ 0.001 per share of Common Stock underlying the Misfits Warrant (the “Call Option”), in the event the closing price of the Company’s Common Stock, as listed on the Nasdaq Capital Market, is at or above $ 18.00 per share for 20 consecutive trading days (the “Call Trigger”).

Upon issuance of the Misfits Pre-Funded Warrant at the Misfits Closing, the exercise price per underlying share of common stock will be $ 0.001 .

Pursuant to the Misfits Pre-Funded Warrant, a holder will not be entitled to exercise any portion of any Misfits Pre-Funded Warrant that, upon giving effect to such exercise, would cause:

(i) the aggregate number of shares of Common Stock beneficially owned by such holder (together with its affiliates) to exceed 4.99 % of the number of shares of Common Stock outstanding immediately after giving effect to the exercise;

or (ii) the combined voting power of the Company’s securities beneficially owned by such holder (together with its affiliates) to exceed 4.99 % of the combined voting power of all of the Company’s securities outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the Misfits Pre-Funded Warrant, which percentage may be changed at the holder’s election to a higher or lower percentage not in excess of 9.99 % upon 61 days’ notice to the Company.

In addition, in certain circumstances, upon a fundamental transaction, a holder of Misfits Pre-Funded Warrants will be entitled to receive, upon exercise of the Misfits Pre-Funded Warrants, the kind and amount of securities, cash or other property that such holder would have received had they exercised the Misfits Pre-Funded Warrants immediately prior to the fundamental transaction.

At the closing of the Misfits Transaction, the Company and Misfits will enter into a registration rights agreement pursuant to which, among other matters, Misfits will be granted certain customary mandatory registration rights with respect to the Misfits Closing Shares, the Misfits Warrant Shares, and the Misfits PFW Shares.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

1 unchanged sentence

March 31, 2026

/s/ Matt Edelman

President and Chief Executive Officer

7 unchanged sentences

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Chief Executive Officer

/s/ Matt Edelman

Chief Executive Officer, President

March 31, 2026

6 unchanged sentences

(Principal Financial and Accounting Officer)

/s/ Jeff Gehl

March 31, 2026

4 unchanged sentences

March 31, 2026

/s/ Michael Keller

/s/ Bant Breen

March 31, 2026

/s/ Hunter Williams

March 31, 2026

Hunter Williams

/s/ Marti Frucci

March 31, 2026

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures