FreeCast, Inc.
For the period ended Mar 31, 2026. Filed May 15, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 15, 2026
CAST$1.33-0.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-12-31; filed 2026-03-30.
0001213900-26-036447
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-15.
0001213900-26-056942
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 151 previous paragraphs and 126 current paragraphs.
78 unchanged; 35 reworded; 12 added; 24 removed; 14 previous and 1 current paragraphs rearranged.
Tables are not compared: 18 previous and 15 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (12)
Current report
Forward-Looking Statements
Current report
Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. We intend such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of complying with those safe-harbor provisions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise. Further information concerning our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the Securities and Exchange Commission.
Current report
FAST (Free Ad-Supported TV)
Current report
Ad Platform Revenue
Current report
Revenue from such contracts is presented separately from “Other Revenue” due to its materiality and distinct nature.
Current report
Deferred Revenue
Current report
Other revenue increased by 141% or $818, to $1,400 in the three months ended March 31, 2026, as compared to $582 for the three months ended March 31, 2025. Other revenue decreased by 15% or $267, to $1,460 in the nine months ended March 31, 2026, as compared to $1,727 for the nine months ended March 31, 2025.
Current report
On December 8, 2025, we entered into an Equity Purchase Agreement, which was subsequently amended on March 30, 2026, (together, the “EPA”) with Amiens Technology Investments LLC, a Delaware limited liability company (the “Investor”), pursuant to which the Investor committed to purchase up to $50 million of shares of our Class A common stock (the “ELOC Shares” and such financing, the “ELOC Financing”), subject to certain limitations and conditions set forth in the EPA. During the Commitment Period (as defined in the EPA), we may from time to time, by written notice delivered by us to the Investor (each, an “Advance Notice”), direct the Investor to purchase a number of shares of our Class A common stock up to the Maximum Advance Amount (as defined in the EPA) as set forth in the Advance Notice, subject to limitations and adjustments as set forth in the EPA. Shares issued pursuant to an Advance Notice are priced at 95% of the VWAP (volume-weighted average price) for the five-trading day period immediately following the delivery of the Advance Notice.
Current report
We have filed a registration statement, which has been declared effective as of May 6, 2026, that registers the resale of up to 5,750,000 shares of our Class A common stock, based on the assumption that we may deliver Advance Notices to the Investor for an aggregate of $21,735,000 under the EPA at an assumed purchase price of $3.78 per share. The actual number of shares of our Class A common stock issuable by us in connection with the ELOC Financing will vary depending on the then-current market price of the shares of our Class A common stock sold to the Investor pursuant to the EPA and we expect that the number of shares currently registered will not be sufficient to register the full $50 million facility in the ELOC Financing and the ELOC Commitment Shares (as defined herein). We may be required to file one or more additional registration statements in order to deliver future Advance Notices to the Investor to access the full $50 million commitment under the EPA.
Current report
We will not receive any of the proceeds from the resale or other disposition of the shares of our Class A common stock by the Investor; however, we may receive gross proceeds of up to $50 million from the sale of the ELOC Shares from time to time, in our discretion, over a 36-month period. The 36-month period began on March 11, 2026, and ends on April 1, 2029.
Current report
Notes Payable – Related Party
Current report
On March 12, 2026, we entered into a premium finance agreement for a Director’s and Officer’s Insurance policy, which required a downpayment of $80,991. We received a loan from our CEO for the full $80,991 in order to pay this down payment. There were no official terms to this loan. The full principal balance was recorded as Notes payable – related party on the condensed balance sheet.
Removed paragraphs (24)
Previous report
In this Report, unless otherwise stated or the context otherwise requires, references to “FreeCast®,” “Company,” “we,” “us” and “our” or similar references mean FreeCast, Inc.
Previous report
Other revenue decreased by 100% or $5, to $0 in the three months ended December 31, 2025, as compared to $5 for the three months ended December 31, 2024. Other revenue decreased by 95% or $1,085, to $60 in the six months ended December 31, 2025, as compared to $1,145 for the six months ended December 31, 2024.
Previous report
On December 8, 2025, we entered into an Equity Purchase Agreement (EPA) with Amiens Technology Investments, LLC (the “Investor”), pursuant to which the Investor has committed to purchase shares of our Class A common stock. Upon the terms and subject to the satisfaction of the conditions set forth in the EPA, we have the right, but not the obligation, to sell to the Investor, and the Investor is obligated to purchase, up to $50 million (the “Commitment Amount”) in shares of our Class A common stock. Such sales of Class A common stock by us, if any, are subject to certain limitations set forth in the EPA, and may occur from time to time, at our sole discretion, over a period of up to 36 months, commencing on the trading day immediately following the date of the Direct Listing (such period, the “Commitment Period”). The EPA is not necessary to meet the Nasdaq initial listing standards, and our ability to complete the Direct Listing and qualify for initial listing on Nasdaq does not depend on the availability of funds under the EPA. However, completion of the Direct Listing is a condition to our ability to sell shares under the EPA.
Previous report
We entered into the EPA to provide ourselves with a flexible source of potential liquidity following the commencement of public trading of our Class A common stock. The EPA is intended to provide flexibility to raise capital incrementally, if and when we determine it is appropriate to do so, based on market conditions, the trading price and liquidity of our Class A common stock, and our capital needs at the time. The EPA is not intended to serve as a committed financing for any specific purpose, and we have not made any determination to draw on the facility. We are not required to utilize the equity line facility, and the Investor does not have the right to require us to sell any shares under the EPA. We may elect not to draw on the EPA at all.
Previous report
During the Commitment Period, we may from time to time, by written notice delivered by us to the Investor (each, an “Advance Notice”), direct the Investor to purchase a number of shares of our Class A common stock up to the Maximum Advance Amount (as defined in the EPA) as set forth in the Advance Notice, subject to limitations and adjustments as set forth in the EPA. The prices at which such shares will be sold will be based on the applicable Market Price (as defined in the EPA). Unless earlier terminated as provided under the EPA, the term of the facility provided under the EPA terminates automatically on the earliest of (1) the first day of the month following the 36-month anniversary of the trading day immediately following the date of the Direct Listing; (2) the date on which the Investor shall have made payment of Advances pursuant to EPA for Class A common stock equal to the Commitment Amount; (3) the date on which we announce or publicly disclose a material restatement of our financial statements for two (2) or more fiscal quarters; (4) the date a Variable Rate Transaction (as defined in the EPA) has occurred; and (5) the date we have failed to comply with the covenants and obligations contained in Section 6.21 of the EPA regarding the Investor’s right during the Commitment Period to participate in up to 30% of any subsequent capital raising transactions by us during the Commitment Period, on the same terms, conditions and price provided for in such financing.
Previous report
Note Payable – Related Party
Previous report
Between July 2018 and April 2018, a related party, a company owned by William A. Mobley, Jr., Public Wire, loaned us $66,380, at an interest rate of 12% per annum. The notes representing the loan originally matured on dates ranging from April 1, 2019, to January 1, 2020. Effective June 30, 2021, we amended the original promissory note with Public Wire and combined principal and interest from the previous notes under one new loan. In addition, we extended the maturity date to June 30, 2024. On March 29, 2024, we entered into a Debt Conversion Agreement with Public Wire to convert the outstanding principal and interest of the note payable at a conversion price of $4.00 per share. The total outstanding principal of $89,289 and accrued interest of $29,425, total of $118,714, was converted into 29,679 shares of our Class B common stock. The Class B common stock was fair market valued at $8 per share and we recognized a debt extinguishment loss of $118,714.
Previous report
On July 1, 2018, we signed a revolving convertible note agreement with Nextelligence, which is a related party that is majority owned and controlled by William A. Mobley, Jr., which was amended and restated as of July 2, 2018, for an amount up to $1,000,000; with any borrowings on this loan being at our complete discretion. Outstanding principal accrued interest at 12% per annum and was due and payable on July 1, 2020. In lieu of repayment, at Nextelligence’s option, all or part of the outstanding principal and accrued interest was convertible into shares of our Class A common stock at a conversion price of $0.50 per share. The loan matured on July 1, 2020, was in default and remained as an on-demand liability of ours until June 30, 2021. On June 30, 2021, we entered into a new revolving convertible promissory note with Nextelligence for an amount up to $2,500,000; with any borrowings on this loan being at our complete discretion. Outstanding principal accrued interest at 12% per annum. The borrowing limit was increased to $6,000,000 pursuant to a first amendment to the note dated June 13, 2022. Pursuant to a second amendment to the note dated July 17, 2023, the borrowing limit was increased to $10,000,000 and the maturity date extended to June 30, 2025. In lieu of repayment, at Nextelligence’s option, all or part of the outstanding principal and accrued interest was convertible into shares of our Class A common stock at a conversion price of $0.50 per share.
Previous report
On March 29, 2024, Nextelligence converted the principal of $13,139,473 and accrued interest of $1,607,952, a total of $14,747,425, into 29,494,851 shares of our Class A common stock.
Previous report
The U.S. Premium Finance agreement dated September 15, 2016, was secured against all rights, title, and interest associated with the D&O and Workers Compensation policies. As part of the legal costs associated with obtaining premium financing, on September 19, 2016, we agreed to pay a loan origination fee in the amount of $98,250. The loan origination fee was recorded as a debt discount and amortized over the life on the policy, maturing September 2019.
Previous report
On April 18, 2017, we entered into an additional agreement with U.S. Premium Finance. We received $568,935 in net proceeds from the premium financing agreement. The loan bears interest at a floating rate per annum equal to the greater of either (i) 4.99% or (ii) 4.99% plus the Wall Street Journal Prime Rate. During the year ended June 30, 2019, and 2018, the interest rate on the loan was 4.99%. We were required to pay monthly principal and interest of approximately $29,705, paid over 20 months, with the final payment on December 15, 2018.
Previous report
The U.S. Premium Finance agreement dated April 18, 2017 was secured against all rights, title, and interest associated with the general liability insurance policy. As part of the legal costs associated with obtaining premium financing, on April 18, 2017, we incurred and capitalized a loan origination fee in the amount of $28,348. The loan origination fee was amortized over the life of the policy, maturing December 2018. As of June 30, 2022, and 2021, there were no prepaid loan origination fees as the amount was fully amortized.
Previous report
On November 13, 2019, we settled the outstanding liability with U.S. Premium Finance, in which we agreed to pay $1,000,000 in various installments, with the last payment due on December 5, 2022. During the year ended June 30, 2020, in accordance with the agreement, we reduced the principal on the balance sheet and recognized a $774,009 gain on forgiveness of debt. In adherence to the conditions of the agreement, we paid $275,000 towards the outstanding balance of the loan as of June 30, 2020. In addition, as of November 13, 2019, we had accrued approximately $162,350 in interest, which was reduced to zero based on the settlement amount and we recognized as a gain on forgiveness of debt, of $162,350. As of June 30, 2023, the balance due was $650,000, all of which was current. In January 2024, we paid the entire principal balance and accrued interest to settle the outstanding liability.
Previous report
On October 22, 2019, we entered into a promissory note with an unrelated third party for the amount of $250,000, at an interest at 6% per annum. Effective June 30, 2021, we combined all previous principal ($250,000) and interest ($25,356) related to this loan and extended the maturity date to June 30, 2024, as per the second amendment to the agreement. On March 29, 2024, we came to an agreement with the lender to convert all of the outstanding principal and interest on the note into shares of our Class A common stock at a conversion price of $4.00 per share. The total principal of $275,356 and accrued interest of $45,400, for a total of $320,076, was converted into 80,189 shares of our Class A common stock. The Class A common stock was fair market valued at $8 per share and we recognized a debt extinguishment loss of $320,076.
Previous report
Between March 2022 and June 2022, an unrelated third party loaned us $200,000, at an interest rate of 6% per annum. In August 2022, the unrelated third party loaned us an additional $100,000. The notes matured on March 1, 2023, and were in default until a renewal and consolidating note was entered into as of August 1, 2023, in the principal amount of $320,384. The interest rate under the renewal note is 6% per annum, and it matures on July 31, 2024. On March 29, 2024, we came to an agreement with the lender to convert all of the outstanding principal and interest on the note into shares of our Class A common stock at a conversion price of $4.00 per share. The total principal of $320,384 and accrued interest of $12,692, for a total of $333,076, was converted into 83,269 shares of our Class A common stock. The Class A common stock was fair market valued at $8 per share and we recognized a debt extinguishment loss of $333,076.
Previous report
On November 18, 2022, we entered into a loan agreement with two unrelated parties for the aggregate amount of $200,000, at an interest rate of 6% compounded annually. The loan matured on December 1, 2024. On March 29, 2024, we came to an agreement with the lenders to convert all of the outstanding principal and interest on the notes into shares of our Class A common stock at a conversion price of $4.00 per share. The total principal of $200,000 and accrued interest of $16,340, for a total of $216,340, was converted into 54,086 shares of our Class A common stock. The Class A common stock was fair market valued at $8 per share and we recognized a debt extinguishment loss of $216,340.
Previous report
Warrant Modification
Previous report
Effective as of June 15, 2023, we authorized and approved: (i) the reissuance of 38 expired warrants held by non-employees and 2 expired warrants held by an employee (“Expired Warrants”) to purchase an aggregate of 7,637,962 shares of our Class A common stock, at purchase prices from $0.50 to $8.00 per share, all of which had expired without being exercised; and (ii) the modification of 31 outstanding warrants held by non-employees and 1 warrant held by an employee (“Reissued Warrants”) to purchase an aggregate of 4,105,625 shares of our Class A common stock, at purchase prices from $3.50 to $6.00 per share, that by their terms will expire if not exercised on or prior to dates ranging from February 10, 2024, to September 30, 2025. We reissued the Expired Warrants and modified the Reissued Warrants (collectively “Warrant Modification”) by extending the expiration date to December 31, 2025, and maintaining all other terms in the original warrant agreements. All outstanding warrants expired unexercised at the end of the day on December 31, 2025.
Previous report
The value of the Warrant Modification to purchase an aggregate of 23,487,174 shares was calculated using the Black-Scholes-Merton option pricing model. The incremental fair value attributable to the Expired Warrants and Reissued Warrants, which was measured at the amount equal to the incremental value reflecting in the change in fair value of the warrants before and after the Warrant Modification, was calculated at $9,848,947. The portion of the incremental fair value related to non-employee warrants that were initially issued as part of equity financings was $2,669,175 and was treated as a deemed dividend and is reflected as “Deemed dividend on warrant modification” in the accompanying statement of operations. The portion of the incremental fair value related to employee warrants that were initially issued as awards was $7,179,772 and was treated as stock-based compensation and is reflected in “Compensation and benefits” in the accompanying statement of operations. Accordingly, the Warrant Modification was recorded as an increase in additional paid in capital with a corresponding decrease to retained earnings.
Previous report
We utilized an option pricing model to determine the fair value of our Class A common stock as of June 15, 2023. The significant inputs were as follows: volatility of 71.1%, term of 2 years and risk-free rate of 4.55%. The valuation determined the fair value of a share of our Class A common stock to be $1.8025 as of June 15, 2023.
Previous report
The Black-Scholes-Merton option pricing model includes the following assumptions to determine the fair value attributable immediately before and after the warrant modification effective June 15, 2023:
Previous report
Subscription Revenue
Previous report
For the Ad Agency revenue stream (Launch That and similar contracts), we provide direct marketing and campaign services, usually with a specified contract. Revenue is recognized over time during Phase 1 (using an input method based on the proportion of costs incurred relative to total estimated costs) and 2 at a point in time during Phase 2 (upon delivery of the performance evaluation report specified in the contract). Amounts paid in advance of the delivery of the specified services are recorded as deferred revenue and recognized as revenue when our performance obligation is satisfied.
Previous report
Other Revenue
Reworded paragraphs (35)
Previous wording
The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes thereto and other financial information appearing elsewhere in this Report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this prospectus, particularly in the section titled “Risk Factors.”
Current wording
The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes thereto and other financial information appearing elsewhere in this Report.
Previous wording
We currently operate exclusively in the U.S., but see opportunities for expansion into international markets, by signing licensing agreements and collaborating with international Consumer Direct Platforms (CDPs). However, we can only take advantage of these opportunities if we have sufficient capital to do so, are able to recruit the necessary staff, and are able to expand our current infrastructure. We may also face additional challenges from new competitors that may be able to launch new businesses at relatively low cost, with consumers easily being able to shift spending from one provider to another. In order to combat this, we must continue to deliver a product that is more advanced than that of competitors.
Current wording
We currently operate primarily in the U.S., but have recently begun to provide services in certain international markets. We continue to explore opportunities for expansion into other international markets by signing licensing agreements and collaborating with international Consumer Direct Platforms (CDPs). However, we can only take advantage of these opportunities if we have sufficient capital to do so, are able to recruit the necessary staff, and are able to expand our current infrastructure. We may also face additional challenges from new competitors that may be able to launch new businesses at relatively low cost, with consumers easily being able to shift spending from one provider to another. In order to combat this, we must continue to deliver a product that is more advanced than that of competitors.
Previous wording
Primarily as a result of our shift to a free registration subscription service, we have been able to increase the number of subscribers during our most recent 12-month period. Our subscriber numbers have increased from 925,270 on December 31, 2024, to 1,006,203 on December 31, 2025. Our revenue excluding Free Ad-Supported TV (FAST) Revenue (FAST Revenue was $101,047 and $141,484 for the six months ended December 31, 2025, and 2024, respectively) and Ad Revenue (Ad Revenue was $119,036 and $50,132 for the six months ended December 31, 2025, and 2024, respectively) per subscriber has decreased from $0.08 for the six months ending December 31, 2024, compared to $0.04 for the six months ending December 31, 2025. Our revenue excluding FAST Revenue (FAST Revenue was $46,381 & $62,345 for the three months ended December 31, 2025, and 2024, respectively) and Ad Revenue (Ad Revenue was $22 & $50,132 for the three months ended December 31, 2025, and 2024, respectively) per subscriber has decreased from $0.04 for the three months ending December 31, 2024, compared to $0.02 for the three months ending December 31, 2025.
Current wording
Primarily as a result of our shift to a free registration subscription service, we have been able to increase the number of subscribers during our most recent 12-month period. Our subscriber numbers have increased from 934,543 on March 31, 2025, to 1,024,592 on March 31, 2026. Our revenue excluding Free Ad-Supported TV (FAST) Revenue (FAST Revenue was $169,110 and $180,405 for the nine months ended March 31, 2026, and 2025, respectively) and Ad Revenue (Ad Revenue was $130,052 and $122,697 for the nine months ended March 31, 2026, and 2025, respectively) per subscriber has decreased from $0.12 for the nine months ending March 31, 2025, compared to $0.05 for the nine months ending March 31, 2026. Our revenue excluding FAST Revenue (FAST Revenue was $68,063 & $38,921 for the three months ended March 31, 2026, and 2025, respectively) and Ad Revenue (Ad Revenue was $11,016 & $72,565 for the three months ended March 31, 2026, and 2025, respectively) per subscriber has decreased from $0.03 for the three months ending March 31, 2025, compared to $0.013 for the three months ending March 31, 2026.
Previous wording
As of December 31, 2025, we had a cash balance of $433,363 and a working capital deficit of $3,839,068. We plan to raise additional equity financing as well, without which we will not be able to meet our obligations as they become due for the next 12 months. However, we cannot provide any assurance that additional equity financing will be available on terms that are acceptable to us, or at all.
Current wording
As of March 31, 2026, we had a cash balance of $119,302 and a working capital deficit of $7,285,937. We plan to raise additional equity financing as well, without which we will not be able to meet our obligations as they become due for the next 12 months. However, we cannot provide any assurance that additional equity financing will be available on terms that are acceptable to us, or at all.
Previous wording
We do, however, sell monthly subscriptions for premium content purchased through our SmartGuide for varying fees for different content. Revenue from such premium subscription fees is recognized on a gross basis over the service period as we are deemed to be the principal in the relationship with the end user. We control the premium content before transferring it to the end user and have latitude in establishing pricing. We both retransmit and “ingest” and distribute this content.
Current wording
We do, however, sell monthly subscriptions for premium content purchased through our SmartGuide for varying fees for different content. Revenue from such premium subscription fees is recognized on a gross basis over the service period as we are deemed to be the principal in the relationship with the end user. We control the content before transferring it to the end user and have latitude in establishing pricing. We both retransmit and “ingest” and distribute content.
Previous wording
We are an agent in transactions on our Ad Exchange platforms. We act as an intermediary between DSPs and non-owned and operated publishers by providing access to a platform that allows both parties to transact in the buying and selling of ad inventory. The transaction price is determined through a real-time auction, and we have no pricing discretion or obligation related to the fulfillment of the advertising delivery.
Current wording
We are an agent in transactions on our Ad Exchange platforms. We act as an intermediary between DSPs and non-owned and operated publishers by providing access to a platform that allows both parties to transact in the buying and selling of ad inventory. The transaction price is determined by a real-time auction, and the Company has no pricing discretion or obligation related to the fulfillment of the advertising delivery.
Previous wording
Three and Six Months Ended December 31, 2025, Compared to Three and Six Months Ended December 31, 2024
Current wording
Three and Nine Months Ended March 31, 2026, Compared to Three and Nine Months Ended March 31, 2025
Previous wording
Subscription revenue decreased by 60%, or $23,376, to $15,687, in the three months ended December 31, 2025, as compared to $39,063 for the three months ended December 31, 2024. Subscription revenue decreased by 51%, or $39,384, to $37,807, in the six months ended December 31, 2025, as compared to $77,191 for the six months ended December 31, 2024. The decrease in subscription revenue is primarily attributable to our shift to a free registration subscription service that is supported with advertising revenue.
Current wording
Subscription revenue decreased by 61%, or $19,387, to $12,430, in the three months ended March 31, 2026, as compared to $31,817 for the three months ended March 31, 2025. Subscription revenue decreased by 54%, or $58,771, to $50,237, in the nine months ended March 31, 2026, as compared to $109,008 for the nine months ended March 31, 2025. The decrease in subscription revenue is primarily attributable to our shift to a free registration subscription service that is supported with advertising revenue.
Previous wording
FAST revenue decreased by 26%, or $15,964, to $46,381, in the three months ended December 31, 2025, as compared to $62,345 for the three months ended December 31, 2024. FAST revenue decreased by 29%, or $40,437, to $101,047, in the six months ended December 31, 2025, as compared to $141,484 for the six months ended December 31, 2024. The decrease was primarily due to lower production activity and reduced related-party channel buildout services compared to the prior year. While we continued to provide platform distribution services, fewer new channel buildouts were completed in the six months ended December 31, 2025, compared to the six months ended December 31, 2024, resulting in lower FAST revenue.
Current wording
FAST revenue increased by 75%, or $29,142, to $68,063, in the three months ended March 31, 2026, as compared to $38,921 for the three months ended March 31, 2025. FAST revenue decreased by 6%, or $11,295, to $169,110, in the nine months ended March 31, 2026, as compared to $180,405 for the nine months ended March 31, 2025. The decrease was primarily due to lower production activity and reduced related-party channel buildout services compared to the prior year. While we continued to provide platform distribution services, fewer new channel buildouts were completed in the six months ended December 31, 2025; however, this slightly increased back to higher production activity during the three months ended March 31, 2026, which resulted in higher FAST revenue for the three-month period but lower FAST revenue for the nine-month period.
Previous wording
Ad revenue decreased by 99.96% or $50,110 to $22, in the three months ended December 31, 2025, as compared to $50,132 for the three months ended December 31, 2024. The decrease was related to the revenue from the “Launch That” contract being recognized in the previous quarter and having minimal demand in the current quarter. Ad revenue increased by 137% or $68,904 to $119,036, in the six months ended December 31, 2025, as compared to $50,132 for the six months ended December 31, 2024. The increase was related to the initial demand partners utilizing the FreeCast Ad platform beginning in October 2024.
Current wording
Ad revenue decreased by 85% or $61,549 to $11,016, in the three months ended March 31, 2026, as compared to $72,565 for the three months ended March 31, 2025. The decrease was related to minimal demand in the current quarter. Ad revenue increased by 6% or $7,355 to $130,052, in the nine months ended March 31, 2026, as compared to $122,697 for the nine months ended March 31, 2025. The increase was related to revenue from the “Launch That” contract.
Previous wording
The connected television (CTV) advertising ecosystem led by demand-side platforms like The Trade Desk is under scrutiny for its lack of transparency and complex fee structures. Advertisers struggle to trace how much of their spending actually reaches publishers, with multiple intermediaries taking cuts along the programmatic supply chain. This opacity, combined with concerns about data quality and measurement consistency, has put pressure on traditional ad tech platforms to justify their value. As brands demand clearer attribution and more efficient media buying, the perceived inefficiencies of third-party platforms are becoming a growing point of friction.
Current wording
The connected TV (CTV) advertising ecosystem led by demand-side platforms like The Trade Desk is under scrutiny for its lack of transparency and complex fee structures. Advertisers struggle to trace how much of their spending actually reaches publishers, with multiple intermediaries taking cuts along the programmatic supply chain. This opacity, combined with concerns about data quality and measurement consistency, has put pressure on traditional ad tech platforms to justify their value. As brands demand clearer attribution and more efficient media buying, the perceived inefficiencies of third-party platforms are becoming a growing point of friction.
Previous wording
In this shifting landscape, our Zer0Gap Ads strategy positions us to benefit long term by aligning with this broader industry trend. By creating and recently launching our own internal ad platform, we are able to directly serve advertising across our network of content partners while also enabling co-branded telecom and MDU partners to monetize their customer bases within the same ecosystem. This dual-sided approach enhances revenue potential, strengthens partner relationships and provides greater control over data and pricing. As transparency and efficiency become critical differentiators in CTV advertising, our integrated model could offer a more streamlined and scalable alternative to traditional programmatic platforms.
Current wording
In this shifting landscape, our ZeroGap Ads strategy positions us to benefit long term by aligning with this broader industry trend. By creating and recently launching our own internal ad platform, we are able to directly serve advertising across our network of content partners while also enabling co-branded telecom and MDU partners to monetize their customer bases within the same ecosystem. This dual-sided approach enhances revenue potential, strengthens partner relationships and provides greater control over data and pricing. As transparency and efficiency become critical differentiators in CTV advertising, our integrated model could offer a more streamlined and scalable alternative to traditional programmatic platforms.
Previous wording
Cost of revenue decreased by 46%, or $34,307, to $39,636 in the three months ended December 31, 2025, as compared to $73,943 for the three months ended December 31, 2024. Cost of revenue decreased by 48%, or $84,445, to $91,741 in the six months ended December 31, 2025, as compared to $176,186 for the six months ended December 31, 2024. The decrease in cost of revenue is primarily attributed to an inventory write-off during the prior period related to moving away from product sales.
Current wording
Cost of revenue decreased by 63%, or $59,298, to $34,416 in the three months ended March 31, 2026, as compared to $93,714 for the three months ended March 31, 2025. Cost of revenue decreased by 53%, or $143,743, to $126,157 in the nine months ended March 31, 2026, as compared to $269,900 for the nine months ended March 31, 2025. The decrease in cost of revenue is primarily attributed to lower revenue, paired with an inventory write-off during the prior period related to moving away from product sales.
Previous wording
Operating expenses decreased by 30%, or $1,192,674 to $2,772,302 in the three months ended December 31, 2025, as compared to $3,964,976 for the three months ended December 31, 2024. The change in operating expenses is attributed to a $767,018 decrease in general and administrative expenses and a decrease in compensation and benefits expense of $413,934. The decrease in compensation and benefits was primarily the result of a decrease to executive compensation. The decrease in general and administrative expenses was primarily the result of decreased website development and professional fees. Operating expenses decreased by 24%, or $1,768,357 to $5,723,644 in the six months ended December 31, 2025, as compared to $7,492,001 for the six months ended December 31, 2024. The change in operating expenses is attributed to a $1,196,809 decrease in general and administrative expenses and a decrease in compensation and benefits expense of $530,283. The decrease in compensation and benefits was primarily the result of a decrease to executive compensation. The decrease in general and administrative expenses was primarily the result of decreased website development and professional fees.
Current wording
Operating expenses increased by 33%, or $1,122,901 to $4,480,359 in the three months ended March 31, 2026, as compared to $3,357,458 for the three months ended March 31, 2025. The change in operating expenses is attributed to a $222,363 increase in general and administrative expenses and an increase in compensation and benefits expense of $962,781. The increase in compensation and benefits was primarily the result of an increase to stock-based compensation. The increase in general and administrative expenses was primarily the result of increased professional fees. Operating expenses decreased by 6%, or $645,456 to $10,204,003 in the nine months ended March 31, 2026, as compared to $10,849,459 for the nine months ended March 31, 2025. The change in operating expenses is attributed to a $974,446 decrease in general and administrative expenses, partially offset by an increase in compensation and benefits expense of $432,498. The increase in compensation and benefits was primarily the result of Maxim Partners’ stock-based compensation. The decrease in general and administrative expenses was primarily the result of decreased website development.
Previous wording
Other expense was $34,134, for the three months ended December 31, 2025, as compared to other expense of $42,144 for the three months ended December 31, 2024. Other expense was $88,896, for the six months ended December 31, 2025, as compared to other expense of $91,088 for the six months ended December 31, 2024. The change was principally caused by an increase in interest expense of $7,457 and $1,365 for the three and six months, respectively.
Current wording
Other expense was $112,108, for the three months ended March 31, 2026, as compared to other expense of $73,240 for the three months ended March 31, 2025. Other expense was $201,004, for the nine months ended March 31, 2026, as compared to other expense of $164,328 for the nine months ended March 31, 2025. The change was principally caused by an increase in interest expense of $38,784 and $37,419 for the three and nine months, respectively.
Previous wording
We have experienced operating losses since our inception and had a total accumulated deficit of $200,881,532 as of December 31, 2025. We expect to incur additional costs and require additional capital as we continue to implement our expansion plan. During the six months ended December 31, 2025, and 2024, our cash used in operations was $5,232,881 and $6,663,663, respectively.
Current wording
We have experienced operating losses since our inception and had a total accumulated deficit of $205,415,506 as of March 31, 2026. We expect to incur additional costs and require additional capital as we continue to implement our expansion plan. During the nine months ended March 31, 2026, and 2025, our cash used in operations was $8,002,935 and $9,958,164, respectively.
Previous wording
Our financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. We have incurred recurring losses and as of December 31, 2025, had an accumulated deficit of $200,881,532. For the three months ended December 31, 2025, and 2024, we sustained a net loss of $2,783,982 and $3,929,518, respectively. For the six months ended December 31, 2025, and 2024, we sustained a net loss of $5,646,331 and $7,489,323, respectively. These factors, among others, raise substantial doubt about our ability to continue as a going concern for the next twelve months from the date these financial statements were issued. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that may be necessary should we be unable to continue as a going concern. Our continuation as a going concern is contingent upon our ability to obtain additional financing and to generate revenue and cash flow to meet our obligations on a timely basis. We will continue to seek to raise additional funding through debt or equity financing during the next twelve months. Management believes that actions presently being taken to obtain additional funding provide the opportunity for us to continue as a going concern. There is no guarantee we will be successful in achieving these objectives.
Current wording
Our financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. We have incurred recurring losses and as of March 31, 2026, had an accumulated deficit of $205,415,506 . For the three months ended March 31, 2026, and 2025, we sustained a net loss of $4,533,974 and $3,380,527, respectively. For the nine months ended March 31, 2026, and 2025, we sustained a net loss of $10,180,305 and $10,869,850, respectively. These factors, among others, raise substantial doubt about our ability to continue as a going concern for the next twelve months from the date these financial statements were issued. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that may be necessary should we be unable to continue as a going concern. Our continuation as a going concern is contingent upon our ability to obtain additional financing and to generate revenue and cash flow to meet our obligations on a timely basis. We will continue to seek to raise additional funding through debt or equity financing during the next twelve months. Management believes that actions presently being taken to obtain additional funding provide the opportunity for us to continue as a going concern. There is no guarantee we will be successful in achieving these objectives.
Previous wording
As consideration for the Investor’s commitment to purchase shares of our Class A common stock in accordance with the EPA, we agreed to pay a commitment fee in an amount equal to $750,000, by the issuance to the Investor of a number of shares of Class A common stock (the “Commitment Shares”) as follows: (1) one-third of the Commitment Shares are to be issued to the Investor on the occurrence of the first closing under the EPA; (2) one-third of the Commitment Shares are to be issued to the Investor on the date the Investor has purchased an aggregate of $15.0 million of shares of our Class A common stock under the EPA; and (3) the remaining one-third of the Commitment Shares are to be issued to the Investor on the date the Investor has purchased an aggregate of $30.0 million of shares of our Class A common stock under the EPA. The number of Commitment Shares issued to the Investor on each required date will equal $250,000 divided by the lower of (i) $10.00; and (ii) the lowest daily VWAP (as defined in the EPA) of our Class A common stock during the five trading days immediately following the date we give the Investor notice of our intent to sell them Class A common stock under the EPA.
Current wording
As consideration for the Investor’s commitment to purchase the ELOC Shares in accordance with the EPA, we agreed to pay a commitment fee in an amount equal to $750,000, by the issuance to the Investor of a number of shares of Class A common stock (the “ELOC Commitment Shares”) as follows: (1) one-third of the ELOC Commitment Shares are to be issued to the Investor on the occurrence of the first closing under the EPA; (2) one-third of the ELOC Commitment Shares are to be issued to the Investor on the date the Investor has purchased an aggregate of $15 million of ELOC Shares; and (3) the remaining one-third of the ELOC Commitment Shares are to be issued to the Investor on the date the Investor has purchased an aggregate of $30 million of ELOC Shares. The number of ELOC Commitment Shares issued to the Investor on each required date will be equal to $250,000 divided by the lower of: (i) $10.00; and (ii) the lowest daily VWAP of our Class A common stock during the five trading days immediately preceding the applicable issuance due date. The issuance of the ELOC Commitment Shares will result in dilution to existing shareholders, independent of any sales of shares under the EPA.
Previous wording
Under the EPA, we will control the timing and amount of sales of our Class A common stock to the Investor, if any. The Investor has no right to require us to sell any shares of our Class A common stock to the Investor, but the Investor is obligated to make purchases as we direct, subject to certain conditions set forth in the EPA. Actual sales of shares of our Class A common stock to the Investor, if any, will depend on a variety of factors to be determined by us from time to time, including, among others, market conditions, the trading prices for the Class A common stock, and determinations by us as to the appropriate sources of funding for us and our operations.
Current wording
We have the right to control the timing and amount of any sales of shares of our Class A common stock to the Investor under the EPA, subject to certain limitations described in the EPA. We will bear all fees and expenses incident to our obligation to register the offer and sale of the shares of Class A common stock. The Investor has no right to require us to sell any shares of our Class A common stock under the EPA and has no obligation to purchase shares unless and until we deliver a valid Advance Notice in accordance with the EPA, at which time, subject to the terms and conditions of the EPA, the Investor is contractually obligated to purchase the applicable shares.
Previous wording
The EPA contains customary representations, warranties, conditions and indemnification obligations of the parties. We have the right to terminate the EPA at any time effective five trading days after providing written notice to the Investor, at no cost or penalty, provided that there are no outstanding Advance Notices, the shares of Class A common stock under which have yet to be issued, and we have paid all amounts owed to the Investor pursuant to the EPA.
Current wording
The EPA contains customary representations, warranties, conditions and indemnification obligations of the parties. We have the right to terminate the EPA at any time effective five trading days after providing written notice to the Investor, at no cost or penalty, provided that there are no outstanding Advance Notices, the shares of Class A common stock under which have yet to be issued, and we have paid all amounts owed to the Investor pursuant to the EPA. We are required to use commercially reasonable efforts to continuously maintain the effectiveness of the registration statement until all of the Commitment Shares and the shares of our Class A common stock to be issued from time to time under the EPA pursuant to an Advance Notice have been sold or may be sold without restriction pursuant to Rule 144.
Previous wording
Between October 9, 2025, and November 21, 2025, Nextelligence, a related party, majority owned by our CEO, provided aggregate funding to us totaling $1,500,000. Of this amount, $191,023 was remitted by Nextelligence on behalf of Celebrity Cigars, Inc. and Test Drive Live Inc. to fully satisfy their outstanding accounts receivable balances with us. As these entities are under common control, Nextelligence agreed to assume the obligations of both Celebrity Cigars, Inc. and Test Drive Live Inc. The remaining $1,308,977 was recorded as a revolving convertible note payable to Nextelligence, for a total of $1,308,977. The Company and Nextelligence entered into an agreement on November 21, 2025, to place terms on this revolving convertible note payable. The new outstanding revolving convertible note payable has an interest rate of 12%, a maturity date of June 30, 2026, and is convertible at Nextelligence’s discretion for $8 per share of Class A common stock. Additionally, the agreement capitalized all unpaid accrued interest as of November 21, 2025, for $6,575, which resulted in an “original principal balance” of $1,315,552. Between the date of the executed agreement and December 31, 2025, we received an additional $1,110,000. As of December 31, 2025, the total outstanding principal is $2,425,552 and the accrued interest balance is $21,144 for a total outstanding balance of $2,446,696.
Current wording
Between October 9, 2025, and November 21, 2025, Nextelligence, a related party, majority owned by our CEO, provided aggregate funding to us totaling $1,500,000. Of this amount, $191,023 was remitted by Nextelligence on behalf of Celebrity Cigars, Inc. and Test Drive Live Inc. to fully satisfy their outstanding accounts receivable balances with the Company. As these entities are under common control, Nextelligence agreed to assume the obligations of both Celebrity Cigars, Inc. and Test Drive Live Inc. The remaining $1,308,977 was recorded as a revolving convertible note payable to Nextelligence, for a total of $1,308,977. The Company and Nextelligence entered into an agreement on November 21, 2025, to place terms on this revolving convertible note payable. The new outstanding revolving convertible note payable has an interest rate of 12%, a maturity date of June 30, 2026, and is convertible at Nextelligence’s discretion for $8 per share of Class A common stock. The terms specify a maximum advance amount of $5,000,000. Additionally, the agreement capitalized all unpaid accrued interest as of November 21, 2025, for $6,575, which resulted in an “original principal balance” of $1,315,552. Between the date of the executed agreement and March 31, 2026, the Company has received an additional $3,573,500. As of March 31, 2026, the total outstanding principal is $4,889,052 and the accrued interest balance is $126,778 for a total outstanding balance of $5,015,830.
Previous wording
On September 15, 2016, we entered into an agreement with U.S. Premium Finance to provide financing in an aggregate amount of $1,967,450 for the insurance premium associated with both D&O and Workers Compensation policies. Both policies commenced September 15, 2016, and provided coverage for the next 36 months, expiring September 15, 2019. The loan bears interest at a floating rate per annum equal to the greater of either (i) 4.99% or (ii) 4.99% plus the Wall Street Journal Prime Rate. During the year ended June 30, 2019, and 2018, the interest rate on the loan was 4.99%. We were required to pay monthly principal and interest of approximately $58,957, paid over 36 months, with the final payment on October 15, 2019.
Current wording
On March 12, 2026, we entered into an agreement with Capital Premium Financing to provide financing in an aggregate amount of $143,949 for the insurance premium associated with a D&O policy. The policy commenced March 12, 2026, and provided coverage for the next 12 months, expiring March 12, 2027. The loan bears interest at a 13.5% rate per annum. We are required to pay monthly principal and interest of approximately $24,977 paid over 6 months, with the final payment on September 12, 2026.
Previous wording
For the six months ended December 31, 2025, cash used in operating activities decreased by $1,430,782 or 21.5% due primarily to our decrease in net loss of $1,842,992 and a net increase in working capital of $165,617. These were offset by a decrease in stock-based compensation of $561,872. The change in working capital was made up mainly of an increase in accounts receivable of $271,336, decrease in prepaid assets of $100,000, increase in deferred revenue of $84,979, and decrease in accounts payable and accrued expenses – related party of $141,828.
Current wording
For the nine months ended March 31, 2026, cash used in operating activities decreased by $1,874,238 or 19% due primarily to our decrease in net loss of $689,545, which comprised of a non-cash increase in stock-based compensation of $375,633, and a net increase in working capital of $829,922.
Previous wording
For the six months ended December 31, 2025, cash used in investing activities decreased by $13,067 or 60%. The change was attributed to a decrease in the cash used to purchase property and equipment.
Current wording
For the nine months ended March 31, 2026, cash used in investing activities decreased by $5,558 or 26%. The change was attributed to a decrease in the cash used to purchase property and equipment.
Previous wording
For the six months ended December 31, 2025, cash provided by financing activities increased by $1,456,098 or 39.7%. The change was primarily due to an increase in proceeds from convertible notes payable – related party of $1,030,552 and a decrease to payments on revolving note payable – related party of $1,075,000, partially offset by a decrease to proceeds from issuance of Class A common stock of $650,000.
Current wording
For the nine months ended March 31, 2026, cash provided by financing activities increased by $2,807,034 or 58%. The change was primarily due to an increase in proceeds from convertible notes payable – related party of $3,264,052 and a decrease to payments on the revolving convertible note payable – related party of $1,161,445, partially offset by a decrease to proceeds from issuance of Class A common stock of $1,700,000.
Previous wording
An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made; if different estimates reasonably could have been used; or if changes in the estimate that are reasonably likely to occur periodically could materially impact the financial statements. While our significant accounting policies are described in more detail in the notes to our financial statements included in this prospectus, we believe the following accounting policies to be critical to the estimates and assumptions used in the preparation of our financial statements.
Current wording
An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made; if different estimates reasonably could have been used; or if changes in the estimate that are reasonably likely to occur periodically could materially impact the financial statements. While our significant accounting policies are described in more detail in the notes to our financial statements included in this Quarterly Report on Form 10-Q, we believe the following accounting policies to be critical to the estimates and assumptions used in the preparation of our financial statements.
Previous wording
The transaction price of a contract is estimated based on the expected value for which a significant reversal of revenue is not expected to occur. Stand-alone selling prices are generally determined based on prices charged to customers. In arrangements with multiple performance obligations, the estimated transaction price is allocated to each distinct performance obligation based on relative stand-alone selling price.
Current wording
The transaction price of a contract is estimated based on the expected value for which a significant reversal of revenue is not expected to occur. Stand-alone selling prices are generally determined based on prices charged to customers. In arrangements with multiple performance obligations, the estimated transaction price is allocated to each distinct performance obligation based on relative stand-alone selling price (“SSP”).
Previous wording
Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash and cash equivalents and trade accounts receivable. Our cash and cash equivalents are exposed to credit risk, subject to federal deposit insurance, in the event of default by the financial institutions holding its cash and cash equivalents to the extent of amounts recorded on the balance sheet. The cash accounts are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 per banking institution. As of December 31, 2025, our cash balance exceeded the FDIC insured limit by $183,363.
Current wording
Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash and cash equivalents and trade accounts receivable. Our cash and cash equivalents are exposed to credit risk, subject to federal deposit insurance, in the event of default by the financial institutions holding its cash and cash equivalents to the extent of amounts recorded on the balance sheet. The cash accounts are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. As of March 31, 2026, the Company’s cash balance did not exceed the FDIC insured limit.
Previous wording
As of December 31, 2025, we had one customer, SportX LLC, representing 96.21% of our receivables. As of December 31, 2024, we had three customers, SportX LLC and related party customers Celebrity Cigars, Inc. and Test Drive Live Corp., representing 62.59%, 18.72%, and 13.53%, respectively, of our receivables.
Current wording
As of March 31, 2026, the Company had two customers, SportX LLC and related party Celebrity Cigars representing 76.9% and 23.3% of the Company’s receivables, respectively. As of March 31, 2025, the Company had two related party customers, Test Drive Live Inc. and Celebrity Cigars, Inc., representing 16.2% and 21.5%, respectively, and one non related party representing 56.4% of our receivables.
Previous wording
As of December 31, 2025, we had three customers, Launch That., related party customer Celebrity Cigars, Inc., and Ignite, representing 46.1%, 29.6%, and 11.86%, respectively, of our revenues. As of December 31, 2024, we had two related party customers, Test Drive Live Inc. and Celebrity Cigars, Inc., representing 21.3% and 29.5%, respectively, of our revenues.
Current wording
As of March 31, 2026, the Company had three customers, Launch That., related party customer Celebrity Cigars, Inc., and Ignite, representing 33.9%, 37.8%, and 12.83%, respectively, of the Company’s revenues. As of March 31, 2025, the Company had two related party customers, Test Drive Live Inc. and Celebrity Cigars, Inc., representing 18.1% and 24.0%, respectively, of our revenues.
Previous wording
We apply fair value accounting for all assets and liabilities that are recognized or disclosed at fair value in the financial statements. The carrying amounts reported in the financial statements for cash, accounts receivable, accounts payable and accrued liabilities approximate their fair value due to their short-term nature.
Current wording
The Company applies fair value accounting for all assets and liabilities that are recognized or disclosed at fair value in the financial statements. The carrying amounts reported in the financial statements for cash, accounts receivable, accounts payable and accrued liabilities approximate their fair value due to their short-term nature.
Previous wording
The following table provides the number of Class A common stock equivalents not included in diluted income per share, because the effects are anti-dilutive, for the six months ended December 31, 2025, and 2024, respectively.
Current wording
The following table provides the number of Class A common stock equivalents not included in diluted income per share, because the effects are anti-dilutive, for the nine months ended March 31, 2026, and 2025, respectively.
Previous wording
Stock-based compensation issued is measured at the date of grant based on the estimated fair value of the award, net of estimated forfeitures. The grant date fair value of a stock-based award is recognized as an expense over the requisite service period of the award on a straight-line basis. We recognize compensation expense measured as the fair value of the stock-based compensation on grant date, when a performance condition is considered probable to occur. For purposes of determining the variables used in the calculation of stock-based compensation issued to employees, we perform an analysis of current market data and historical data to calculate an estimate of implied volatility, the expected term of the option and the expected forfeiture rate. With the exception of the expected forfeiture rate, which is not an input, we use these estimates as variables in the Black-Scholes option pricing model. Depending upon the number of warrants granted, any fluctuations in these calculations could have a material effect on the results presented in our Statements of Operations. In addition, any differences between estimated forfeitures and actual forfeitures could also have a material impact on our financial statements.
Current wording
Stock-based compensation issued is measured at the date of grant based on the estimated fair value of the award, net of estimated forfeitures. The grant date fair value of a stock-based award is recognized as an expense over the requisite service period of the award on a straight-line basis. The Company will recognize compensation expense measured as the fair value of the stock-based compensation on grant date, when a performance condition is considered probable to occur. For purposes of determining the variables used in the calculation of stock-based compensation issued to employees, the Company performs an analysis of current market data and historical data to calculate an estimate of implied volatility, the expected term of the option and the expected forfeiture rate. With the exception of the expected forfeiture rate, which is not an input, the Company uses these estimates as variables in the Black-Scholes option pricing model. Depending upon the number of warrants granted, any fluctuations in these calculations could have a material effect on the results presented in the Company’s Statements of Operations. In addition, any differences between estimated forfeitures and actual forfeitures could also have a material impact on the Company’s financial statements.
Previous wording
In accounting for modifications of equity-classified warrants held by employees, it is our policy to determine the impact by analogy to the share-based compensation guidance of ASC 718, Compensation - Stock Compensation (“ASC 718”). The model for a modified share-based payment award that is classified as equity and remains classified in equity after the modification is addressed in ASC 718-20-35-3. Pursuant to that guidance, the incremental fair value from the modification is recognized as stock-based compensation expense in the statements of operations to the extent the modified instrument has a higher fair value. We modified certain equity-classified warrants held by employees in the year 2023.
Current wording
In accounting for modifications of equity-classified warrants held by employees, it is the Company’s policy to determine the impact by analogy to the share-based compensation guidance of ASC 718, Compensation - Stock Compensation (“ASC 718”). The model for a modified share-based payment award that is classified as equity and remains classified in equity after the modification is addressed in ASC 718-20-35-3. Pursuant to that guidance, the incremental fair value from the modification is recognized as stock-based compensation expense in the statements of operations to the extent the modified instrument has a higher fair value. The Company modified certain equity-classified warrants held by employees in the year 2023.
Previous wording
We apply the guidance enumerated in ASC 480, when determining the classification and measurement of preferred stock. Preferred stock subject to mandatory redemption, if any, is classified as a liability and is measured at fair value. We classify conditionally redeemable preferred stock, which includes preferred stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control, as mezzanine equity. At all other times, we classify its preferred stock in stockholders’ equity. We subsequently measure mezzanine equity to redemption value when the instrument is currently redeemable or when it is probable the instrument will become redeemable. Initially, the redemption rights were not solely within our control because our Chief Executive Officer (CEO), William Mobley, was able to force us to redeem the shares for cash. Therefore, we classified the Series A Preferred Stock as mezzanine equity pursuant to ASC 480-10-S99. We had adjusted the value of the Series A Preferred shares to its maximum redemption amount as the instrument was redeemable.
Current wording
We apply the guidance enumerated in ASC 480, when determining the classification and measurement of preferred stock. Preferred stock subject to mandatory redemption, if any, is classified as a liability and is measured at fair value. We classify conditionally redeemable preferred stock, which includes preferred stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control, as mezzanine equity. At all other times, we classify its preferred stock in stockholders’ equity. We subsequently measure mezzanine equity to redemption value when the instrument is currently redeemable or when it is probable the instrument will become redeemable. Initially, the redemption rights were not solely within our control because our Chief Executive Officer (CEO), William Mobley, was able to force us to redeem the shares for cash. Therefore, we classified the Series A Preferred Stock as mezzanine equity pursuant to ASC 480-10-S99. We had adjusted the value of the Series A Preferred shares to its maximum redemption amount as the instrument was redeemable.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Ad Agency Revenue (Launch That and Similar Contracts)
Rearranged previous paragraphs (14)
Previous report — wording carried elsewhere
In accordance with the EPA, we are required to file a registration statement with respect to the resale of the shares of our Class A common stock issuable under the EPA, including the Commitment Shares. The EPA requires us to file a registration statement within 30 days following the trading day after the Direct Listing date, and to use commercially reasonable efforts to have such registration statement declared effective within 90 days following the trading day after the Direct Listing date. We are required to use commercially reasonable efforts to continuously maintain the effectiveness of the registration statement until all of the Commitment Shares and the shares of our Class A common stock to be issued from time to time under the EPA pursuant to an Advance Notice have been sold or may be sold without restriction pursuant to Rule 144. Such resale registration statement must be effective before we may begin giving Advance Notices.
Previous report — wording carried elsewhere
Revolving Convertible Note Payable – Related Party
Previous report — wording carried elsewhere
We no longer generate subscription revenue through renewal sales of Rabbit TV and Rabbit TV Plus, or through Select TV and Streaming TV Kits, which operated as the successor products to Rabbit TV and Rabbit TV Plus. In October 2022, our SelectTV.com paid subscription service and packaged SelectTV Streaming TV Kits were discontinued. We rebranded to the corporate namesake FreeCast.com and relaunched our SmartGuide as a free registration subscription service. SmartGuide is our internet distributed streaming media guide that searches and aggregates media content on the web and facilitates access to its customers through Wi-Fi-enabled devices that support streaming video.
Previous report — wording carried elsewhere
We do, however, sell monthly subscriptions for premium content purchased through our SmartGuide for varying fees for different content. Revenue from such premium subscription fees is recognized on a gross basis over the service period as we are deemed to be the principal in the relationship with the end user. We control the premium content before transferring it to the end user and have latitude in establishing pricing. We both retransmit and “ingest” and distribute this content.
Previous report — wording carried elsewhere
Subscription revenue is derived from online sales through search engine optimization, search engine marketing, various marketing advertising services, the utilization of resellers in the form of publishers that promote upcoming retail promotions and packages, as well as direct sales to subscribers of our Value Channels subscription service. Value Channels subscription contains 17 cable channels and sells on a monthly subscription or annual fee. Value Channels is integrated into the initial FreeCast.com free registration and then offered as an upgrade. Both FreeCast.com (free registration) and Value Channels are available in various streaming smart TV models (Google TV’s, Amazon Fire TV’s, LG, Samsung, TCL, Sony and others), plus Streaming Devices (Amazon Fire, Google ChromeCast, Apple TV), PC’s/Laptops and mobile apps for Android and iOS devices.
Previous report — wording carried elsewhere
Subscription revenue is recognized ratably on a straight-line basis over the duration of the subscription period, generally ranging from one month to five years. If the subscriber renews early, then the expiration date is extended by the renewal period, and the additional subscription fee is deferred and amortized over the additional months purchased by the subscriber. We no longer offer SelectTV lifetime subscriptions, which were initially deferred and recognized over a five-year period. All subscription fees are collected at the time of purchase.
Previous report — wording carried elsewhere
We provide FAST channel buildouts that include post-production editing, motion graphics, channel assembly and content acquisitions. We charge the customers based on time incurred for the services plus a reasonable margin in addition to any additional out-of-pocket cost incurred that is charged at cost to us. Revenue is recognized when services are performed. We charge a monthly platform fee for distributing the FAST channel on our platform. Revenue is recognized at the point in time when the content is available on the digital platform.
Previous report — wording carried elsewhere
We are an agent in transactions on our Ad Exchange platforms. We act as an intermediary between DSPs and non-owned and operated publishers by providing access to a platform that allows both parties to transact in the buying and selling of ad inventory. The transaction price is determined through a real-time auction, and we have no pricing discretion or obligation related to the fulfillment of the advertising delivery.
Previous report — wording carried elsewhere
We generally invoice buyers at the end of each month for the full purchase price of ad impressions monetized in that month. Accounts receivables are recorded at the amount of gross billings for the amounts we are responsible for collecting, and accounts payable are recorded at the net amount payable to suppliers. Accordingly, both accounts receivable and accounts payable appear large in relation to revenue reported on a net basis.
Previous report — wording carried elsewhere
We earn revenue from direct client service contracts for marketing and campaign execution, such as the Launch That agreement. These contracts typically involve two distinct phases:
Previous report — wording carried elsewhere
For the Ad Platform revenue stream, we provide demand partners with access to our Ad Platform, enabling real-time bidding on advertising inventory. Revenue is recognized at a point in time when a transaction is completed—specifically, when a bid is won and the client’s purchase occurs through the platform. Amounts invoiced in advance of the completion of these transactions are recorded as deferred revenue and recognized as revenue when our performance obligation is satisfied.
Previous report — wording carried elsewhere
Other revenue includes product, licensing, and referral fee revenue. We generate revenue through free registrations on FreeCast.com by partnering with retailers, manufacturers, operators and/or distributors of streaming devices, mobile phones, broadband carriers, broadcasters, property management, multi-dwelling developers, builders, and various mass consumer communities of streaming tv watchers. A FreeCast.com license is freely provided per registered consumer marketed by distributors in exchange for a negotiated revenue sharing percentage with each distributor on a case-by-case basis. Affiliate commissions are earned and then shared from third-party advertisement service providers, pay-per-view movie or series distributors and live events tickets sales for such things as professional boxing or concerts. These license arrangements have not resulted in significant revenue to date.
Previous report — wording carried elsewhere
Beginning in 2024, in conjunction with the release of our new product FreeCast Home, we started recognizing contracts with customers from product sales requiring performance up to delivery, as well as contracts with customers that contain a subscription portion that causes revenue to be allocated or adjusted over time. Shipping and handling activities are performed before the customer obtains control of the goods and therefore represent a fulfillment activity rather than a promised service to the customer. Revenue and costs of sales are recognized when control of the products transfers to our customer, which generally occurs upon shipment from our facilities. For our physical product sales, our performance obligations are satisfied at that time.
Previous report — wording carried elsewhere
Referral fee revenue is generated through premium services which are also available on our platform, for an additional fee, to allow single or time-limited use of private, decrypted viewing of movies, sporting events, concerts or other types of events.