Newsmax Inc.

NOTE 1. NATURE OF BUSINESS

Newsmax Inc. began as Newsmax Media, Inc., a Nevada Corporation, which was incorporated on July 15, 1998, and registered on August 20, 1998, as a foreign corporation in the State of Florida. During 2014, Newsmax Media, Inc. changed its state of domicile from Nevada to Delaware. In connection with the change, the NMX Holdings, LLC entity was dissolved.

On April 14, 2024, Newsmax Media, Inc. consummated a corporate reorganization. Newsmax Inc. (the “Company”) was formed as a new holding company that owns all of the outstanding shares of the operating company, Newsmax Media, Inc. The stockholders of Newsmax Media, Inc. exchanged their shares of capital stock in Newsmax Media, Inc. for the same class and number of shares in Newsmax Inc. Subsequently, Newsmax Media, Inc. changed its state of domicile from Delaware to Florida. As a result of this reorganization, Newsmax Inc. became the direct holding company and the sole shareholder of Newsmax Media, Inc. Newsmax Media, Inc.’s ownership of its subsidiaries was not affected or changed as a result of this reorganization.

The Company is a multi-platform media company that provides original news and lifestyle content using a mixed-revenue model that derives income from its linear cable television and over-the-top (“OTT”) news channels, websites, proprietary database, publishing products and e-commerce products. The Company uses original news and editorial content to draw large numbers of readers to its media outlets in order to sell advertising, print and online information products. The Company’s business operations are conducted throughtwo operating segments, Broadcasting and Digital.

In June 2024, the Company issued a Private Placement Memorandum (“PPM”) to potential investors, aiming to raise capital through the sale of its Series B Preferred Stock in a Private Placement. The initial offering was for up to 30,000 shares of Series B Preferred Stock at $5,000 per share for a base offering amount of $150,000,000, with the option to expand up to 45,000 shares of Series B Preferred Stock for an offering amount of $225,000,000. The PPM was distributed to accredited investors as defined under Regulation D of the Securities Act of 1933. In connection with the PPM, the Company agreed to issue athree-year warrant to Digital Offering, LLC, as placement agent for the Private Placement, exercisable for 900 shares of Series B Preferred Stock with an exercise price per share of $5,000 upon the closing of the PPM. As of December 31, 2024, the Company had raised approximately $138,000,000. The offering was closed on February 27, 2025 and raised a total of $225,000,000.

Initial Public Offering and Listing

On February 27, 2025, the Company completed the sale of the remaining Series B Preferred Stock from the PPM raising approximately $87,000,000.

On March 24, 2025, a majority in interest of the shareholders of the Company approved by written consent (1) the amending and restating of the Company's articles of incorporation, the recapitalization of the Company's capital stock and the appointment of directors and (2) the Company's 2025 Omnibus Equity Incentive Plan. See Note 15. Equity-Based Compensation.

On March 28, 2025, the Company completed its initial public offering (the “IPO”). Concurrently with the closing of the IPO and in accordance with the terms of the applicable Certificates of Designation, all shares of the Company’s Series A-1 Preferred Stock, Series A-2 Preferred Stock, and Series A-3 Preferred Stock automatically converted into shares of the Company’s then-existing Class A Common Stock. At the Company’s election, all shares of the Company’s Series A Preferred Stock also converted into shares of the Company’s then-existing Class A Common Stock. All shares of Series B Preferred Stock automatically converted into shares of Class B Common Stock.

On March 28, 2025 the Company also amended and restated its Articles of Incorporation (the “Amended and Restated Articles of Incorporation”) to reclassify its authorized share capital to implement a dual class of securities. As a result, each share of the Company's then-existing Class A Common Stock that was issued and outstanding immediately prior to the effectiveness of the Amended and Restated Articles of Incorporation, and not held by the Company's CEO, was recapitalized, reclassified, and reconstituted intoone fully paid and non-assessable share of Class B Common Stock of Newsmax Inc. Each share of the Company’s then-existing Class A Common Stock held by the Company's CEO immediately before the recapitalization, was recapitalized, reclassified, and reconstituted intoone fully paid and non-assessable share of Class A Common Stock of Newsmax Inc. The IPO resulted in total net proceeds of $67,469,857.

On March 31, 2025, the Company listed on The New York Stock Exchange under the ticker symbol “NMAX”.

Stock Split

On March 28, 2025, a previously announced forward stock split of the Company's issued and outstanding shares of common stock at a ratio of 6,765.396-for-1 took effect. Accordingly, the Company has adjusted the number of issued and outstanding common shares, par value, and the computations of basic and diluted earnings per share retroactively for all periods presented in the financial statements and related notes. Immediately following the recapitalization 27,061,584 shares (post stock split) of treasury stock were effectively retired.

The broadcasting segment produces and licenses news, business news and lifestyle content for distribution primarily through multichannel video programming distributors (“MVPDs”) including cable television systems, direct broadcast satellite operators and telecommunication companies, primarily in the United States.

The Company creates and broadcasts content and distributes such content using a hybrid distribution strategy of linear cable, free OTT channels, over-the-air and free ad-supported streaming television services (“FAST”) channels. The broadcast segment generates revenues from (1) linear TV channels, primarily through advertising sales, (2) OTT and FAST channels, primarily through revenue derived from third-party advertising in connection with services accessed through websites, apps and digital media players, (3) affiliate revenue earned through MVPDs broadcasting the Company’s content to their paid subscribers, and (4) subscription revenue earned via the Company’s new Newsmax+ subscription program which users can sign up to receive the Company’s content directly.

Digital

The digital segment generates revenues through (1) online advertising, including online display, email advertising, other online placements and print advertisements, (2) subscriptions, including our collection of specialized health and financial newsletters, Newsmax Magazine andfour online membership programs, and (3) e-commerce, primarily through our subsidiaries that sell nutraceuticals and nonfiction books on political, financial and health-related topics.

The Company also distributes content through its websites and social media accounts, apps, email and newsletters. The Company’s websites and apps provide live and/or on-demand streaming of network-related programming to allow video subscribers of the Company’s participating distribution partners to view Company content via the internet.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements include the accounts of Newsmax Inc. and its wholly owned subsidiaries Newsmax Media Inc, Medix Select, LLC (“Medix”), Crown Atlantic Insurance, LLC (“Crown”), Newsmax Broadcasting, LLC (“Broadcasting”), Humanix Publishing, LLC (“Humanix”), ROI Media Strategies (“ROI”) and Newsmax Radio LLC (“Radio”). All intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the amounts that are reported in the consolidated financial statements and accompanying disclosures. Although these estimates are based on management’s best knowledge of current events and actions that the Company may undertake in the future, actual results may differ from those estimates.

Immaterial correction of error

In the second quarter of 2025, the Company identified immaterial errors that were corrected in its consolidated financial statements.

The Company understated cost of revenues and overstated general and administrative by $6.1 million for the year ended December 31, 2024 due to a misclassification of employee payroll costs. Additionally the Company understated prepaid and other assets - current and overstated other assets - non-current by $3.1 million as of December 31, 2024 due to a misclassification of the current portion of the other assets.

The Company has corrected the account classification in the current period consolidated financial statements. The correction had no impact on loss from continuing operations, net loss, loss per share, total assets, total liabilities, equity (deficit) or cash flows for any period presented.

Cash and Cash Equivalents

The Company considers all investments, which includes money market funds, short-term treasuries and certificate of deposits, purchased with original maturities of three (3) months or less to be cash and cash equivalents. From time to time, the cash balance in the Company's bank accounts may exceed amounts covered by the insurance provided by the U.S. Federal Deposit Insurance Corporation (“FDIC”). The Company has not experienced any losses in such accounts and believes it is not exposed to significant credit risk.

Investments

Equity Securities

The Company accounts for its equity securities in accordance with ASC Topic 321, Investments - Equity Securities. Equity securities are measured at fair value, with changes in fair value recognized in net income (loss). The Company’s investments consist of equity securities with readily determinable fair values. The cost of securities sold is based on the specific identification method, and interest and dividends on securities are included in non-operating income (expense).

The fair market value of equity securities is determined based on quoted market prices in active markets. See Note 3 - Fair Value Measurements, for additional information regarding the valuation of marketable equity securities.

Debt Securities - Available-for-Sale

The Company classifies investments in fixed income securities as available-for-sale debt investments. These investments primarily consist of certificates of deposits and treasury securities and are held in the custody of a major financial institution. A specific identification method is used to determine the cost basis of available-for-sale debt investments sold. These investments are recorded in the consolidated balance sheets at fair value. We determine the cost of the investment sold at the individual security level and record the interest income and realized gains or losses on the sale of these investments in interest and dividend income. Unrealized gains and losses on these investments are included within other comprehensive loss, net of tax. The Company classifies investments as current based on the nature of the investments and their availability for use in operations.

The fair market value of marketable debt securities is determined based on quoted market prices in active markets. See Note 3 - Fair Value Measurements, for additional information regarding the valuation of marketable equity securities.

The Company regularly reviews investment securities for impairment. For debt securities, any impairment relating to credit losses is recorded through an allowance for credit losses. A change in the allowance for credit losses is recorded into earnings in the period of change.

Revenue Recognition

In accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers, the Company recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration the Company expects to be entitled in exchange for those goods and services. The Company records taxes collected from customers and remitted to governmental authorities on a net basis.

Service Revenue

Service revenue is primarily derived from the Company’s original news and lifestyle content, using a mixed-revenue multi-platform model that derives income from digital, linear and over-the-top (“OTT”) news channels, websites, proprietary database, publishing and video subscription services. The Company uses original news, syndicated services and editorial content to draw consumers to its media outlets in order to sell advertising, license fees and video, print and online information services. The Company earns revenue through contractual allocations of fees based on impressions received or subscriber counts.

Service revenue is comprised of the following for the years ended December 31,

Advertising Revenue

Advertising revenue is derived from the sale of advertising on the Company’s cable television, email database, magazine and related publications, and website. Revenue related to the sale of advertising in the broadcasting segment is recognized at the time the commercials are aired. Revenue related to the Company's digital segment is recognized when display or other digital advertisement records are placed on various digital media. Revenue related to magazine and related publications is recognized when the ad is displayed in the printed document. Each advertisement is determined to be a distinct performance obligation that is satisfied at the point in time when such advertisements are published or aired. Advertising contracts, which are generally short-term, are billed monthly for the services provided during the month, with payments due shortly thereafter. Cash payments received prior to services rendered are recorded as deferred revenue, which is then recognized as revenue when the advertising time or space is provided.

The Company enters into agreements with OTT distribution platforms to distribute the Company’s news channel. Pursuant to certain distribution agreements, advertising revenues are earned based on an allocation of the fee determined by the number of impressions received. These contracts represent a single performance obligation recognized over the contract period. Revenue is recognized upon delivery of the content over the course of an over-the-top distribution agreement term based on time elapsed, as this best depicts the simultaneous consumption and delivery of the services. The Company bills OTT customers monthly over the contract term. The Company has an unconditional right to receive payment of the amount billed, generally within 30 days from the invoice date. The invoiced amount to be received is recorded in accounts receivable on the consolidated balance sheets.

Subscription Revenue

The Company sells magazines to consumers through subscriptions. Each subscription is determined to be a distinct performance obligation that is satisfied over the term of the contract, normally one (1) to five (5) years. Subscription payments received from customers in advance of the publication are recorded as deferred revenue and recognized as revenue on a straight-line basis over the contract term.

Newsmax+ provides the Company’s content directly to consumers either monthly or annually. Monthly subscriptions are recognized as revenue in the month it was earned. Annual subscriptions are recorded as deferred revenue and recognized as revenue ratably over the term of the contract.

The Company’s deferred subscription revenue balances as of December 31:

Deferred subscription revenue recognized in revenue for the years ended December 31, 2025 and 2024 that was included in deferred revenue balance as of December 31, 2024 and 2023 were $13.4 million and $14.6 million, respectively.

Affiliate Fee Revenue

The Company generates affiliate fee revenue from agreements with MVPDs for cable networks. It is recognized over time as programming is made available to the customer over the term of the agreement using the output method. For contracts with affiliate fees based on the number of the affiliate’s subscribers, revenues are recognized based on the contractual rate multiplied by the estimated number of subscribers each period. Consideration payable to a customer is treated as a cost of sale when distinct. If a distinct service is not received, such costs are recorded as a reduction to revenues. Affiliate fee contracts are generally multi-year contracts billed monthly with payments due shortly thereafter.

Other

Other primarily includes revenue generated from content licensing agreements and is recognized over the term our symbolic IP is made available. Deferred revenue related to licensing agreements amounts to $0.3 million and $0.3 million as of December 31, 2025 and 2024 respectively.

Product Revenue

Product sales are derived primarily from the sales of books, audio and video, and dietary supplements and are recognized at the point in time control transfers to the customer, which is when the product is shipped. Allowances are considered for estimated returns and refunds when revenue is recognized. As of December 31, 2025 and 2024, the refund liability was $0.7 million and $0.4 million, respectively, and is classified as a reduction in Product revenue and Accounts receivable. Product revenue is comprised of the following for the years ended December 31:

Practical Expedients

As a practical expedient, the Company recognizes any incremental costs of obtaining contracts are recognized as expense when the amortization period is considered to be a year or less.

As a practical expedient, the Company accounts for shipping and handling activities related to contracts with customers as costs to fulfill the promise to transfer the associated products.

Shipping and Handling Costs

Amounts billed to third-party customers for shipping and handling are included as a component of revenue. Shipping and handling costs incurred are included as a component of cost of products sold. Shipping and handling charges recorded as revenue amounted to $0.3 million and $0.3 million for the years ended December 31, 2025 and 2024, respectively.

Cost of Services

Cost of services consists primarily of compensation-related expenses and costs incurred for the publishing of editorial, promotional, and news content across all platforms, as well as amounts due to third party websites and platforms to fulfil customers’ advertising campaigns. Web hosting and advertising serving platform costs are also included in cost of services.

Cost of Products Sold

Cost of product sold consists primarily of cost of inventory sold, fulfillment costs and compensation-related expenses.

General and Administrative expenses

General and administrative expense consists of compensation-related expenses for corporate employees. It also consists of expenses for facilities, professional services fees, insurance costs, legal costs, public company costs, other corporate matters and other general overhead costs.

Accounts Receivable and Allowance for Credit Losses

Accounts receivable is presented net of an allowance for credit losses of $1.7 million and $2.3 million at December 31, 2025 and December 31, 2024, respectively. The Company performs ongoing credit evaluations of its customers and maintains allowances for potential credit losses and doubtful accounts. The Company’s allowance for credit losses is estimated based on historical loss rates, current conditions, reasonable economic forecasts that affect collectability, and known credit issues with specific customers.

Inventory

Inventory consists of promotional items, books and supplements and is stated at the lower of cost (first-in, first-out basis) or net realizable value. The Company also reduces the carrying value of inventories for items identified as excess, obsolete, or slow-moving based on customer demand and other economic factors.

Impairment of Long-Lived Assets

The Company continually evaluates factors, events and circumstances that include, but are not limited to, historical and projected operating performance of the Company, specific industry trends and general economic conditions to assess whether the remaining estimated useful lives of long-lived assets may warrant revision or that the remaining balance of long-lived assets may not be recoverable. When such factors, events or circumstances indicate that long-lived assets should be evaluated for possible impairment, the Company uses an estimate of undiscounted cash flows over the remaining lives of the long-lived assets in measuring their recoverability. The Company measures asset impairment loss as the amount by which the carrying amount exceeds the fair market value of the asset.

Leases

The Company has lease agreements primarily for office facilities and other equipment. At contract inception, the Company determines if a contract is or contains a lease and, if so, whether it is an operating or finance lease. The Company does not separate lease components from non-lease components for real estate leases. Operating lease assets and liabilities are included in the Company’s consolidated balance sheets within the right of use asset, net, and operating lease liability, current and non-current. Finance lease assets are included in Property and equipment, net and Finance lease liability, current and non-current. The Company generally uses the base, non-cancelable, lease term when determining the lease assets and liabilities.

Operating lease liabilities are recorded based on the present value of lease payments over the expected lease term, discounted using the Company's incremental borrowing rate, and adjusted for lease incentives. The interest rate implicit in lease contracts is typically not readily determinable and the Company currently does not have any outstanding borrowings. As such, the Company estimates its incremental borrowing rate based on the rate it would incur to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. Options to extend or terminate a lease are included in the calculation of the lease term to the extent that the option is reasonably certain of exercise.

The Company has made a policy election to exclude short-term leases, those with an original term of less than twelve months, from recognition and measurement under ASC 842. As such, the Company has not recognized an ROU asset or lease liability for these leases.

Property and Equipment

Property and equipment are stated at cost. The Company computes depreciation using the straight-line method over the estimated economic useful lives of the assets. Leasehold improvements are depreciated over the shorter of their estimated economic useful lives or the remaining term lease term.

Other Assets

During 2023, the Company capitalized a separate payment obligation of $41.3 million associated with a commercial counterparty to resolve various claims. The Company accounted for the payment as a reduction to the transaction price and is amortizing the asset as a contra-revenue item over the life of the agreement.

Amortization of the capitalized costs is being recorded on a straight-line basis over the life of the agreement which ends June 30, 2029 as contra revenue in the consolidated statements of operations and comprehensive loss. Amortization expense amounted to $3.1 million and $3.1 million during the years ended December 31, 2025 and 2024, respectively.

The Company evaluates these other assets for impairment each reporting period based upon its estimate of recoverability based upon estimated cash flows including reductions for direct and indirect costs attributable to the underlying business arrangement. The Company didnot recognize an impairment for the years ended December 31, 2025 and 2024.

Funds Held in Escrow

In connection with the settlement agreement reached with Dominion (as defined below in Note 12), the Company established an escrow account to secure the settlement obligations. The escrow funds are restricted in use and are classified as Funds held in escrow on the Company’s consolidated balance sheets. As of December 31, 2025, the balance in the escrow account totaled $40.0 million: $20.0 million as current assets and $20.0 million as noncurrent assets. Pursuant to the terms of the settlement, the escrowed funds will be released in two equal installments of $20.0 million each, payable on or before January 15, 2026 and January 15, 2027. See Note 18 Subsequent Events for details on the January 2026 installment payment.

The escrow account earns interest at an annual rate of 4.02%. As of December 31, 2025, cumulative interest income of $0.6 million has been earned on the escrow balance. The interest income is recorded as a component of other income in the accompanying consolidated statements of operations and comprehensive loss. The related interest receivable is included in prepaid expenses and other current assets on the accompanying consolidated balance sheet.

Share-Based Compensation

The Company accounts for its stock-based compensation awards to employees and non-employees in accordance with FASB ASC Topic 718, Compensation ― Stock Compensation (“ASC 718”). ASC 718 requires all stock-based compensation to employees and non-employees, including grants of employee stock options and restricted stock units, to be recognized in the consolidated statements of operations and comprehensive income (loss) based on their grant date fair values. Compensation expense related to awards to employees is recognized on a straight-line basis based on the grant date fair value over the associated service period of the award, which is generally the vesting term.

The Company's fair value of stock options is determined using the Black-Scholes option pricing model. The model incorporates assumptions including the grant-date fair value of the underlying stock, the risk-free interest rate, and expected volatility based on a peer group. The Company applied the simplified method to estimate the expected term due to the Company's limited exercise information. Additionally, based on its review of contemporaneous public filings, the Company concluded that the awards were not “spring-loaded” under SEC Staff Accounting Bulletin No. 120. Stock-based compensation expense is included in cost of sales and selling, general and administrative expenses in the consolidated statements of operations and comprehensive loss. The Company accounts for forfeitures as they occur.

Fair Value Measurements

The Company carries certain assets and/or liabilities at fair value in the Consolidated Balance Sheets. The Company applies accounting guidance that defines fair value as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. Fair value measurements under the accounting guidance are classified based on the following fair value hierarchy:

Level 1: Quoted market prices in active markets for identical assets or liabilities.

Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data. The Company uses inputs such as actual trade data, benchmark yields, and other similar data, which are obtained from quoted market prices, independent pricing vendors, or other sources, to determine the ultimate fair value of assets or liabilities.

Level 3: Unobservable inputs that are not corroborated by market data.

The fair value of a financial instrument is the amount for which the instrument could be exchanged in a current transaction between willing parties. The level in the fair value hierarchy within which a fair value measurement in its entirety falls is based on the lowest-level input that is significant to the fair value measurement in its entirety.

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, accrued payroll and accrued distribution approximate fair value due to their short-term nature and observable inputs.

Income Taxes

Income taxes are provided for the tax effects of transactions reported in the consolidated financial statements and consist of taxes currently due plus deferred taxes related primarily to operating losses carried forward as well as differences between the financial reporting and tax reporting bases of assets and liabilities. The deferred tax assets and liabilities represent the future tax return consequences of those differences, which also are recognized for operating losses that are available to offset future federal income taxes. The Company files income tax returns in the U.S. federal jurisdiction, and various state jurisdictions. The recording of a deferred tax asset assumes the realization of such asset in the future. Otherwise, a valuation allowance is recorded to reduce the asset to its estimated net realizable value. If management determines that the Company may not be able to realize all or part of a deferred tax asset in the future, a valuation allowance for the deferred tax asset is charged to income tax expense in the period the determination is made.

Management considers all positive and negative evidence including attribute carrybacks, reversing taxable temporary differences, future pretax income, and ongoing prudent and feasible tax planning strategies in assessing the estimated net realizable value of tax assets and the corresponding need for any related valuation allowances. ASC 740 requires a valuation allowance to reduce the deferred tax assets reported if, based on the weight of the evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. At December 31, 2025 and 2024, a full valuation allowance was required.

In accordance with the provisions of ASC 740, Income Taxes, a two-step approach is utilized to recognize and measure uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained upon tax authority examination, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon the ultimate settlement. At December 31, 2025 and 2024, the Company has no liabilities for uncertain tax positions. The Company continually evaluates expiring statutes of limitations, audits, proposed settlements, changes in tax law and new authoritative rulings. The open tax years subject to U.S. federal and State tax examinations with respect to the Company’s operations are 2023, 2024, and 2025.

Advertising Costs

Amounts incurred for advertising costs with third parties are expensed as incurred. Total advertising costs expensed for the years ended December 31, 2025 and 2024 were $21.7 million and $16.9 million, respectively.

Mezzanine Equity - Prior to Conversion

Historically, the Company issued Series A convertible redeemable preferred stock instruments that were determined to be financial instruments with characteristics of both equity and debt. Because the preferred stock was redeemable upon the occurrence of certain events that were not solely within the control of the Company, the instruments were classified as temporary equity.

The Company reassesses the classification of the preferred stock at each reporting date to determine whether the instruments were currently redeemable or probable of becoming redeemable. If redemption became probable, the Company adjusted the carrying value of the preferred stock to its redemption value, with changes recognized immediately as they occurred. In evaluating classification, the Company reviewed all substantive features of the instruments, including redemption provisions and conversion features. The Company determined that the Series A convertible redeemable preferred stock represented an equity host instrument and that no embedded derivatives required bifurcation.

Mezzanine Equity - Conversion During the Current Year

During the year ended December 31, 2025, all outstanding shares of Series A convertible redeemable preferred stock were converted into shares of the Company’s common stock in accordance with the terms of the governing agreements. Following the conversion, the Company no longer has any outstanding instruments classified as temporary equity. For details of the conversion see Footnote 14. Convertible and Redeemable Preferred Stock.

Embedded Derivatives

Embedded derivatives that are required to be bifurcated from the underlying host instrument are accounted for and valued as a separate financial instrument. These embedded derivatives are bifurcated, accounted for at their estimated fair value, which is based on certain estimates and assumptions, and presented separately on the consolidated statements of financial position. Changes in fair value of the embedded derivatives related to the Series B convertible redeemable preferred stock are recognized as a non-cash component of other, net expense in the consolidated statements of operations and comprehensive loss. The fair value for embedded derivatives are measured on a recurring basis using Level 3 inputs.

Warrants

The Company evaluates warrants under ASC 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity. The Company assesses whether the warrant is a freestanding financial instrument and whether it meets the criteria to be classified in stockholders’ equity, or classified as a liability under ASC 480, Distinguishing Liabilities from Equity and ASC 815, Derivatives and Hedging. Warrant liabilities are categorized within Level 3 of the fair value hierarchy and are remeasured at each financial reporting date with any changes in fair value being recognized as a non-cash component of other, net expense in the consolidated statements of operations and comprehensive loss.

Net Loss Per Share

The holders of our Class A and Class B common stock have identical liquidation and dividend rights but different voting rights. Accordingly, we present the earnings per share (EPS) for Class A and Class B common stock together. Basic and diluted loss per share is computed as net loss available to common stockholders divided by the weighted average number of shares outstanding for the period. For the years ended December 31, 2025 and 2024, all dilutive securities have been excluded as their inclusion would have had an antidilutive effect on loss per share. Potentially dilutive common shares include warrants, convertible preferred stock, and stock options.

Recently Adopted Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”) to enhance transparency and decision usefulness of income tax disclosures. ASU 2023-09 requires greater standardization and disaggregation of categories within an entity’s tax rate reconciliation disclosure, as well as disclosure of income taxes paid by jurisdiction, among other requirements.. The Company adopted this standard retrospectively for the period ending December 31, 2025 (See Note 8. Income Taxes).

Recent Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires additional disclosures of the nature of expenses included in the income statement. The new standard requires disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses. The amendments in this update are effective for fiscal years beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027 on a prospective basis, with early adoption permitted. The Company is currently evaluating the provisions of the amendments and the impact on its disclosures.

In July 2025, the FASB issued ASU 2025-05, Measurement of Credit Losses for Accounts Receivable and Contract Assets(“ASU 2025-05”), which provides a practical expedient to measure credit losses on accounts receivable and contract assets. The ASU is effective for annual periods beginning after December 15, 2025, and interim periods with those annual reporting periods. The Company is currently evaluating the effects of this ASU on its calculation for credit losses.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow Scope Improvements(“ASU 2025-11”). This standard is intended to enhance the existing interim reporting guidance by improving the organization and accessibility of required interim disclosure requirements, clarifying when that guidance is applicable, and introducing a new principle requiring disclosure of events occurring after the end of the most recent annual reporting period that have a material impact on the company. This standard is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The standard may be applied prospectively to interim financial statements issued for periods subsequent to the effective date, or retrospectively to any or all prior periods presented. The Company is currently evaluating the provisions of the amendments and the impact on its disclosures.

NOTE 3. FAIR VALUE MEASUREMENTS

The Company accounts for its investments at fair value and classifies these assets within the fair value hierarchy (Level 1, Level 2, or Level 3). Assets and liabilities subject to fair value measurements are as follows:

The Company’s Level 2 investments are valued using third-party pricing sources. The pricing services utilize industry standard valuation models, including both income and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. U.S. treasury notes and bills are considered Level 2 investments when they were issued before the most recent issue and were still outstanding at measurement day (off-the-run). There were no transfers in or out of Level 3 investments for the year ended December 31, 2025. In connection with the Company's IPO, previously outstanding Level 3 warrant and derivative liabilities were settled and derecognized.

The valuation methodologies and significant unobservable inputs for Level 3 investments are disclosed in the following tables. For the warrant liability that was revalued and then reclassified during 2025, the fair value inputs are as of the date of revaluation. For the derivative liability that was revalued and then reclassified during 2025, the fair value was equivalent to its intrinsic value.

Changes in Level 3 liabilities measured at fair value on a recurring basis for the year ended December 31, 2025 were as follows:

NOTE 4. PROPERTY AND EQUIPMENT

Major classes of property and equipment are as follows:

Depreciation of property and equipment amounted to $2.8 million and $3.1 million for the years ended December 31, 2025 and 2024, respectively.

Included in property and equipment are finance lease assets of $0.3 million and $0.4 million as of December 31, 2025 and 2024, respectively.

NOTE 5. INVESTMENTS

Investments on the consolidated balance sheets consisted of the following at December 31:

The major classes of the Company's available-for-sale investment securities and their respective fair values at December 31, 2025, were as follows:

The maturity distribution based on the contractual terms of the Company's available-for-sale investment securities at December 31, 2025 was as follows:

The Company had 21 investments mature during the year ended December 31, 2025. There wereno material realized gains or losses from available for sale securities that were reclassified out of accumulated other comprehensive income for the year ended December 31, 2025.

NOTE 6. LEASES

Below is a summary of the weighted-average discount rate and weighted-average remaining lease terms at December 31:

The Company’s total operating and finance lease expense all relate to lease costs and amounted to $5.0 million and $5.1 million for the years ended December 31, 2025 and December 31, 2024, respectively.

Future minimum lease payments at December 31, 2025 were as follows:

NOTE 7. LINE OF CREDIT

The Company had a $9.0 million available line of credit which expired in October 2024. In May 2025 the Company renewed the existing line of credit with an available balance of $1.0 million and a maturity date of January 04, 2026. Upon maturity, the facility automatically converted to a demand note. The Company also established a new line of credit in May 2025 with an available balance of $8.0 million maturing April 26, 2026. Both lines of credit bear interest at the greater of (i) one percent (1.000%) or (ii) the Prime Rate minus seventy five hundredths percent (-0.750%). There wereno borrowings outstanding as of December 31, 2025 and December 31, 2024.

NOTE 8. INCOME TAXES

The components of income tax expense related to its operations are as follows at December 31:

A reconciliation of the provision for income taxes to the amount computed by applying the 21% statutory U.S. federal income tax rate to income before income taxes after the adoption of ASU 2023-09 is as follows:

The components of deferred income tax assets and liabilities in the Company’s consolidated financial statements are as follows at December 31:

The Company anticipates that it is more likely than not that most of its net deferred tax assets will not be realized and we have recorded a valuation allowance against such net deferred tax assets. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. In making such a determination, we considered all available positive and negative evidence, including our past operating results, forecasted earnings, frequency and severity of current and cumulative losses, duration of statutory carryforward periods, future taxable income and prudent and feasible tax planning strategies. The realization of our NOLs and certain other deferred tax assets may be further limited due to the application of IRC Section 382 and state equivalent statutes.

As of December 31, 2025, we had U.S. Federal NOL carryforwards of $240.7 million generated in tax years 2011 through 2025, of which $20.8 million will expire from 2031 to 2037 and $219.9 million, will carryforward indefinitely. We have state NOL carryforwards of $209.0 million generated in tax years 2009 through 2025. The state NOL carryforwards of $132.3 million will expire from 2025 to 2044 and $76.7 million will carry forward indefinitely.

As of December 31, 2025 we have recorded a valuation allowance of $80.1 million for the portion of the deferred tax asset that did not meet the more-likely-than-not realization criteria. We increased the valuation allowance on our net deferred taxes by $24.1 million during 2025.

We do not have any unrecorded unrecognized tax positions (“UTPs”) as of December 31, 2025. While we currently do not have any UTPs, it is foreseeable that the calculation of our tax liabilities may involve dealing with uncertainties in the application of complex tax laws and regulations in a multitude of jurisdictions across our global operations. ASC 740 states that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, on the basis of the technical merits.

Upon identification of a UTP, we would (1) record the UTP as a liability in accordance with ASC 740 and (2) adjust these liabilities if/when management’s judgment changes as a result of the evaluation of new information not previously available. Ultimate resolution of UTPs may produce a result that is materially different from an entity’s estimate of the potential liability. In accordance with ASC 740, we would reflect these differences as increases or decreases to income tax expense in the period in which new information is available. If any, we recognize and include interest and penalties accrued on uncertain tax positions as a component of income tax expense.

On July 4, 2025, U.S. tax legislation was signed into law (known as the “One Big Beautiful Bill Act” or “OBBBA”) which makes permanent many of the tax provisions enacted in 2017 as part of the Tax Cuts and Jobs Act that were set to expire at the end of 2025. In addition, the OBBBA makes changes to certain U.S. corporate tax provisions, many of which are generally not effective until January 1, 2026. The OBBBA did not have a material effect on the Company’s consolidated financial statements for the fiscal year ended December 31, 2025. The Company is currently evaluating the future impact of the OBBBA, but does not expect it will have a material impact on its consolidated financial statements.

NOTE 9. SEGMENT INFORMATION

The Company hastwo operating segments: (1) Broadcasting and (2) Digital, which both qualify as reportable segments. In accordance with ASC 280, “Segment Reporting,” the operating segments reflect how the chief operating decision maker (“CODM”), which is our Chief Executive Officer, assesses the performance of each operating segment and determines the appropriate allocations of resources to each segment. The Company continually reviews its operating segment classifications to align with operational changes in our business and may make changes as necessary. The Company evaluates performance based upon several factors, of which the primary financial measure is Segment Adjusted EBITDA.

Due to the integrated nature of these operating segments, estimates and judgments are made in allocating certain assets, revenues and expenses.

Segment Adjusted EBITDA is defined as segment revenues less segment cost of revenues and segment general and administrative expenses and excludes depreciation, interest, net, asset impairment, unrealized gain (loss) on marketable securities, other corporate matters, other, net and income tax expense. Other corporate matters represent certain litigation expenses, and related fees, for specific proceedings that the Company has determined are infrequent and unusual in terms of their magnitude.

Segment Adjusted EBITDA is used by our CODM for evaluating the operating performance of the Company’s business segments to evaluate the performance of and allocate resources. The Company does not present asset information for its segments as this financial information is not used by the CODM to allocate resources. The following tables set forth the Company’s Revenues by Segment and Segment Adjusted EBITDA for fiscal 2025 and 2024:

(1) Adjusted cost of sales includes cost of sales less stock-based compensation.

(2) Adjusted general and administrative expenses includes general and administrative expenses less depreciation, stock-based compensation and other corporate matters.

(3) For the year ended December 31, 2025, Other, net primarily consisted of the final fair market adjustments of the Warrant liability and Derivative liability for$1.8 million and$6.1 million, respectively.

The following tables set forth the Company’s Revenues by Segment for fiscal 2025 and 2024:

NOTE 10. CONCENTRATIONS OF CREDIT RISKS

Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash, short-term investments available-for-sale and accounts receivable. Management believes the financial risks associated with these financial instruments are minimal.

The Company places its cash, and its short-term investments with high credit quality financial institutions. The Company maintains its cash in bank deposit accounts that, at times, may exceed federally insured limits. The Company has not experienced any associated losses due to this policy. The Company's short-term investments are generally deemed to be low risk; however, the longer the duration of a security, the more susceptible it is to changes in market interest rates and bond yields. As the balance of the Company's short-term investments has grown, the market risk related to those investments has grown as well.

Concentrations of credit risk with respect to accounts receivable are limited because a large number of geographically diverse customers make up the Company’s customer base. The Company manages its credit risk through credit approvals, setting reasonable credit limits and regularly monitoring activities. The Company performs credit evaluations of its commercial customers but generally does not require collateral.

No single customer accounted for over 10% of the Company’s consolidated net revenues during either of the years ended December 31, 2025 or 2024. No single customer accounted for over 10% of the Company’s consolidated accounts receivable as of December 31, 2025 or 2024.

NOTE 11. COMMITMENTS AND CONTINGENCIES

The Company has commitments under certain firm contractual arrangements (“firm commitments”) to make future payments. These firm commitments secure the future rights to various assets and services to be used in the normal course of operations. The following table summarizes the Company’s material firm commitments for contracts that run through 2028 as of December 31, 2025:

NOTE 12. LEGAL

Legal Matters

From time to time, the Company may be involved in various claims, lawsuits, and disputes with third parties, actions involving allegations of discrimination or breach of contract incidental to the ordinary operations of the business. In the opinion of management, the amount of ultimate liability with respect to these actions will not have a material adverse impact on the Company’s consolidated financial position or results of consolidated operations or consolidated cash flows. The Company accrues for loss contingencies that are probable and reasonably estimable. The Company generally does not accrue for legal costs expected to be incurred with a loss contingency until those services are provided.

On September 26, 2024, the Company entered into a settlement agreement with Smartmatic pursuant to which the parties agreed to resolve the lawsuits among them. The Company agreed to pay a settlement of approximately $40 million payable over time and granted afive year warrant to purchase 2,000 shares of Series B preferred stock at an exercise price of $5,000 per share. Refer to Note 15. Equity for details of the warrant. The settlement expense, inclusive of the warrant, is included in other corporate matters in the Consolidated Statements of Operations and Comprehensive (Loss) Income for the year ended December 31, 2024. The $40 million payable over time is recorded within settlement liability on the consolidated balance sheet as of December 31, 2024. As of December 31, 2025 the outstanding balance was fully satisfied.

On August 15, 2025, Newsmax Media, Inc. and Newsmax Broadcasting, LLC entered into a settlement agreement with Dominion Voting Systems, Inc. and certain of its affiliates (“Dominion”), pursuant to which such parties agreed to resolve the lawsuit among them for a total amount of $67.0 million. The payments will be made inthree installments: (1) $27.0 million was paid on August 15, 2025; (2) $20.0 million on or before January 15, 2026; and (3) $20.0 million on or before January 15, 2027. The settlement expense is included in other corporate matters in the Consolidated Statements of Operations and Comprehensive (Loss) Income for the year ended December 31, 2025. The $40.0 million payable over time is recorded within settlement liability on the consolidated balance sheet. At December 31, 2025 the outstanding balance of the settlement is $40 million. The fair value of the settlement agreement as of December 31, 2025 was $38.1 million, representing the present value of future settlement payments due on January 15, 2026 and January 15, 2027 discounted at an annual rate of 9.75%. The fair value measurement is disclosed for information purposes and is not reflected in the carrying amount on the consolidated balance sheet.

In 2023, the Company entered into a settlement agreement with a commercial counterparty for $41.3 million. As of December 31, 2025, and pursuant to the payment schedule associated with this settlement agreement, the Company has a total of approximately $29.6 million remaining to be paid over time. The fair value of the settlement agreement as of December 31, 2025 and 2024 was $24.9 million and $27.7 million, respectively, which assumes a discount rate of 9.75% and making quarterly payments for 42 and 54 months, respectively. The fair value measurement is disclosed for information purposes and is not reflected in the carrying amount on the consolidated balance sheet.

The table below represents the estimated timing of payments over the term of the agreements as of December 31, 2025.

NOTE 13. EMPLOYEE BENEFIT PLANS

The Company maintains a 401(k) Salary Savings Plan (the “401k Plan”) covering eligible employees. The matching contribution is at the discretion of the Company’s board of directors. The Company’s policy is to match 100% of the first 2% of employee contributions and 50% on the next 2 to 6% of employee contributions. Total compensation expense for the 401k Plan for the years ended December 31, 2025 and 2024 amounted to $1.6 million and $1.2 million, respectively.

NOTE 14. CONVERTIBLE AND REDEEMABLE PREFERRED STOCK

Convertible and Redeemable Preferred Stock

Prior to the March 28, 2025 initial public offering, the Company had outstanding Convertible and Redeemable Preferred Stock, which converted into shares of common A and common B shares. in connection with the initial public offering. The conversion included accumulated dividends on the Redeemable Preferred Stock except for those shares held bytwo preferred stockholders who elected to receive their accumulated dividends in cash on the initial public offering date. As of December 31, 2025, the Company doesnot have Convertible and Redeemable Preferred Stock outstanding.

Convertible and Redeemable Preferred Stock as of December 31, 2024 (71,034 total shares authorized and all classes are $0.001 par value per share) is as follows. The conversion prices and conversion ratios presented in this footnote have not been adjusted for the stock split disclosed in Note 1. Nature of Business:

Prior to the March 28, 2025 initial public offering, the Company’s Series A convertible preferred stock was classified as mezzanine equity and Series B convertible preferred stock was classified as permanent equity in the Company's consolidated financial statements.

The Company measured the Series A preferred stock where redemption was probable at its maximum redemption value plus dividends not declared or paid but which would be payable upon redemption. On December 31, 2024, the preferred stock was remeasured, resulting in a maximum redemption value of $128.6 million and accretion of $12.8 million, included in Accumulated Deficit on the consolidated balance sheets as of December 31, 2024. On March 28, 2025 the preferred stock was remeasured for the IPO resulting in in a maximum redemption value of $129.2 million and additional accretion of $0.6 million, included in accumulated deficit on the consolidated balance sheets as of December 31, 2025.

The Series B preferred stock included certain redemption rights that were solely in the control of the Company, including redemption upon sale or liquidation of the Company, and an in-substance redemption feature associated with the conversion terms of the Series B preferred stock upon IPO. The stock was recorded in permanent equity on the consolidated balance sheets as of December 31, 2024. The redemption features were bifurcated as an embedded derivative and were accounted for as a derivative liability on the consolidated balance sheet.

As of December 31, 2024, the Company has not recognized an accrual for unpaid dividends on preferred stock which amount to $33,729,540. Included in these amounts are dividends that have been accreted to the preferred stock being measured at its maximum redemption value which is explained below.

The fair value of the embedded derivative was estimated using a scenario-based discounted cash flow method. The valuation methodology included assumptions and judgments regarding discount rates and timing of conversion, which were primarily level 3 assumptions. The embedded derivative was measured at fair value on a recurring basis and any changes in fair value in a subsequent period were be recorded to other income (expense). For the year ended December 31, 2025, the Company recognized a loss of $6.1 million in fair value adjustments in other, net on the consolidated statements of operations and comprehensive loss related to the change in net fair value between the beginning of the year and the conversion of the Series B preferred stock upon IPO. For the year ended December 31, 2024, the Company recognized a loss of $0.9 million in fair value adjustments in other, net on the consolidated statements of operations and comprehensive loss.

NOTE 15. EQUITY

Common Stock A – As of December 31, 2025 and December 31, 2024, the Company was authorized to issue 50,000,000 shares of common stock, with a par value of $0.001 per share.

Common Stock B - As of December 31, 2025 and December 31, 2024, the Company was authorized to issue 940,000,000 shares of common stock, with a par value of $0.001 per share.

Settlement Warrant - On September 26, 2024, the Company granted afive year warrant to purchase 2,000 shares of Series B preferred stock at an exercise price of $5,000 per share in connection with a settlement agreement with Smartmatic. Following the conversion of the underlying Series B preferred stock into Class B common stock in connection with the Company's March 28, 2025 initial public offering, Smartmatic has afive year warrant to purchase 1,333,333 shares of Class B common stock at an exercise price of $7.50 per share. Refer to Note 12. Legal for details of the settlement.

The exercise price and the number of shares of the warrant are subject to adjustment for standard anti-dilution provisions. The warrant is fully vested and exercisable as of December 31, 2025. Exercise of the warrant would result in the Company recognizing a $10 million increase in gross proceeds. Prior to conversion of the underlying Series B preferred stock into Class B common stock, the settlement warrant did not meet the conditions to be classified in equity, and therefore the Company assessed and confirmed it met the definition of a liability under ASC 815 and ASC 480 and it was recognized on the balance sheet at fair value. Following the conversion of the underlying Series B preferred shares to Class B common shares as a result of the Company's March 28, 2025 offering, the warrant meets the conditions for equity classification. As a result, the warrant has been recorded in equity at its March 28, 2025 fair value of $8.3 million, determined in accordance with the Company's fair value measurement policies described in Note 3. Fair Value Measurements, with a final fair value adjustment loss of $1.8 million recorded in other, net on the December 31, 2025 consolidated statements of operations and comprehensive (loss).

Agent Warrants - The Company agreed to issue athree-year warrant to the placement agent associated with the Private Placement of shares of the Company's Series B convertible preferred Stock. The number of shares under the warrant is equal to 2% of the total shares raised under the private placement with an exercise price of $5,000 per share. The warrant is fully vested and exercisable as of December 31, 2025. Following the conversion of the underlying Series B preferred stock into Class B common stock in connection with the Company's March 28, 2025 initial public offering, the agent has athree-year warrant to purchase 600,000 shares of Class B common stock at an exercise price is $7.50 per share. The warrant holder has the option to elect net share settlement. The effective date of the warrant is the date of the final close of the private placement offering. The Company evaluated the warrant under ASC 718, Compensation - Stock Compensation and determined that the award was non-employee share-based compensation that does not meet the criteria for liability classification. As a result, the warrant was classified in equity in the Company's consolidated balance sheets as of December 31, 2025.

Standby Equity Purchase Agreement - On April 4, 2025, the Company entered into a $1.2 billion Standby Equity Purchase Agreement (“SEPA”) with Yorkville pursuant to which the Company has the right to direct Yorkville during the 24 month term of the agreement to purchase common stock subject to certain limitations and conditions set forth in the SEPA. There were no purchases of common stock associated with the SEPA during the year ended December 31, 2025.

As consideration under the SEPA, the Company paid to Yorkville (i) a structuring fee in the amount of $25,000 and (ii) a commitment fee of $500,000 of shares of Class B common stock equal to the commitment fee divided by the daily VWAP of the common shares during the trading day immediately prior to the effective date of the SEPA. The structuring fee and commitment fee were expensed in full immediately following the consummation of the SEPA and is recorded within the professional fees in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2025.

NOTE 16. EQUITY-BASED COMPENSATION

On March 28, 2025, the Company's board of directors adopted the 2025 Omnibus Equity Incentive Plan (the “2025 Incentive Plan”) and it was approved by the Company's shareholders on March 24, 2025 (the “Effective Date”). Under the 2025 Incentive Plan,6,500,000 shares of Class B Common Stock are initially available for grant. The Company's administrator may grant incentive stock options (“ISOs”), non-statutory stock options, stock appreciation rights, restricted stock, restricted stock units and other stock-based awards to participants to acquire shares of common stock under the 2025 Incentive Plan. The 2025 Incentive Plan is administered by the board of directors.

Pursuant to the terms of the 2025 Incentive Plan, the number of shares of Class B common stock reserved for issuance under the plan automatically increases on January 1 of each year, beginning January 1, 2026 and continuing through January 1, 2035, by an amount equal to the lesser of: (a)5% of the total number of shares of common stock outstanding on December 31 of the immediately preceding fiscal year, or (b) such lesser number of shares (including zero) as determined at the discretion of the board of directors prior to the applicable January 1.

On March 28, 2025, the Company granted stock options to employees and certain service providers to purchase an aggregate of 3,382,000 shares of common stock at an exercise price of $10.00 per share, which was the fair market value on the grant date. These options allow for early exercise after 90 days, vest over 1.5 years, and expire 10 years from the grant date. Proceeds received from the early exercise of stock options are recorded as a share repurchase liability on the balance sheet and reclassified into additional paid-in capital as such awards vest.

As of December 31, 2025, the Company’s total estimated compensation cost, not yet recognized, related to non-vested equity awards held by the Company’s employees under the 2025 Plan was approximately $10.0 million and is expected to be recognized over a weighted average period of 0.8 years.

As of December 31, 2025, the Company had 3,123,092 shares of Class B common stock reserved under the 2025 Incentive Plan for future issuance as equity-based compensation.

The Company granted 703,507 options under the previous equity incentive plan which were fully vested as of December 31, 2025.

The following table summarizes the activities for the Company's stock options for the year ended December 31, 2025:

The table below summarizes the resulting weighted average inputs used to calculate the estimated fair value of options awarded under the 2025 Incentive Plan for the year ended:

Upon exercise of the option, the holder may pay in full the option exercise price in cash or any other method, if any, and including a broker-assisted cashless exercise arrangement, if approved by the administrator. Stock options issued under the 2025 Incentive Plan are non-transferable.

Cash received from exercise of share options for the year ended December 31, 2025 totaled $7,882,962 and resulted in issuance of 928,410 shares of Class B common shares.

Intrinsic value is the amount by which the fair value of the underlying stock exceeds the exercise price of an option. The aggregate intrinsic value of exercised options during the year ended December 31, 2025 totaled $11,680,144. The aggregate intrinsic value of outstanding options as of December 31, 2025 totaled $1,156,274.

The following table shows the weighted average remaining contractual term for outstanding options that are exercisable (including 419,025 vested options and 2,637,368 options which are early exercisable) as of December 31, 2025:

The equity-based compensation expense was recorded in the consolidated statements of operations and comprehensive loss for the years ended December 31, 2025 and 2024 as follows:

NOTE 17. LOSS PER SHARE

The following table illustrates the reconciliation of the basic and diluted loss per share computations.

The following outstanding potentially dilutive shares were excluded from the computation of diluted net loss per share attributable to common stock for the periods presented because the impact of including them would have been anti-dilutive.

NOTE 18. SUBSEQUENT EVENTS

On January 15, 2026, the Company made its second ofthree installment payments totaling $20.0 million to Dominion. See Note 12: Legal for additional information.