エドガーで原本を確認する
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
or
For the transition period from ___________ to ___________
Commission File Number:
(Exact Name of Registrant as Specified in its Charter)
| State or Other Jurisdiction of Incorporation or Organization |
I.R.S. Employer Identification No. |
| Address of Principal Executive Offices | Zip Code |
Registrant’s Telephone Number, Including Area Code
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No
The registrant had
HOUSE OF DOGE INC.
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”). In particular, statements contained in this Quarterly Report on Form 10-Q, including but not limited to, statements regarding the sufficiency of our cash, our ability to finance our operations and business initiatives and obtain funding for such activities; our future results of operations and financial position, business strategy and plan prospects, or costs and objectives of management for future acquisitions, are forward looking statements. These forward-looking statements relate to our future plans, objectives, expectations and intentions and may be identified by words such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “seeks,” “goals,” “estimates,” “predicts,” “potential” and “continue” or similar words. Readers are cautioned that these forward-looking statements are based on our current beliefs, expectations and assumptions and are subject to risks, uncertainties, and assumptions that are difficult to predict, including those identified below, under Part II, Item lA. “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Therefore, actual results may differ materially and adversely from those expressed, projected or implied in any forward-looking statements. We undertake no obligation to revise or update any forward-looking statements for any reason.
NOTE REGARDING COMPANY REFERENCES
Throughout this Quarterly Report on Form 10-Q, the terms “House of Doge”, “HOD”, “Brag House,” “we,” “us,” “our,” “our company,” “Company” and “our business” refer to House of Doge Inc. and its wholly owned subsidiaries, House of Doge (U.S.) Inc., Dogecoin Ventures, Inc., The Official Dogecoin Treasury and Reserve Inc., House of Doge Canada Inc., Brag House Inc. and Brag House Ltd.
FORM 10-Q
TABLE OF CONTENTS
i
PART I - FINANCIAL INFORMATION
Item 1. Interim Condensed Consolidated Financial Statements (Unaudited)
| House of Doge Inc. |
| Interim Condensed Consolidated Statements of Financial Position |
| (Unaudited, in United States dollars, except for per share data) |
| June 30, 2026 |
March 31, 2026 |
|||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable, net | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Short-term investments - related party | ||||||||
| Short-term investments | ||||||||
| Total current assets | ||||||||
| Non-current assets | ||||||||
| Property and equipment, net | ||||||||
| Intangible assets, net | ||||||||
| Long-term investments - related party | ||||||||
| Long-term investments | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued liabilities | $ | $ | ||||||
| Current portion of license contract liability | ||||||||
| Warrant derivative liability | ||||||||
| Related party debt | ||||||||
| Short-term debt | ||||||||
| Total current liabilities | ||||||||
| Long-term liabilities | ||||||||
| License contract liability | ||||||||
| Total liabilities | ||||||||
| Stockholders’ equity | ||||||||
| Common stock subscribed but unissued | ||||||||
| Common stock | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated other comprehensive income | ||||||||
| Retained earnings (accumulated deficit) | ( | ) | ( | ) | ||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
The accompanying notes are an integral part of the Unaudited Interim Condensed Consolidated Financial Statements
1
| House of Doge Inc. |
| Interim Condensed Consolidated Statement of Loss and Comprehensive Loss |
| (Unaudited, in United States dollars, except for per share data) |
| For the three month period ending | ||||||||
| June 30, 2026 | June 30, 2025 | |||||||
| Revenue | $ | $ | ||||||
| Operating (income) expenses | ||||||||
| Professional and legal | ||||||||
| Advertising and marketing | ||||||||
| General and administrative | ||||||||
| Depreciation of property and equipment | ||||||||
| Amortization of intangible assets | ||||||||
| Change in fair value of digital assets | ||||||||
| Change in fair value of equity guarantee liability | ||||||||
| Change in fair value of investments | ( | ) | ||||||
| Loss on disposal of assets | ||||||||
| Impairment of assets | ||||||||
| Total operating (income) expenses | ( | ) | ||||||
| Operating (income) loss | ( | ) | ||||||
| Other expense (income) | ||||||||
| Finance expense | ||||||||
| Foreign exchange loss | ||||||||
| Total other expense | $ | $ | ||||||
| Net income (loss) for the period | $ | $ | ( | ) | ||||
| Gain on change in fair value of investment | ||||||||
| Foreign currency translation adjustment | ||||||||
| Net comprehensive income (loss) for the period | $ | $ | ( | ) | ||||
| Weighted average number of shares of common stock outstanding, basic | ||||||||
| Net income (loss) per share, basic | $ | $ | ( | ) | ||||
| Weighted average number of shares of common stock outstanding, diluted | ||||||||
| Net income (loss) per share, diluted | $ | $ | ( | ) | ||||
The accompanying notes are an integral part of the Unaudited Interim Condensed Consolidated Financial Statements
2
| House of Doge Inc. |
| Interim Condensed Consolidated Statement of Changes in Stockholders’ Equity |
| (Unaudited, in United States dollars, except for per share data) |
| Common stock | Series C preferred stock |
Additional paid-in |
Common stock subscribed but |
Retained earnings (accumulated |
Accumulated other comprehensive |
Total stockholders’ |
||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | capital | unissued | deficit) | income | equity | ||||||||||||||||||||||||||||
| For the Three Months Ended June 30, 2026 | ||||||||||||||||||||||||||||||||||||
| Balance, March 31, 2026, as retrospectively recast | $ | $ | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||||||||||||||
| Reclassification of common shares into Series C at merger | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Settlement of vested restricted stock units at merger | ( | ) | ||||||||||||||||||||||||||||||||||
| Reverse recapitalization with legacy shares and net assets | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||
| Share-based compensation | - | - | ||||||||||||||||||||||||||||||||||
| Issuance of common stock subscribed in advance | - | - | ||||||||||||||||||||||||||||||||||
| Income for the period | - | - | ||||||||||||||||||||||||||||||||||
| Other comprehensive income | - | - | ||||||||||||||||||||||||||||||||||
| Balance, June 30, 2026 | ( | ) | ||||||||||||||||||||||||||||||||||
| Common stock | Series C preferred stock |
Additional paid-in |
Common stock subscribed but |
Retained earnings (accumulated |
Accumulated other comprehensive |
Total stockholders’ |
||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | capital | unissued | deficit) | income | equity | ||||||||||||||||||||||||||||
| For the Three Months Ended June 30, 2025 | ||||||||||||||||||||||||||||||||||||
| Balance, March 31, 2025, as retrospectively recast | $ | $ | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||||||||||||||
| Issuance of common stock for proceeds | - | |||||||||||||||||||||||||||||||||||
| Issuance of common stock for services | - | |||||||||||||||||||||||||||||||||||
| Issuance of common stock for licensing agreement | - | |||||||||||||||||||||||||||||||||||
| Issuance of common stock subscribed in advance | - | ( | ) | |||||||||||||||||||||||||||||||||
| Share-based compensation | - | - | ||||||||||||||||||||||||||||||||||
| Loss for the period | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Balance, June 30, 2025, as retrospectively recast | $ | ( | ) | |||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of the Unaudited Interim Condensed Consolidated Financial Statements
3
| House of Doge Inc. |
| Interim Condensed Consolidated Statement of Cash Flows |
| (Unaudited, in United States dollars, except for per share data) |
| For the three month period ending | ||||||||
| June 30, 2026 | June 30, 2025 | |||||||
| Cash flows from operating activities | ||||||||
| Income (loss) for the period | $ | $ | ( | ) | ||||
| Adjustments for: | ||||||||
| Depreciation of property and equipment | ||||||||
| Amortization of intangibles | ||||||||
| Share-based compensation | ||||||||
| Common stock issued for services | ||||||||
| Finance expense | ||||||||
| Change in fair value of digital assets | ||||||||
| Change in fair value of equity guarantee liability | ||||||||
| Change in fair value of investments | ( | ) | ||||||
| Impairment of assets | ||||||||
| Loss on disposal of assets | ||||||||
| Change in non-cash working capital items: | ||||||||
| Accounts receivable, net | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Accounts payable and accrued liabilities | ||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities | ||||||||
| Purchase of property and equipment | ( | ) | ||||||
| Purchase of investments - related party | ( | ) | ||||||
| Purchase of investments | ( | ) | ( | ) | ||||
| Proceeds from sale of investments | ||||||||
| Payment of license liability | ( | ) | ( | ) | ||||
| Purchase of digital assets | ( | ) | ||||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities | ||||||||
| Proceeds from issuance of common stock | ||||||||
| Proceeds from reverse recapitalization | ||||||||
| Proceeds from short-term debt | ||||||||
| Proceeds from related party debt | ||||||||
| Repayment of short-term debts | ( | ) | ||||||
| Net cash provided by financing activities | ||||||||
| Effect of foreign exchange translation on cash | ||||||||
| Net increase (decrease) in cash and cash equivalents | ( | ) | ||||||
| Cash and cash equivalents, beginning of period | ||||||||
| Cash and cash equivalents, end of period | $ | $ | ||||||
| Supplemental cash flow information | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Non-cash transactions: | ||||||||
| Supplemental non-cash effect of reverse recapitalization | ||||||||
| Equity issued for reverse recapitalization | ||||||||
| Deferred cost applied against reverse recapitalization | ||||||||
| Recognition of par value after reverse recapitalization | ||||||||
| Stock issued for advance subscriptions | ||||||||
| Stock issued for services | ||||||||
| Stock issued for licensing agreement | ||||||||
| Digital assets paid for investments | ||||||||
The accompanying notes are an integral part of the Unaudited Interim Condensed Consolidated Financial Statements
4
House of Doge Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(In United States dollars, except for per share data)
1. Organization and Business overview
On June 30, 2026 (the “Effective Date”), House of Doge Inc. (formerly Brag House Holdings, Inc.) (the “Company”) completed its previously announced merger pursuant to the Merger Agreement, dated as of October 12, 2025, as amended, by and among the Company, Brag House Merger Sub, Inc., a Delaware corporation (“Merger Sub”), and House of Doge Inc. (the “Merger Agreement”). Pursuant to the Merger Agreement, House of Doge Inc. had merged with and into Merger Sub, with House of Doge Inc. (now renamed House of Doge (U.S.) Inc. (“HOD US”) surviving as a wholly-owned subsidiary of the Company.
Pursuant to the terms of the Merger Agreement, the board of directors of the Company (the “Board”) was increased from five directors to six directors and each of Lavell Juan Malloy II, Daniel Leibovich, DeLu Jackson, Scott Woller, and Kevin Foster resigned as directors of the Company, and Michael Galloro, Sarosh Mistry, Timothy Stebbing, Doug Wall, Stephen Ilott and Duncan Moir were appointed as directors. Also pursuant to the Merger Agreement, Mr. Malloy resigned as the Company’s Chief Executive Officer, Mr. Leibovich resigned as the Company’s Chief Operating Officer, Rene Rodriguez resigned as the Company’s Acting Chief Financial Officer, Marco Margiotta was appointed the Company’s Chief Executive Officer and Charles Park was appointed the Company’s Chief Financial Officer.
In conjunction with the closing of the Merger, the Company transferred all of the Company’s pre-Merger business and operations to the Company’s wholly-owned subsidiary, Brag House, Inc. (“Brag House”), such that immediately following the closing of the Merger, the Company became a holding company.
House of Doge Business Overview
Through a strategic Trademark License agreement that was previously entered into by HOD US and the Dogecoin Foundation on January 31, 2025, as amended and restated on May 7, 2025, and as further amended on June 25, 2025 (the “Dogecoin Foundation Agreement”), the Company has become the official corporate arm of the Dogecoin Foundation, serving as its exclusive commercialization partner.
The Company is committed to advancing Dogecoin ($DOGE) as a widely accepted and decentralized global digital currency through infrastructure investments needed to integrate Dogecoin into everyday commerce and through cultural partnerships. House of Doge is currently building secure, scalable, and efficient systems for real-world use that includes digital payments and financial products, as well as real-world asset tokenization. The Company currently has approximately 29 employees and staff (inclusive of Brag House personnel), located primarily in North America, Australia and New Zealand.
Since it commenced operations in January 2025, the Company, through its wholly-owned subsidiary Dogecoin Ventures, Inc. was previously engaged as an asset manager along with 21 Shares for The Official Dogecoin Treasury, held as a treasury reserve asset by CleanCore Solutions, Inc. (NYSE: ZONE). Also, in partnership with 21 Shares, HOD has supported the launch of 21 Shares’ Dogecoin exchange traded product that is currently listed on the SIX Swiss Exchange, as well as the 21Shares Dogecoin ETF (Nasdaq: TDOG) in the United States that was launched in January 2026. HOD continues to earn support service fees from its partnership with 21 Shares on the exchange traded products.
The Dogecoin Foundation Agreement grants the Company with an exclusive, royalty-bearing license to use certain trademarks, including the DOGECOIN mark, for the manufacture, sale, and distribution of licensed goods and services worldwide. The Company is required to pay a
HOD has also made strategic equity investments and sponsorship deals in each of HC Sierre Hockey Club, a professional ice hockey team competing in the Swiss League, U.S. Triestina Calcio 1918 S.r.l, a professional football (soccer) club competing in the Series D Italian football league, and most recently in the newly formed Milano Hockey Club, a professional hockey club that will compete in the ICE Hockey League in Europe. Each of these investments advances HOD’s long-term real-world asset expansion strategy, as well as bringing digital and cryptocurrency innovations, new models of fan ownership, and community-aligned infrastructure into professional sports.
The headquarters and principal registered address of the Company is located at 261 NE 61st Street, Miami, Florida, 33137, USA.
5
House of Doge Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(In United States dollars, except for per share data)
2. Summary of Significant Accounting Policies and Recent Accounting Pronouncements
The following significant accounting policies have been applied consistently to the unaudited interim condensed consolidated financial statements for the three months ended June 30, 2026 and 2025, except where a transaction or balance arose only during the current period. These interim accounting policies should be read in conjunction with the audited consolidated financial statements and related notes for the year ended March 31, 2026.
a) Basis of Presentation
The accompanying unaudited interim condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the applicable rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for interim financial reporting. They include the accounts of the Company and its consolidated subsidiaries and have been prepared on a going-concern basis. Unless otherwise indicated, amounts are presented in United States dollars.
In the opinion of management, the unaudited interim condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the Company’s financial position as of June 30, 2026 and March 31, 2026 and its results of operations, stockholders’ equity and cash flows for the three months ended June 30, 2026 and 2025. The results for the three months ended June 30, 2026 are not necessarily indicative of the results expected for the fiscal year ending March 31, 2027 or any other future period.
The unaudited interim condensed consolidated financial statements and accompanying notes do not include all information and disclosures required for complete annual financial statements prepared in conformity with U.S. GAAP. Accordingly, they should be read in conjunction with the Company’s audited consolidated financial statements for the year ended March 31, 2026 and the related notes.
On June 30, 2026, the Company completed the reverse recapitalization described in Note 4, with Legacy House of Doge determined to be the accounting acquirer and Brag House Holdings, Inc. determined to be the accounting acquiree. Accordingly, the consolidated financial statements are presented as a continuation of the historical financial statements of Legacy House of Doge for periods prior to the Merger, while the consolidated equity structure reflects the legal capital structure of the public parent. All shares, equity instruments and per-share amounts have been retrospectively adjusted to reflect the merger exchange ratio and the 1-for-8 reverse stock split effected on June 1, 2026. Following the Merger, the Company continued to use the fiscal year-end of Legacy House of Doge for financial reporting purposes; therefore, beginning with this Quarterly Report on Form 10-Q, the Company’s interim and annual financial statements are presented based on the accounting acquirer’s fiscal year, with comparative periods presented in accordance with applicable SEC reporting requirements and reflecting the historical financial information of Legacy House of Doge prior to the Merger.
b) Basis of Consolidation
As a result of the Merger, Brag House Inc. (“BHI”), a Delaware Corporation and Brag House, Ltd. (“BHL”), a United Kingdom entity, continues to be wholly owned subsidiaries of the Company. The unaudited interim condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries: House of Doge (U.S.) Inc. (formerly House of Doge Inc.), Dogecoin Ventures Inc., The Official Dogecoin Treasury and Reserve Inc., House of Doge Canada Inc., Brag House, Inc. and Brag House, Ltd. All significant intercompany accounts, balances and transactions have been eliminated in consolidation.
The Company consolidates a legal entity when it has a controlling financial interest in that entity. For entities evaluated under the voting-interest model, a controlling financial interest generally exists when the Company owns, directly or indirectly, more than 50% of the outstanding voting interests or otherwise has the ability to control the entity. The Company also evaluates its interests in legal entities under the variable-interest-entity model. A variable interest entity is consolidated when the Company is its primary beneficiary because the Company has both (i) the power to direct the activities that most significantly affect the entity’s economic performance and (ii) the obligation to absorb losses or the right to receive benefits that could potentially be significant to the entity.
6
House of Doge Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(In United States dollars, except for per share data)
2. Summary of Significant Accounting Policies and Recent Accounting Pronouncements (cont.)
Subsidiaries are included in the consolidated financial statements from the date control is obtained and cease to be consolidated when control is lost. Investments over which the Company has the ability to exercise significant influence, but not control, are accounted for using the equity method. Other investments are accounted for under the applicable U.S. GAAP guidance based on the nature and terms of the instrument. The assets acquired and liabilities assumed of Brag House were included in the unaudited interim condensed consolidated statement of financial position as of June 30, 2026, and its results of operations are included beginning on the acquisition date. Because the acquisition closed on the last day of the quarter, Brag House contributed no material post-acquisition operating results for the three months ended June 30, 2026.
c) Use of Estimates
The preparation of unaudited interim condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenue and expenses during the reporting periods.
Significant estimates and judgments include, but are not limited to, the Company’s assessment of its ability to continue as a going concern; revenue recognition, including variable and non-cash consideration, principal-versus-agent conclusions, contract modifications and the release of contract liabilities; expected credit losses on accounts receivable; the classification and fair value of equity securities, debt securities, warrant assets, warrant liabilities and convertible debt measured under the fair value option; significant unobservable inputs used in Level 3 fair value measurements; equity-method accounting, purchase-date basis differences and impairment of equity-method investments; business-combination accounting, including identification of the accounting acquirer, measurement of consideration transferred, valuation of assets acquired and liabilities assumed, replacement awards, deferred taxes and goodwill; the fair value of digital assets; share-based compensation; useful lives and impairment of intangible assets; the present value and classification of the license contract liability; recoverability of prepaid assets and investment-related deposits; accounting for debt instruments and related financing costs; income taxes; and accrued liabilities and contingencies.
Management bases its estimates on historical experience, observable market information, current economic and market conditions, forecasts and other assumptions that it believes are reasonable under the circumstances. Estimates and assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized prospectively in the period in which the estimate is revised and in any future periods affected. Actual results may differ from these estimates, and such differences could be material to the consolidated financial statements.
d) Significant Accounting Policies
(i) Revenue Recognition
The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers. Revenue is recognized when, or as, the Company satisfies a performance obligation by transferring control of promised services to a customer in an amount that reflects the consideration to which the Company expects to be entitled. The Company applies the five-step revenue model by identifying the contract and performance obligations, determining and allocating the transaction price, and recognizing revenue as the performance obligations are satisfied.
Service arrangements and variable consideration
The Company’s revenue arrangements principally consist of exchange-traded product and exchange-traded fund (“ETP/ETF”) support services and may include asset management, strategic advisory, licensing, marketing, operational and other stand-ready support services. Integrated activities that are not separately identifiable are accounted for as a single performance obligation, or as a series of substantially similar services, satisfied over time because the customer receives and consumes the benefits as the Company performs. Revenue is generally recognized based on time elapsed, the service period completed or, when applicable, the amount to which the Company has a right to invoice. The Company’s asset-management and strategic-advisory arrangements with CleanCore were terminated effective March 6, 2026 and had no substantive remaining performance obligations during the three months ended June 30, 2026.
Consideration may be variable based on assets under management, sponsor or management fees, product activity or the applicable service period. Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal of cumulative revenue will not occur when the uncertainty is resolved. Variable fees that relate specifically to a distinct service period are allocated to and recognized in that period when the related services have been provided and the contractual inputs are known or reliably determinable.
7
House of Doge Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(In United States dollars, except for per share data)
2. Summary of Significant Accounting Policies and Recent Accounting Pronouncements (cont.)
Principal-versus-agent presentation
For arrangements involving another service provider, the Company identifies each specified service and evaluates whether it controls that service before transfer to the customer. The Company recognizes revenue on a gross basis for services it controls and for which it is primarily responsible, limited to the consideration to which it is contractually entitled. Amounts attributable to services controlled by another party are excluded from revenue or recorded as payable when collected on that party’s behalf. Distinct product operating services separately obtained from a customer or service provider are recorded as cost of services when the amount does not exceed fair value; otherwise, the applicable amount is recorded as a reduction of revenue.
Non-cash consideration, contract changes and contract balances
Non-cash consideration, including warrants or digital assets, is measured at fair value in accordance with ASC 606 when included in the transaction price. When consideration is received before the related services are transferred, the Company records a contract liability within deferred revenue and recognizes revenue as the services are performed. Subsequent changes in the fair value of the non-cash asset that result solely from the form of consideration are accounted for under the applicable financial instrument or digital asset guidance and are not included in revenue.
The Company evaluates contract modifications, terminations and customer unexercised rights based on the remaining enforceable rights and substantive performance obligations. Consideration is recognized when the Company has no remaining substantive obligation and its right to retain the consideration is unconditional. Amounts related to customer unexercised rights are recognized as breakage in proportion to rights exercised when estimable, or when the likelihood that the customer will exercise the remaining rights becomes remote.
A receivable is recognized when the Company has an unconditional right to consideration. A contract asset is recognized when the right to consideration remains conditional on something other than the passage of time, and a contract liability is recognized when consideration is received or becomes due before the related services are transferred. Accounts receivable and contract assets are evaluated for expected credit losses under ASC 326, Financial Instruments - Credit Losses, considering customer credit quality, aging, historical collection experience, current conditions and reasonable and supportable forecasts.
(ii) Cash and Concentration of Credit Risk
Cash consists of unrestricted demand deposits maintained with commercial banks and amounts held in legal trust accounts by external counsel for the benefit of the Company, and unrestricted U.S. dollar fiat balances maintained in accounts with digital asset trading and custody service providers that are available for withdrawal on demand. Amounts held in legal trust accounts represent funds held on behalf of the Company, are not commingled with other clients’ funds, and are fully accessible for use by the Company in accordance with legal and contractual terms. The Company considers these balances to be part of its cash. At March 31, 2026, the Company held approximately $
The Company maintains cash balances with financial institutions in the United States and Canada. At March 31, 2026, the Company also maintained fiat currency through a digital asset trading and custody service provider. Deposits maintained directly with commercial banks may, at times, exceed amounts insured by the Federal Deposit Insurance Corporation or other applicable deposit-insurance programs. Fiat balances maintained through digital asset trading or custody platforms are subject to additional counterparty, custodial, operational and insolvency risks and may not have the same deposit-insurance protections as amounts deposited directly by the Company with an insured commercial bank. The Company manages its concentration of credit risk by maintaining relationships with counterparties and placing funds with institutions that management believes to be creditworthy, monitoring counterparty credit quality and liquidity, considering the safeguarding arrangements applicable to funds held by service providers, and diversifying banking and custody relationships when considered appropriate. Although the Company believes that its cash-management arrangements are appropriate, and its cash is subject to minimal credit risk, it still remains exposed to the risk of loss or delayed access to funds in the event of financial distress, insolvency, operational failure or other disruption of a banking or custody service provider. There is no assurance that the financial institutions will remain solvent or that access to funds will be uninterrupted. The Company has not experienced losses on its cash deposits.
8
House of Doge Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(In United States dollars, except for per share data)
2. Summary of Significant Accounting Policies and Recent Accounting Pronouncements (cont.)
(iii) Digital Assets
The Company accounts for directly held crypto assets that meet the scope criteria of ASC 350-60, Intangibles - Goodwill and Other - Crypto Assets. When held, the Company’s crypto assets consist solely of Dogecoin. The Company has ownership of and control over its digital assets and may use qualified third-party custodians or wallets to safeguard those assets. Digital assets are not cash or financial instruments under U.S. GAAP and are presented separately in the consolidated balance sheets.
Purchased digital assets are initially recognized at their acquisition-date fair value and transaction costs are expensed as incurred. Digital assets received as non-cash consideration are initially measured at fair value in accordance with the guidance applicable to the underlying transaction. Thereafter, digital assets are measured at fair value at each reporting date, with changes in fair value recognized in earnings within the change in fair value of digital assets. Upon sale, transfer or use of digital assets as consideration, the difference between the proceeds or fair value of consideration transferred and the carrying amount of the assets is recognized in earnings. The Company uses the weighted-average-cost method to track historical cost basis for disposition and disclosure purposes.
Fair value is determined in accordance with ASC 820, Fair Value Measurement, using quoted prices in the principal market to which the Company has access at the measurement date. During periods in which the Company held Dogecoin, the Company determined Coinbase Exchange to be its principal market for Dogecoin based on its assessment of the volume and level of activity in markets accessible to the Company. Accordingly, the Company measures the fair value of Dogecoin using the quoted, unadjusted DOGE-USD price on Coinbase Exchange at the applicable measurement date. Because these quoted prices are observable in an active market for an identical asset, the resulting fair value measurements are classified within Level 1 of the fair value hierarchy. The Company periodically reassesses its principal market determination and will update the selected market if facts and circumstances indicate that another accessible market has the greatest volume and level of activity for Dogecoin. The Company held digital assets as of June 30, 2026 or March 31, 2026.
(iv) License Contract Liability
In connection with the Company’s exclusive trademark license agreement, the Company is obligated to make fixed minimum royalty payments of $
The license contract liability is subsequently measured at amortized cost. The carrying amount is increased for the accretion of the discount using the effective-interest method, with the accretion recognized as finance expense, and is reduced by the required minimum royalty payments. The obligation is classified between current and noncurrent portions based on the contractual payment dates. Royalties payable in excess of the fixed minimum payments, if any, are recognized as incurred based on the related licensed sales.
(v) Equity Guarantee Liability
The original trademark license agreement included an equity guarantee that required the Company to take the actions necessary for the licensors to hold at least
9
House of Doge Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(In United States dollars, except for per share data)
2. Summary of Significant Accounting Policies and Recent Accounting Pronouncements (cont.)
(vi) Financial Assets and Financial Liabilities
Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of an instrument. Except where another U.S. GAAP measurement requirement applies, financial instruments are initially measured at fair value. Directly attributable transaction costs are included in the initial carrying amount of instruments that are not subsequently measured at fair value through net income and are expensed as incurred for instruments measured at fair value through net income. Trade receivables arising from contracts with customers are initially measured at the transaction price in accordance with ASC 606.
Subsequent measurement is based on the nature and contractual terms of the instrument. Cash, accounts receivable, accounts payable and accrued liabilities, conventional short-term debt and the license contract liability are generally carried at amortized cost, subject to applicable credit-loss, interest-accretion and impairment guidance. Equity securities, debt securities, warrant assets, equity-method investments, convertible debt elected under the fair value option and warrant derivative liabilities are accounted for under the applicable investment, derivative, fair-value and equity-method guidance described in the Company’s other significant accounting policies and related notes.
A financial asset is derecognized when the contractual rights to cash flows expire, upon settlement, or when the asset is transferred and the transfer qualifies for sale accounting under ASC 860, Transfers and Servicing. A financial liability is derecognized when it has been extinguished because the obligation has been paid, cancelled or legally released in accordance with ASC 405, Liabilities. Financial assets and liabilities are presented on a net basis only when the Company has a valid and enforceable right of setoff, the amounts are determinable, and the Company intends either to settle on a net basis or to realize the asset and settle the liability simultaneously in accordance with ASC 210-20, Balance Sheet - Offsetting.
(vii) Intangible Assets
Acquired intangible assets with finite useful lives are recorded at cost, net of accumulated amortization and impairment losses. The cost of an acquired intangible asset includes cash and non-cash consideration and the present value of fixed contractual payment obligations when required by U.S. GAAP. Finite-lived intangible assets are amortized over the shorter of their estimated economic useful lives and contractual terms using the straight-line method unless another pattern better reflects the consumption of economic benefits. Amortization begins when the asset is available for its intended use. The Company reviews the useful life and amortization method at least annually and accounts for changes in estimates prospectively.
Finite-lived intangible assets are evaluated for impairment under ASC 360, Property, Plant, and Equipment, whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Recoverability is assessed by comparing the carrying amount of the asset or asset group with the undiscounted cash flows expected from its use and eventual disposition. If the carrying amount is not recoverable, an impairment loss is recognized for the excess of the carrying amount over fair value. Impairment losses for finite-lived intangible assets are not subsequently reversed.
The Company evaluates software development costs based on the intended use of the software. Costs incurred during preliminary project planning, research and development, data conversion, training, maintenance and post-implementation activities are expensed as incurred. Qualifying application-development costs for internal-use software are capitalized only after the preliminary project stage is completed, management authorizes and commits to funding the project, and completion and use of the software as intended are probable. Costs of software to be sold, leased or otherwise marketed are expensed as research and development until technological feasibility is established in accordance with ASC 985-20, Software - Costs of Software to Be Sold, Leased, or Marketed. No internally developed software costs met the applicable capitalization criteria as of June 30, 2026 or March 31, 2026; accordingly, such costs were expensed as incurred.
10
House of Doge Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(In United States dollars, except for per share data)
2. Summary of Significant Accounting Policies and Recent Accounting Pronouncements (cont.)
(viii) Foreign Currency Translation
The unaudited interim condensed consolidated financial statements are presented in U.S. dollars, which is the reporting currency of the Company. The functional currency of the Company and its subsidiaries is the U.S. dollar, except for House of Doge Canada Inc., whose functional currency is the Canadian dollar.
The Company is exposed to currency risk on transactions and balances in currencies other than the functional currency. For a consolidated subsidiary whose functional currency is not the U.S. dollar, assets and liabilities are translated into U.S. dollars at exchange rates in effect at the balance-sheet date, revenues and expenses are translated at appropriate average exchange rates for the period, and equity transactions are translated at historical exchange rates. Resulting translation adjustments are recognized in other comprehensive income and accumulated in accumulated other comprehensive income. The effect of exchange rate changes on cash is presented separately in the unaudited interim condensed consolidated statement of cash flows.
Transactions denominated in a currency other than an entity’s functional currency are initially recorded using the exchange rate on the transaction date. At each reporting date, foreign-currency-denominated monetary assets and liabilities are remeasured using closing exchange rates, while nonmonetary assets and liabilities carried at historical cost remain translated at historical rates unless another U.S. GAAP measurement basis applies. Transaction gains and losses are recognized in earnings within foreign exchange gain or loss. The Company did not use foreign exchange contracts to hedge its currency exposure during either interim period.
(ix) Accounts Receivable and Allowance for Credit Losses
Accounts receivable primarily consist of unconditional rights to consideration arising from contracts with customers for ETP/ETF support and other services. A right to consideration is unconditional when only the passage of time is required before payment is due. Accounts receivable are recognized at the amount invoiced or otherwise due under the contract and are carried at amortized cost, net of an allowance for credit losses. Contract assets, if any, represent conditional rights to consideration and are presented separately from accounts receivable. The Company applies the practical expedient in ASC 606 and does not adjust consideration for a significant financing component when, at contract inception, the period between transfer of the service and payment is expected to be one year or less.
The Company estimates expected credit losses on accounts receivable and contract assets in accordance with ASC 326, Financial Instruments - Credit Losses. The allowance represents management’s estimate of credit losses expected over the contractual life of the receivables. The estimate considers information available at each reporting date, including the aging of balances, historical collection experience, customer-specific creditworthiness and payment history, the existence of disputes, current economic conditions, and other relevant qualitative and quantitative factors. Receivables that do not share similar risk characteristics are evaluated individually. Changes in the allowance are recognized in credit loss expense.
Accounts receivable are written off against the allowance when collection is no longer expected based on management’s assessment of the facts and circumstances and after reasonable collection efforts. Recoveries of amounts previously written off are recognized when received. No allowance for expected credit losses was recorded as of June 30, 2026 or March 31, 2026.
(x) Accounts Payable and Accrued Liabilities
Accounts payable and accrued liabilities are recognized when the Company has received goods or services or otherwise has a present obligation, and the amount can be reasonably estimated. Accounts payable are recorded at invoiced or contractual amounts. Accrued liabilities include estimates for services received but not yet invoiced, payroll and employee-related obligations, financing and professional fees, investment-related amounts and other obligations. Estimates are based on contractual terms, vendor communications, service periods, historical experience and other available information and are reviewed and adjusted as additional information becomes available. Because these obligations are generally short term, their carrying amounts are approximately fair value.
11
House of Doge Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(In United States dollars, except for per share data)
2. Summary of Significant Accounting Policies and Recent Accounting Pronouncements (cont.)
(xi) Investments and Investment-Related Financial Instruments
The Company determines the accounting model for each investment at initial recognition based on the legal form and substantive terms of the instrument, the Company’s level of control or influence over the investee, and whether the instrument is an equity security, debt security, derivative instrument, or equity-method investment. The Company first evaluates whether an investee is required to be consolidated under ASC 810, Consolidation. Interests that are not consolidated are accounted for under the applicable guidance in ASC 323, Investments - Equity Method and Joint Ventures; ASC 321, Investments - Equity Securities; ASC 320, Investments - Debt Securities; ASC 815, Derivatives and Hedging; and ASC 825, Financial Instruments.
Equity securities (ASC 321 and ASC 825)
Equity securities with readily determinable fair values are measured at fair value at each reporting date, with changes in fair value recognized in net income. Equity securities without readily determinable fair values are measured using the measurement alternative at cost, less impairment, adjusted for observable price changes in orderly transactions for identical or similar investments of the same issuer, unless the Company elects the fair value option for an eligible instrument under ASC 825. Changes resulting from observable price adjustments, impairment, or subsequent fair value measurement are recognized in earnings. For equity securities measured using the measurement alternative, the Company performs a qualitative impairment assessment at each reporting date. If the qualitative assessment indicates that the investment is impaired, the investment is written down to fair value, and the impairment loss is recognized in earnings. When a privately held equity security subsequently obtains a readily determinable fair value, the Company begins measuring the security at fair value through net income from that date.
Debt securities (ASC 320 and ASC 326)
Debt securities classified as available-for-sale are measured at fair value. Interest income and the amortization or accretion of premiums and discounts are recognized in earnings using the effective-interest method. Unrealized gains and losses that are not credit-related are recognized in other comprehensive income and accumulated other comprehensive income until realized. Realized gains and losses are recognized in earnings upon sale, settlement, conversion, or other derecognition. The Company evaluates available-for-sale debt securities for credit losses in accordance with ASC 326, Financial Instruments—Credit Losses. If the Company intends to sell a security, or it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis, the amortized cost basis is written down to fair value through earnings. Otherwise, the credit-related portion of a decline in fair value is recognized through an allowance for credit losses, limited to the amount by which fair value is below amortized cost and the non-credit portion remains in other comprehensive income.
Convertible instruments and bundled investment transactions (ASC 320, ASC 321, ASC 815 and ASC 825)
Convertible debentures are accounted for as debt securities unless another accounting model is required by their terms. Embedded conversion, redemption, put, call, default and other settlement features are evaluated under ASC 815 to determine whether they require separate accounting as derivatives. If a feature is not bifurcated, it is accounted for together with the host instrument under the applicable debt-security guidance. When debt securities, preferred shares, warrants, or other financial instruments are acquired in a single transaction, the consideration transferred is allocated among the instruments using the allocation method required by the applicable U.S. GAAP guidance, based on the instruments’ respective fair values or an applicable residual approach. Each instrument is subsequently accounted for under its applicable accounting model. Preferred shares are accounted for as equity securities under ASC 321 or, when elected and eligible, at fair value under ASC 825, with changes in fair value recognized in earnings.
12
House of Doge Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(In United States dollars, except for per share data)
2. Summary of Significant Accounting Policies and Recent Accounting Pronouncements (cont.)
Warrant assets and non-cash consideration received from customers (ASC 815, ASC 820 and ASC 606)
Freestanding warrants are evaluated under ASC 815. Warrant assets that meet the definition of a derivative are recognized at fair value, with changes in fair value recognized in earnings, unless designated in a qualifying hedge relationship. When quoted market prices for the warrants are not available, fair value is estimated using valuation techniques consistent with ASC 820, including option-pricing models such as Black-Scholes and other market-participant assumptions. Upon exercise, a warrant is remeasured immediately before exercise and its carrying amount is reclassified to the underlying equity security received.
Warrants received as non-cash consideration from a customer for goods or services are initially accounted for under ASC 606, Revenue from Contracts with Customers. When the warrants are received before the related performance obligation is satisfied, the Company records the warrant asset and a corresponding contract liability measured at the fair value of the non-cash consideration in accordance with the applicable guidance. Once the Company’s right to receive or retain the warrants is unconditional, the warrants are subsequently accounted for under the applicable financial instrument guidance. Subsequent changes in the fair value of the warrants are excluded from revenue and recognized in earnings. The related contract liability is recognized as revenue as the promised services are transferred or when the remaining performance obligation is extinguished or released and the consideration is nonrefundable and not subject to claw back.
Equity-method investments (ASC 323 and ASC 810)
Investments in entities over which the Company has the ability to exercise significant influence, but not control, are accounted for using the equity method under ASC 323. Significant influence is evaluated based on all facts and circumstances, including ownership percentage, board representation, participation in policy-making processes, material transactions, interchange of managerial personnel, technological dependency, and other governance or contractual rights. Consolidation is evaluated before application of the equity method under the voting-interest and variable-interest-entity models in ASC 810.
Equity-method investments are initially recorded at cost and subsequently adjusted for the Company’s share of the investee’s earnings or losses, distributions received, additional contributions, basis-difference adjustments, and impairment. The difference between the cost of an equity-method investment and the Company’s share of the underlying equity in the investee’s net assets is allocated to identifiable assets and liabilities as if the investee were consolidated. Identifiable basis differences are amortized, accreted, or otherwise recognized over the periods in which the related assets are consumed or liabilities are settled. Any residual equity-method goodwill is included in the carrying amount of the investment and is not separately amortized or separately tested for impairment.
The Company discontinues recognition of additional equity-method losses when the carrying amount of the investment and any other interests that are in substance common stock are reduced to zero, unless the Company has guaranteed obligations of the investee, is otherwise committed to provide further financial support, or has incurred obligations on behalf of the investee. Unrecognized losses are tracked and are recognized before the Company resumes recognizing its share of future earnings.
The Company evaluates an equity-method investment for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable. If a decline in value below carrying amount is determined to be other than temporary, the investment is written down to fair value, and the impairment loss is recognized in earnings. The resulting carrying amount becomes the new cost basis and is not subsequently increased for a recovery in fair value. Fair value used in an impairment measurement is determined under ASC 820 and may represent a nonrecurring Level 3 measurement.
Investment-related deposits and purchase commitments (ASC 450 and ASC 855)
Cash advances made before the Company obtains substantive ownership, voting, governance, liquidation, or other economic rights in an investee are recorded as investment-related deposits within prepaid and other assets. Such deposits are carried at cost, assessed for recoverability at each reporting date, and reclassified to an investment when the underlying transaction closes and the applicable recognition criteria are met. Amounts that are refundable or expected to be applied against future contractual payments remain classified as deposits until settled or otherwise resolved.
Executory commitments to acquire investments are generally not recognized as an asset or liability before the related subscription, trade, or settlement obligation is executed and accepted, unless the arrangement meets the definition of a derivative or a loss contingency is probable and reasonably estimable under ASC 450, Contingencies. Purchases and sales of exchange-traded securities are recognized on the trade date. Events occurring after the balance-sheet date are evaluated under ASC 855, Subsequent Events, to determine whether they provide additional evidence of conditions existing at the reporting date or represent non-recognized subsequent events requiring disclosure.
13
House of Doge Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(In United States dollars, except for per share data)
2. Summary of Significant Accounting Policies and Recent Accounting Pronouncements (cont.)
(xii) Fair Value Measurements (ASC 820)
Fair value represents the price 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. The Company maximizes the use of observable inputs and minimizes the use of unobservable inputs. The classification of an instrument within the hierarchy is reassessed at each reporting date.
Fair value measurements are classified in a three-level hierarchy based on the lowest-level input that is significant to the measurement in its entirety:
| ● | Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities that the Company can access at the measurement date. |
| ● | Level 2 - Observable inputs other than Level 1 quoted prices, including quoted prices for similar instruments, quoted prices in inactive markets and market-corroborated inputs. |
| ● | Level 3 - Significant unobservable inputs that reflect management’s assumptions about the assumptions market participants would use in pricing the asset or liability. |
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available, including market approaches, discounted cash flow models, option-pricing models, back-solve methods and probability-weighted expected return methods. Changes in valuation techniques or their application are made when the change results in a measurement that is equally or more representative of fair value. Transfers between levels are recognized in the period in which the event or change in circumstances causing the transfer occurs.
(xiii) Presentation and Classification
Changes in the fair value of equity securities and derivative warrant assets, observable-price adjustments, and investment impairment losses are recognized in loss (gain) on change in fair value of investments or another appropriate line item in the unaudited interim condensed consolidated statements of operations and comprehensive loss. The Company’s share of the earnings or losses of equity-method investees is presented separately from fair value changes. Noncredit unrealized gains and losses on available-for-sale debt securities are reported in other comprehensive income, net of tax, until realized or otherwise reclassified in accordance with U.S. GAAP.
Investments are classified as current or noncurrent based on the contractual maturity of the instrument, restrictions on realization, and management’s intent and ability to hold or realize the investment. Debt securities with contractual maturities within twelve months of the balance sheet date and investments expected to be realized within the operating cycle are generally classified as current; other investments are classified as noncurrent.
Financial assets pledged as collateral remain recognized unless the transfer qualifies for derecognition under ASC 860. Pledged assets and the related borrowings are presented gross unless the offsetting criteria in ASC 210-20 are met. Debt is classified as current unless the Company has an unconditional right to defer settlement for more than twelve months after the balance-sheet date.
(xiv) Convertible Debt, Fair Value Option and Warrant Liabilities
Convertible debt instruments are evaluated under ASC 470, Debt, and ASC 815, Derivatives and Hedging, to determine whether embedded conversion, redemption, put, call, default or other settlement features require separate accounting. For eligible instruments, the Company may elect the fair value option under ASC 825, Financial Instruments, on an instrument-by-instrument basis at initial recognition. An instrument for which the fair value option is elected is measured in its entirety at fair value at each reporting date. Changes in fair value are recognized in earnings, except for the portion attributable to instrument-specific credit risk that is recognized in other comprehensive income when required by ASC 825. Upfront fees and issuance costs related to debt measured under the fair value option are expensed as incurred unless another U.S. GAAP requirement applies.
Freestanding warrants and other equity-linked contracts that do not qualify for equity classification under ASC 815-40 are accounted for as derivative liabilities. Warrant derivative liabilities are initially and subsequently measured at fair value, with changes in fair value recognized in earnings. Fair value may be estimated using probability-weighted expected return methods, Monte Carlo simulation or other valuation techniques that reflect market-participant assumptions.
14
House of Doge Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(In United States dollars, except for per share data)
2. Summary of Significant Accounting Policies and Recent Accounting Pronouncements (cont.)
(xv) Deferred Financing and Offering Costs
Direct and incremental costs incurred in connection with a probable equity offering are deferred and subsequently recorded as a reduction of the related equity proceeds when the offering is completed. Costs associated with an abandoned equity offering are expensed. Debt issuance costs for debt not measured at fair value are generally presented as a direct deduction from the carrying amount of the related debt and amortized to interest expense over the contractual term using the effective-interest method. Debt issuance costs associated with revolving credit arrangements may be presented as an asset and amortized over the arrangement term. Costs related to debt measured under the fair value option are expensed as incurred. Acquisition-related costs are accounted for separately from financing and equity issuance costs as described below.
(xvi) Reverse Recapitalization
The Company accounts for reverse recapitalization transactions in accordance with ASC 805, Business Combinations. In determining the accounting acquirer, the Company considers the relevant facts and circumstances, including the relative voting rights of the shareholders of the combined company, the composition of the governing body and senior management of the combined company, the relative size of the combining entities and other pertinent factors.
On June 30, 2026, the Company completed a transaction that was accounted for as a reverse recapitalization. Although Brag House was the legal acquirer in the transaction, House of Doge was determined to be the accounting acquirer and Brag House was determined to be the accounting acquiree for financial reporting purposes. Because Brag House did not meet the definition of a business under ASC 805, the transaction was not accounted for as a business combination and no goodwill or other intangible assets were recognized as a result of the transaction.
The reverse recapitalization was accounted for as the equivalent of House of Doge issuing equity interests for the net assets of Brag House, accompanied by a recapitalization. Accordingly, the identifiable net assets of Brag House were recognized at their historical carrying amounts as of the transaction date, consistent with the accounting treatment for a reverse recapitalization.
The unaudited interim condensed consolidated financial statements following the reverse recapitalization represent a continuation of the financial statements of House of Doge, the accounting acquirer, with the assets and liabilities of Brag House, the accounting acquiree, included beginning on June 30, 2026. The historical operations presented for periods prior to the transaction are those of House of Doge.
The equity structure presented in the unaudited interim condensed consolidated financial statements reflects the legal equity structure of Brag House, including the number and type of equity interests issued and outstanding. Accordingly, the historical equity accounts of House of Doge have been retrospectively adjusted for all periods presented to reflect the legal capital structure of Brag House after giving effect to the exchange ratio established in the transaction.
(xvii) Impairment of Long-Lived Assets
The Company evaluates long-lived assets to be held and used, including property and equipment and finite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities.
When a potential impairment indicator exists, recoverability is assessed by comparing the carrying amount of the asset group with the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset group. If the carrying amount is not recoverable, an impairment loss is recognized for the amount by which the carrying amount exceeds fair value. Fair value is determined using market-participant assumptions and may be estimated using discounted cash flow techniques, observable market information, independent appraisals or other valuation methods appropriate under ASC 820, Fair Value Measurement. Impairment losses recognized for assets held and used are not subsequently reversed.
Long-lived assets that meet the criteria to be classified as held for sale are presented separately and measured at the lower of carrying amount or fair value less cost to sell. Impairment of goodwill, equity-method investments, equity securities, debt securities and other financial assets is evaluated under the accounting guidance applicable to those instruments and is not included in this long-lived-asset policy. No impairment loss was recognized under ASC 360 for the Company’s property and equipment or finite-lived trademark license during the three months ended June 30, 2026 or the year ended March 31, 2026.
(xviii) Property and Equipment, Net
Property and equipment consist principally of computer and office equipment and are recorded at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over an estimated useful life of three years. Upon retirement or disposal, the cost of the asset and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is recognized in operations. Maintenance and repair costs are expensed as incurred, while expenditures that extend the useful life or improve the functionality of the equipment are capitalized.
15
House of Doge Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(In United States dollars, except for per share data)
2. Summary of Significant Accounting Policies and Recent Accounting Pronouncements (cont.)
(xix) Capital Stock
Following the Merger, the Company is authorized to issue
Direct and incremental costs incurred to complete an equity issuance are recorded as a reduction of the related equity proceeds. Equity issuance costs associated with an offering that is abandoned are expensed when the offering is no longer considered probable. Common shares repurchased and held are recorded as treasury shares at cost. When repurchased shares are immediately retired or cancelled, the recorded amount associated with the shares is removed from stockholders’ equity and any excess of the repurchase price over that amount is charged to additional paid-in capital or accumulated deficit, as applicable.
(xx) Stock-Based Compensation
The Company accounts for stock-based compensation under ASC 718, Compensation - Stock Compensation. Equity-classified awards are measured at grant-date fair value and compensation expense is recognized over the requisite service period, generally using the straight-line method for awards with graded vesting unless another attribution method is required. Liability-classified awards are remeasured at fair value at each reporting date until settlement. For awards with performance conditions, expense is recognized when achievement of the condition is probable. The Company recognizes forfeitures as they occur.
The fair value of restricted stock units is generally based on the fair value of the underlying common stock on the grant date. The fair value of stock options and warrants granted as compensation is estimated using an option-pricing model, such as Black-Scholes or a binomial lattice model, using assumptions including expected volatility, expected term, risk-free interest rate and dividend yield. Because the Company has limited historical trading data, expected volatility and exercise behavior may be based in part on comparable public companies and other market-participant information.
(xxi) Income Taxes
The Company accounts for income taxes using the asset-and-liability method under ASC 740, Income Taxes. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to temporary differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases, as well as for operating loss and tax-credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply in the periods in which the temporary differences are expected to reverse or the carryforwards are expected to be realized. The effect of a change in enacted tax rates or tax laws is recognized in income from continuing operations in the period of enactment.
A valuation allowance is recorded when, based on the weight of available positive and negative evidence, it is more likely than not that some portion or all of a deferred tax asset will not be realized. In assessing realizability, management considers, among other factors, cumulative losses, the scheduled reversal of deferred tax liabilities, projected future taxable income, available carryforward periods and prudent and feasible tax-planning strategies. The need for and amount of a valuation allowance are reassessed at each reporting date.
The Company recognizes the financial statement benefit of a tax position only when it is more likely than not, based on the technical merits of the position, that the position will be sustained upon examination. A recognized tax benefit is measured as the largest amount of benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Interest and penalties associated with uncertain tax positions, if any, are recognized within income tax expense.
For interim reporting, the Company records income tax expense or benefit using the estimated annual effective tax rate applied to year-to-date ordinary income or loss, adjusted for discrete items recognized in the period in which they occur. The Company maintains a valuation allowance against deferred tax assets to the extent realization is not more likely than not and reassesses the allowance and uncertain tax positions at each reporting date.
16
House of Doge Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(In United States dollars, except for per share data)
2. Summary of Significant Accounting Policies and Recent Accounting Pronouncements (cont.)
(xxii) Net Income (Loss) Per Share
Basic net income (loss) per common share is calculated by dividing net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding during the period. The Series C Preferred Stock is a participating security because its holders are entitled to dividends on an as-converted basis when dividends are declared on common stock. Accordingly, net income is allocated between common stock and Series C Preferred Stock using the two-class method. Net losses are not allocated to Series C Preferred Stock because its holders are not contractually obligated to share in the Company’s losses. Fully vested restricted stock units that are noncontingently issuable are included in the basic weighted-average share denominator from their respective vesting dates until settlement in common shares.
Diluted net income (loss) per common share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised, converted or settled. Potential common shares are generally included using the treasury-stock method for share-based awards and warrants and the if-converted method for convertible debt and preferred stock, when applicable. Potential common shares are excluded when their effect would be anti-dilutive. Because the Company reported a net loss for the three months ended June 30, 2026 and 2025, unvested RSUs were excluded from diluted net loss per share, and basic and diluted net loss per share were the same.
(xxiii) Segments
The Company identifies operating segments in accordance with ASC 280, Segment Reporting. An operating segment is a component of the Company for which discrete financial information is available and whose operating results are regularly reviewed by the chief operating decision maker to assess performance and allocate resources. Reportable segments are determined based on the nature of products and services, customer characteristics, economic characteristics, internal management structure and the quantitative thresholds and aggregation criteria in ASC 280.
The Company manages its operations and evaluates financial performance on a consolidated basis and has determined that it operated as
e) New Accounting Pronouncements
Recently Issued but not yet Adopted Accounting Pronouncements
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 all public entities to disclose information about purchases of inventory, employee compensation, depreciation, intangible asset amortization and depletion for each income statement line item that contains those expenses. The amendments are effective for the Company in fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 27, 2027. Early adoption is permitted on either a prospective or retrospective basis. The Company is currently evaluating the guidance and its impact on the financial statements.
In September 2025, the FASB issued ASU No. 2025-06, Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”). ASU 2025-06 updates the accounting for costs related to the development of internal-use software to reflect the evolution of software development from a sequential to an agile development method by removing references to project stages in the existing guidance and requiring capitalization of software costs when management has authorized and committed to funding a software project and it is probable that the project will be completed and the software will be used as intended. ASU 2025-06 is effective for annual reporting periods beginning after December 15, 2027. Early adoption is permitted as of the beginning of a fiscal year. The Company is currently evaluating the guidance and its impact on the financial statements.
Other recently issued accounting standards: The Company has evaluated other accounting standards updates issued through the date the consolidated financial statements were issued, including guidance relating to ASU 2024-04 - Debt-Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments, ASU 2025-11 - Interim Reporting (Topic 270): Narrow-Scope Improvements and ASU 2025-12 - Codification Improvements, and does not currently expect those standards to have a material impact on its consolidated financial statements or related disclosures.
17
House of Doge Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(In United States dollars, except for per share data)
3. Going Concern
In accordance with ASC 205-40, Presentation of Financial Statements — Going Concern, the Company evaluates whether there are conditions or events that raise substantial doubt about its ability to continue as a going concern within one year after the date the financial statements are issued (or available to be issued). As part of this assessment, the Company considers both qualitative and quantitative factors including its current financial condition, available sources of liquidity, forecasted cash flow and its obligations due over the assessment period.
The Company remains in the early stages of executing its commercialization, payments, exchange-traded product support, licensing and strategic investment initiatives. For the three months ended June 30, 2026, the Company had net income of $
The Company’s ability to continue as a going concern is dependent on its ability to obtain additional working capital, satisfy debt and other obligations as they become due, manage the timing and amount of operating expenditures, monetize or otherwise realize value from certain investments and execute its commercial growth initiatives.
The Company has historically financed its activities through issuances of equity securities, short-term and convertible debt, related-party advances and strategic transactions. Certain financing arrangements are short term, secured, convertible, subject to market or registration conditions, or dependent on collateral values. In addition, the timing and amount of cash flows that may be generated from the Company’s investments and commercial initiatives are exposed to public-equity and digital-asset market volatility, counterparty performance, customer adoption, regulatory developments and execution risk. These conditions and events, considered in the aggregate, raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date these financial statements are issued.
The Company has developed and is implementing plans intended to improve liquidity and support the ongoing operations. These plans include the following:
| ● | Capital market access and financing: The Company completed its reverse merger with Brag House Holdings, Inc. on June 30, 2026 and established a publicly traded parent-company structure. Management intends to use this platform to pursue public and private equity offerings, the Yorkville equity purchase facility and other debt or strategic financing arrangements. Availability under these arrangements is subject to applicable conditions, market prices, registration effectiveness, exchange rules, collateral requirements and investor demand and therefore is not equivalent to committed unrestricted cash. |
| ● | Debt and liquidity management: During the three months ended June 30, 2026, the Company received $ |
| ● | Investment monetization and liquidity preservation: Management continues to evaluate selective monetization of marketable and other investments, including CleanCore related securities, subject to market prices, trading restrictions, collateral arrangements and the Company’s strategic objectives. Management also intends to defer or reduce discretionary expenditures and investment commitments when necessary and to continue periodic cash-flow forecasting and review of payroll, vendor obligations, debt service and other liquidity requirements. |
| ● | Revenue development: Management is pursuing recurring and diversified revenue sources through Dogecoin-related payment products, support services for exchange-traded products, licensing, brand and commercial partnerships, real-world-asset initiatives and other digital asset services. The timing and amount of future revenue and cash inflows depend on product development, customer adoption, partner performance, regulatory compliance and market conditions. |
18
House of Doge Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(In United States dollars, except for per share data)
3. Going Concern (cont.)
Management believes that these plans are designed to provide additional liquidity and support the continuation of the Company’s operations. However, the Company’s ability to obtain additional capital, monetize investments and achieve anticipated operating improvements is subject to conditions and uncertainties that are not entirely within its control. Accordingly, management concluded that its plans do not alleviate the substantial doubt about the Company’s ability to continue as a going concern within one year after the date these unaudited interim condensed consolidated financial statements are issued.
The accompanying unaudited interim condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
4. Reverse Recapitalization
Transaction overview
On June 30, 2026 (the “Closing Date”), Brag House Holdings Inc. (“Legal Acquirer”) completed the transactions contemplated by the Merger Agreement, dated October 12, 2025, as amended (the “Merger Agreement”), by and among Brag House Holdings, Inc. (“Brag House”), House of Doge Inc., a Texas corporation (“Legacy House of Doge” or “HOD”), and Brag House Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Brag House (“Merger Sub”) (collectively, the “Transaction”).
Pursuant to the Merger Agreement, Merger Sub merged with and into Legacy House of Doge, with Legacy House of Doge continuing as the surviving corporation and becoming a wholly owned subsidiary of Brag House. In connection with the closing of the Merger, Brag House changed its corporate name to “House of Doge Inc.” Unless the context otherwise requires, references to the “Company” following the Merger refer to House of Doge Inc., formerly known as Brag House Holdings, Inc., together with its consolidated subsidiaries. The Company’s common stock commenced trading on Nasdaq under the symbol “HODO” on July 1, 2026.
The Transaction was completed on June 30, 2026, which is the acquisition date for accounting purposes. Accordingly, the accompanying unaudited interim condensed consolidated financial statements include:
| ● | the historical financial position and results of operations of HOD for all periods presented; |
| ● | the assets and liabilities of Brag House beginning on the closing date; and |
| ● | the consolidated results of the Combined Company from the closing date through June 30, 2026. |
The historical financial statements of Brag House before the closing date are not reflected as the historical financial statements of the Combined Company, except for Brag house’s net assets acquired in the Transaction. Because the Transaction was accounted for as a reverse recapitalization and not as a business combination, the Company has not presented supplemental pro forma revenue and earnings information as though the Transaction had occurred at the beginning of the comparative periods under the business-combination disclosure requirements of ASC 805
Accounting treatment
Although Brag House was the legal acquirer in the Transaction, HOD was determined to be the accounting acquirer based on the evaluation of the facts and circumstances under Accounting Standards Codification (“ASC”) Topic 805, Business Combinations. The factors considered in identifying HOD as the accounting acquirer included, among other things:
| ● | the former shareholders of HOD hold approximately |
| ● | the former shareholders of HOD have the ability to appoint or remove a majority of the members of the Combined Company’s governing body; |
19
House of Doge Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(In United States dollars, except for per share data)
4. Reverse Recapitalization (cont.)
| ● | members of HOD’s senior management comprise all of the Officers of the Combined Company; |
| ● | HOD was the larger entity based on assets, operations and employees; and |
| ● | HOD’s operations comprise the ongoing operations of the Combined Company. |
Management determined that Brag House did not meet the definition of a business under ASC 805 as of the closing date because substantially all the fair value of the gross assets acquired is concentrated in one identifiable asset (“screen test”).
Management also considered whether the Transaction should be accounted for as a reverse asset acquisition. After eliminating reciprocal intercompany balances, the acquired set consisted principally of Brag House’s monetary and financial assets and liabilities and did not include substantive nonfinancial assets, an organized workforce or operating processes. Accordingly, the Transaction did not represent the acquisition of an operating asset or asset group and was, in substance, a capital transaction through which HOD obtained Brag House’s net assets and public-company capital structure.
As a result, the Transaction was accounted for as a reverse recapitalization rather than as a business combination or reverse asset acquisition. For accounting purposes, the Transaction was treated as the equivalent of HOD issuing shares for the net assets of Brag House, accompanied by a recapitalization.
The net assets of Brag House were recognized at their historical carrying amounts as of the closing date. No goodwill or other intangible assets were recognized. The excess of the fair value of the equity instruments deemed issued by HOD over the carrying value of the identifiable net assets of Brag House, after consideration of transaction costs, was recognized as equity in the unaudited interim condensed consolidated statements of financial position.
HOD is considered the predecessor of the Combined Company for financial reporting purposes. Accordingly, the assets, liabilities and results of operations of HOD before the closing date are presented as those of the Combined Company. The Combined Company’s capital structure has been retrospectively recast for all periods presented to reflect the number of shares of the legal parent issued to HOD’s former shareholders in connection with the Transaction.
Reverse Stock Split
On June 1, 2026 and prior to the completion of the Merger, the Company effected a
The reverse stock split became effective at 5:00 a.m. Eastern Time on June 1, 2026, and the Company’s common stock began trading on a split-adjusted basis on The Nasdaq Capital Market under the existing ticker symbol, “TBH” at the opening of trading on the same date.
As a result of the reverse stock split, every eight issued and outstanding shares of common stock were automatically combined into one share of common stock. The reverse stock split did not affect the number of authorized shares of common stock or the par value of the common stock. No fractional shares were issued in connection with the reverse stock split. Stockholders who otherwise would have been entitled to receive a fractional share received a cash payment in lieu of such fractional share.
The reverse stock split also resulted in proportionate adjustments to the number of shares of common stock issuable upon the exercise or conversion of the Company’s outstanding equity awards, warrants, convertible securities, and other equity-linked instruments, as well as corresponding adjustments to the applicable exercise or conversion prices, in accordance with the terms of the respective instruments.
All references to quantities of stock throughout this document are effected for this reverse stock split and presented with the current quantities. This change was also applied retrospectively to all share and per-share amounts.
Transaction consideration and capitalization
Immediately before the closing, the Legacy HOD common shares and Legacy HOD restricted stock units (“RSUs”) were converted using the
20
House of Doge Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(In United States dollars, except for per share data)
4. Reverse Recapitalization (cont.)
The following table summarizes the common shares and Series C preferred shares issued in connection with the Transaction:
| Share reconciliation | Common shares | Series C preferred shares | ||||||
| Legacy HOD balance as of March 31, 2026, as retrospectively recast | ||||||||
| Common-share equivalents delivered in Series C preferred form | ( | ) | ||||||
| Settlement of vested Legacy HOD RSUs at the Merger | ||||||||
| Legacy Brag House common shares included at the Merger | ||||||||
| Balance, June 30, 2026 | ||||||||
A total of
The exchange ratio was applied retrospectively to HOD’s historical:
| ● | common shares outstanding; |
| ● | common shares converted into series C preferred; |
| ● | restricted stock units; |
| ● | weighted-average shares used in calculating earnings or loss per share; and |
| ● | per-share amounts. |
The par value of the Combined Company’s common stock was retrospectively reflected for all periods presented. The difference between the par value of the Combined Company’s common stock and the historical par value of HOD’s equity was recorded as an adjustment to additional paid-in capital.
Net assets acquired
The following table presents the historical carrying amounts of Brag House’s net assets recognized by the Combined Company as of the closing date:
| Net assets acquired | Amount | |||
| Cash | $ | |||
| Prepaid expenses | $ | |||
| Intercompany loans | $ | |||
| Long-term investments (equity) | $ | |||
| Accounts payable and accrued liabilities | $ | ( | ) | |
| Short-term debt | $ | ( | ) | |
| Warrant derivative liability | $ | ( | ) | |
| Net assets of Brag House acquired in the Transaction | $ | |||
The amounts above reflect the historical carrying amounts of Brag House’s assets and liabilities as of the transaction date, consistent with the treatment for a reverse capitalization. The $
21
House of Doge Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(In United States dollars, except for per share data)
4. Reverse Recapitalization (cont.)
Transaction costs
Prior to the Merger, Brag House incurred transaction costs of $
Legacy HOD incurred $
| Classification of transaction costs | Amount | |||
| Brag House Costs recognized as listing or transaction expense before the Merger | $ | |||
| Legacy HOD costs recorded as a reduction of additional paid-in capital | ||||
| Total transaction costs | $ | |||
At June 30, 2026, $
Warrants
Upon closing, the Company assumed warrants to purchase an aggregate of
| Warrant category | Number of warrants | Exercise price | ||||||
| PIPE warrants | $ | |||||||
| Private-placement agent warrants | $ | |||||||
| H.C. Wainwright warrants | $ | |||||||
| Underwriter warrants | $ | |||||||
| Yorkville warrants | $ | |||||||
| Total warrants | ||||||||
The Company evaluated the warrants under ASC 480, Distinguishing Liabilities from Equity, and ASC 815, Derivatives and Hedging, and classified the warrants as equity and liabilities, as applicable.
For liability classification: The warrant liabilities were initially recognized at fair value on the closing date and are re-measured at fair value at each reporting date, with changes in fair value recognized in earnings. The warrant liabilities had an aggregate fair value of approximately $
See Note 10 - Short-Term Debt, Note 11 - Capital Stock, and Note 15 - Fair Value Measurements and Financial Risk Management, for additional information.
Presentation of stockholders’ equity
The consolidated statements of stockholders’ equity have been retrospectively recast to reflect the legal capital structure of the Combined Company following the Merger.
22
House of Doge Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(In United States dollars, except for per share data)
4. Reverse Recapitalization (cont.)
Brag House’s pre-Merger equity accounts were eliminated and replaced with Legacy HOD’s historical equity accounts, as retrospectively recast, together with the net asset contribution, transaction costs and the
Cash flow impact
At closing, the Company acquired cash of $
See Note 3 - Going Concern, for additional information.
5. Accounts Receivable and Revenue Recognition
| As of June 30, 2026 | As of March 31, 2026 | |||||||
| Accounts receivable, net | ||||||||
| ETP and ETF support service fees | ||||||||
| Other receivables | ||||||||
| Accounts receivable, net | $ | $ | ||||||
| Three months ended June 30, 2026 | Three months ended June 30, 2025 | |||||||
| Revenue | ||||||||
| Support services (ETP and ETF) | $ | $ | ||||||
| Revenue | $ | $ | ||||||
23
House of Doge Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(In United States dollars, except for per share data)
5. Accounts Receivable and Revenue Recognition (cont.)
ETP and ETF support services - 21Shares
Effective April 4, 2025, the Company entered into a five-year support services agreement with 21 Shares. The European 21Shares Dogecoin ETP commenced trading on April 8, 2025 and the U.S. 21Shares Dogecoin ETF (ticker: TDOG) commenced operations on January 22, 2026.
Under the agreement, the Company provides a royalty-free license to specified Dogecoin and House of Doge marks together with research and operational assistance, marketing support, website and link support, access to relationships and channels, and related ongoing collaboration activities. The licensed marks and support activities are highly interdependent and are accounted for as one combined stand-ready performance obligation satisfied over time.
Consideration is variable and equals the Company’s contractual
The Company is principal for the combined licensed marks and support service because it controls and is primarily responsible for that specified service before transfer to 21Shares. The Company is not principal for the underlying ETP or ETF sponsorship, issuance, regulatory, custody, distribution or fund-management services performed or arranged by 21Shares and therefore does not recognize
For the three months ended June 30, 2026, the Company recognized $
Remaining performance obligations
At June 30, 2026, the Company had no fixed transaction price allocated to unsatisfied or partially unsatisfied performance obligations. Consideration under the continuing 21Shares support agreement is entirely variable based on future sponsor and management fee activity and is allocated to the service period in which the related support is provided. The Company applies the practical expedient in ASC 606 and does not disclose an estimate of variable consideration allocated to future performance obligations when the consideration is allocated entirely to a wholly unsatisfied performance obligation or to a distinct future period of a series.
Customer and credit concentrations
21Shares accounted for
6. Prepaid and Other Current Assets
The following table presents the components of prepaid and other current assets as of June 30, 2026 and March 31, 2026:
| As of June 30, 2026 | As of March 31, 2026 | |||||||
| Prepaid deposits | $ | $ | ||||||
| Deferred financing and offering costs | ||||||||
| Sponsorships | ||||||||
| Prepaid insurance and other prepaid expenses | ||||||||
| Legal retainers | ||||||||
| Compliance support and reporting | ||||||||
| Total prepaid expenses and other current assets | $ | $ | ||||||
24
House of Doge Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(In United States dollars, except for per share data)
6. Prepaid and Other Current Assets (cont.)
Prepaid expenses are recognized as an expense over the applicable service or benefit periods. Investment-related and other deposits are reclassified or otherwise accounted for upon completion or settlement of the underlying transaction. The Company evaluates the recoverability of these balances at each reporting date.
At June 30, 2026, prepaid deposits included $
As of June 30, 2026, the proposed equity acquisition had not closed, no SVS shares had been issued or transferred to the Company, and the Company had not obtained voting, dividend, liquidation or board-observer rights. Accordingly, $
7. Investments
| As of June 30, 2026 | As of March 31, 2026 | |||||||
| Equity Securities | ||||||||
| DataCentrex Inc. common shares | $ | $ | ||||||
| 21Shares Dogecoin ETF(TDOG) common shares | ||||||||
| Stay Inc. common shares | ||||||||
| CleanCore Solutions Inc. Class B common shares | ||||||||
| Equity securities | ||||||||
| Unsecured convertible debt securities: | ||||||||
| McQueen Labs Inc. - Tranche I | ||||||||
| McQueen Labs Inc. - Tranche II | ||||||||
| Unsecured convertible debt securities | ||||||||
| McQueen Labs Inc. Series F convertible preferred shares | ||||||||
| Preferred stock | ||||||||
| Common stock purchase warrants | ||||||||
| CleanCore Solutions Inc. pre-funded warrants | ||||||||
| CleanCore Solutions Inc. strategic advisory services warrants | ||||||||
| Common stock purchase warrants | ||||||||
| Equity-method investment: | ||||||||
| LBK Triestina Holdings LLC | ||||||||
| Total Investments | $ | $ | ||||||
| Short-term investments | ||||||||
| Long-term investments | $ | $ | ||||||
25
House of Doge Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(In United States dollars, except for per share data)
7. Investments (cont.)
a) Datacentrex Inc.
Initial investment and ownership
On March 13, 2025, the Company purchased
On July 22, 2025, USDAE was acquired by Dogehash Technologies, Inc. (“Dogehash”), and the retained units were exchanged for
On December 15, 2025, Dogehash completed a business combination with Thumzup Media Corporation and the public company was renamed Datacentrex, Inc (NASDAQ: “DTCX”). The Company then discontinued the measurement alternative and measured the publicly traded shares at fair value through earnings.
March 31, 2026 measurement
At March 31, 2026, the Company held
June 2026 disposition
| Disposition result | Three months ended June 30, 2026 | |||
| Net proceeds from sale of | $ | |||
| Carrying amount derecognized | ( | ) | ||
| Loss on disposal | $ | ( | ) | |
During June 2026, the Company sold 100% of their DTCX common shares for aggregate proceeds of $
At June 30, 2026, the Company held no DTCX common shares, had no remaining ownership interest in Datacentrex and reported no related carrying amount.
b) Stay Inc.
Initial investment and ownership
On June 12, 2025, the Company through its wholly owned subsidiary Dogecoin Ventures Inc., entered into an agreement with Stay Inc. (“Stay”), a privately held company, and acquired
26
House of Doge Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(In United States dollars, except for per share data)
7. Investments (cont.)
Conditional purchase commitments
Under the agreement the Company was required to purchase up to an additional
| ● | The purchase of |
| ● | The purchase of an additional |
As of June 30, 2026, neither liquidity event had been confirmed as occurring within the contractual period, nor additional shares had been issued or purchased, and the contractual period had expired. Accordingly, the contingent purchase provisions were not triggered, and, absent an amendment or extension, no further purchase commitment remained outstanding. No additional investment, commitment liability, or derivative liability was recognized as of June 30, 2026. At March 31, 2026, the contractual period remained open, and the maximum potential additional commitment was $
Subsequent measurement
Because the investment does not have a readily determinable fair value, the Company elected the measurement alternative under ASC 321. Accordingly, the investment is carried at cost, less impairment, adjusted for observable price changes in orderly transactions for identical or similar investments of the same issuer. As of June 30, 2026 and March 31, 2026, the Company held
The investment is included in long-term investments on the unaudited interim condensed consolidated statements of financial position as of both June 30, 2026 and March 31, 2026.
c) McQueen Labs Inc.
The Company, through its wholly owned subsidiary Dogecoin Ventures Inc. (“DVI”), holds senior unsecured, non-interest-bearing convertible debentures and Series F convertible preferred shares issued by McQueen Labs Inc. (“McQueen”), a privately held Delaware corporation and a related party due to management relationships between the entities. DVI does not control McQueen and does not have the ability to exercise significant influence over McQueen’s operating or financial policies.
Convertible Debentures:
Transaction and contractual terms
During the year ended March 31, 2026, DVI acquired two senior unsecured, non-interest-bearing convertible debentures issued by McQueen with aggregate principal of $
If a Qualified Offering or Qualified Event does not occur, the debentures are repayable in cash at maturity. Before maturity, the principal automatically converts upon a Qualified Offering or Qualified Event, including a qualifying public offering, direct listing, reverse takeover or de-SPAC transaction. The conversion price is the lower of the price derived from a $
The debentures originally matured on February 9, 2026 and March 31, 2026, respectively. The agreements permitted two three-month extensions, subject to DVI’s consent. DVI consented to the first extensions on February 9, 2026 and March 31, 2026 and to the second extensions on May 9, 2026 and June 30, 2026. The second extensions revised the respective maturity dates to August 9, 2026 and September 30, 2026 and resulted in the issuance of an additional
27
House of Doge Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(In United States dollars, except for per share data)
7. Investments (cont.)
At June 30, 2026, no Qualified Offering, Qualified Event, conversion, default, change-of-control event or cash repayment had occurred. The embedded conversion features were not accounted for separately from the debt hosts based on the terms and conditions of the instruments.
Accounting and subsequent measurement
The Company accounts for the debentures as available-for-sale debt securities under ASC 320, Investments - Debt Securities and measures them at fair value at each reporting date, with unrealized gains and losses recognized in other comprehensive income. The Series F preferred shares are equity securities within the scope of ASC 321, Investments - Equity Securities, Because the shares do not have a readily determinable fair value, the Company elected the measurement alternative and carries them at cost, less impairment, adjusted for observable price changes in orderly transactions for similar securities of McQueen. The Company did not elect recurring fair value measurement for the Series F preferred shares. The recurring fair value measurements of the debentures and the non-recurring grant-date fair value measurements of the Series F preferred shares are classified within Level 3 because their valuations use significant unobservable inputs.
The Company estimated the fair value of the debentures using a discounted cash flow model based on the contractual principal amounts, remaining terms to maturity and a market-participant discount rate of
During the three months ended June 30, 2026, the
Series F convertible preferred shares
In connection with the original financings, DVI received
Under the debenture agreements, each three-month maturity extension entitles DVI to additional Series F preferred shares with an aggregate stated value equal to
The second-extension shares were initially measured at grant-date fair value. The
The Company applies the ASC 321 measurement alternative to all McQueen Series F preferred shares because the shares do not have a readily determinable fair value. Following initial recognition at grant-date fair value, the shares are carried at cost, less impairment, adjusted for qualifying observable price changes. At March 31, 2026, the carrying amount of the
Fair value measurements
The grant-date fair value of the Series F preferred shares was estimated using an option-pricing-method backsolve calibrated to the consideration paid in recent McQueen equity financings. Significant unobservable inputs included a risk-free interest rate of 3.92% and expected volatility of McQueen common shares of 125%. These initial recognition measurements are classified within Level 3 of the fair value hierarchy.
28
House of Doge Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(In United States dollars, except for per share data)
7. Investments (cont.)
At June 30, 2026, the carrying amount of the Company’s
Related-party transactions
McQueen is a related party of the Company due to management relationships between the entities. The Company’s related-party transactions with McQueen consisted of the acquisition and extension of the convertible debentures and the receipt of Series F preferred shares described above. The related investment balances were $
The following table summarizes the Company’s recurring Level 3 fair value measurements at June 30, 2026. The Series F preferred shares are excluded because they are not subsequently measured at recurring fair value:
| Instrument | Fair value | Valuation technique and significant unobservable inputs | ||||
| Convertible debenture – Tranche I | $ | |||||
| Convertible debenture – Tranche II | ||||||
| Total recurring Level 3 investments | $ | |||||
Credit loss assessment and presentation
Available-for-sale debt securities are evaluated for credit losses when their fair value is below adjusted amortized cost. At June 30, 2026 and March 31, 2026, the fair value of the McQueen debentures exceeded their adjusted amortized cost basis, and management did not identify a credit-related loss. Accordingly, no allowance for credit losses was recorded at either date. The Series F preferred shares are evaluated for impairment and qualifying observable price changes under ASC 321. No impairment indicator or qualifying observable price change was identified at June 30, 2026 or March 31, 2026. The debentures are presented as short-term investments because their contractual maturities were within twelve months of each reporting date, and the Series F preferred shares are presented as long-term investments on the unaudited interim condensed consolidated statement of financial position.
29
House of Doge Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(In United States dollars, except for per share data)
7. Investments (cont.)
d) Investment in CleanCore Solutions Inc.
The Company, through its wholly owned subsidiary Dogecoin Ventures Inc., holds CleanCore Solutions Inc. (“CleanCore”) common shares, pre-funded warrants and strategic advisory services warrants. Following the June 30, 2026 merger with Brag House Holdings, Inc. (“Brag House”), the consolidated balance also includes
Pre-funded warrants and common shares
On September 5, 2025, the Company acquired
On September 23, 2025,
On June 30, 2026, the Company completed its merger with Brag House. Upon consolidation, the Company included
At June 30, 2026, the
During the three months ended June 30, 2026, the Company recognized an unrealized gain of $
At June 30, 2026, all CleanCore common shares and warrants held by the Company were pledged as collateral under the Yorkville financing arrangement and were restricted from transfer. See Note 10, Short-term debt.
Strategic advisory services warrants
On September 5, 2025, the Company entered into a five-year strategic advisory services agreement with CleanCore. As non-cash consideration for strategic integration and diversification, treasury and industry advisory, vendor selection and strategic partnerships, reporting and board advisory, and ongoing strategic support, the Company received
| Instrument | Quantity | Exercise price | Expiration date | June 30, 2026 fair value | March 31, 2026 fair value | |||||||||||||
| Strategic advisory warrants - Tranche 1 | $ | $ | $ | |||||||||||||||
| Strategic advisory warrants - Tranche 2 | $ | |||||||||||||||||
| Total warrants outstanding | $ | $ | ||||||||||||||||
The strategic advisory services warrants had an aggregate grant-date fair value of $
30
House of Doge Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(In United States dollars, except for per share data)
7. Investments (cont.)
Accounting policy and significant influence assessment
The CleanCore common shares are equity securities with readily determinable fair values and are measured at fair value through net income under ASC 321, Investments - Equity Securities. The pre-funded warrants and strategic advisory services warrants are freestanding financial assets measured at fair value through earnings under the applicable financial instrument guidance, including ASC 815, Derivatives and Hedging, and ASC 820, Fair Value Measurement. The Company recognizes changes in fair value within loss (gain) on change in fair value of investments in the unaudited interim condensed consolidated statements of operations and comprehensive loss. Because these instruments are measured at fair value through earnings, a separate impairment model is not applied.
The Company’s asset-management, strategic-advisory and other service arrangements with CleanCore were terminated effective March 6, 2026, and the Company had no continuing rights to provide services to or participate in the management or operating policies of CleanCore. During the year ended March 31, 2026, CleanCore was a related party of the Company because of board and management relationships between the entities. Timothy Stebbing, the Company’s Chief Technology Officer, served as a CleanCore director, and Marco Margiotta, the Company’s Chief Executive Officer, served as CleanCore’s Chief Investment Officer until March 4, 2026. Mr. Stebbing continued to serve as a director of CleanCore after termination of the arrangements, although his board service did not arise from a contractual designation right held by the Company. The Company had no contractual right to appoint, nominate or remove a CleanCore director. Following termination of the service arrangements, Mr. Margiotta’s resignation and the cessation of Mr. Stebbing’s role as a representative of the Company, management concluded that CleanCore was no longer a related party after March 6, 2026. The Company recognized no revenue from the terminated CleanCore service arrangements during the three months ended June 30, 2026 or 2025, and no related accounts receivable or contract liabilities were outstanding at June 30, 2026 or March 31, 2026.
At June 30, 2026, the
Fair value changes recognized in earnings
The following table summarizes the changes in fair value recognized in earnings for the three months ended June 30, 2026:
| Instrument | Three months ended June 30, 2026 | |||
| DVI common shares | $ | |||
| Pre-funded warrants | ||||
| Strategic advisory services warrants | ||||
| Total net fair value gain | $ | |||
The fair value changes reflect the increase in CleanCore’s quoted share price from $
31
House of Doge Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(In United States dollars, except for per share data)
7. Investments (cont.)
Fair value hierarchy
The following table presents the recurring fair value measurements for the CleanCore instruments as of June 30, 2026:
| Instrument | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| CleanCore common shares | $ | $ | $ | $ | ||||||||||||
| Pre-funded warrants | ||||||||||||||||
| Strategic advisory services warrants | ||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
The common shares are classified within Level 1 because they are valued using an unadjusted quoted price in an active market. The remaining pre-funded warrants and strategic advisory services warrants are classified within Level 2 because their fair values are derived from the quoted CleanCore common share price, contractual terms and other market-based observable inputs. There were transfers between levels during the three months ended June 30, 2026.
Valuation techniques and inputs
The fair value of the remaining pre-funded warrants was based substantially on the quoted CleanCore common share price, adjusted for the nominal remaining exercise price. The Company used the Black-Scholes option-pricing model to estimate the fair value of the strategic advisory services warrants.
| Valuation input | June 30, 2026 | March 31, 2026 | Application | |||||||
| CleanCore common share price | $ | $ | ||||||||
| Risk-free interest rate | % | % | ||||||||
| Expected term | ||||||||||
| Expected volatility | % | % | ||||||||
| Dividend yield | % | % | ||||||||
| Exercise prices | $ | $ | ||||||||
The fair value of the strategic advisory services warrants is particularly sensitive to changes in CleanCore’s common share price and expected volatility. In isolation, increases in the share price, expected term or expected volatility generally increase the estimated fair value of the strategic advisory services warrants, while decreases in those assumptions generally reduce the estimated fair value. Changes in the risk-free interest rate and dividend yield have a comparatively smaller effect at the reported exercise prices and remaining terms.
32
House of Doge Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(In United States dollars, except for per share data)
7. Investments (cont.)
e) 21Shares Dogecoin ETF (TDOG)
Initial acquisition and ownership
The Company holds common shares of beneficial interest in the 21Shares Dogecoin ETF (“TDOG”), which provides indirect exposure to Dogecoin. The investment is accounted for under ASC 321 and measured at fair value, with changes in fair value recognized in earnings. The investment is classified as long term because management does not intend to sell the shares within twelve months of June 30, 2026. The Company concluded that it neither controls nor exercises significant influence over TDOG because the trust is managed by its sponsor and the shares do not provide the Company with substantive voting, management or policy-making rights, and the Company’s separate role as a service provider to the Trust does not provide power over the activities that most significantly affect the Trust’s economic performance. Accordingly, the Company does not consolidate the Trust and does not apply the equity method to its TDOG investment.
In April 2026, the Company purchased an aggregate of
At June 30, 2026, the carrying value was determined using the unadjusted quoted market price of $
| Three months ended June 30, 2026 | Amount | |||
| Unrealized loss on change in fair value | $ | ( | ) | |
| Brokerage commissions and handling expense | ( | ) | ||
| Total investment-related loss and transaction expense | $ | ( | ) | |
Fair value measurement
The TDOG shares are measured on a recurring basis using an unadjusted quoted price in an active market and are therefore classified within Level 1 of the fair value hierarchy under ASC 820, Fair Value Measurement. The following table presents the fair value hierarchy for investment.
| Measurement date | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| June 30, 2026 | $ | $ | $ | $ | ||||||||||||
| March 31, 2026 | $ | $ | $ | $ | ||||||||||||
At June 30, 2026, all
March 31, 2026 purchase commitment
At March 31, 2026, the Company’s contractual commitment to purchase $
33
House of Doge Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(In United States dollars, except for per share data)
7. Investments (cont.)
f) LBK Triestina Holdings LLC
The Company, through its wholly owned subsidiary Dogecoin Ventures Inc. (“Dogecoin Ventures”), holds preferred membership units in LBK Triestina Holdings LLC (“LBK”), a Delaware limited liability company that indirectly owns and operates Unione Sportiva Triestina Calcio 1918 s.r.l. (“Triestina”), an Italian professional football club.
At June 30, 2026 and March 31, 2026, the investment had a carrying amount of nil after recognition of equity-method losses, basis-difference expense and impairment losses. The Company’s direct ownership interest increased to
Background and ownership
Dogecoin Ventures became a preferred member of LBK on December 1, 2025, when LBK’s Second Amended and Restated Limited Liability Company Agreement became effective. At March 31, 2026, Dogecoin Ventures held
During the three months ended June 30, 2026, the Company made additional capital contributions of $
| June 30, 2026 | March 31, 2026 | |||||||
| Preferred units held | ||||||||
| Direct ownership interest | % | % | ||||||
| Cumulative investment cost | $ | $ | ||||||
Equity-method accounting and consolidation assessment
The Company accounts for its investment in LBK under the equity method because its ownership interest, director-designation rights and participation rights provide it with the ability to exercise significant influence over LBK’s operating and financial policies. At June 30, 2026, and March 31, 2026, LBK’s board consisted of two directors, one of whom was designated by the Company. Accordingly, the Company held one of the two board seats but did not control a majority of the board. .The Company also held less than
34
House of Doge Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(In United States dollars, except for per share data)
7. Investments (cont.)
Impairment and nonrecurring fair value measurements
The Company evaluates its equity-method investment for impairment when events or changes in circumstances indicate that a decline in value may be other than temporary. The Company made additional capital contributions of $
The June 30, 2026 fair value measurement was a nonrecurring Level 3 measurement. Management considered LBK’s recurring operating losses, negative net assets, continuing dependence on capital support, Triestina’s relegation from Series C to Series D, the ongoing legal and criminal investigation involving Triestina and certain current and former directors, technical insolvency, creditor claims, potential judicial-liquidation exposure, the negotiated business-crisis settlement process described below and the resulting bankruptcy risk. These significant factors indicated that the additional contributions represented capital support in a distressed and capital-dependent Company. Based on the totality of these factors management estimated the fair value of the investment at nil.
Legal and restructuring matters
On June 25, 2026, Triestina filed a petition to initiate a negotiated business-crisis settlement process under Italian law (the “CNC”), together with a request for protective measures and a draft restructuring plan. The Trieste Chamber of Commerce appointed an independent expert on June 30, 2026. At that date, Triestina was technically insolvent, and depended on continued investor funding and faced creditor claims, including a petition seeking judicial liquidation. The CNC is a consent-based creditor negotiation process and does not assure a successful restructuring; the process may terminate if recovery prospects are not demonstrated, which could result in judicial liquidation or bankruptcy.
On July 1, 2026, the expert accepted the appointment and the request for protective measures was published in the applicable business register. Management considered these subsequent procedural developments to the extent they provided additional evidence about the legal and financial conditions that existed at June 30, 2026. No gain or restoration of the previously impaired investment was recognized.
8. Intangible Assets and License Contract Liability
On January 31, 2025, the Company entered into an exclusive, royalty-bearing trademark license agreement (“the License Agreement”) with Dogecoin Foundation, Inc. and its affiliate, MadeUpNumbers Ltd. (collectively, the “Licensors”). The License agreement grants the Company worldwide rights to use certain Dogecoin related trademarks, including the DOGECOIN mark, in connection with the manufacture, marketing, sale and distribution of licensed goods and services. The initial contractual term is five years, and the Company has an option to renew the arrangement for an additional fifteen- year period.
Under the License Agreement, the Company is required to pay a royalty equal to
35
House of Doge Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(In United States dollars, except for per share data)
8. Intangible Assets and License Contract Liability (cont.)
Initial recognition and measurement
At inception, the Company recognized the trademark license at a gross carrying amount of $
A corresponding license contract liability was recognized for the present value of the fixed minimum royalty payments. The obligation is subsequently measured at amortized cost using the effective interest method. Scheduled minimum royalty payments reduce the obligation, and the unwinding of the discount is recognized as a finance expense.
The intangible asset is being amortized over
Intangible license asset
The continuity of intangible assets for the period ended June 30, 2026 is as follows:
| Intangible license asset | Amount | |||
| Balance, March 31, 2026 | $ | |||
| Amortization expense | ( | ) | ||
| Balance, June 30, 2026 | $ | |||
The Company’s finite-lived intangible assets consist solely of the trademark license. The gross carrying amount, accumulated amortization and net carrying amount of the finite-lived trademark license were as follows:
| June 30, 2026 | March 31, 2026 | |||||||
| Gross carrying amount | $ | $ | ||||||
| Accumulated amortization | ( | ) | ( | ) | ||||
| Total intangible license asset, net | $ | $ | ||||||
Amortization expense was $
| Year ending June 30 | Estimated amortization expense | |||
| 2027 | $ | |||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Total | $ | |||
36
House of Doge Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(In United States dollars, except for per share data)
8. Intangible Assets and License Contract Liability (cont.)
License contract liability
The continuity of license contract liability for the period ended June 30, 2026 is as follows:
| License contract liability | Amount | |||
| Balance, March 31, 2026 | $ | |||
| Minimum royalty payments | ( | ) | ||
| Finance expense | ||||
| Balance, June 30, 2026 | $ | |||
| Less: current portion | ( | ) | ||
| Non-current portion | $ | |||
During the three months ended June 30, 2026, the Company recognized finance expense of $
At June 30, 2026, the undiscounted future minimum royalty payments and their reconciliation to the carrying amount of the license contract liability were as follows:
| Minimum payments under the License Agreement | Amount | |||
| Within 1 year | $ | |||
| 2 to 3 years | ||||
| 4 to 5 years | ||||
| Total minimum payments | ||||
| Less: effect of discounting | ( | ) | ||
| Present value of minimum payments | $ | |||
Equity guarantee and amendment
The original License Agreement included an equity guarantee under which the Licensors were entitled to own no less than
Impairment assessment
The Company evaluates the finite-lived trademark license for recoverability whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. At June 30, 2026 and March 31, 2026, the Company identified no such indicators. Accordingly, no recoverability test was required, and impairment loss was recognized during the three months ended June 30, 2026.
37
House of Doge Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(In United States dollars, except for per share data)
9. Yorkville Warrant
On December 4, 2025, prior to the completion of the Merger on June 30, 2026, Brag House Holdings, Inc. issued YA II PN, Ltd. (“Yorkville”) a warrant (the “Yorkville Warrant”) to purchase
Upon completion of the Merger and the related one-for-eight reverse stock split on June 30, 2026, the original warrant share amount was adjusted to
The Yorkville Warrant may be exercised for cash or, when the applicable registration statement or prospectus is unavailable, on a cashless basis. The exercise price and number of warrant shares are subject to customary adjustments for stock dividends, stock splits, reorganizations and similar events. Subject to limited exceptions, Yorkville may not exercise the warrant to the extent its beneficial ownership would exceed
The Yorkville Warrant is a freestanding derivative within the scope of ASC 815, Derivatives and Hedging. It does not qualify for equity classification under ASC 815-40 because the fundamental transaction provision may require cash settlement in circumstances in which the warrant holder’s rights differ from those of holders of the Company’s common stock. Accordingly, the warrant is included in current liabilities and measured at fair value at each reporting date, with changes in fair value recognized in earnings.
The carrying amount of the Yorkville Warrant was as follows:
| June 30, 2026 | March 31, 2026 | |||||||
| Warrant derivative liability | $ | $ | ||||||
No corresponding warrant derivative liability was included in the Company’s March 31, 2026 condensed consolidated balance sheet because the Merger had not been completed as of that date.
38
House of Doge Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(In United States dollars, except for per share data)
9. Yorkville Warrant (cont.)
The following table presents the change in the warrant derivative liability for the three months ended June 30, 2026:
| Amount | ||||
| Balance at March 31, 2026 | $ | |||
| Liability recognized in connection with the Merger | ||||
| Change in fair value recognized in earnings | ||||
| Exercises and settlements | ||||
| Balance at June 30, 2026 | $ | |||
The fair value measurement is classified within Level 3 of the fair value hierarchy under ASC 820, Fair Value Measurement, because it incorporates significant unobservable inputs. The Company estimated the June 30, 2026 fair value using a Monte Carlo simulation based on geometric Brownian motion with
| Significant valuation input | June 30, 2026 | |||
| Closing market price of common stock | $ | |||
| Contractual five-day average Nasdaq closing price | $ | |||
| Adjusted exercise price | $ | |||
| Warrant shares after contractual adjustment (approximately) | ||||
| Remaining contractual term | ||||
| Expected volatility | % | |||
| Risk-free interest rate | % | |||
At June 30, 2026, the resulting fair value of the Yorkville Warrant was $
10. Short-Term Debt
The following table presents the carrying amounts of the Company’s short-term debt as of June 30, 2026 and March 31, 2026. All debt outstanding at June 30, 2026 was classified as current because the contractual maturities or repayment requirements were within twelve months of the reporting date. Debt for which the fair value option was elected is presented at the fair value of the entire instrument; contractual principal and accrued interest are not presented separately for those instruments. Related-party debt is presented separately on the consolidated balance sheet and is disclosed in Note 14 - Related Party Transactions.
| Debt instrument | June 30, 2026 | March 31, 2026 | ||||||
| Secured promissory note - Brag House | $ | |||||||
| Additional short-term advance - Brag House | ||||||||
| Margin loan | ||||||||
| Yorkville convertible note, at fair value | ||||||||
| Senior secured convertible notes, at fair value | ||||||||
| Total short-term debt | $ | $ | ||||||
39
House of Doge Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(In United States dollars, except for per share data)
10. Short-Term Debt (cont.)
Promissory Note and Advances - Brag House
On October 14, 2025, the Company entered into a secured promissory note with Brag House Holdings, Inc. (“Brag House”), which initially provided for borrowings of up to $
Effective December 4, 2025, the note was amended to increase the maximum principal amount to $
Effective April 14, 2026, the Company and Brag House amended the secured promissory note to extend its maturity date to
In addition, on December 4, 2025, the Company received a short-term advance of $
The secured promissory note and the additional advance were not repaid, cancelled or legally extinguished upon completion of the merger. The remaining obligations were reclassified in the respective legal entities as an intercompany payable of Legacy HOD and a corresponding intercompany receivable of the legal parent. These intercompany balances have no stated maturity or settlement date following the merger. Immediately before reclassification, aggregate principal outstanding was $
Margin Loan
On June 29, 2026, the Company entered into a margin loan arrangement with Revere Securities (the “Broker”) and withdrew $
During the three months ended June 30, 2026, the Company repaid $
Yorkville Convertible Note
On December 4, 2025, the Company and Brag House, as joint and several issuers, issued a convertible promissory note to Yorkville in an aggregate original principal amount of up to $
40
House of Doge Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(In United States dollars, except for per share data)
10. Short-Term Debt (cont.)
A second amendment effective June 1, 2026 extended the maturity date to
The note includes a
The Company elected the fair value option under ASC 825, Financial Instruments, for the Yorkville convertible note. Accordingly, the entire hybrid instrument is measured at fair value at each reporting date, and its embedded features are not separately bifurcated under ASC 815, Derivatives and Hedging. Changes in fair value are recognized in earnings, except for changes attributable to instrument-specific credit risk, which are recognized in other comprehensive income.
The Yorkville convertible note was recognized in the Company’s consolidated financial statements upon completion of the merger on June 30, 2026. Its fair value and carrying amount as of June 30, 2026 were both $
Senior Secured Convertible Notes
On
The notes mature on
In connection with the financing, Brag House issued an aggregate of
The Company elected the fair value option under ASC 825 for the senior secured convertible notes. Accordingly, the hybrid instruments are measured at fair value at each reporting date, and their embedded features are not separately bifurcated under ASC 815. Changes in fair value are recognized in earnings, except for changes attributable to instrument-specific credit risk, which are recognized in other comprehensive income.
The senior secured convertible notes were recognized in the Company’s consolidated financial statements upon completion of the merger on June 30, 2026. Their aggregate fair value and carrying amount as of June 30, 2026 was $
41
House of Doge Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(In United States dollars, except for per share data)
10. Short-Term Debt (cont.)
Fair Value Measurements
The following table presents the Company’s financial liabilities measured at fair value on a recurring basis as of June 30, 2026. The Company classified both instruments within Level 3 because the valuation models used significant unobservable inputs.
| Liability | Fair value | Level 1 | Level 2 | Level 3 | ||||||||||||
| Yorkville convertible note | $ | $ | $ | $ | ||||||||||||
| Senior secured convertible notes | ||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
The following table summarizes the changes in Level 3 debt liabilities measured at fair value on a recurring basis during the three months ended June 30, 2026:
| Level 3 debt liabilities | Amount | |||
| Balance, March 31, 2026 | $ | |||
| Liabilities recognized in connection with the merger | ||||
| Changes in fair value recognized in earnings | ||||
| Balance, June 30, 2026 | $ | |||
Because the Yorkville convertible note and the senior secured convertible notes were first recognized in the Company’s consolidated financial statements upon completion of the merger on June 30, 2026, no change in their fair value was recognized in earnings or other comprehensive income for the three months ended June 30, 2026. There were no transfers into or out of Level 3 during the period.
The fair values of the Yorkville convertible note and senior secured convertible notes were estimated by combining the present value of contractual principal and interest with the value of the applicable conversion feature. Contractual cash flows were discounted at
The significant unobservable inputs were the market-participant discount rate and expected equity volatility. In isolation, an increase in the discount rate would generally decrease the fair value of the contractual debt cash flows, while an increase in expected volatility would generally increase the fair value of the conversion features. Changes in these inputs may not be independent and, therefore, the directional effect of a change in any one input may be affected by changes in other inputs
The following table presents the difference between the fair value and unpaid principal balance of debt instruments for which the fair value option was elected as of June 30, 2026:
| Liability | Fair value | Unpaid principal | Fair value over (under) unpaid principal | |||||||||
| Yorkville convertible note | $ | $ | $ | ( | ) | |||||||
| Senior secured convertible notes | ( | ) | ||||||||||
| Total | $ | $ | $ | ( | ) | |||||||
Interest expense on short-term debt measured at amortized cost, excluding related-party debt was $
42
House of Doge Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(In United States dollars, except for per share data)
11. Capital Stock
Capital Structure
Capital Structure and reverse recapitalization
On June 30, 2026, the Brag House completed the Merger with House of Doge Inc. (“HOD”). Brag House was the legal acquirer and HOD was identified as the accounting acquirer. Accordingly, the Merger was accounted for as a reverse recapitalization. The historical financial statements before the Merger are those of HOD, and the equity structure presented for all periods has been retrospectively recast to reflect the legal parent’s capital structure. Legacy HOD common shares and Legacy HOD restricted share units (“RSUs”) were converted using the applicable
As a result of the Merger, the Company’s authorized capital consists of
| June 30, 2026 | March 31, 2026 | |||||||
| Common shares issued and outstanding | ||||||||
| Series C preferred shares issued and outstanding | ||||||||
| Common stock | $ | $ | ||||||
| Preferred stock | ||||||||
| Additional paid-in capital | $ | $ | ||||||
| Common stock subscribed but unissued | $ | |||||||
March 31, 2026 share and par value amounts have been retrospectively recast to reflect the Merger exchange ratio as adjusted for 1-for-8 reverse stock split.
The Series A Preferred Stock is entitled to
Each share of Series C Convertible Preferred Stock is convertible into
The Series C certificate of designation contains customary anti-dilution adjustments for stock splits, stock dividends, recapitalizations and similar transactions. Series C Preferred Stock may be issued only in accordance with the Merger Agreement or in subsequent rights offerings in which Series C holders are entitled to participate on an as-converted basis.
Common stock activity
Immediately before the Merger, after giving effect to the legal parent’s
43
House of Doge Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(In United States dollars, except for per share data)
11. Capital Stock (cont.)
At closing, HOD common shareholders received
Separately, holders of vested HOD RSUs received
Upon consummation of the Merger, the reverse recapitalization resulted in the recognition of $
Restricted share units (“RSUs”)
The Company grants equity-classified RSUs to employees, executives, contractors and consultants. The awards generally vest based on continued service over periods of up to 18 months. Compensation cost is recognized over the requisite service period for each vesting tranche. During the three months ended June 30, 2026, HOD did not grant any new RSUs.
At March 31, 2026, HOD had
Under the Merger settlement schedule,
| March 31, 2026 predecessor units | March 31, 2026 equivalent successor units | June 30, 2026 successor units | ||||||||||
| Vested and unsettled | ||||||||||||
| Nonvested | ||||||||||||
| Total outstanding RSUs | ||||||||||||
44
House of Doge Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(In United States dollars, except for per share data)
11. Capital Stock (cont.)
The June 30, 2026 balance excludes the
The Company recognized RSU compensation expense of $
Stock Options
In connection with the Merger completed on June 30, 2026, the Company recognized
The Options were fully vested before the acquisition date and did not require post-combination service, no unrecognized compensation cost related to the Options remained as of June 30, 2026.
The following table summarizes the Options recognized in connection with the Merger.
| Stock Option Measure | June 30, 2026 | March 31, 2026 | ||||||
| Options outstanding and exercisable | ||||||||
| Weighted Average Exercise Price | $ | |||||||
| Weighted Average Remaining Life | - | |||||||
| Aggregate Intrinsic Value | $ | |||||||
Warrants
In connection with the Merger completed on June 30, 2026, the Company recognized
The following table summarizes the equity-classified warrant balances for the three months ended June 30, 2026:
| Warrant class | Remaining Life (Years) | Number of Warrants | Exercise Price | |||||||||
| PIPE Warrants | $ | |||||||||||
| Placement Agent Warrants | $ | |||||||||||
| H.C. Wainwright Warrants | $ | |||||||||||
| Underwriter Warrants | $ | |||||||||||
| Total as of June 30, 2026 | ||||||||||||
45
House of Doge Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(In United States dollars, except for per share data)
12. General and administrative expenses
The table below presents the Company’s general and administrative expenses for the three-months ended June 30, 2026 and 2025:
| Three months ended June 30, 2026 | Three months ended June 30, 2025 | |||||||
| Bank fees | $ | $ | ||||||
| Insurance | ||||||||
| Office expenses | ||||||||
| Travel and entertainment | ||||||||
| Consulting fees | ||||||||
| Salaries and benefits | ||||||||
| Technology development | ||||||||
| Share-based compensation | ||||||||
| Total general and administrative expenses | $ | $ | ||||||
13. Income (Loss) Per Share
Basic income (loss) per share is determined by dividing net loss attributable to common stockholders by the weighted average number of basic shares outstanding for the relevant period. The calculation of diluted income (loss) per share includes the dilutive effect of potential shares outstanding during the relevant period.
The following table summarizes the securities that are excluded from the diluted per share calculation because the effect of including these potential shares is anti-dilutive.
| Three months ended June 30, 2026 | Three months ended June 30, 2025 | |||||||
| Anti-dilutive securities not included in the calculation of diluted EPS (weighted average): | ||||||||
| Convertible debt | ||||||||
| Warrants | ||||||||
| Convertible series C preferred stock | ||||||||
| Stock options | ||||||||
| Common stock subscribed but unissued | ||||||||
| Non-vested RSUs outstanding | ||||||||
| Total | ||||||||
46
House of Doge Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(In United States dollars, except for per share data)
13. Income (Loss) Per Share (cont.)
The following table sets forth the computation of basic and diluted income (loss) per share for the three-month periods ending June 30, 2026 and 2025:
| Three months ended June 30, 2026 | Three months ended June 30, 2025 | |||||||
| Weighted average # of common shares outstanding, basic | ||||||||
| Weighted average # of vested RSUs outstanding | ||||||||
| Weighted average # of common shares outstanding, basic and diluted | ||||||||
| Net income (loss) attributable to common stockholders | $ | $ | ( | ) | ||||
| Net income (loss) per share, basic and diluted | $ | $ | ( | ) | ||||
| Weighted average # of common shares outstanding, basic | ||||||||
| Effect of convertible debt | ||||||||
| Effect of warrants | ||||||||
| Effect of convertible series C preferred stock | ||||||||
| Effect of stock options | ||||||||
| Effect of common stock subscribed but unissued | ||||||||
| Effect of non-vested RSUs outstanding | ||||||||
| Weighted-average shares outstanding – diluted | ||||||||
| Net income (loss) attributable to common stockholders | $ | $ | ( | ) | ||||
| Income (loss) per share, diluted | $ | $ | ( | ) | ||||
14. Related Party Transactions
The Company considers its directors, executive officers, key management personnel, and entities controlled or significantly influenced by such persons to be related parties. Key management personnel are those persons having authority and responsibility for planning, directing, and controlling the activities of the Company, directly or indirectly.
On February 10, 2026, the Company entered into an unsecured and subordinated short-term promissory note with Marco Margiotta, the Company’s Chief Executive Officer and a director, providing for borrowings of up to $
On February 11, 2026, Dogecoin Ventures Inc., a wholly owned subsidiary of the Company, received an initial advance of $
47
House of Doge Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(In United States dollars, except for per share data)
14. Related Party Transactions (cont.)
During the three months ended June 30, 2026, Dogecoin Ventures Inc. received additional advances totaling $
During the year ended March 31, 2026, the Company incurred consulting fees of $
One of the Company’s founders has family members and associated companies who have had transactions with the Company during the three months ended June 30, 2026 and 2025. In aggregate, this group holds 24.64% of the outstanding common shares of the Company for the period ended June 30, 2026.
The table below summarizes investment with the founder-related group as of June 30, 2026 and March 31, 2026:
| As of June 30, 2026 | As of March 31, 2026 | |||||||
| Unsecured convertible debt securities: | ||||||||
| McQueen Labs Inc. - Tranche I | $ | $ | ||||||
| McQueen Labs Inc. - Tranche II | ||||||||
| Unsecured convertible debt securities | ||||||||
| Preferred Stock | ||||||||
| McQueen Labs Inc. Series F convertible preferred shares | ||||||||
| Preferred stock | ||||||||
The table below summarizes expenses incurred with the founder-related group during the three months ended June 30, 2026 and 2025:
| Three months ended June 30, 2026 | Three months ended June 30, 2025 | |||||||
| Consulting fees | $ | $ | ||||||
| Other general and administration | ||||||||
| Advertising and marketing | ||||||||
| Total expenses | $ | $ | ||||||
Other than the transactions described above and transactions arising in the normal course of business, there were no material related-party transactions during the three months ended June 30, 2026.
48
House of Doge Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(In United States dollars, except for per share data)
15. Fair Value Measurements and Financial Risk Management
The Company’s financial instruments include cash, accounts receivable, equity, and debt securities, investments, warrant assets, a warrant derivative liability, accounts payable and accrued liabilities, short-term debt, including convertible debt measured under the fair value option, and the license contract liability. The Company recognizes and measures these instruments under the applicable U.S. GAAP guidance and evaluates its exposure to credit, liquidity, market-price and valuation, interest-rate, foreign-currency and concentration risks. Digital assets are not financial instruments under U.S. GAAP, however, the Company’s investment in the 21Shares Dogecoin ETF (“TDOG”) creates indirect exposure to Dogecoin market prices.
Fair value measurements
Fair value measurements are classified within a three-level hierarchy. Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities; Level 2 inputs are observable inputs other than Level 1 quoted prices; and Level 3 inputs are significant unobservable inputs. Classification is based on the lowest-level input that is significant to the measurement in its entirety. The Company recognizes transfers between levels of the fair value hierarchy at the beginning of the reporting period in which the transfer occurs. There were no transfers between levels during the three months ended June 30, 2026.
The following tables present the Company’s assets and liabilities measured at fair value on a recurring basis as of June 30, 2026 and March 31, 2026. Instruments carried under the measurement alternative; the equity method or amortized cost are excluded. Detailed Level 3 reconciliations, valuation techniques, significant unobservable inputs and sensitivity information are presented in Note 7 - Investments, Note 9 - Yorkville Warrant, Note 10 - Short-Term Debt and Note 11 - Capital Stock. See Note 8 - Intangible Assets and License Contract Liability for the measurement and contractual terms of the license contract liability.
As of June 30, 2026
| Recurring fair value measurement | Total | Level 1 | Level 2 | Level 3 | ||||||||||||
| Assets | ||||||||||||||||
| TDOG common shares | $ | $ | $ | $ | ||||||||||||
| CleanCore common shares | ||||||||||||||||
| CleanCore pre-funded warrants | ||||||||||||||||
| CleanCore strategic advisory warrants | ||||||||||||||||
| McQueen convertible debentures | ||||||||||||||||
| Total recurring fair value assets | $ | $ | $ | $ | ||||||||||||
| Liabilities | ||||||||||||||||
| Yorkville warrant derivative liability | $ | $ | $ | $ | ||||||||||||
| Yorkville convertible note - fair value option | ||||||||||||||||
| Senior secured convertible notes - fair value option | ||||||||||||||||
| Total recurring fair value liabilities | $ | $ | $ | $ | ||||||||||||
As of March 31, 2026
| Recurring fair value measurement | Total | Level 1 | Level 2 | Level 3 | ||||||||||||
| Assets | ||||||||||||||||
| DataCentrex common shares | $ | $ | $ | $ | ||||||||||||
| CleanCore common shares | ||||||||||||||||
| CleanCore pre-funded warrants | ||||||||||||||||
| CleanCore strategic advisory warrants | ||||||||||||||||
| McQueen convertible debentures | ||||||||||||||||
| Total recurring fair value assets | $ | $ | $ | $ | ||||||||||||
| Total recurring fair value liabilities | $ | $ | $ | $ | ||||||||||||
Quoted market prices were used to measure the TDOG and CleanCore common shares at June 30, 2026 and the DataCentrex and CleanCore common shares at March 31, 2026. The Company sold its entire DataCentrex position during the three months ended June 30, 2026. See Note 7 - Investments for the related realized loss and the accounting for each investment.
49
House of Doge Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(In United States dollars, except for per share data)
15. Fair Value Measurements and Financial Risk Management (cont.)
Level 3 measurements and related disclosures
The following table presents changes in the McQueen convertible debentures, the Company’s recurring Level 3 investment assets for the three months ended June 30, 2026. Detailed instrument-level valuation techniques, significant unobservable inputs and sensitivity information are presented in Note 7 - Investments. The corresponding disclosures for convertible debt measured under the fair value option are presented in Note10 - Short-Term Debt, and those for the Yorkville warrant derivative liability are presented in Note 09 - Yorkville Warrant.
| Level 3 asset | March 31, 2026 | Change in OCI | June 30, 2026 | |||||||||
| McQueen convertible debentures | $ | $ | ( | ) | $ | |||||||
| Total recurring Level 3 assets | $ | $ | ) | $ | ||||||||
During the three months ended June 30, 2026, the fair value of the McQueen convertible debentures decreased by $771, which was recognized in other comprehensive income. The Series F preferred shares received in connection with maturity extensions were accounted for separately from the debentures under the ASC 321 measurement alternative and therefore did not affect the debentures’ carrying amount or the recurring Level 3 roll-forward. CleanCore warrants are classified within Level 2 and are excluded from the Level 3 rollforward. See Note 7 - Investments.
Management selects valuation techniques that maximize the use of observable inputs, evaluates significant assumptions from the market participants perspective and reviews valuation changes from period to period.
Level 3 fair value measurements are sensitive to changes in significant unobservable inputs. Changes in discount rates, expected volatility, underlying equity values, expected conversion timing and scenario assumptions could materially affect the reported fair values and the amounts recognized in earnings or other comprehensive income. See Notes 7, 9, 10 and 11 for instrument-specific valuation methods, inputs, sensitivity information and Level 3 reconciliations. The Yorkville convertible note, senior secured convertible notes and Yorkville warrant derivative liability were first recognized on June 30, 2026 in connection with the merger, therefore, no post-recognition change in fair value was recognized through that date.
Financial liabilities measured under the fair value option
The Company elected the fair value option under ASC 825 for the Yorkville and senior secured convertible notes. The entire instruments are measured at fair value, with changes generally recognized in earnings and the portion attributable to instrument-specific credit risk recognized in other comprehensive income. See Note 10 - Short-Term Debt for the fair values and unpaid principal balances by instrument, the Level 3 roll- forward, valuation techniques, significant unobservable inputs, sensitivity information, contractual terms, collateral and maturities.
Nonrecurring measurements and instruments not measured at fair value
The Company’s LBK Triestina Holdings LLC equity-method investment is measured at fair value on a non-recurring basis when an impairment is recognized. See Note 7 - Investments for the investment roll- forward, impairment losses, fair value classification, valuation methodology, significant assumptions and related legal and restructuring considerations as of June 30, 2026 and March 31, 2026.
Stay Inc. and the McQueen Series F preferred shares are accounted for under the ASC 321 measurement alternative and are not included in the recurring fair value hierarchy. The carrying amounts of the McQueen Series F preferred shares were $
50
House of Doge Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(In United States dollars, except for per share data)
15. Fair Value Measurements and Financial Risk Management (cont.)
The carrying amounts of cash, accounts receivable, accounts payable and accrued liabilities and conventional short-term debt approximate fair value because of their short maturities. Convertible debt for which the fair value option was elected is included in the recurring fair value tables above and is discussed in Note 10 - Short-Term Debt. The license contract liability is measured at amortized cost using the effective-interest method; and is not included in the recurring fair value tables. Its carrying amount was $
Financial risk management
The Company’s activities expose it to several financial risks. Management monitors these risks through cash-flow forecasting, counterparty and investment review, aging and collection procedures, periodic valuation processes and review of contractual obligations. The Company did not use foreign exchange, interest-rate or other hedging derivatives during the three months ended June 30, 2026 or the fiscal year ended March 31, 2026.
Credit risk
Credit risk is the risk of financial loss if a counterparty or issuer fails to meet its contractual obligations. The Company’s principal credit exposures arise from cash, accounts receivable, the McQueen convertible debentures and amounts held through brokerage arrangements. The Company maintains cash with commercial banks and third-party digital-asset service providers. Cash balances maintained with banks may exceed applicable deposit-insurance limits, while amounts maintained through digital-asset service providers are subject to additional counterparty, operational and access risks. The Company monitors the creditworthiness and financial condition of significant counterparties. At June 30, 2026 and March 31, 2026, cash was $
The Company manages receivable credit risk through customer credit review, contractual payment terms, aging analysis and collection monitoring. Accounts receivable were $
Market-price and valuation risk
Market-price and valuation risk is the risk that changes in quoted equity prices, Dogecoin prices, volatility, credit conditions, expected cash flows or other valuation assumptions will affect the Company’s financial results or the carrying amount of its investments and derivative liabilities. The objective of market risk management is to monitor and manage exposures within the Company’s risk tolerance while considering liquidity needs and strategic objectives.
Total investments were $
51
House of Doge Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(In United States dollars, except for per share data)
15. Fair Value Measurements and Financial Risk Management (cont.)
Interest-rate and debt risk
Interest-rate risk is the risk that changes in market interest rates will affect future cash flows or fair values. The Company’s conventional short-term borrowings and license obligation are fixed-rate or short-term obligations, limiting direct cash-flow exposure to changes in market rates. Changes in market discount rates may nevertheless affect the fair values of the McQueen investments, CleanCore warrants, Yorkville warrant derivative liability, convertible debt measured under the fair value option and the license contract liability. The Company did not enter into interest-rate hedging contracts during the periods presented.
At June 30, 2026, short-term debt was $
Foreign-currency risk
Foreign-currency risk is the risk that the value of monetary assets and liabilities or future cash flows will fluctuate because of changes in exchange rates. The Company enters into certain transactions denominated in currencies other than its U.S. dollar functional currency, including European operating, investment and vendor transactions. Foreign-currency monetary balances were not significant at June 30, 2026 or March 31, 2026. The Company recognized a foreign-exchange loss of $
Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty meeting obligations as they become due. At June 30, 2026, the Company had cash of $
Management manages liquidity through rolling cash-flow forecasts, monitoring debt and contractual maturities, collecting receivables, managing discretionary expenditures, evaluating selective monetization of investments and seeking additional debt or equity financing. The Company’s ability to meet its obligations depends on available cash, the timing of collections, the liquidity and realizable value of investments, compliance with financing conditions and access to additional capital. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. See Note 3 - Going Concern and Notes 8 and 10 for the license and debt maturities, management plans and subsequent financing actions.
Digital-asset price risk
Digital assets are not financial instruments under U.S. GAAP; however, the Company is exposed to digital-asset price risk through its TDOG investment. TDOG’s objective is to track the performance of Dogecoin, net of the trust’s expenses and liabilities. At June 30, 2026, the TDOG investment had a fair value of $
52
House of Doge Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(In United States dollars, except for per share data)
15. Fair Value Measurements and Financial Risk Management (cont.)
Concentration risk
The Company’s revenue, receivables and investment portfolio are concentrated among a limited number of counterparties and issuers. Substantially all revenue for the three months ended June 30, 2026 was earned from 21Shares; approximately
The Company’s operations and commercial strategy are substantially focused on the Dogecoin ecosystem, including Dogecoin-related products, licensed intellectual property, strategic partnerships and other commercialization initiatives. As a result, the Company is exposed to concentration risk associated with changes in the adoption, market acceptance, liquidity, regulatory treatment and functionality of Dogecoin. Adverse developments affecting Dogecoin or the broader Dogecoin ecosystem could adversely affect the Company’s revenues, investments, commercialization activities and results of operations. The Company held no directly owned Dogecoin as of June 30, 2026.
The Company also utilizes a limited number of third-party digital-asset trading, custody and service providers, including Bitstamp and BitGo. Amounts maintained with, or services provided by, digital-asset trading and custody providers are subject to counterparty, custody, cybersecurity, operational, regulatory and access risks. A disruption, insolvency, regulatory restriction or other failure affecting a significant service provider could impair or delay the Company’s ability to access funds or digital assets or execute transactions and materially affect the Company’s financial position, results of operations and liquidity.
The Company manages these concentrations through monitoring of significant counterparties and service providers, access and authorization controls, periodic reconciliation of accounts and digital-asset holdings and, where practicable, diversification of service providers. These measures do not eliminate the risks associated with the Company’s concentration in the Dogecoin ecosystem or its reliance on significant counterparties and digital-asset service providers.
16. Commitments and Contingencies
Sierre-Valais Sport SA Investment Commitment
The Company is party to an agreement to acquire a minority interest in Sierre-Valais Sport SA (“SVS”). At June 30, 2026, $
Legal Proceedings
There are no legal proceedings or claims pending against the Company that management believes would have a material adverse effect on the Company’s business, financial condition, or results of operations, either individually or in the aggregate.
17. Accounts Payable and Accrued Liabilities
The following table summarizes the Company’s Accounts payable and accrued liabilities balances:
| As of | ||||||||
| June 30, 2026 | March 31, 2026 | |||||||
| Accounts payable | $ | $ | ||||||
| Accrued liabilities | ||||||||
| Payroll liabilities | ||||||||
| Other payables | ||||||||
| Accounts payable and accrued liabilities | $ | $ | ||||||
53
House of Doge Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(In United States dollars, except for per share data)
18. Subsequent Events
The Company evaluated events and transactions occurring after June 30, 2026 through the date these consolidated financial statements were issued. The Company assessed whether each event provided additional evidence about conditions that existed at the balance-sheet date or represented a condition arising after June 30, 2026 in accordance with ASC 855, Subsequent Events.
| (a) | Loan to LBK Triestina Holdings, LLC (“LBK Holdings”) |
Subsequent to June 30, 2026, the Company contributed a total of $
The Company continues to evaluate the accounting treatment and settlement of the amounts advanced to LBK Holdings, including any impact on the Company’s prospective equity ownership interest and related board representation rights.
| (b) | YA II PN, Ltd. Loan Repayment |
Subsequent to June 30, 2026, the Company fully repaid amounts outstanding under its senior convertible promissory note with YA II PN, Ltd. The Company made repayments totaling $
| (c) | Unsecured Subordinated Short-Term Promissory Note - Related Party |
On July 28, 2026, Dogecoin Ventures, Inc., a wholly owned subsidiary of the Company, issued an unsecured subordinated short-term promissory note in the principal amount of $
The principal amount of the note is payable through the transfer of
On August 3, 2026, following the full repayment of the YA II PN, Ltd. loan, the Company repaid the principal amount of the subordinated short-term note through the transfer of
| (d) | Repayment of Margin Loan |
As of June 30, 2026, the Company had an outstanding margin loan of $
The Company fully repaid the outstanding margin loan and accrued interest by July 16, 2026.
| (e) | Resignation of Board Member |
On July 19, 2026, Mr. Stephen Ilott provided written notice of his resignation from the board, effective on the date of the notice, due to personal reasons.
| (f) | Change in the Company’s external auditor |
On July 23, 2026, the Company’s Board of Directors approved the dismissal of CBIZ CPAs P.C. (former Brag House Holdings Inc. external auditors) and appointed Davidson & Company LLP as the Company’s new independent registered public accounting firm.
54
House of Doge Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
(In United States dollars, except for per share data)
18. Subsequent Events (cont.)
| (g) | Issuance of shares |
As of August 13, 2026, the Company had an aggregate of
| (h) | Secured Short Term Note |
On August 12, 2026, House of Doge (U.S.) Inc. (“HOD US” or the “Borrower”), a wholly-owned subsidiary of the Company issued a secured short term note (the “Note”) to lender Garrington Financial Corp. (the “Lender”), in the principal amount of $
In connection with the Note, each of the Borrower’s wholly-owned subsidiaries, Dogecoin Ventures, Inc., The Official Dogecoin Treasury and Reserve Inc. and House of Doge Canada Inc. act as guarantors (the “Guarantors”) to the Borrower’s obligations, the full and punctual payment when due.
| (i) | Participation in CleanCore Public Offering |
On August 11, 2026, House of Doge (U.S.) Inc. (“HOD US”), a wholly-owned subsidiary of the Company, participated in CleanCore’s public Offering. HOD US entered into a securities purchase agreement (the “SPA”) with CleanCore pursuant to which the Company purchased
The Pre-Funded Warrants have a nominal exercise price of $
The SPA includes customary representations, warranties and covenants. They also provide that CleanCore will indemnify HOD US, its directors, officers, shareholders, members, partners, employees and agents against certain liabilities, including liabilities under the Securities Act of 1933.
The foregoing summary of the terms and conditions of the Offering, SPA and related securities, does not purport to be complete and is qualified in its entirety by reference to the full text of certain documents attached as Exhibits hereto, which are incorporated herein by reference.
| (j) | Change in Fiscal Year |
On August 10, 2026, the Company changed its fiscal year end from December 31 to March 31, to match the fiscal year end of the legacy entity “House of Doge”, now a wholly-owned subsidiary of the Company named “House of Doge (U.S.) Inc.”.
55
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following management’s discussion and analysis is intended as a review of significant factors affecting our financial condition and results of operations for the periods indicated. The discussion should be read in conjunction with our condensed unaudited interim financial statements and the notes presented herein included in this Form 10-Q. When used, the words “believe,” “plan,” “intend,” “anticipate,” “target,” “estimate,” “expect” and the like, and/or future tense or conditional constructions (“will,” “may,” “could,” “should,” etc.), or similar expressions, identify certain of these forward-looking statements. In addition to historical information, the following Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements that involve risks and uncertainties including, but not limited to, those set forth below under “Risk Factors” and elsewhere herein. Our actual results could differ significantly from those anticipated in these forward-looking statements as a result of certain factors discussed herein and any other periodic reports filed and to be filed with the Securities and Exchange Commission.
Business Overview
House of Doge is committed to advancing the utility and adoption of Dogecoin by investing in the necessary infrastructure to integrate it into everyday commerce and through strategic cultural partnerships.
The Company is in the process of developing secure, scalable and efficient systems designed for real-world applications. These systems encompass digital payments, various financial products and real-world asset tokenization. It also provides consulting, educational resources and operational support to businesses seeking to incorporate Dogecoin into their operations.
Key Performance Indicators
The key performance indicators for House of Doge are revenue growth, operating income and net income.
The Company measures its success by revenue growth. Revenue growth will be dependent on the Company’s ability to drive utility and institutional acceptance of Dogecoin.
The Company uses operating income to measure the profitability of its core business operations. Operating income helps to evaluate the Company’s ability to cover operational expenses, make decisions on new opportunities and track progress on its strategic goals. This metric provides insights into efficiency and profitability, informing management on crucial business decisions.
Management believes that net income is also an important measure for determining the value created for shareholders and measure of how effectively the Company’s business is running.
Organization
The Company was formed as a Delaware corporation in December 2021. In connection with completion of the Merger on June 30, 2026, the Company was renamed “House of Doge Inc.”.
House of Doge (U.S.) Inc., formerly House of Doge Inc., is the surviving wholly-owned subsidiary following the merger with Merger Sub, that was completed in connection with the Merger. It is a Texas corporation that was incorporated on January 13, 2025 and one of the primary entities through which the Company’s operations are conducted.
Dogecoin Ventures, Inc., a wholly owned indirect subsidiary of the Company is the entity through which most of its investments are made through. It is a Texas corporation that was incorporated on April 17, 2025.
House of Doge Canada Inc., a wholly owned indirect subsidiary of the Company is the entity which employs certain of the Canadian employees of the Company. It is an Ontario corporation that was incorporated on August 15, 2025.
The Official Dogecoin Treasury and Reserve Inc. a wholly owned indirect subsidiary of the Company doesn’t currently carry on operations. It is a Texas corporation that was incorporated on January 13, 2025 as Doge Miner Inc. On March 14, 2025 its name was changed to The Official Dogecoin Reserve Inc. On July 30, 2025, its name was changed once more to The Official Dogecoin Treasury and Reserve Inc.
Brag House, Inc. (“BHI”), the Company’s wholly owned indirect subsidiary and the entity through which Brag House operations are primarily conducted, was formed as a Delaware corporation in February 2018.
56
On June 11, 2021, Brag House, Ltd. (“BHL”) was registered in the United Kingdom. Their principal offices are located at 7 – 9 Swallow Street, London W1B 4DE, United Kingdom.
On August 16, 2021, BHL acquired all of the 10,000,000 issued and outstanding BHI shares held by BHI shareholders on a one for 14.07 basis (rounded to the nearest whole number) in exchange for 140,700,000 ordinary shares of £0.0001 in BHL, making BHI a wholly owned subsidiary of BHL (“UK Reorganization”).
Following the UK Reorganization, the board of directors of BHL determined that it was in the best interests of BHL and its shareholders that an initial public offering in the United States and concurrent listing on The Nasdaq Stock Market (“Nasdaq”) be pursued. To effect that proposed initial public offering and listing on Nasdaq, in December 2021, the Company was formed. On February 8, 2022, the Company approved a reorganization, in which the shareholders of BHL would exchange their ordinary shares and preference shares of BHL for a proportionate number of common and preferred shares in the Company on a 21 to 1 basis (“U.S. Reorganization”). Immediately following the U.S. Reorganization, BHL became the wholly-owned subsidiary of the Company, and BHI became the indirect wholly-owned subsidiary of the Company.
We anticipate that BHL will be wound down and dissolved as soon as reasonably practicable.
We effected a 1 for 5.1287 consolidation of our issued and outstanding Common Stock and Preferred Stock on June 14, 2024, (the “Original Reverse Split”). On October 11, 2024, we canceled the Original Reverse Split and filed an amendment to our certificate of incorporation, as amended, with the Secretary of State of the State of Delaware to effect a 1 for 2.43615 consolidation of our issued and outstanding Common Stock and Preferred Stock (the “Reverse Split”). Any future redemption of stock options or warrants for options or warrants that were granted prior to October 11, 2024 will also reflect the Reverse Split. The Company began the process to pay for the Fractional Shares, which total $85.81, to its shareholders that were affected by the Reverse Split. This Quarterly Report gives effect to the cancellation of the Original Reverse Split and the effectiveness of the Reverse Split. Except where otherwise indicated, all share and per share data in this Quarterly Report have been retroactively restated to reflect the Reverse Split.
On July 25, 2025, the Company filed a certificate of designation with the Secretary of State of the State of Delaware to designate 15,000 shares of the available 25,000,000 shares of Preferred Stock as Series B Preferred Stock. On July 30, 2025, the Company closed its PIPE Offering and issued all 15,000 shares of Series B Preferred Stock.
On October 9, 2025, Brag House Merger Sub, Inc. (“Merger Sub” or “BHMS”), a wholly owned subsidiary of the Company, was formed as a Delaware corporation.
Our principal executive offices are located at 261 NE 61st Street, Miami, FL 33137 and our telephone number is 214-216-8608. Our website address is www.houseofdoge.com. The investor relations portion of our website is available at https://www.houseofdoge.com/investors. The references to our website addresses do not constitute incorporation by reference of the information contained at or available through our websites, and you should not consider it to be a part of this Quarterly Report. We have included our website addresses in this Quarterly Report solely as inactive textual references.
Recent Developments
Reverse Stock Split
On May 29, 2026, the Company filed a certificate of amendment to its Certificate of Incorporation with the Secretary of State of Delaware to effect a 1-for-8 reverse stock split of the Company’s common stock, effective as of 5:00 a.m. Eastern Time on June 1, 2026. The common stock began trading on a post-split basis on the Nasdaq Capital Market at the open of trading on June 1, 2026. The reverse stock split was previously approved by stockholders at the Special Meeting held on April 7, 2026, which authorized the Board of Directors to determine the split ratio within a range of 1-for-5 to 1-for-50. As a result of the reverse stock split, every 8 shares of issued and outstanding common stock were automatically combined into one share, without any change in the number of authorized shares or par value. No fractional shares were issued; stockholders entitled to receive a fractional share received a cash payment in lieu thereof. Proportionate adjustments were made to outstanding equity awards and convertible securities. The new CUSIP number for the Company’s common stock following the reverse stock split is 104813308. A copy of the Certificate of Amendment was filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K filed June 4, 2026 and is incorporated by reference herein.
57
Amendment to Yorkville Convertible Promissory Note
On June 1, 2026, the Company and YA II PN, Ltd. (“Yorkville”) entered into Amendment No. 2 to Convertible Promissory Note, which amended the Promissory Note dated December 4, 2025, as previously amended. Pursuant to the amendment, the parties agreed to extend the maturity date of the Promissory Note from June 1, 2026 to July 31, 2026. As a condition to the effectiveness of the amendment, the Company agreed to (i) pay Yorkville $100,000 as consideration for the extension, (ii) pay Yorkville $200,000 toward the outstanding balance, and (iii) deposit 9,000,000 shares in CleanCore Solutions held by Dogecoin Ventures, Inc. with Revere Securities LLC, with instructions to direct any consideration received from sales or trades of such shares to Yorkville as payment under the Promissory Note. A copy of the amendment was filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed June 4, 2026 and is incorporated by reference herein.
Completion of the Merger
On June 30, 2026, the Company completed its previously announced merger pursuant to the Merger Agreement dated October 12, 2025, as amended, by and among the Company, Brag House Merger Sub, Inc. and House of Doge Inc., a Texas corporation (“HOD”). HOD merged with and into Merger Sub, with HOD surviving as a wholly owned subsidiary of the Company.
Since the Merger closed on the last day of the quarter, Brag House contributed no material post-acquisition revenue or net income or loss to the Company’s results for the three months ended June 30, 2026.
In connection with the Merger, the Company’s Board of Directors was reconstituted, with Lavell Juan Malloy II, Daniel Leibovich, DeLu Jackson, Scott Woller and Kevin Foster resigning as directors. Michael Galloro, Sarosh Mistry, Timothy Stebbing, Doug Wall, Stephen Ilott and Duncan Moir appointed as new directors. Marco Margiotta was appointed Chief Executive Officer and Charles Park was appointed Chief Financial Officer.
At closing, former HOD common shareholders and vested HOD RSU holders received 70,363,704 of the 75,902,985 shares of Common Stock then outstanding, or approximately 92.7%, in addition to 2.051823 shares of Series C Convertible Preferred Stock.
Name Change and Trading Symbol
On June 30, 2026, in connection with the closing of the Merger, the Company filed a Certificate of Amendment to its Certificate of Incorporation with the Secretary of State of Delaware, changing the Company’s name from Brag House Holdings, Inc. to House of Doge Inc. The Common Stock began trading on the Nasdaq Stock Market under the new ticker symbol “HODO” as of July 1, 2026. A copy of the Certificate of Amendment was filed as Exhibit 3.2 to the Company’s Current Report on Form 8-K filed July 7, 2026 and is incorporated by reference herein.
Director Resignation
On July 19, 2026, Stephen Ilott provided written notice of his resignation from the Board of Directors, effective immediately, due to personal reasons. At the time of his resignation, Mr. Ilott served as a member of the Audit Committee. Following Mr. Ilott’s resignation, the Company continues to satisfy the applicable independence requirements of the Nasdaq Stock Market and Rule 10A-3 under the Securities Exchange Act of 1934, as amended.
58
Short-Term Note
On July 28, 2026, Dogecoin Ventures, Inc., a wholly owned subsidiary of the Company, issued an unsecured subordinated short-term note with principal of $1,400,000. The note bore interest at 10.714% per annum and was scheduled to mature on July 27, 2027. On August 3, 2026, after the Company fully repaid the Yorkville senior convertible promissory note, Dogecoin Ventures settled the $1,400,000 principal through the transfer of 2,227,300 shares of CleanCore Solutions, Inc. common stock and paid $150,000 on August 12, 2026 to settle fees.
Subsequent to June 30, 2026, the Company also fully repaid $1,587,500 of principal under the Yorkville senior convertible promissory note and the approximately $0.7 million Revere Securities margin loan.
Change in Independent Registered Public Accounting Firm
On July 23, 2026, the Audit Committee of the Board of Directors recommended, and the Board approved, the dismissal of CBIZ CPAs P.C. (“CBIZ”) as the Company’s independent registered public accounting firm. CBIZ’s audit report on the Company’s consolidated financial statements for the fiscal year ended December 31, 2025 did not contain an adverse opinion or disclaimer of opinion and was not qualified or modified as to uncertainty, audit scope, or accounting principles, except for an explanatory paragraph regarding substantial doubt about the Company’s ability to continue as a going concern. There were no disagreements with CBIZ on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure.
On July 23, 2026, the Board of Directors approved the engagement of Davidson & Company LLP (“Davidson”) as the Company’s independent registered public accounting firm. During the Company’s two most recent fiscal years and the subsequent interim period through the date of Davidson’s engagement, neither the Company nor anyone acting on its behalf consulted with Davidson regarding the application of accounting principles, audit opinions, or any matter that was the subject of a disagreement or reportable event.
Emerging Growth Company Status
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act, and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Results of Operations
Three Months Ended June 30, 2026 as compared to the Three Months Ended June 30, 2025
Revenue
Revenue was $0.04 million for the three months ended June 30, 2026, compared with nil for the three months ended June 30, 2025. The current-period revenue was generated principally from exchange-traded product (“ETP”) support services provided to 21Shares in connection with U.S. and European Dogecoin ETPs. These services include research, data, sales and marketing, and operational support, for which the Company is entitled to a share of sponsor and management fees under the applicable agreements. The year-over-year increase reflects the commencement of these arrangements after the prior-year comparative period.
59
Operating (Income) Expenses
Professional and legal expenses were $0.12 million for the three months ending June 30, 2026 compared to $0.07 million for the same period in 2025. The increase is primarily due to various legal costs associated with ongoing business operations.
Advertising and marketing expenses were $0.2 million for the three months ending June 30, 2026 compared to $2.1 million for the same period in 2025.The year over year decline can be attributed to lower sponsorship, advertising and public relations costs as the Company prioritized closing the Merger transaction in the current year.
General and administrative expenses decreased 57% from $3.8 million for the three months ending June 30, 2026 to $8.8 million in the three months ended June 30, 2025. The year over year decrease can be attributed to a $3.6 million reduction in share-based compensation, $2.2 million decrease in consulting fee and $0.09 million decline in travel and entertainment expenses. This was partially offset by year over year increases in salaries and benefits of $0.6 million and $0.03 million increase in technology development expenses year over year.
Amortization of intangible assets was $0.4 million for the three months ending June 30, 2026 remained the same as the same period in the prior year. The balance is primarily a result of amortization of a minimum royalty payment under an exclusive trademark and licensing agreement.
Change in fair value of digital assets was nil for the three months ending June 30, 2026 compared to a loss $0.2 million for the same period in the prior year. The losses are related to the Company’s prior-period digital asset holdings and the remeasurement. The Company had no digital asset holdings during the three months ending June 30, 2026.
Change in fair value of equity guarantee liability was nil for the three months ending June 30, 2026 compared to loss of $0.3 million for the same period in the prior year. On June 25, 2025, the Company settled the equity guarantee by issuing additional common shares. As a result, there was no balance to remeasure in the current period.
Change in fair value of investments was a gain of $9.8 million for the three months ending June 30, 2026 compared to nil for the same period in the prior year. The gain was primarily due to an increase in the Company CleanCore Solutions equity/warrant holdings during the current period.
The Company recorded an impairment of assets charge of $1.0 million for the three months ending June 30, 2026 compared to a nil balance for both for the same period in the prior year. The current period charges relate to the impairment of its investment in LBK at June 30, 2026.
Other Expenses
Finance expense for the three months ending June 30, 2026 was $0.4 million compared to $0.3 million for the same period in the prior year. The current period’s balance consists of $0.3 million accretion expense on the related to the Company’s trademark and licensing agreement with the balance mainly related to interest expense on short-term debt.
60
Financial Condition, Liquidity and Capital Resources
At June 30, 2026, the Company had total assets of $32.4 million and total liabilities of $23.9 million, compared with $21.8 million and $18.7 million, respectively, at March 31, 2026. Total investments increased by approximately $14.2 million to $24.8 million, principally because of fair-value appreciation in the CleanCore investment portfolio and the acquisition-date recognition of additional CleanCore shares in the Merger. Accounts payable and accrued liabilities increased by approximately $6.4 million to $8.9 million, principally reflecting acquisition-date Brag House balances and higher legal, transaction, consulting, audit, marketing, payroll and other vendor obligations. A $2.8 million warrant derivative liability was also recognized at the Merger date. Short-term debt and related party debt decreased $3.6 million to $5. 7 million, primarily because short-term debt between HOD and Brag House were eliminated upon consolidation, partially offset by the acquisition-date recognition of Yorkville and senior secured convertible notes and current-period borrowings. Cash was $0.7 million at June 30, 2026 and $2.8 million at March 31, 2026. Current assets were $3.5 million and current liabilities were $19.8 million at June 30, 2026, resulting in a working-capital deficit of $16.3 million, compared with a working-capital deficit of $7.3 million at March 31, 2026.
The accompanying financial statements have been prepared on the basis that the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. At June 30, 2026 and March 31, 2026, the Company had an accumulated deficit of $39.8 million and $43.4 million, respectively. For the three months ended June 30, 2026, the Company recognized net income of $3.998 million, compared with a net loss of $12.1 million for the three months ended June 30, 2025. Net cash used in operating activities for the three months ending June 30, 2026 was $1.6 million and $4.0 million for the same period in the prior year. The improvement in net results was driven principally by a non-cash fair-value gain on investments. The non-cash gains did not eliminate the Company’s working-capital deficit. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.
The Company expects to continue incurring operating losses and negative operating cash flows as it executes its business strategy. The Company is dependent on obtaining additional working capital, selectively monetizing investments, managing or reducing operating expenditures and increasing revenue and profitability. Management monitors liquidity through cash-flow forecasts and evaluates debt and equity financing and strategic alternatives. There can be no assurance that additional financing will be available when needed or on acceptable terms, that investments can be monetized at recorded values, or that management’s plans will be successful.
Subsequent to June 30, 2026, the Company fully repaid the Yorkville senior convertible promissory note and the Revere Securities margin loan. Dogecoin Ventures also obtained a $1.4 million unsecured subordinated short-term note and settled its principal on August 3, 2026 through the transfer of 2,227,300 CleanCore common shares. These actions reduced certain near-term debt maturities but did not provide committed liquidity for the full going-concern assessment period. The Company continues to evaluate additional equity issuances, credit facilities and other financing or strategic alternatives.
| June 30, 2026 | June 30, 2025 | |||||||
| Cash Flows Used In Operating Activities | $ | (1,580,880 | ) | $ | (4,009,824 | ) | ||
| Cash Flows Used In Investing Activities | (2,753,266 | ) | (4,913,686 | ) | ||||
| Cash Flows Provided By Financing Activities | 2,150,057 | 12,450,000 | ||||||
| Net Increase (Decrease) in Cash and Cash Equivalents | $ | (2,184,089 | ) | $ | 3,526,490 | |||
Cash Flows Used In Operating Activities
For the three months ended June 30, 2026, net cash used in operating activities was $1.6 million, compared with $4.0 million for the three months ended June 30, 2025. Current-period net income of $3.98 million included a $9.8 million non-cash gain from changes in the fair value of investments that was deducted in reconciling net income to operating cash flows. Other non-cash adjustments included $1.7 million of share-based compensation, $1.0 million of impairment expense, $0.4 million of amortization and $0.4 million of finance expense. Operating cash flows benefited from a $0.6 million increase in accounts payable and accrued liabilities and a $0.06 million decrease in accounts receivable, partially and $0.2 million decrease in prepaid expenses and other current assets and $0.6 million of cash payments on the license contract liability. The year-over-year reduction in cash used in operations also reflects lower operating expenditures, partially offset by the lower amount of non-cash share-based compensation and the absence of $1.5 million of common stock issued for services in the prior-year period.
61
For the three months ended June 30, 2025, net cash used in operating activities was $4.6 million, primarily reflecting the Company’s net loss of $12.1 million, partially offset by significant non-cash share-based compensation of $5.2 million, common stock issued for services of $1.5 million, amortization of intangible assets of $0.4 million, finance expense of $0.3 million, and other non-cash fair value adjustments. Cash used in operating activities also reflected changes in working capital, including decreases in prepaid expenses and other current assets.
Cash Flows Used In Investment Activities
For the three months ended June 30, 2026, net cash used in investing activities was $2.7 million, compared to $4.9 million for the three months ended June 30, 2025. Cash used in investing activities during the 2026 period primarily consisted of $2.5 million used to purchase investments, partially offset by $0.4 million of proceeds received from the sale of investments and $0.6 million of license liability payments. During the comparable prior-year period, investing activities primarily consisted of $2.4 million used to purchase investments and $1.9 million used to acquire digital assets. The decrease in cash used in investing activities compared to the prior-year period was primarily attributable to the absence of digital asset purchases during the 2026 period and proceeds received from the sale of investments.
Cash Flows Provided By Financing Activities
For the three months ended June 30, 2026, net cash provided by financing activities was $2.1 million, compared with $12.5 million for the three months ended June 30, 2025. Current-period financing cash flows consisted of $3.5 million of proceeds from short-term debt and related party debt, $0.05 million of cash acquired in the reverse recapitalization, partially offset by $1.4 million short-term debt repayments. Prior-year financing cash flows consisted of $12.5 million of proceeds from the issuance of common stock. The decrease reflects the absence of equity financing transactions comparable to those completed in the prior-year period and the Company’s greater reliance on short-term borrowings during the current period.
Off-Balance Sheet Arrangements
The Company did not have any off-balance-sheet arrangement that has or is reasonably likely to have a current or future material effect on its financial condition, changes in financial condition, revenue or expenses, results of operations, liquidity, cash requirements or capital resources.
Material Cash Requirements and Commitments
At June 30, 2026, the Company’s material cash requirements included accounts payable and accrued liabilities of $8.9 million, short-term debt with a carrying amount of $5.1 million and related-party debt with a carrying value of $0.6 million, and fixed minimum royalty payments under its trademark license. Remaining undiscounted fixed minimum royalty payments were $8.6 million, including $2.4 million payable within twelve months, $4.8 million payable in years two and three, and $1.4 million payable in years four and five. The Company fulfilled its $1.5 million commitment to purchase TDOG shares through April 2026 market purchases having a total cash settlement of approximately $1.48 million; no additional TDOG purchase obligation remained at June 30, 2026. The timing and ability to satisfy these requirements depend on available cash, investment monetization, operating cash flows and access to additional financing. See Notes 3, 5, 6, 7, 8,10 and 15 to the unaudited interim condensed consolidated financial statements for additional information.
Critical Accounting Estimates
The Company prepares our consolidated financial statements in accordance with U.S. GAAP, which require our management to make estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the balance sheet dates, as well as the reported amounts of revenues and expenses during the reporting periods. To the extent that there are material differences between these estimates and actual results, our financial condition or results of operations would be affected. We base our estimates on our own historical experience and other assumptions that we believe are reasonable after taking account of our circumstances and expectations for the future based on available information. We evaluate these estimates on an ongoing basis.
The Company considers an accounting estimate to be critical if (i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations.
62
Share-Based Compensation and Warrant Valuations
The Company measures equity-classified share-based awards at grant-date fair value and remeasures liability-classified awards and warrant derivatives at each required measurement date. Depending on the instrument’s terms, the Company uses Black-Scholes of option-pricing, back-solve and conversion options, present value of future payments binomial lattice or Monte Carlo models. These measurements require estimates and assumptions that can materially affect share-based compensation expense, derivative balances and changes in fair value recognized in earnings.
Key assumptions used in these models include expected volatility, expected term, risk-free interest rate, expected dividend yield and, for lattice models, assumptions about exercise behavior and future stock-price changes. Because the Company has limited operating history and trading data, expected volatility is based on the Company’s available trading history and, when appropriate, the historical volatility of comparable publicly traded companies. Risk-free interest rates are based on U.S. Treasury yields with maturities consistent with expected terms, and expected dividend yields are zero because the Company has not historically paid dividends.
The Company uses the “simplified method” to estimate the expected term for stock options that have exercise prices issued at-the-money, consistent with SEC Staff Accounting Bulletin Topic 14. For stock options with exercise prices that are out-of-the-money, the Company uses a Binomial Lattice model, which incorporates assumptions about future exercise behavior and potential changes in stock price over the life of the award. As an alternate option, the Company used the exercise patterns of comparable companies to determine and establish a reasonable estimate for the expected term for stock options.
Because these valuation assumptions involve significant judgment, changes in expected volatility, expected term, exercise behavior or the Company’s stock price could materially affect the fair values of share-based awards and warrants and the related compensation expense or fair-value changes recognized in earnings. Management reviews these assumptions at each required measurement date.
Investment and Other Fair Value Measurements
At June 30, 2026, recurring fair-value assets totaled $23.3 million, including $1.6 million of Level 3 assets. Level 3 assets consisted of McQueen convertible debentures. The Company uses discounted-cash-flow, option-pricing and probability-weighted models, as applicable. Significant unobservable inputs include discount rates, expected volatility, discounts for lack of marketability, equity values, conversion assumptions and scenario probabilities. During the three months ended June 30, 2026, the Company recognized a $9.8 million net fair-value gain on investments, principally attributable to the CleanCore portfolio. The Company also recognized a $0.5 million impairment of its LBK Triestina Holdings LLC equity-method investment based on a nonrecurring Level 3 measurement. Changes in the selected techniques or assumptions could materially affect investment balances, earnings and other comprehensive income.
Yorkville Convertible Note and Yorkville Warrant
On December 4, 2025, the legal parent and Yorkville entered into the Yorkville Convertible Note and Yorkville Warrant. Because HOD is the accounting acquirer, the consolidated entity first recognized the instruments on the June 30, 2026 acquisition date. The Company elected the fair value option under ASC 825, Financial Instruments, for the Yorkville Convertible Note and the senior secured convertible notes, and accounts for the Yorkville Warrant as a derivative liability under ASC 815, Derivatives and Hedging. At June 30, 2026, the Yorkville Convertible Note, senior secured convertible notes and Yorkville Warrant had Level 3 fair values of $1.6 million, and $2.7 million, respectively. The convertible notes are valued using probability-weighted expected return models, and the Yorkville Warrant is valued using a Monte Carlo simulation. Because the instruments were initially recognized by the consolidated entity on the last day of the quarter, no post-acquisition change in their fair values was recognized during the three months ended June 30, 2026.
Key assumptions used in these models include the Company’s common-stock price, conversion prices and timing, expected volatility, instrument-specific credit risk and discount rates, expected term, risk-free interest rate, default assumptions and probabilities assigned to cash settlement, conversion, redemption, change-of-control and event-of-default scenarios. Expected volatility is based on the Company’s available trading history and, when appropriate, the historical volatility of comparable publicly traded companies. Risk-free interest rates are based on U.S. Treasury yields with maturities consistent with the instruments’ expected terms, and expected dividend yields are zero because the Company has not historically paid dividends.
63
Because these valuation assumptions involve significant judgment, changes in the Company’s stock price, expected volatility, discount rates, credit risk, conversion outcomes or scenario probabilities could materially affect the fair values of the convertible notes and Yorkville Warrant and the related gains or losses recognized in future periods. Management reviews these assumptions at each required measurement date.
For a detailed discussion of our significant accounting policies and related judgments, see Note 2 of the notes to the unaudited interim condensed consolidated financial statements in this report.
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
The Company holds warrant assets and a warrant derivative liability and has material exposure to equity-market prices, Dogecoin prices and Level 3 valuation assumptions; however, it does not use derivatives for hedging. Total investments were approximately $24.8 million at June 30, 2026 and $10.6 million at March 31, 2026. CleanCore common shares and warrants represented approximately $20.6 million, or 82.8 %, of total investments at June 30, 2026, compared with approximately $7.1 million, or 67.3 %, at March 31, 2026. The Company recognized a $9.8 million net fair-value gain on investments during the three months ended June 30, 2026. The Company’s $1.1 million TDOG investment provides indirect exposure to Dogecoin prices and was pledged as collateral for a $0.7 million margin loan at June 30, 2026. Changes in quoted prices, volatility, discount rates, expected cash flows, conversion outcomes or other valuation assumptions could materially affect earnings, other comprehensive income and liquidity. See Note 15 to the unaudited interim condensed consolidated financial statements for additional information regarding fair-value measurements and financial risk management.
Item 4. Controls and Procedures.
Disclosure Controls and Procedures
We maintain “disclosure controls and procedures” as that term is defined in Rule 13a-15(e), promulgated by the SEC pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our Company’s reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer to allow timely decisions regarding required disclosure. Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated our Company’s disclosure controls and procedures as of the end of the period covered by this Form 10-Q. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of June 30, 2026, our disclosure controls and procedures were effective as of the end of the period covered by this Quarterly Report on Form 10-Q to provide reasonable assurance that information required to be disclosed by the Company in reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
Internal Control Over Financial Reporting
In connection with the review of our unaudited interim condensed consolidated financial statements for the three month period ending June 30, 2026, our external auditors (“Davidson & Company LLP) considered the following deficiency in the Company’s internal control to be a material weakness:
Use of valuation experts
The Company has made and continues to make material investments in private companies without directly observable trading prices. We recommend the Company formally engage or hire valuation experts for material investments or non-cash payments requiring complex valuation models.
As defined in the standards established by the Public Company Accounting Oversight Board (“PCAOB”) of the United States, a material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the entity’s annual or interim financial statements will not be prevented, or detected and corrected on a timely basis.
64
We will take measures to address the material weakness by engaging with a qualified valuations expert for material investments or material non-cash payments requiring complex valuation models.
We believe these measures will assist us with meeting the compliance requirements and improving our overall internal control. We cannot assure you, however, that these measures will fully address the material weakness in our internal control over financial reporting or that we may conclude that it has been fully remediated.
If we fail to remediate the material weakness or fail to otherwise maintain effective internal control over financial reporting in the future, such failure could result in loss of investors’ confidence in our financial statements, limit our ability to raise capital and have a negative effect on the trading price of our common stock. Additionally, failure to remediate the material weakness or otherwise maintain effective internal control over financial reporting may also negatively impact our operating results and financial condition, impair our ability to timely file our periodic and other reports with the SEC, subject us to additional litigation and regulatory actions and cause us to incur substantial additional costs in future periods relating to the implementation of remedial measures.
Management’s Quarterly Report on Internal Control Over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended. Internal control over financial reporting is a process designed by, or under the supervision of, the Company’s Chief Executive Officer and Chief Financial Officer, and effected by the Company’s Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with generally accepted accounting principles in the United States.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect all misstatements. Accordingly, even effective internal control over financial reporting can provide only reasonable assurance with respect to financial statement preparation and presentation. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that compliance with established policies or procedures may deteriorate.
Management evaluated the effectiveness of the Company’s internal control over financial reporting as of June 30, 2026. Based on this evaluation, management concluded that the Company’s internal control over financial reporting was effective as of June 30, 2026.
This Quarterly Report on Form 10-Q does not include an attestation report of the Company’s independent registered public accounting firm regarding internal control over financial reporting, as such attestation is not required pursuant to applicable SEC rules.
Changes in Internal Control Over Financial Reporting
There were no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the fiscal quarter ended June 30, 2026, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
65
PART II-OTHER INFORMATION
Item 1. Legal Proceedings.
There are no actions, suits, proceedings, inquiries or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our Company or any of our subsidiaries, threatened against or affecting our Company, our common stock, any of our officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.
Item 1A. Risk Factors.
Risks Related to the Company’s Operations Following the Merger
We have operating net losses and our financial results are subject to fluctuations.
During its short operating history, the Company has reported net losses; we anticipate increasing expenses in the future and may never become profitable. Even if we achieve profitability in the future, we may not be able to sustain profitability in subsequent periods. Our failure to become and remain profitable would decrease the value of our company and could impair our ability to raise capital, expand our business, diversify our product offerings or continue our operations. A decline in the value of our company could cause you to lose all or part of your investment.
The Company expects to continue to expend substantial financial and other resources on developing technologies, marketing, partnerships and acquiring strategic assets. These efforts may be more costly than expected and may not result in increased revenue or growth. Any failure to increase revenue sufficiently to keep pace with investments and other expenses could prevent us from achieving profitability or positive cash flows. If we are unable to successfully address these risks and challenges as we encounter them, our business, financial condition, and results of operations could be adversely affected. In addition, our quarterly financial results have fluctuated in the past and we expect our financial results to fluctuate in the future. These fluctuations may be due to a variety of factors, some of which are outside of our control and may not fully reflect the underlying performance of our business. Fluctuating operating results could cause performance to fall below the expectations of investors, which could materially adversely affect the Company and the market price of the Common Stock.
Our history of recurring losses and anticipated expenditures raises substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern requires that we obtain sufficient funding to finance our operations.
The Company had incurred operating losses from their date of incorporation through the Effective Time, and the Company may never generate a profit. Brag House’s financial statements for the years ended December 31, 2025 and 2024, and Legacy House of Doge’s financial statements for the years ended March 31, 2026 and March 31, 2025, were prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. If we are unable to raise sufficient capital as and when needed, our business, financial condition and results of operations will be materially and adversely affected, and we will need to significantly modify our operational plans to continue as a going concern. If we are unable to continue as a going concern, we may have to liquidate our assets, and the values we receive for our assets in liquidation or dissolution could be significantly lower than the values reflected in our consolidated financial statements. Our lack of cash resources and our potential inability to continue as a going concern may materially adversely affect our share price and our ability to raise new capital, enter into critical contractual relations with third parties and otherwise execute our development strategy.
66
The Company’s international operations could expose it to additional risks.
We expect the Company to operate in multiple jurisdictions. The Company may expand its operations to additional jurisdictions around the world, including those in markets in which it has limited experience or that have a different regulatory and/or compliance framework. In addition, if the Company expands its business into international jurisdictions, such entries would require management attention and financial resources that would otherwise be spent on other parts of its business.
Conducting business internationally, particularly in regions in which it has limited experience operating, may subject us to additional risks, including but not limited to: operational challenges caused by operating in markets with different languages, consumer preferences and cultural differences; the use of resources to localize our business; compliance with legislative and regulatory regimes that differ from current operating jurisdictions and that may pose new restrictions on the way our business operates; competition from local service providers with more experience and scale in the international jurisdiction; challenges managing growth across multiple jurisdictions; adverse tax consequences; increased financial and reporting obligations; challenges protecting intellectual property; and general political, social and economic instability and related conditions. These risks could adversely affect the Company’s operations, prospects and financial condition.
Currency fluctuations could negatively impact the Company’s business, prospects, financial condition and financial performance.
The Company may conduct business in several countries. While we expect that, initially, a majority of our revenues will be denominated in U.S. dollars, the expansion of our business into new jurisdictions may introduce different payment schedules and require us to use the currencies of the local jurisdictions, which could impact operations in certain markets. This could expose the Company to the risk of fluctuations in foreign currency exchange rates and changes in exchange rates that are reflected in reported income and loss from its international businesses included in its consolidated statements of operations as it translates the financial statements of its foreign subsidiaries into U.S. dollars in consolidation.
A fluctuation in the exchange rates for the U.S. dollar or other currencies in which we may transact may therefore affect reported revenue and expenses from our international businesses included in our consolidated statements of operations. Significant fluctuations in the exchange rates of foreign currencies may negatively impact our business, prospects, financial condition and financial performance.
We do not currently have currency hedging arrangements in place and do not expect to put in place any currency hedging arrangements in the future. If we decide to hedge foreign currency exposure, we may not be able to hedge effectively due to lack of experience, unreasonable costs or illiquid markets. In addition, those activities may be limited in the protection they provide from foreign currency fluctuations and can themselves result in losses.
We rely on information technology and other systems and platforms, and any failures, errors, defects or disruptions in our systems or platforms could diminish our brand and reputation, subject us to liability, disrupt our business, affect our ability to scale our technical infrastructure and adversely affect our operating results and growth prospects. The games offered through our gaming platform and other software applications and systems may contain defects and the third-party platforms upon which they are made available could contain undetected errors.
Our technology infrastructure is critical to the performance of our Brag House platform, the Such mobile payments application, and related offerings, and to user satisfaction. We devote significant resources to network and data security to protect our systems and data. However, our systems may not be adequately designed with the necessary reliability and redundancy to avoid performance delays or outages that could be harmful to our business. We cannot assure you that the measures we take to prevent or hinder cyber-attacks and protect our systems, data and user information and to prevent outages, data or information loss, fraud and to prevent or detect security breaches, including a disaster recovery strategy for server and equipment failure and back-office systems and the use of third parties for certain cybersecurity services, will provide absolute security. We may in the future experience website disruptions, outages and other performance problems due to a variety of factors, including infrastructure changes, human or software errors and capacity constraints. Future disruptions from unauthorized access to, fraudulent manipulation of, or tampering with our computer systems and technological infrastructure, or those of third parties, could result in a wide range of negative outcomes, each of which could materially adversely affect our business, financial condition, results of operations and prospects.
67
As our business grows, we will need an increasing amount of technical infrastructure, including data centers, network capacity, storage and database technologies and computing power. Creating the appropriate support for our technology platforms, including big data and computational infrastructure, will be expensive and complex, and execution could result in inefficiencies or operational failures and increased vulnerability to cyber-attacks; and unanticipated delays in completing these projects or availability of components may lead to increased project costs, operational inefficiencies, or interruptions in the delivery or degradation of the quality of our offerings. In addition, there may be issues related to this infrastructure that are not identified during the testing phases of design and implementation, which may only become evident after we have started to fully use the underlying equipment or software, that could further degrade the user experience or increase our costs. In addition, our business may be subject to interruptions, delays or failures resulting from adverse weather conditions, other natural disasters, power loss, terrorism, cyber-attacks, public health emergencies or other catastrophic events. Further, our failure to adequately implement and enforce security policies could result in a loss of client and user confidence, damage to our reputation and a loss of business.
We believe that if our users have a negative experience with our offerings, or if our brand or reputation is negatively affected, users may be less inclined to continue or resume utilizing our products or recommend the platform to other potential users. As such, a failure or significant interruption in our services would harm our reputation, business and operating results.
Our business could be adversely affected if our data privacy and security practices are not adequate, or perceived as being inadequate, to prevent data breaches, or by the application of data privacy and security laws generally.
In the course of our business, we may collect, process, store and use information, including personally identifiable information, passwords and credit card information, the latter of which is subject to PCI-DSS (Payment Card Industry Data Security Standard) compliance. Although we take measures to protect this information from unauthorized access, acquisition, disclosure and misuse, our security controls, policies and practices may not be able to prevent the improper or unauthorized access, acquisition or disclosure of such information. The unauthorized access, acquisition or disclosure of this information, or the perception that we do not adequately secure this information, could result in legal liability, costly remedial measures, governmental and regulatory investigations, harm our profitability and reputation and cause our financial results to be materially adversely affected. In addition, third party vendors and business partners receive access to information that we collect. These vendors and business partners may not prevent data security breaches with respect to the information we provide them or fully enforce our policies, contractual obligations and disclosures regarding the collection, use, storage, transfer and retention of personal data. A data security breach of one of our vendors or business partners could cause reputational harm to them and/or negatively impact our ability to maintain the credibility of our gamer community. Data privacy, data protection, localization, security and consumer-protection laws are evolving, and the interpretation and application of these laws in the United States, Europe (including compliance with the General Data Protection Regulation), and elsewhere often are uncertain, contradictory and changing. It is possible that these laws may be interpreted or applied in a manner that is averse to us or otherwise inconsistent with our practices, which could result in litigation, regulatory investigations and potential legal liability or require us to change our practices in a manner adverse to our business. As a result, our reputation and brand may be harmed, we could incur substantial costs, and we could lose both gamers and creators and revenue.
A failure of our information technology (IT) and data security infrastructure could adversely impact our business, operations, and reputation.
Security breaches could not only diminish the quality of services that we provide but also result in a violation of our security obligations to our clients and users that are designed to protect the data that we collect, store and transmit for them. Cyber-attacks could include denial-of-service attacks impacting service availability and reliability, the exploitation of software vulnerabilities in internet-facing applications, the theft or loss of digital wallet keys resulting in the loss of the value of cryptocurrency holdings, social engineering of system administrators (tricking company employees into releasing control of their systems to a hacker), or the introduction of computer viruses or malware into our systems with a view to misappropriate confidential or proprietary data. In addition, we may be vulnerable to unintentional errors as well as malicious actions by persons with authorized access to our systems. The steps that we take to increase the reliability, integrity and security of our systems may be expensive and may not prevent system failures or unintended vulnerabilities resulting from the increasing number of persons with access to our systems, complex interactions within technology platforms and the increasing number of connections with the technology of clients and third-party partners.
68
We continually face cyber risks and threats that seek to damage, disrupt or gain access to our networks and our gaming platform, supporting infrastructure, intellectual property and other assets. In addition, we rely on technological infrastructure, including third party cloud hosting and broadband, provided by third party business partners to support the in-person and online functionality of our gaming platform. These business partners are also subject to cyber risks and threats. Such cyber risks and threats may be difficult to detect. Both our partners and we have implemented certain systems and processes to guard against cyber risks and to help protect our data and systems. The techniques that may be used to obtain unauthorized access or disable, degrade, exploit or sabotage our networks and gaming platform change frequently and often are not detected. Our systems and processes, and the systems and processes of our third-party business partners, however, may not be adequate. Any failure to prevent or mitigate security breaches or cyber risks, or respond adequately to a security breach or cyber risk, could result in interruptions to our gaming platform, degrade the gamer experience, cause gamers and creators to lose confidence in our gaming platform and cease utilizing it, as well as significant legal and financial exposure. This could harm our business and reputation, disrupt our relationships with partners and diminish our competitive position.
Security breaches can also occur as a result of non-technical issues, including intentional or inadvertent breaches by our employees or by third parties. These risks may increase over time as the complexity and number of technical systems and applications we use also increase. Breaches of our security measures or those of our third-party service providers or cybersecurity incidents could result in unauthorized access to our sites, networks and systems; unauthorized access to and misappropriation of user information, including users’ personally identifiable information, or other confidential or proprietary information of ourselves or third parties; viruses, worms, spyware or other malware being served from our sites, networks or systems; deletion or modification of content or the display of unauthorized content on our sites; interruption, disruption or malfunction of operations; costs relating to breach remediation, deployment of additional personnel and protection technologies, response to governmental investigations and media inquiries and coverage; engagement of third-party experts and consultants; and litigation, regulatory action and other potential liabilities. If any of these breaches of security should occur and be material, our reputation and brand could be damaged, our business may suffer, we could be required to expend significant capital and other resources to alleviate problems caused by such breaches, and we could be exposed to a risk of loss, litigation or regulatory action and possible liability. We cannot guarantee that recovery protocols and backup systems will be sufficient to prevent data loss. Actual or anticipated attacks may cause us to incur increasing costs, including costs to deploy additional personnel and protection technologies, train employees and engage third-party experts and consultants.
In addition, any party who is able to illicitly obtain a user’s password or account recovery phrase/keys could access the user’s transaction data, cryptocurrency holdings, or personal information, resulting in the perception that our systems are insecure. Any compromise or breach of our security measures, or those of our third-party service providers, could violate applicable privacy, data protection, data security, network and information systems security and other laws and cause significant legal and financial exposure, adverse publicity and a loss of confidence in our security measures, which could have a material adverse effect on our business, financial condition, results of operations and prospects.
Our acquisitions and investments could expose us to additional risks.
We may make acquisitions or investments in complementary companies, professional sports clubs, services and technologies that we believe fit within our business model. Such acquisitions, including recent acquisitions by HOD, could require significant management attention, disrupt business, dilute stockholder value and adversely affect our operating results.
69
We may not be able to acquire and integrate other companies, services or technologies in a successful manner. We may also not be able to find suitable acquisition candidates or, if we do find appropriate acquisition targets, we may not be able to complete such acquisitions on favorable terms or at all. In addition, the pursuit of potential acquisitions may divert the attention of management and cause us to incur additional expenses in identifying, investigating and pursuing suitable acquisitions, regardless of whether they are consummated. If we do not complete acquisitions, we may not ultimately strengthen our competitive position or achieve our goals, including increases in revenue and in the pursuit of tokenizing real-world assets, and any acquisitions we complete could be viewed negatively by investors and industry analysts. We may have to pay cash, incur debt or issue equity securities to pay for any such acquisition, each of which could adversely affect our financial condition or the value of the Common Stock.
Each of HOD’s current investments are in companies or professional sports clubs that are privately held and for which no current market exists, nor is there current liquidity into such investments. As such, the amount of information that is available and provided on an ongoing basis may be limited. If we were looking to sell such investments or a portion thereof, there may not be buyers readily available nor ones that are willing to take on the risks of holding such assets.
As it relates to professional sports club investments, we have limited experience and expertise in operating or managing such assets. While each of these sport club investments have their own management teams to operate their clubs and related activities, investor input and oversight will be necessary from us. If we cannot manage these investments adequately or make prudent decisions, or we are unable to leverage the branding and trademarks from Doge and the Dogecoin community, the value of these assets may be impaired or adversely impacted.
Additional capital that we may require may not be available or may be available only on onerous terms, either of which could negatively impact our growth and business.
We may require additional capital to support our growth and such capital might not be available on favorable or acceptable terms, if at all. The unavailability of capital could hamper our growth and adversely affect our business.
We expect to rely on both cash flows from operations and capital raises to meet our capital needs. We cannot provide any assurance that our business will generate sufficient cash flows from operations to enable us to fund our liquidity needs. We will require equity and/or debt financing in the future to support our ongoing operations, to undertake capital expenditures, and to complete acquisitions or other investment transactions. Third-party financing may not be available on terms favorable to us, and we may not manage costs and working capital successfully. Our inability to raise additional capital as needed could impede our growth and could adversely affect our business, financial condition and financial performance.
Our business may be materially and adversely affected by significant developments stemming from political events and changes.
Changes in U.S. and international social, political, regulatory and economic conditions, or in laws and policies governing cryptocurrency and digital assets, foreign trade, technology, financial services and investments that affect the jurisdictions where we operate could adversely affect our business.
In addition, our business could be negatively affected by trade or other regulatory barriers in the United States, Canada, or other countries reacting to trade policies adopted by one or more other countries. The uncertainty posed by the current period of political and trade volatility may result in various negative effects on our business, many of which may not be currently foreseeable. These possible negative effects may adversely affect our operating results, financial condition and growth prospects.
Our insurance coverage may not be adequate to cover all potential risks associated with our operations.
Insurance may not cover all risks to which we will be exposed. While we believe that our current insurance will address material risks to which we are exposed and that our insurance coverage is adequate and customary given our current operations, such insurance is and will be subject to coverage limits and exclusions. Our insurance will not cover all the potential risks associated with our operations. Moreover, insurance against certain risks encountered in our operations may not be generally available or on acceptable terms, if at all, especially given our operation in the cryptocurrency industry.
70
Our officers and directors may have conflicts of interest that could negatively impact our business.
Our directors and officers may be involved in businesses similar to ours and may have conflicts of interest with us. Certain of our directors and officers currently hold, or may in the future hold, interests in other companies involved in the same or similar businesses to ours or may be directors or officers of other related companies, clients, or partners, including Marco Margiotta, House of Doge’s Chief Executive Officer, serving as a director on several of the professional sports clubs or companies we have invested in, and Timothy Stebbing, House of Doge’s Chief Technology Officer, as a director of CleanCore and the Dogecoin Foundation. As a result, conflicts of interest may arise between these directors and officers in certain circumstances that could be adverse to us and, whether the conflict of interest is real or perceived, put our reputation at risk.
If our compliance and risk management program is not effective, it could result in events that could have a material adverse effect on our reputation, financial condition and operating results.
Our compliance and risk management programs may not be effective and may result in outcomes that could materially and adversely affect our reputation, financial condition and operating results, among other things.
We anticipate that through contract or by operation of law, we will be subject to anti-money laundering laws, know your customer/know your business laws, travel rules, payment network rules, money transmitter or money service business laws, sanctions, foreign corruption/practices and other related legislation. Our ability to comply with applicable laws and regulations will be largely dependent on our establishment and maintenance of compliance, review and reporting systems, as well as our ability to attract and retain qualified compliance and other risk management personnel. If we enter into new markets, or become involved in certain payment services with our partners, we may become subject to laws and regulations that differ from those of our then-current markets or verticals and that may conflict with other laws and regulations to which we are subject. We cannot provide any assurance that our compliance policies and procedures will be effective or that we will always be successful in monitoring or evaluating applicable risks. In the case of alleged non-compliance with applicable laws or regulations, we could be subject to investigations and legal or regulatory proceedings that may result in substantial penalties or claims against us. Any such claims may materially and adversely affect our reputation, financial condition and the value of any investment in the Company.
Operational risks, such as misconduct and errors of employees, contractors or entities with which we do business, may be difficult to detect and deter and could cause us material reputational and financial harm.
Our employees and agents could engage in misconduct, which may include conducting and concealing unauthorized activities or improperly using or disclosing confidential information. It may not be possible to deter misconduct by employees or others, and the precautions that we take to prevent and detect these activities may not be effective in all cases. Any unauthorized actions by our employees or agents could lead to regulatory or criminal proceedings, which, in each case, could have a material and adverse effect on the Company. Furthermore, our employees could make errors recording or executing transactions, which may result in additional material costs to us.
Our collection of personal information could expose us to regulatory and other risks, and changes in applicable laws and regulations addressing the collection of such information could result in additional costs.
Measures that we take to protect personal information that we obtain or collect may be inadequate and there is a risk of a data breach or the loss or theft of such personal information.
Legislation and regulation of digital businesses, including privacy and data protection regimes, could create unexpected additional costs, subject us to enforcement actions for compliance failures, or cause us to change our technology solution or business model, which may have an adverse effect on the demand for our platform or services, such as through the mobile payments application, Such.
Many local, provincial/state, national, and international laws and regulations apply to the collection, use, retention, protection, disclosure, transfer, and other processing of data collected from and about consumers and devices, and the regulatory framework for privacy issues is evolving worldwide. Various U.S., Canadian, Australian, Mexican and foreign governments, consumer agencies, self-regulatory bodies, and public advocacy groups have called for new regulation directed at the collection and retention of personal information, and one can expect to see an increase in legislation and regulation related to the collection and use of such data. Such legislation or regulation could materially and adversely affect the costs of doing business.
71
While we take measures to protect the security of information that we collect, use and disclose in the operation of our business, if we experience a data breach, we may face claims by users whose personal information is disclosed without authorization, which claims may have a material adverse effect on our business and financial condition. The Company may also be subject to various regulatory proceedings, enforcement and additional oversight as a result of any loss or disclosure of personal information.
We may be subject to litigation and similar proceedings that adversely affect our business.
We may be subject to various litigation and other proceedings. All industries, including the cryptocurrency, payment technology and financial services industries, are subject to legal claims, with and without merit. We may become party to litigation in the ordinary course of business, which could adversely affect our business. Should any litigation in which we become involved be determined against us, such a decision could adversely affect our ability to continue operating and the market price for the Common Stock, and could require us to spend significant financial and other corporate resources to address. Even if we are successful in litigation, litigation can significantly redirect our resources. Litigation may also negatively affect our reputation.
We may be unable to integrate successfully the businesses of Brag House and HOD and realize the anticipated benefits of the Merger.
The Merger involved the combination of two companies that, before the Effective Date, operated as independent companies. We are be required to devote significant management attention and resources to integrating the business practices and operations of HOD and Brag House. We may fail to realize some or all of the anticipated benefits of the Merger if the integration process takes longer or is more costly than expected. Potential difficulties that we may encounter in the integration process include the following:
| ● | our inability to successfully combine the businesses of Brag House and HOD in a manner that permits the Company to achieve the anticipated benefits from the Merger, which would result in the anticipated benefits of the Merger not being realized partly or wholly in the time frame currently anticipated or at all; |
| ● | creation of uniform standards, controls, procedures, policies, and information systems; and |
| ● | potential unknown liabilities and unforeseen increased expenses, delays or regulatory conditions associated with the Merger. |
In addition, before the Effective Time each of Brag House and HOD operated independently. It is possible that the integration process could result in the diversion of the Company’s management’s attention, the disruption or interruption of, or the loss of momentum in, the company’s ongoing businesses or inconsistencies in standards, controls, procedures, and policies, any of which could adversely affect the Company’s ability to maintain its business relationships or the ability to achieve the anticipated benefits of the Merger, or could otherwise adversely affect our business and financial results. If we are unable to successfully integrate the businesses of Brag House and HOD, we may not realize the anticipated benefits of the Merger, such as revenue synergies and operational efficiencies. Further, the significant changes in management pursuant to the Merger could present challenges to operational continuity.
Unfavorable global economic conditions could adversely affect our business, financial condition, results of operations or cash flows.
Our results of operations could be adversely affected by general conditions in the global economy and in the global financial markets. A severe or prolonged economic downturn could result in a variety of risks to our business, including our ability to raise additional capital when needed on acceptable terms or at all. A weak or declining economy could also strain our suppliers, possibly resulting in supply disruption, or cause our customers to delay making payments for our services. Any of the foregoing could harm our business and we cannot anticipate all of the ways in which the current economic climate and financial market conditions could adversely impact our business.
72
Risks Related to Digital Asset Custody and Operations
The loss, theft, or destruction of private keys required to access our digital assets, or the failure of our custodial arrangements, could result in the irreversible loss of our digital asset holdings.
Digital assets, including any Dogecoin or other cryptocurrency we may hold from time to time, are typically controlled by the holder of the unique private key for the digital wallet in which such assets are held. While public addresses are published in blockchain transactions, private keys are required to access, retrieve, or transfer the digital assets in a given wallet. If any private keys are lost, stolen, destroyed, or otherwise compromised, and if backup keys are not available, the holder will be unable to access the digital assets in the affected wallet, and such loss would generally be irreversible. We rely on third-party custodians and digital wallet infrastructure to safeguard our digital asset holdings. These custodial arrangements are subject to risks including cybersecurity breaches, hacking, operational errors, and failures of security protocols. Blockchain technologies that hold digital assets, such as wallets and smart contracts, can be hacked or otherwise subject to security breaches and malicious activities, which may result in the unauthorized transfer or misappropriation of digital assets. There is no assurance that our custodial arrangements, or the security measures employed by our custodians, will be adequate to prevent such losses. Any loss of digital assets due to custodial failures, private key compromises, or cybersecurity incidents could materially and adversely affect our business, financial condition, and results of operations.
If we engage in staking or validator operations, we may be subject to slashing penalties, technological failures, and other risks that could result in the loss of staked digital assets.
Certain proof-of-stake blockchain networks require digital assets to be transferred into smart contracts or delegated to validator nodes to participate in staking. If we or our partners engage in staking activities, including with respect to Dogecoin or other digital assets, we would be exposed to risks including validator node failures, cybersecurity attacks, extended downtime, coding or hardware errors, and “slashing” penalties imposed by the underlying blockchain network. Slashing penalties may be imposed if a validator node acts maliciously, “double signs” transactions, experiences prolonged inactivity, or encounters inadvertent operational errors. Such penalties can result in the confiscation, withdrawal, or permanent loss of staked digital assets. Additionally, the rules and requirements for staking participation are determined by the relevant blockchain network and are subject to change without notice. Any loss of staked digital assets, slashing events, or failures in validator operations could damage our brand and reputation, cause us to suffer financial losses, and adversely impact our business.
The lack of a centralized clearinghouse for digital asset transactions and our reliance on third-party counterparties for settlement expose us to significant counterparty and settlement risk.
The digital asset market operates 24 hours a day, seven days a week, and does not have a centralized clearinghouse. Transactions in digital assets rely on direct settlements between third parties after trades are executed. We rely on our partners, including 21Shares, affiliates, and third-party banks and trading venues to facilitate cash and digital asset settlements. If any of these counterparties experience operational failures, liquidity constraints, insolvency, fraud, or cybersecurity incidents, they may be unable to complete settlement transactions, which could disrupt our operations and result in financial losses. The digital asset industry has experienced significant counterparty failures in recent years, including the bankruptcies of FTX, Celsius Networks, Voyager Digital, Three Arrows Capital, and Genesis, which resulted in widespread loss of customer assets and a loss of confidence in the broader digital asset ecosystem. There is no assurance that our counterparties will not experience similar failures, and any such failures could have a material adverse effect on our business, financial condition, and results of operations.
Our pursuit of real-world asset tokenization and digital financial products may expose us to risks associated with decentralized finance protocols and smart contract vulnerabilities.
As we develop tokenization platforms and digital financial products, we may interact with or rely upon decentralized finance (“DeFi”) protocols and smart contracts. DeFi protocols are subject to various risks, including uncertain regulatory and compliance conditions, the risk that underlying smart contracts contain security vulnerabilities or coding errors, the risk that borrowers may default, and the risk that a single exploit within one protocol can trigger cascading failures across multiple platforms. Smart contracts are self-executing programs on blockchain networks that, once deployed, generally cannot be modified. If a smart contract contains a flaw or vulnerability, it may be exploited by malicious actors, potentially resulting in the irreversible loss of digital assets. Additionally, the complexity and interconnectedness of DeFi protocols enable new forms of malicious attacks, including price manipulation attacks that trigger uneconomic collateral liquidations. DeFi protocols also pose heightened regulatory concerns, as regulators may determine that certain DeFi activities constitute securities offerings or other regulated financial activities. Any of these risks could materially and adversely affect our digital asset holdings, our tokenization initiatives, and our business.
73
We depend on third-party custodians and service providers to safeguard our digital asset holdings, and any failure by these custodians could result in the loss of assets and material financial harm.
We rely on third-party custodians, digital wallet providers, and brokerage platforms to hold, secure, and facilitate transactions in our digital asset holdings. Products backed by digital assets are subject to the risks associated with the custody of digital assets, including the risk that digital assets or the blockchain infrastructure could be impacted by hacking, cybersecurity breaches, or other malicious actions. The security procedures and infrastructure of our custodians may not fully protect against loss of assets. Digital assets may also be exposed to the internet or other vulnerabilities during transfers before reaching secure custodial accounts. In addition, there are risks associated with changes to blockchain protocols, such as forks, which could disrupt custodial arrangements or result in losses. The failure of our custodians to adequately safeguard our digital assets could result in financial loss, reputational harm, and regulatory consequences, and our recovery of any losses from a custodian may be inadequate.
A fork of the Dogecoin blockchain could disrupt our operations, compromise the security of our digital asset holdings, and adversely affect the value of Dogecoin and our business.
Blockchain software, including the Dogecoin protocol, is generally open-source, and any user can propose modifications to the network. If a proposed modification is adopted by less than a substantial majority of users and the modification is not compatible with the existing software, the result would be a “fork” — a split of the blockchain network into two or more parallel versions, each running incompatible software with separate native assets that lack interchangeability. A fork of the Dogecoin blockchain could result in significant disruptions, including: replay attacks, in which transactions from one forked network are rebroadcast on the other to achieve unauthorized “double-spending”; a reduction in the level of network security due to the splitting of mining or validation power across networks, making it easier for a malicious actor to exceed the majority threshold necessary to manipulate the network; disruptions to our information technology systems and digital payment infrastructure; confusion among users, merchants, and partners regarding which version of Dogecoin is supported by our products and services; and a decline in the value and liquidity of Dogecoin. As the exclusive commercialization partner of the Dogecoin Foundation, any fork of the Dogecoin blockchain could have a uniquely direct and material adverse effect on our business, brand, trademark licensing arrangement, ETP support services, and the value of any Dogecoin we may hold.
Risks Related to Our ETP Business
Our sole revenue stream depends on exchange-traded products operated by a third-party partner, and regulatory changes affecting such products could eliminate our revenue.
Substantially all of our current revenue is derived from support service fees earned in connection with Dogecoin exchange-traded products (“ETPs”) operated by 21Shares. These ETPs are subject to extensive and evolving regulatory requirements, including those imposed by the SEC, FINRA, applicable securities exchanges, and the Investment Company Act of 1940. Exchange-traded products must comply with listing standards, disclosure requirements, valuation rules, and other regulatory obligations that may change over time. The SEC or an exchange may determine to delist, suspend trading in, or impose additional restrictions on the Dogecoin ETPs, or may decline to approve future Dogecoin-related products. Changes in the regulatory classification of Dogecoin, the imposition of new fees or compliance costs on ETP sponsors, or the failure of 21Shares to maintain its regulatory approvals could directly and adversely affect our revenue. Given our concentration of revenue in a single product category with a single partner, any disruption to the Dogecoin ETP ecosystem would have a material adverse effect on our business, financial condition, and results of operations.
Our advisory and asset management activities may give rise to fiduciary duties and regulatory obligations, and our failure to comply could result in enforcement actions, litigation, and reputational harm.
We provide strategic advisory services, asset management, and consulting services to third-party clients in connection with their Dogecoin treasury assets and exchange-traded products. These activities may subject us to fiduciary duties under applicable federal and state laws, including the Investment Advisers Act of 1940, as well as obligations to act in the best interest of our clients, manage conflicts of interest, and provide appropriate disclosures. Our Chief Executive Officer serves as a director of several companies and professional sports clubs in which we have invested, and our Chief Technology Officer serves as a director of CleanCore Solutions and the Dogecoin Foundation, creating potential conflicts of interest. If we fail to adequately identify, disclose, and manage actual or perceived conflicts of interest, or if regulators determine that our advisory activities require registration as an investment adviser, we could face enforcement actions, litigation, penalties, reputational damage, and restrictions on our business activities, any of which could materially and adversely affect our business.
74
Risks Related to Financial and Market Conditions
The U.S. federal and state income tax treatment of digital asset transactions is uncertain and evolving, and adverse tax developments could materially affect our financial condition and results of operations.
Many significant aspects of the U.S. federal income tax treatment of digital assets remain uncertain, including the timing, character, and amount of income recognition for various digital asset transactions such as holding, disposing of, staking, lending, and receiving digital assets as compensation or in exchange for services. The IRS has issued limited guidance on certain aspects of digital asset taxation, including Notice 2014-21, which treats virtual currency as “property” for federal income tax purposes, but has not addressed many other significant tax questions. Our operations involve holding digital assets, receiving non-cash consideration (such as warrants) for advisory services, and earning fees denominated in or tied to digital asset values. The uncertain tax treatment of these transactions could affect our effective tax rate, the timing of income recognition, and our overall financial results. Future IRS guidance, Treasury regulations, legislative changes, or adverse judicial decisions could result in tax consequences that differ materially from our current positions, which could have a material adverse effect on our business, financial condition, and results of operations. Similar uncertainties exist in the foreign jurisdictions in which we operate, including Canada, Australia, and New Zealand.
The failure of stablecoin issuers to maintain adequate reserves or honor redemption obligations could disrupt our digital payment operations and adversely affect the broader digital asset ecosystem.
As we develop digital payment infrastructure, including our “Such” mobile payments application and proposed DOGE debit card, we may interact with or rely upon stablecoins for settlement, liquidity, or payment processing purposes. Stablecoins are digital assets designed to maintain a relatively stable price, typically pegged to a fiat currency such as the U.S. dollar. However, certain stablecoin issuers have discretion to determine the composition and amounts of assets backing their stablecoins, and there is a risk that an issuer may be unable to liquidate sufficient backing assets in the event of mass redemptions. A stablecoin depegging event or issuer failure could undermine public confidence in stablecoins and digital assets more broadly, cause significant market disruption, and adversely affect the value of digital assets we hold, the functionality of our payment infrastructure, and our business operations. Regulatory developments, including the GENIUS Act, may impose new requirements on stablecoin issuers, and the extent to which stablecoins with significant market share will qualify under such frameworks remains uncertain.
Our inability to establish or maintain banking relationships could materially disrupt our operations and impair our ability to conduct business.
As a company operating in the digital asset and cryptocurrency industry, we may face difficulties in establishing or maintaining relationships with banks and other financial institutions. Many financial institutions have decided, or been compelled by their regulators, to decline to provide bank accounts, payment services, or other financial services to companies involved in cryptocurrency activities, due to perceived compliance risks, costs, or regulatory uncertainty. Similarly, certain companies in the digital asset industry have had their existing bank accounts closed by financial institutions. If we are unable to procure or maintain banking relationships, we may be unable to process payments, settle transactions, fund operations, or otherwise conduct business. As of June 30, 2026, we had cash of only $658,348 and a working capital deficit of approximately $14.9 million. Any disruption to our banking relationships at our current liquidity levels could have a severe and potentially existential adverse effect on our business, financial condition, and results of operations. In addition to banks, other service providers, including accountants, lawyers, and insurance providers, may also decline to provide services to companies engaged in digital asset-related businesses, which could further impair our ability to operate.
Our use of margin financing secured by digital asset holdings, and any future borrowing or lending of digital assets, expose us to amplified financial risks including unlimited loss potential.
We have entered into a margin loan agreement with Revere Securities LLC, secured by our holdings of the 21Shares Dogecoin ETF (TDOG), and we may in the future engage in additional borrowing, lending, or margin financing activities involving digital assets. Margin financing amplifies both potential gains and potential losses, and a decline in the value of the collateral securing a margin loan could trigger margin calls requiring us to post additional collateral or liquidate assets at unfavorable prices. Borrowing and lending markets for digital assets are currently limited and are unlikely to become as developed and stable as those for traditional securities. Under adverse market conditions, we may have difficulty purchasing digital assets to meet delivery obligations, and a “short squeeze” scenario could compel us to replace borrowed assets at significantly elevated prices. In addition, certain regulators have taken the position that digital asset lending programs may constitute unregistered securities offerings. While we do not believe our current borrowing activities constitute securities offerings, there is a risk that the SEC or state regulators could take a contrary view, which could result in enforcement actions, penalties, and restrictions on our business. Any losses from margin financing, borrowing, or lending of digital assets could materially and adversely affect our financial condition and results of operations.
75
Risks Related to Our Sports Investments
Our equity investments in professional sports clubs are subject to the rules and regulations of sports governing bodies, including FIFA, UEFA, and national football associations, which could restrict our ownership rights, impose financial penalties, or require us to divest our interests.
We have made equity investments in professional sports clubs, including HC Sierre Hockey Club in the Swiss League, U.S. Triestina Calcio 1918 s.r.l in the Italian Serie C football league, and Milano Hockey Club in the ICE Hockey League. These investments are subject to the rules and regulations of various sports governing bodies, including the Fédération Internationale de Football Association (“FIFA”), the Union of European Football Associations (“UEFA”), the International Ice Hockey Federation (“IIHF”), and applicable national sports associations. These governing bodies impose comprehensive rules regarding club ownership, governance, financial management, and competitive integrity. FIFA requires that each member association manage its affairs independently and without undue influence from third parties, and that no natural or legal person exercise control over more than one club whenever the integrity of any match or competition could be jeopardized. UEFA’s Financial Fair Play Regulations impose financial sustainability requirements, including break-even rules that limit owner investments to specified thresholds. Non-compliance with these regulations can result in sanctions including warnings, fines, withholding of prize money, prohibition on registering new players for competitions, and exclusion from competitions. Any failure to comply with the rules of applicable sports governing bodies could result in sanctions, forced divestiture, or restrictions on our ability to derive economic benefit from our sports investments, any of which could materially and adversely affect our business and financial condition.
Laws and regulations in certain jurisdictions restrict the ownership of multiple sports clubs, which could limit our ability to expand our sports investment portfolio or require divestiture of existing investments.
Various sports governing bodies and national laws restrict multi-club ownership to preserve the integrity of sporting competitions. FIFA rules prohibit any person or entity from controlling more than one club whenever competitive integrity could be jeopardized. National football associations and other sports governing bodies may impose additional restrictions. For example, in Italy, the Norme Organizzative Interne della FIGC (“NOIF”) prohibits any person from controlling, directly or indirectly, more than one football company in the professional league. Similar restrictions exist in other jurisdictions in which we have invested or may invest. Mergers, acquisitions, sales, and transfers of sports clubs are also subject to specific approval requirements from the relevant sports governing body. If we are found to be in violation of multi-club ownership restrictions, we could be required to divest one or more of our sports investments, may be subject to penalties, or may be restricted in our ability to make additional sports investments. These restrictions could limit our growth strategy in the professional sports sector and adversely affect our business.
The sports clubs in which we have invested are subject to complex player transfer and registration regulations that could restrict their ability to attract talent and compete effectively.
Professional sports clubs, including those in which we have made equity investments, are subject to detailed regulations governing player registration, transfers, and eligibility. FIFA, UEFA, national football associations, and analogous bodies in other sports impose rules regarding the registration of players, the transfer of player contracts between clubs, restrictions on the number of foreign players, and requirements related to player development and youth academies. Certain jurisdictions restrict the number of non-EU or non-domestic players that may be fielded in league matches, which could limit the talent available to our invested clubs. The global transfer market is subject to FIFA’s Transfer Matching System and associated regulations, which govern the timing, documentation, and financial terms of player transfers. Changes in transfer market regulations, immigration rules affecting player mobility, or disputes over player contracts could adversely affect the competitive performance and financial results of our invested sports clubs, and, in turn, the value of our investments.
76
Risks Related to Our Intellectual Property
We may not be able to protect our proprietary technology or trademarks adequately.
Our rights with respect to our intellectual property may be difficult to protect or to enforce. This could enable others to copy or use aspects of our platform, including the Such mobile application, or others may use or infringe on the licensed Dogecoin marks without compensation, which could erode our competitive advantages and harm our business. Due to the global brand recognition around Dogecoin and its related marks, our success will depend, in part, on our ability to protect our proprietary marks and the technologies that we develop. We rely on trademark and copyright laws, confidentiality procedures and contractual provisions to protect our intellectual properties and those trademarks that we own or otherwise manage. Uncertainty may result from changes to intellectual property legislation enacted in various jurisdictions where we may operate. Accordingly, despite our efforts, we may be unable to obtain adequate protection for our intellectual property or to prevent third parties from infringing upon or misappropriating our intellectual property.
From time to time, we and the Dogecoin Foundation may need to take legal action to enforce our trademark or intellectual property rights, protect our trade secrets, determine the validity and scope of the proprietary rights of others, or defend against claims of infringement. Such litigation could result in substantial costs and the diversion of limited resources and could negatively affect our business, financial condition and financial performance. If we are unable to protect our proprietary rights (including aspects of our Brag House platform), we may find ourselves at a competitive disadvantage to others who have not incurred the same level of expense, time and effort to create and protect their intellectual property.
We may be subject to claims of infringement of third-party intellectual property rights, which are costly to defend, could result in significant damage awards, and could limit our ability to use certain technologies in the future.
From time to time, third parties may claim that we have infringed their intellectual property rights. For example, patent holding companies may assert patent claims against us in which they seek to monetize patents they have purchased or otherwise obtained. Although we take steps to avoid knowingly violating the intellectual property rights of others, it is possible that third parties still may claim infringement.
Existing or future infringement claims against us, whether valid or not, may be expensive to defend and divert the attention of our employees from business operations. Such claims or litigation could require us to pay damages, royalties, legal fees and other costs. We also could be required to stop offering, distributing or supporting games, our gaming platform or other features or services that incorporate the affected intellectual property rights, redesign products, features or services to avoid infringement, or obtain a license (if licenses are available at all), all of which could be costly, result in a loss of revenues for us and otherwise harm our business.
In addition, many patents have been issued that may apply to potential systems for real-world use of Dogecoin including digital payments, financial products and tokenization of real-world assets as well as new modes of delivering, playing or monetizing interactive entertainment software products and services, such as those offered on our Brag House gaming platform or that we would like to offer in the future. We may discover that future opportunities to provide new and innovative digital payment systems, financial products and tokenization methods as well as modes of game play and game delivery to gamers and creators may be precluded by existing patents that we are unable to license on reasonable terms.
Our technology, content and brand are subject to the threat of piracy, unauthorized copying and other forms of intellectual property infringement.
We regard our technology, content and brand as proprietary and take measures to protect our technology, content and brand and other confidential information from infringement. Piracy and other forms of unauthorized copying and use of our technology, content and brands are persistent, and policing is difficult. Further, the laws of some countries in which our products are or may be distributed either do not protect our intellectual property rights to the same extent as the laws of the United States or are poorly enforced. Legal protection of our rights may be ineffective in such countries. In addition, although we take steps to enforce and police our rights, factors such as the proliferation of technology designed to circumvent the protection measures used by our business partners or by us, the availability of broadband access to the Internet, the refusal of Internet service providers or platform holders to remove infringing content in certain instances, and the proliferation of online channels through which infringing product is distributed all have contributed to an expansion in unauthorized copying of our technology, content and brands.
77
Third parties may register trademarks or domain names or purchase internet search engine keywords that are similar to our registered trademark or pending trademarks, brands or websites, or misappropriate our data and copy our gaming platform, all of which could cause confusion, divert gamers and creators away from our gaming platform and tournaments, or harm our reputation.
Competitors and other third parties may register trademarks that are similar to our trademarks and purchase domain names or Internet search engine keywords that are confusingly similar to our brands or websites in Internet search engine advertising programs and in the header and text of the resulting sponsored links or advertisements in order to divert gamers and creators from us to their websites. Preventing such unauthorized use is inherently difficult. If we are unable to prevent such unauthorized use, competitors and other third parties may continue to drive potential gamers and creators away from our gaming platform to competing, irrelevant or potentially offensive platforms, which could harm our reputation and cause us to lose revenue.
We may not be able to prevent others from unauthorized use of our intellectual property, which could harm our business and competitive position.
We regard the protection of our trademarks, service marks, patents, domain names, trade secrets, proprietary technologies and similar intellectual property as critical to our success. We rely on federal, state and common law rights, as well as contractual restrictions, and confidentiality and invention assignment agreements with our employees and contractors and other parties with whom we conduct business. These contractual arrangements and the other steps we have taken to protect our intellectual property may not prevent the misappropriation of our proprietary information or deter independent development of similar technologies by others. Failure to adequately protect our intellectual property rights could result in our competitors offering similar products, potentially resulting in the loss of some of our competitive advantage, and a decrease in our revenue which would adversely affect our business, prospects, financial condition and operating results. Our success depends, at least in part, on our ability to protect our core technology and intellectual property.
Currently, we have one registered trademark and others that have been filed for registration. We also plan to file patents to protect our core technology and intellectual property. We cannot assure you that we will be granted a patent with respect to any patent applications we intend to file. We may, over time, increase our investment in protecting our innovations through increased patent filings that are expensive and time-consuming and may not result in issued patents that can be effectively enforced. Failure to maintain or protect these rights could harm our business. Numerous U.S. and foreign issued patents and pending patent applications owned by others exist in the fields in which we have developed and are developing our technology. These patents and patent applications might have priority over our patent applications and could subject our patent applications to invalidation. Finally, in addition to those who may claim priority, any of our pending patent and trademark applications may also be challenged by others on the basis that they are otherwise invalid or unenforceable.
Patent, trademark, and trade secret laws vary significantly throughout the world. Some foreign countries do not protect intellectual property rights to the same extent as do the laws of the United States. Further, policing the unauthorized use of our intellectual property in foreign jurisdictions may be difficult. Therefore, our intellectual property rights may not be as strong or as easily enforced outside of the United States.
In addition, any unauthorized use of our intellectual property by third parties may adversely affect our current and future revenues and our reputation. Policing unauthorized use of proprietary technology is difficult and expensive. Others may attempt to copy or otherwise obtain and use our intellectual property or seek court declarations that they do not infringe upon our intellectual property rights. Monitoring unauthorized use of our intellectual property is difficult and costly, and we cannot assure you that the steps we have taken will prevent misappropriation of our intellectual property. From time to time, we may have to resort to litigation to enforce our intellectual property rights, which could result in substantial costs and diversion of our resources. Any litigation of this nature, regardless of outcome or merit, could result in substantial costs, adverse publicity or diversion of management and technical resources, any of which could adversely affect our business and operating results. If we fail to maintain, protect and enhance our intellectual property rights, our business and operating results may be harmed.
78
We may be subject to legal liability for information or content displayed on, retrieved from or linked to our online gaming platform, or distributed to our users.
The Brag House interactive live streaming platform enables gamers and creators to exchange information and engage in various other online activities. Although content on our online gaming platform is typically generated by third parties, and not by us, we may be sued or face regulatory liability for claims relating to content or information that is made available on the platform, including claims of defamation, disparagement, intellectual property infringement, or other alleged damages could be asserted against us. We may be subject to claims by virtue of our involvement in hosting, transmitting, marketing, branding, or providing access to content created by third parties. Further, although we require our gamers and creators to register their real name, we do not require user identifications used and displayed during gameplay to contain any real-name information, and hence we are unable to verify the sources of all the information posted by our gamers and creators. In addition, because a majority of the communications on our online and in-person gaming platform is conducted in real-time, we are unable to examine the content generated by gamers and creators before they are posted or streamed. Therefore, it is possible that gamers and creators may engage in illegal, obscene or incendiary conversations or activities, including publishing inappropriate or illegal content that may be deemed unlawful. Our systems, tools and personnel that help us to proactively detect potentially policy-violating or otherwise inappropriate content cannot identify all such content on our online gaming platform.
If any content on the Brag House platform is deemed illegal, obscene or incendiary, or if appropriate licenses and third-party consents have not been obtained, claims may be brought against us for defamation, libel, negligence, breaches of contract, copyright, patent or trademark infringement, unfair competition, other unlawful activities or other theories and claims based on the nature and content of the information delivered on or otherwise accessed through the platform. We may be subject to claims by virtue of our involvement in hosting, transmitting, marketing, branding, or providing access to content created by third parties.
The law relating to the liability of online service providers for others’ activities on their services is still somewhat unsettled around the world. We rely on a variety of statutory and common-law frameworks for the content we host and provide our users, including the Digital Millennium Copyright Act, the Communications Decency Act (the “CDA”), and the fair-use doctrine. Each of these statutes and doctrines, however, is subject to uncertain judicial interpretation and regulatory and legislative amendments. For example, the U.S. Congress amended the CDA in 2018 in ways that could expose some Internet platforms to an increased risk of litigation. In addition, the U.S. Congress and the Executive branch have proposed further changes or amendments each year since 2019 including, among other things, proposals that would narrow the CDA immunity, expand government enforcement power relating to content moderation concerns, or repeal the CDA altogether. Some U.S. states have also enacted or proposed legislation that would undercut, or conflict with, the CDA’s protections. If these state laws were upheld in a challenge in court or if additional similar laws or the changes or amendments to the CDA proposed by the U.S. Congress and the Executive branch were enacted, such changes may decrease the protections provided by the CDA and expose us to lawsuits, penalties, and additional compliance obligations. Moreover, some of these statutes and doctrines that we rely on provide protection only or primarily in the United States. If the rules around these doctrines change, if international jurisdictions refuse to apply similar protections, or if a court were to disagree with our application of those rules to the Brag House platform, we could incur liability or be required to make significant changes to our online gaming platform, business practices, or operations, and our business could be seriously harmed. Defense of any such actions could be costly and involve significant time and attention of our management and other resources, may result in monetary liabilities or penalties, and may require us to change our business in an adverse manner. Moreover, the costs of compliance may continue to increase when more content is made available on the platform as a result of our growing base of gamers and creators, which may adversely affect our results of operations.
Intensified government regulation of the Internet industry could restrict our ability to maintain or increase the level of traffic to our gaming platform as well as our ability to capture other market opportunities.
Businesses operating in the digital asset and payment industry and over the Internet generally are increasingly subject to strict scrutiny. New laws and regulations may be adopted from time to time, to address new issues that come to authorities’ attention. We may not timely obtain or maintain all the required licenses or approvals or make all the necessary filings in the future. We also cannot assure you that we will be able to obtain all required licenses or approvals if we plan to expand into other digital asset or Internet-based businesses. If we fail to obtain or maintain any of the required licenses or approvals or make any necessary filings, we may be subject to various penalties, which may disrupt our business operations or derail our business strategy and materially and adversely affect our business, financial condition and results of operations.
79
Changes in intellectual property laws and governmental regulations regarding the internet that are applied adversely to us or our users may have a material adverse effect on our business operations, financial condition and results of operations.
New intellectual property laws, statutes, rules and regulations could be enacted at any time, which may affect our business and financial performance. Further, the applicability and scope of these laws, as interpreted by the courts, remain uncertain and could harm our business. To date, laws, regulations and enforcement actions by governments have not materially restricted use of the Internet in most parts of the world. However, the legal and regulatory environment relating to the Internet is uncertain, and governments may impose regulation in the future. New laws may be passed, courts may issue decisions affecting the Internet, existing but previously inapplicable or unenforced laws may be deemed to apply to the Internet or regulatory agencies may begin to more rigorously enforce such formerly unenforced laws, or existing legal safe harbors may be narrowed, both by U.S. federal or state governments and by governments of foreign jurisdictions. The adoption of any new laws or regulations, or the narrowing of any safe harbors, could hinder growth in the use of the Internet and online services generally, and decrease acceptance of the Internet and online services as a means of communications, e-commerce and advertising.
In addition, such changes in laws could increase our costs of doing business or prevent us from delivering our online gaming platform over the Internet or in specific jurisdictions, which could harm our business, financial condition and results of operations. For example, we rely on a variety of statutory and common-law frameworks and defenses relevant to the content available on the Brag House platform, including the Digital Millennium Copyright Act, the CDA, and the fair-use doctrine in the United States and the Electronic Commerce Directive in the European Union.
Each of these statutes and doctrines are subject to uncertain or evolving judicial interpretation and regulatory and legislative amendments, and we cannot guarantee that such frameworks and defenses will be available. Regulators in the United States and in other countries may introduce new regulatory regimes that increase potential liability for content available on the Brag House platform, including liability for misleading, false or manipulative information, hate speech, privacy violations, copyrighted content and other types of online harm. For example, there have been various legislative and executive efforts to restrict the scope of the protections available to online platforms under Section 230 of the CDA, and current protections from liability for third-party content in the United States could decrease or change. There are also a number of legislative proposals in the United States, at both the federal and state level, and in the European Union and the United Kingdom, that could impose new obligations in areas affecting our business, such as liability for copyright infringement and other online harm. Any new legislation may be difficult to comply with in a timely and comprehensive manner and may expose our business or users to increased costs. If the rules, doctrines or currently available defenses change, if international jurisdictions refuse to apply protections similar to those that are currently available in the United States or the European Union or if a court were to disagree with our application of those rules to the Brag House platform and offerings, our potential liability for information or content created by third parties and posted to the platform could require us to expend significant resources to try to comply with the new rules and implement additional measures to reduce our exposure to such liability or we could incur liability and our business, financial condition and results of operations could be harmed.
Risks Related to Our Securities and Organizational Documents
The market price of the Common Stock may be volatile and may decline in value following the Merger.
There may be significant fluctuations in the market price of the Common Stock following the Merger. Since its initial public offering, the market price of the Common Stock has fluctuated and the HOD common stock was never publicly traded, listed on a stock exchange or quoted on a quotation system. Any price fluctuations of the Common Stock may be unrelated or disproportionate to our actual operating performance and may be due to factors beyond our control.
Broad market and industry factors, as well as factors specifically relating to us and our business, may adversely affect the market price of the Common Stock. Some of the factors that may cause the market price of the Common Stock to fluctuate include:
| ● | actual or anticipated variations in our financial results; |
| ● | changes in estimates or recommendations by securities analysts, if any, covering the Common Stock; |
| ● | our failure to meet analysts’ expectations; |
80
| ● | media coverage of our business and financial performance; |
| ● | the public’s reaction to our press releases, other public announcements and filings with the U.S. Securities and Exchange Commission (the “SEC”); |
| ● | conditions or trends in the industries in which we operate, including governmental or regulatory changes affecting cryptocurrencies; |
| ● | general economic conditions; |
| ● | progress and resolution with respect to existing litigation and regulatory inquiries; |
| ● | announcements by us or our competitors of significant acquisitions, strategic partnerships or divestitures; |
| ● | the operating and stock price performance of, or other developments involving, other companies that stockholders may deem comparable to the Company; |
| ● | any significant change in our management, including additions or departures of key personnel and our ability to recruit and retain employees; |
| ● | the entry into, or termination of, key agreements or arrangements affecting our business or operations; and |
| ● | future sales of our securities, including sales of Common Stock by our directors and officers or our strategic investors. |
An active trading market for the Common Stock may not develop, and our stockholders may not be able to resell their shares of common stock for a profit, if at all.
Prior to the Merger, there had been no public market for shares of HOD Common Stock and a limited market for the Common Stock. An active trading market for the Common Stock may never develop or be sustained. If an active market for the Common Stock does not develop or is not sustained, it may be difficult for our stockholders to sell their shares of Common Stock at an attractive price or at all.
Our failure to maintain compliance with Nasdaq’s continued listing requirements could result in the delisting of our securities.
The Common Stock is currently listed on the Capital Market tier of The Nasdaq Stock Market LLC (“Nasdaq”). Continued listing of a security on the Nasdaq Capital Market is conditioned upon compliance with various continued listing standards. In the past, we have received notices from Nasdaq’s Listing Qualifications Department indicating that we had not complied with certain of the Nasdaq Capital Market’s continued listing standards. A delisting could substantially decrease trading in the Common Stock, adversely affect the market liquidity of the Common Stock as a result of the loss of market efficiencies associated with Nasdaq and the loss of federal preemption of state securities laws, adversely affect our ability to obtain financing on acceptable terms, if at all, and may result in the potential loss of confidence by investors, suppliers, and employees and lead to fewer business development opportunities. Additionally, the market price of the Common Stock may decline further, and stockholders may lose some or all of their investment.
In the event of a delisting, we anticipate that we would take actions to restore our compliance with the Nasdaq Capital Market or another national exchange’s listing requirements, but we can provide no assurance that any such action taken by us would allow the Common Stock to regain listing on the Nasdaq Capital Market, stabilize its market price, improve the liquidity of the Common Stock, prevent the Common Stock from dropping below the Nasdaq Capital Market’s minimum bid price requirement, or prevent future non-compliance with the Nasdaq Capital Market or another national securities exchange’s listing requirements.
81
Future sales of shares by existing stockholders could cause the trading price of the Common Stock to decline.
If our securityholders sell, or indicate an intention to sell, substantial amounts of Common Stock in the public market, the trading price of the Common Stock could decline. As of the Effective Time, 75,902,985 shares of Common Stock were issued and outstanding, of which approximately 17,70third0,00 shares are freely tradeable, with the balance of such shares becoming freely tradable over the next nine months. If a significant amount of these shares are sold, the trading price of the Common Stock could decline.
Holders of the Common Stock may experience significant dilution.
We may issue additional securities in the future. If we raise additional financing through the issuance of Common Stock (including securities convertible or exchangeable into Common Stock) or completes an acquisition or investment by issuing additional shares of Common Stock, such issuance may substantially dilute the interests of holders of Common Stock and reduce the value of their investment.
The Board has the discretion to determine the price and the terms of future issuances, and the market price of the Common Stock could decline as a result of our issuance of new shares. Moreover, we may issue shares of Common Stock upon the exercise of options or the vesting of RSUs, in connection with other incentive securities and upon the exercise of any outstanding warrants.
Our executive officers, directors and principal stockholders may have the ability to control or significantly influence certain matters submitted to our stockholders for approval.
As of the Effective Time, our executive officers, directors and principal stockholders, in the aggregate, beneficially own approximately 43.44% of the outstanding shares of Common Stock. As a result, if these stockholders were to choose to act together, they may be able to control or significantly influence certain matters submitted to our stockholders for approval, as well as our management and affairs. For example, these stockholders, if they choose to act together, would control or significantly influence the election of directors and approval of any merger, consolidation or sale of all or substantially all of our assets. This concentration of voting power could delay or prevent an acquisition of the Company on terms that other stockholders may desire.
If equity research analysts do not publish research or reports, or publish unfavorable research or reports, about the Company, its business or its market, its stock price and trading volume could decline.
The trading market for the Common Stock will be influenced by the research and reports that equity research analysts publish about us and our business. Equity research analysts may elect to not provide research coverage of the Common Stock after the completion of the Merger, and such lack of research coverage may adversely affect the market price of the Common Stock. In the event that it does have equity research analyst coverage, the Company will not have any control over the analysts or the content and opinions included in their reports. The price of the Common Stock could decline if one or more equity research analysts downgrade the Common Stock or issue other unfavorable commentary or research. If one or more equity research analysts cease coverage of the Company or fails to publish reports on it regularly, demand for the Common Stock could decrease, which in turn could cause the Common Stock price or trading volume to decline.
We do not anticipate paying any cash dividends in the foreseeable future.
We expect to retain any future earnings to fund the growth of our business. We may never pay any dividends and we are not party to any contractual obligation to do so. Any determination to pay dividends in the future will be at the discretion of the Board and will depend upon our results of operations, financial condition, contractual limitations, restrictions imposed by applicable law, business and investment strategy and any other factors that the Board deems relevant. As a result, capital appreciation, if any, of the Common Stock will be investors’ sole source of gain, if any, for the foreseeable future.
If we issue shares of preferred stock, the rights of holders of the Common Stock may be materially adversely affected.
The Board is authorized to issue up to 24,987,810 – number of shares of Preferred C issued in the Merger shares of “blank check” preferred stock. The designations, rights and preferences of the Company’s preferred stock may be determined from time to time, by the Board. Accordingly, the Board is empowered, without stockholder approval, to issue one or more series of preferred stock with dividend, liquidation, conversion, voting or other rights superior to those of the holders of the Common Stock. For example, an issuance of shares of preferred stock could:
| ● | adversely affect the voting power of the holders of the Common Stock; |
| ● | dilute the value of holders’ investment in the Common Stock; |
82
| ● | make it more difficult for a third party to gain control of the Company; |
| ● | discourage bids for the Common Stock; |
| ● | limit or eliminate any payments that the holders of the Common Stock could expect to receive upon the Company’s liquidation; or |
| ● | adversely affect the market price of the Common Stock. |
Provisions of our organizational documents and Delaware law may delay or deter a change of control of the Company.
Our organizational documents contain provisions that may have the effect of discouraging, delaying or preventing a change of control of, or unsolicited acquisition or merger proposals for, the Company. These include provisions that:
| ● | permit the Board to establish the number of directors and fill any vacancies and newly created directorships; |
| ● | provide that directors may only be removed by the majority of the shares of voting stock then outstanding; |
| ● | limit the persons that may call special meetings of stockholders; |
| ● | establish advance notice requirements for stockholder proposals and director nominations; and |
| ● | prohibit stockholder from acting by written consent in lieu of a meeting. |
In addition, Delaware corporate law makes it difficult for stockholders that recently have acquired a large interest in a corporation to cause the merger or acquisition of the corporation against the directors’ wishes. Under Section 203 of the Delaware General Corporation Law (the “DGCL”), a Delaware corporation such as the Company may not engage in any merger with an interested stockholder or such stockholder’s affiliates or associates for a period of three years following the date that such stockholder became an interested stockholder, except in limited circumstances, including by approval of the corporation’s board of directors.
Our certificate of incorporation provides that the Court of Chancery of the State of Delaware is the exclusive forum for substantially all disputes between the Company and its stockholders, which could limit stockholders’ ability to obtain a favorable judicial forum for disputes with the Company or its directors, officers or employees giving rise to such claim.
Our certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware is the sole and exclusive forum for the following types of actions, suits or proceedings (“Proceedings”):
| ● | any derivative Proceeding brought on the Company’s behalf; |
| ● | any Proceeding asserting a claim of breach of a fiduciary duty or other wrongdoing by any of the Company’s directors, officers, employees or agents; |
| ● | any Proceeding asserting a claim against the Company arising pursuant to any provision of the DGCL or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware; |
| ● | any Proceeding to interpret, apply, enforce or determine the validity of the Company’s certificate of incorporation or bylaws; and |
| ● | any Proceeding asserting a claim governed by the internal affairs doctrine. |
83
Section 27 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. As a result, the exclusive forum provision will not apply to suits brought to enforce any duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. Section 22 of the Securities Act of 1933, as amended (the “Securities Act”) creates concurrent jurisdiction for state and federal courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. Therefore, pursuant to our certificate of incorporation and bylaws, the choice of forum provision shall not apply, and the Company will have consented to such inapplicability, to claims or causes of action brought to enforce a duty or liability created by the Securities Act, the Exchange Act, or any other claim for which the federal courts have exclusive jurisdiction. In addition, our bylaws provide that unless we consent in writing to the selection of an alternative forum, to the fullest extent permitted by law, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause or causes of action arising under the Securities Act, including all causes of action asserted against any defendant to such complaint.
For the avoidance of doubt, this provision is intended to benefit and may be enforced by the Company and its officers and directors. This choice of forum provision may, however, limit a stockholder’s ability to bring a Proceeding in a judicial forum that it finds favorable for disputes with the Company or its directors, officers, other employees or stockholders. Further, this choice of forum provision may increase the costs for a stockholder to bring such a Proceeding and may discourage them from doing so.
While the Delaware courts have determined that such choice of forum provisions are facially valid, a stockholder may nevertheless seek to bring a Proceeding in a venue other than those designated in the exclusive forum provisions, and there can be no assurance that such provisions will be enforced by a court in those other jurisdictions. If a court were to find the choice of forum provision contained in the Company’s certificate of incorporation or bylaws to be inapplicable or unenforceable in an action, it may incur additional costs associated with resolving such Proceeding in other jurisdictions. For example, the Court of Chancery of the State of Delaware recently determined that the exclusive forum provisions of federal district courts of the United States of America for resolving any complaint asserting a cause of action arising under the Securities Act is not enforceable. We note that investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder.
We are an “emerging growth company” and, as a result of the reduced disclosure and governance requirements applicable to emerging growth companies, the shares of Common Stock may be less attractive to investors.
The Company qualifies as an “emerging growth company” as defined in Rule 405 under the Securities Act and Rule 12b-2 under the Exchange Act, and we intend to continue to take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies for as long as we continue to be an emerging growth company, including, but not limited to, (i) not being required to comply with the requirements for auditor attestation of its internal control over financial reporting, (ii) reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and (iii) exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. As a result, our stockholders may not have access to certain information that they may deem important. The Company will remain an emerging growth company until the earliest of (a) the last day of the fiscal year in which the market value of the shares of Common Stock that are held by non-affiliates exceeds $700.0 million as of June 30 of that fiscal year, (b) the last day of the fiscal year in which it has total annual gross revenue of $1.235 billion or more during such fiscal year (as indexed for inflation), (c) the date on which it has issued more than $1 billion in non-convertible debt in the prior three-year period, or (d) December 31, 2030 (the last day of the fiscal year following the fifth anniversary of the completion of the Company’s initial public offering). If some investors find Common Stock less attractive as a result of our reliance on these exemptions, the trading price of the Common Stock may be lower than it otherwise would be, there may be a less active trading market for the Common Stock and the trading prices of the Common Stock may be more volatile.
Further, Section 13(a) of the Exchange Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. An emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
84
Risks Related to HOD’s Business
We might not be able to sustain HOD’s current rate of growth, which could negatively impact our operating revenue, operating income or net income.
Although HOD has experienced some revenue growth during its limited time of operations, it may not be able to sustain this rate of growth or maintain current revenue levels as it continues its second year of operations.
Accordingly, there can be no assurance or high degree of predictability that the rate of growth will continue in future fiscal periods and there may be fluctuations and declines in operating revenues, operating income or net income. For example, while HOD earned fee revenues for a period of time as the asset manager for The Official Dogecoin Treasury that was established at CleanCore Solutions, Inc., this commercial relationship has since been terminated as CleanCore Solutions has decided to pivot away from its Dogecoin Treasury strategy.
Continued growth depends on a number of factors, including an ability to launch certain technology and payment services, driving mass adoption to Dogecoin usage and its interrelated eco-systems, increase in the market value of HOD’s various investments, and finding new clients and customers for its various services. The Company may fail to fulfill its overall objectives of increasing global adoption of Dogecoin as a form of currency, including an inability to develop or adapt services that appeal to users, failure of usage incentives to influence Dogecoin holder behavior, an inability to predict accurately consumer preferences or cryptocurrency industry changes, to modify the services on a timely basis in response thereto and the inability to produce new features and services that appeal to the masses.
As the cryptocurrency and decentralized finance industry continues to develop, competitors may be able to offer services that are, or that are perceived to be, substantially similar to or better, or more cost effective, than ours. Even if we are successful at generating service fee revenues and other fees through our various initiatives and strategies, we may experience a decline in growth rates. If our operating revenue or growth rate slows materially or declines, our business, operating results and financial condition could be adversely affected.
House of Doge has a limited operating history in an evolving industry, which makes it difficult to evaluate the Company’s future prospects and may increase the risk that we will not be successful.
HOD only began operations in early 2025 and it has since hired or retained a limited number of employees and contractors, made certain strategic investments, and entered into key partnerships and management/advisory agreements. This limited operating history and its evolving business make it difficult to evaluate future prospects and the risks and challenges that HOD and the Company may encounter. These risks and challenges include its ability to:
| ● | accurately forecast revenue and plan operating expenses; |
| ● | increase the number of clients; |
| ● | successfully launch and market new products and services; |
| ● | successfully compete with current and future competitors; |
| ● | successfully expand business in existing markets and enter new markets and geographies; |
| ● | anticipate and respond to macroeconomic changes and changes in the markets in which we operate; |
| ● | maintain and enhance the value of its reputation and brand; |
| ● | adapt to rapidly evolving trends in the ways clients and cryptocurrency users interact with technology; |
85
| ● | avoid interruptions or disruptions in service; |
| ● | develop a scalable, high-performance technology infrastructure that can efficiently and reliably handle increased usage, as well as the deployment of new features and services; |
| ● | hire, integrate and retain talented technology, sales, customer service and other personnel; |
| ● | effectively manage rapid growth in its personnel and operations which currently spans the globe; and |
| ● | effectively manage its costs. |
If we fail to address the risks and difficulties that we face, including those associated with the challenges listed above as well as those described elsewhere in this “Risk Factors” discussion, our business, financial condition, and results of operations could be adversely affected. Further, because HOD has limited historical financial data and operates in a rapidly evolving market, any predictions about future revenue and expenses may not be as accurate as they would be if it had a longer operating history or operated in a more predictable market.
The Company has encountered in the past, and the Company will encounter in the future, risks and uncertainties frequently experienced by growing companies with limited operating histories in rapidly changing industries, especially related to cryptocurrency and blockchains. If our assumptions regarding these risks and uncertainties, which we use to plan and operate the HOD business, are incorrect or change, or if we do not address these risks successfully, our results of operations could differ materially from expectations and our business, financial condition, and results of operations could be adversely affected.
We are subject to risks as a result of Dogecoin’s status as a highly volatile asset.
Dogecoin is a highly volatile asset, and significant fluctuations in its price may adversely affect the Company’s financial results, the market price of the Common Stock and our overall business.
The market price of Dogecoin has experienced, and we expect it to continue to experience, extreme volatility. For example, Dogecoin soared from approximately $0.002 per coin in November 2020 to a historical high of approximately $0.74 per coin on May 8, 2021, and later retreated to approximately $0.05 in June 2022. A material decline in the value of Dogecoin would directly reduce the fair value of any holdings thereof, could require a holder of Dogecoin to recognize material impairment or fair-value losses, and could negatively impact our net income and stockholders’ equity in any given period. The price of Dogecoin may be adversely affected by, among other factors:
| ● | changes in user, consumer, or investor sentiment toward Dogecoin or the wider digital asset industry; |
| ● | negative publicity or social-media coverage, including on platforms that historically have driven Dogecoin trading activity or disassociation from influential public figures; |
| ● | changes in consumer preferences and the perceived value or prospects of Dogecoin; |
| ● | transactional activities such as (i) activities of highly active retail and institutional users, speculators and holders or (ii) actual or expected significant dispositions of Dogecoin by large holders, including the expected liquidation of digital assets seized by governments or associated with entities that have filed for bankruptcy protection; |
| ● | sales or anticipated sales of significant Dogecoin positions by large holders, including those required to liquidate assets in bankruptcy or enforcement proceedings; |
| ● | a proposed or actual change of protocol for Dogecoin that may result in a “fork” that may have a negative impact on the value or function of Dogecoin and, consequently, impact the various players in Dogecoin’s network, including holders of Dogecoin and, potentially, the Company; |
| ● | competition from other blockchains, centralized exchanges or decentralized exchanges that exhibit comparable or better speed, security, scalability or energy efficiency, or that feature other more favored characteristics; |
86
| ● | competition from other digital assets that feature other more favored characteristics, are backed by governments, including the U.S. government, or reserves of fiat currencies, or that represent ownership or security interests in physical assets; |
| ● | macroeconomic conditions such as inflation, rising interest rates, recessionary pressures, or geopolitical conflict; |
| ● | competition from other blockchains or digital assets that are perceived to have superior technological or economic characteristics; |
| ● | transaction congestion and fees associated with processing transactions on the Dogecoin network; |
| ● | disruption, failure, or suspension of Dogecoin trading venues, custodians, or payment processors; and |
| ● | technological developments — such as advances in quantum computing — that could render the cryptography underlying the Dogecoin blockchain insecure or obsolete. |
Any of these events could materially and adversely affect the value of the Company, any of its Dogecoin holdings that it may hold from time to time and, in turn, the value of the Common Stock.
Substantial legal and regulatory uncertainty regarding digital assets and Dogecoin could materially impact the price of Dogecoin as well as our and our customers’ and counterparties’ ability to operate their respective businesses.
Dogecoin and other digital assets are subject to significant legal and regulatory uncertainty that could materially impact the price of Dogecoin and our — as well as our customers’ and our counterparties’ — ability to hold, transfer, stake or otherwise use Dogecoin. Regulators in the United States and abroad continue to re-evaluate and update laws and regulations governing digital assets, with agencies such as the SEC and the U.S. Commodity Futures Trading Commission taking enforcement actions and proposing new rules. Although some high-profile enforcement actions have been dismissed, the risk of future proceedings remains, which could affect Dogecoin’s liquidity, value, or our ability to use it, and may result in substantial compliance costs.
Laws and regulations at the federal, state, and international levels are evolving rapidly. Recent years have seen new executive orders, agency guidance, enforcement actions, and legislative proposals aimed at clarifying the regulatory treatment of digital assets. For example, the Guiding and Establishing National Innovation for U.S. Stablecoins Act (the “GENIUS Act”) was signed into law on July 18, 2025, establishing a federal regulatory framework in the United States for payment stablecoins, which are digital assets used, or designed to be used, as a means of payment and are, among other things, convertible, redeemable or eligible for repurchase by the issuer for a fixed amount of monetary value. Under the GENIUS Act, only permitted entities may issue payment stablecoins in the United States, subject to certain exceptions or safe harbors adopted at the discretion of the Secretary of the Treasury. Although the GENIUS Act provides a level of regulatory clarity in the United States, it remains to be seen how many stablecoins will actually qualify as payment stablecoins. To the extent that stablecoins with a significant market share do not qualify as payment stablecoins, the regulatory uncertainty and increased risk that comes with their use will remain and could have a significant impact on the digital asset ecosystem (including Dogecoin). In addition, on July 17, 2025, the House of Representatives passed the Digital Asset Market Clarity Act of 2025, which would establish a market structure for digital assets and, among other things, would divide regulatory authority between the SEC and the U.S. Commodity Futures Trading Commission. Unless and until the Digital Asset Market Clarity Act of 2025 (or comparable legislation) is enacted, however, existing uncertainty regarding Dogecoin’s regulatory status will persist.
It is impossible to predict whether or when additional laws, regulations, or court decisions will be adopted or how they will be interpreted. New or expanded regulations, enforcement actions, or adverse judicial decisions could restrict our ability to buy, sell, lend, stake, or otherwise use Dogecoin, subject us to liability, require registration or licensing, or increase compliance costs. As a result, our business, financial condition, and results of operations and the market price of our securities could be materially and adversely affected.
There has been increasing focus on the extent to which digital assets can be used to launder the proceeds of illegal activities, fund criminal or terrorist activities, or circumvent sanctions on regimes, including sanctions such as those imposed in response to the ongoing conflict between Russia and Ukraine. We plan to implement and maintain policies and procedures reasonably designed to promote compliance with applicable anti-money laundering and sanctions laws and regulations and only acquire Dogecoin through entities subject to anti-money laundering regulation and related compliance rules in the United States. If we were found to have purchased any of our Dogecoin from bad actors that have used Dogecoin to launder money or persons subject to sanctions, we may be subject to regulatory proceedings and any further transactions or dealings in Dogecoin by us may be restricted or prohibited.
87
We may incur indebtedness or enter into other financial instruments in the future that may be collateralized by our Dogecoin holdings and/or may also consider pursuing strategies to create income streams or otherwise generate funds using our Dogecoin holdings, in each case, to the extent permitted by applicable law. These and any other Dogecoin-related transactions that we may enter into, beyond simply acquiring and holding Dogecoin, may subject us to additional regulatory compliance requirements and scrutiny, including under federal and state money services regulations, money transmitter licensing requirements and various commodity and securities laws and regulations.
Increased enforcement activity and changes in the regulatory environment, including evolving or changing interpretations and the implementation of new or varying regulatory requirements by the government or any new legislation affecting digital assets (and, in particular, Dogecoin), as well as enforcement actions involving or impacting our trading venues, counterparties and custodians, may impose significant costs or significantly limit our ability to hold and transact in Dogecoin.
In addition, private actors that are wary of digital assets (in particular, Dogecoin) or the regulatory concerns associated with digital assets (in particular, Dogecoin) have in the past taken and may in the future take further actions that may have an adverse effect on our business or, following the Effective Time, the market price of the Common Stock.
The concentration of our business in the digital asset space will likely subject us to the risk of enhanced regulatory oversight and the increased corresponding costs of compliance could have a substantial negative effect on our profitability.
If Dogecoin is classified as a “security” it could have a material adverse impact on our business.
Any classification of Dogecoin as a “security” under applicable law would subject us to additional regulation and could materially impact the operation of HOD’s business.
Neither the SEC nor any other U.S. federal or state regulator has publicly concluded that Dogecoin is, or is not, a “security,” and no federal or state court has yet addressed the status of Dogecoin as a security under the U.S. federal or state securities laws. Consequently, although House of Doge believes, based on available guidance, such as the application of the analytical framework for digital assets that the staff of the SEC’s Division of Corporation Finance first adopted in 2018 (the “2018 Digital Asset Framework”), other existing guidance, and relevant case law, that Dogecoin is not a security within the meaning of the federal securities laws, a regulator or court could take a contrary view. Should any regulator or court determine that Dogecoin is a security, House of Doge could face substantial regulatory burdens and other consequences, such as being compelled to register as an “investment company” under the Investment Company Act of 1940, as amended (the “Investment Company Act”), and/or otherwise alter our business model in a manner that could be costly and disruptive.
We have instituted a continuing process for analyzing the federal securities law status of Dogecoin and other digital assets as guidance evolves. In that process we rely on (i) the definitional elements of a “security” contained in the Securities Act and the Exchange Act, (ii) seminal Supreme Court precedents such as the cases of SEC v. W.J. Howey Co. and Reves v. Ernst & Young, and (iii) interpretive materials, speeches, enforcement actions, and other public statements issued by the SEC and its staff, including the 2018 Digital Asset Framework. The current position that Dogecoin is not a security rests, among other factors, on our determination that Dogecoin does not satisfy the investment-contract elements outlined in Howey when analyzed in light of the 2018 Digital Asset Framework and related SEC guidance. Accordingly, we view Dogecoin as not a security for purposes of, or subject to regulation under, the federal securities laws.
Nonetheless, application of the securities laws to any digital asset remains complex, highly fact-specific, and subject to ongoing regulatory and judicial development. Even if the present analysis is reasonable, it would not preclude the SEC, another regulator, or a court from reaching a different conclusion. If Dogecoin, or any other digital asset that we may hold, were ultimately deemed a security, we could face enforcement actions, private litigation, injunctions, cease-and-desist orders, and significant monetary penalties. We could also be required to register as an investment company under the Investment Company Act, register Dogecoin offers or sales under the Securities Act, modify or limit our products and services, or cease certain operations altogether, any of which could materially and adversely affect our business, financial condition, results of operations, and prospects.
88
As the application of the federal securities and similar laws to digital assets is still evolving and because market participants apply differing interpretations of the 2018 Digital Asset Framework and related guidance, other companies may reach conclusions about the security status of particular digital assets that differ from us. If competitors adopt approaches that allow them to engage in activities that are impermissible or too risky under the 2018 Digital Asset Framework, they may obtain competitive advantages or revenue opportunities that are unavailable to House of Doge.
If we were to be considered an investment company as defined in the Investment Company Act, we could not continue to operate our business in accordance with our business plan.
If we were deemed to be an investment company under the Investment Company Act, applicable restrictions, including the potential obligation to register under such act, likely would make it impractical for either to continue certain segments of our business, such as HOD acting as the asset manager to the Official Dogecoin Treasury.
The Investment Company Act is intended to protect investors (for example, by preventing insiders from managing investment companies to their benefit and to the detriment of public investors) and requires that an issuer primarily engaged in the business of investing, reinvesting or trading in securities to register as an investment company, unless a valid exemption applies. Under Sections 3(a)(1)(A) and (C) of the Investment Company Act, a company generally will be deemed to be an “investment company” if (i) it is or holds itself out as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting, or trading in securities or (ii) it engages or proposes to engage in the business of investing, reinvesting, owning, holding, or trading in securities, and it owns or proposes to acquire investment securities having a value exceeding 40% of the value of its total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis.
We do not believe that we or HOD is an “investment company” as such term is defined in either Section 3(a)(1)(A) or Section 3(a)(1)(C) of the Investment Company Act, in part, as we believe that Dogecoin is not an investment security. With respect to Section 3(a)(1)(A), we do not hold HOD or the Company out as being engaged primarily or propose to engage primarily in the business of investing, reinvesting, or trading in securities within the meaning of such section.
Dogecoin and other digital assets, as well as new business models and transactions enabled by blockchain technologies, present novel interpretive questions under the Investment Company Act, however. There is a risk that assets or arrangements that we have concluded are not securities could be deemed to be securities by the SEC or another authority for purposes of the Investment Company Act.
If Dogecoin were deemed to be a security, and the Company or HOD were deemed to be an investment company, maintaining the status of a non-investment company could require us to substantially modify our business model and to take actions to dispose of assets such as Dogecoin deemed to be securities and/or acquire other assets. Any such modification could entail substantial costs, and such dispositions or acquisitions could be required to take place under unfavorable market conditions, could result in the incurrence of losses, and could limit our ability to make certain investments or enter into joint ventures or otherwise limit or change our current service offerings and operations.
Future legislation or regulations could negatively impact our business.
Other legislation or regulations may be introduced that could have a negative effect on our business, operations or future prospects. If local, state or federal legislative or regulatory changes are made in respect of cryptocurrency, financial services or technology companies, among other industries or sectors, our business may be adversely affected, or we may be unable to carry on our business as currently conducted or contemplated. Changes in interpretations of the law, amendments to, or new legislation or regulations introduced in any of the jurisdictions in which we operate could subject us to new restrictions or result in increased costs associated with complying with such legislation and regulations. We cannot predict the nature of any future laws, regulations, interpretations or applications, nor can we determine what effect additional governmental regulations or administrative policies and procedures, when and if promulgated, could have on our business.
89
Our reliance on key clients and our agreement with the Dogecoin Foundation puts us at risk.
House of Doge’s revenue is currently dependent on contracts with two significant counterparties, CleanCore and 21Shares US LLC (“21 Shares”). These two contracts may not be easily replaced, and the termination, non-renewal or loss of either one may have a material adverse impact on our business and financial condition. In addition, we are reliant on our agreement with the Dogecoin Foundation, which grants HOD exclusive commercial use of certain Dogecoin and Doge trademarks and the further sublicensing of those marks. If we are unable to maintain the agreement with the Dogecoin Foundation or are found to be in material default of our obligations, our business model will need to pivot or materially change, and there can be no assurance that we could do so successfully or profitably.
If we cannot attract and retain senior management and key employees, it could negatively impact our business, prospects, financial condition and financial performance.
We depend on the experience and expertise of our senior management team and key employees, and the loss of any key employee, or the inability to identify and recruit executive officers and key employees in a timely manner, could harm our business, prospects, financial condition and financial performance.
The Company’s ongoing and future success will depend upon the continued service of its senior management team and key employees, including key technical and business development employees, as well as the ability to continue to attract and retain additional highly qualified personnel. Each member of the senior management team, key personnel and other employees could terminate his or her relationship with the Company at any time and we may not be able to replace such persons readily, if at all. As we pursue growth, there may be changes in the senior management team resulting from the hiring or departure of executives, which could disrupt our business. Additionally, we may incur additional expenses to recruit and retain new executive officers or other key employees. If we fail to identify, recruit and integrate strategic hires, or if new members of our senior management team do not successfully transition into their new positions or fail to create effective working relationships among the other members of management, our business, operating results and financial condition could be adversely affected. Any such changes in leadership or the loss of members of our senior management team or key personnel could significantly delay or impede the achievement of our business objectives and could harm our business and client relationships, especially if adequate succession plans have not been developed. As we move into new markets, we will need to attract and recruit skilled employees in those locales. We have limited experience with recruiting in markets outside of our existing operating jurisdictions and may face additional challenges in attracting, integrating and retaining international employees.
We are subject to significant competition, which may limit our ability to grow and successfully operate our business.
HOD operates in a competitive industry that includes companies that have more operating experience and greater financial, technical and marketing resources than we do, and will be promoting and making use of other cryptocurrencies and blockchains. We may not be able to compete for clients successfully against current and future competitors, and our competitors may offer solutions that are perceived to be more attractive than ours. These factors could result in declining revenue or the inability to grow our business.
Each of the cryptocurrency, payments technology and financial services industry are subject to rapid development of service offerings, changing standards and evolving consumer demands, all of which affect our ability to remain competitive. We expect competition to increase because the barriers to enter these industries are low. Mounting competition may force us, in the future, to charge less for services or offer pricing models that are less attractive and consequently decrease margins.
As technology continues to improve, and governmental regulations are announced to provide more certainty, market factors continue to compel changes to our business, competition and pricing pressure may increase and market saturation may change the competitive landscape in favor of larger competitors with greater scale and broader product and service offerings, including those that can afford to spend more than we can to grow more quickly and strengthen their competitive position through innovation, development and acquisitions. In order to compete effectively, we may need to innovate, further differentiate our offerings and expand the scope of our operations more quickly than would be feasible through our own internal efforts. As some capabilities may reside only in a small number of companies, however, our ability to accomplish necessary expansion through acquisitions may be limited because available companies may not wish to be acquired or may be acquired by larger competitors with the resources to outbid us, or we may need to pay substantial premiums to acquire those businesses.
90
Risks Related to Brag House’s Business
We might not be able to sustain the recent rate of growth of Brag House’s business, which could negatively impact our operating revenue, operating income or net income.
Although Brag House’s business has experienced significant growth since we launched the Brag House gaming platform for amateur online experiences, and we established our amateur tournaments, the Company’s historical growth rate with respect to the Brag House business may not be indicative of its future performance due to its limited operating history and the rapid evolution of its business model. Brag House may not be able to achieve similar results or accelerate growth at the same rate as the Company has historically. As our amateur tournaments continue to develop, we may adjust our strategy and business model to adapt. These adjustments may not achieve expected results and may have a material and adverse impact on our financial condition and results of operations of Brag House and, in turn, the Company as a whole.
In addition, our rapid growth and expansion have placed, and will continue to place, significant strain on Brag House’s and the Company’s management and resources. This level of significant growth may not be sustainable or achievable at all in the future. We believe that continued growth of the Brag House business will depend on many factors, including our ability to develop new sources of revenues, diversify monetization methods including our direct to consumer offerings, attract and retain competitive gamers and creators, increase engagement, continue developing innovative technologies, tournaments in response to shifting demand in online gaming, increase brand awareness, and expand into new markets. We cannot assure you that we will achieve any of the above, and our failure to do so may materially and adversely affect our business and results of operations.
The loss of or a substantial reduction in activity by one or more of Brag House’s largest clients, vendors and/or sponsors could materially and adversely affect our Brag House business and our financial condition and results of operations.
From inception through December 31, 2025, our corporate relationships have accounted for approximately 99% of revenue from Brag House’s business. As we are still developing the Brag House platform and attracting new users, the loss of any one of these partners would have a significant adverse effect on the Brag House business and, potentially, the Company and the value of the Common Stock.
These relationships, along with providers of online services, search engines, social media, directories and other websites and ecommerce businesses, direct consumers to the Brag House platform. In addition, many of the parties with whom we have advertising arrangements provide advertising services to other companies, including other gaming platforms with whom we compete.
While we believe that there are other third parties that could drive users to the Brag House platform, adding or transitioning to them may disrupt our Brag House business and increase our costs. In the event that any of our existing or future relationships fail to provide services to us in accordance with the terms of our arrangement with them, or at all, and we are not able to find suitable alternatives, this could impact our ability to attract consumers cost effectively and harm our Brag House business and prospects and our financial condition and results of operations.
We are subject to risks associated with operating in a rapidly developing industry and a relatively new market.
Many elements of Brag House’s business are novel, evolving and relatively unproven. Brag House’s business and prospects depend on the continuing development of live streaming of competitive online gaming. The market for amateur online gaming competition is relatively new and rapidly developing and is subject to significant challenges. Brag House’s business relies upon our ability to cultivate and grow an active gamer community, and our ability to successfully monetize such a community through tournament fees, digital subscriptions for its gaming services, and advertising and sponsorship opportunities. In addition, Brag House’s continued growth depends, in part, on our ability to respond to constant changes in the gaming industry, including rapid technological evolution, continued shifts in gamer trends and demands, frequent introductions of new games and titles and the constant emergence of new industry standards and practices. Developing and integrating new games, titles, content, products, services or infrastructure could be expensive and time-consuming, and these efforts may not yield the benefits we expect to achieve at all. We cannot assure you that we will succeed in any of these aspects or that the gaming industry will continue to grow as rapidly as it has in the past.
91
Brag House’s revenue model may not remain effective, and we cannot guarantee that its future monetization strategies will be successfully implemented or generate sustainable revenues and profit.
Pursuant to its current business model, Brag House generates or expects to generate revenues from advertising- and sponsorship-related fees related to tournaments and through the operation of its live streaming platform using a revenue model whereby gamers and creators can get free access to certain live streaming of amateur tournaments and pay fees to compete in tournaments. We expect that Brag House will continue to generate a substantial portion of its revenues using this revenue model in the near term and, to date, substantially all of the Company’s revenue has been generated business-to-business from tournaments-related fees. Brag House’s other intended revenue sources discussed in this Current Report on Form 8-K have not generated meaningful revenue as of yet. Brag House is, however, particularly focused on implementing a direct to consumer model for our expanding gamer base. Although its business has experienced significant growth in recent years, there is no guarantee that Brag House’s direct to consumer packages will gain significant traction to maximize its growth rate in the future, as the demand for our offerings may change, decrease substantially or dissipate, or we may fail to anticipate and serve gamer demands effectively.
Our marketing and advertising efforts may fail to resonate with amateur gamers and creators.
We market our amateur tournaments through a diverse spectrum of advertising and promotional programs and campaigns such as online and mobile advertising, marketing through websites, event sponsorship and direct communications with our gaming community including via email, blogs and other electronic means. An increasing portion of our marketing activity is taking place on social media platforms that are either outside, or not totally within, our direct control. Changes to gamer preferences, marketing regulations, privacy and data protection laws, technology changes or service disruptions may negatively impact our ability to reach target gamers and creators. Our ability to market our amateur tournaments is dependent in part upon the success of these programs. If the marketing for our amateur tournaments fails to resonate and expand with the gamer community, or if advertising rates or other media placement costs increase, our business and operating results could be harmed.
Technology changes rapidly in our Brag House business and if we fail to anticipate or successfully implement new technologies or adopt new business strategies, technologies or methods, the quality, timeliness and competitiveness of our amateur tournaments may suffer.
Rapid technology changes in the gaming market require us to anticipate, sometimes years in advance, which technologies we must develop, implement and take advantage of in order to be and remain competitive in the gaming market. We have invested, and in the future may invest, in new business strategies including a direct to consumer model, technologies, products, or games or first-tier game titles to continue to persistently engage the amateur gamer and deliver the best online and in-person gaming experience. Such endeavors may involve significant risks and uncertainties, and no assurance can be given that the technology that we choose to adopt and the features that we pursue will be successful. If we do not successfully implement these new technologies, our reputation may be materially adversely affected and our financial condition and operating results may be impacted. We also may miss opportunities to adopt technology or develop amateur tournaments that become popular with gamers and creators, which could adversely affect our financial results. It may take significant time and resources to shift our focus to such technologies, putting us at a competitive disadvantage.
Our development process usually starts with particular gamer experiences in mind and a range of technical development and feature goals that we hope to be able to achieve. We may not be able to achieve these goals, or our competitors may be able to achieve them more quickly and effectively than we can based on having greater operating capital and personnel resources. If we cannot achieve our technology goals within the original development schedule, then we may delay their release until these goals can be achieved, which may delay or reduce revenue and increase our development expenses. Alternatively, we may be required to significantly increase the resources employed in research and development in an attempt to accelerate our development of new technologies, either to preserve our launch schedule or to keep up with our competitors, which would increase our development expenses.
We have a community culture that is vital to the success of Brag House’s business. Brag House’s operations may be materially and adversely affected if we fail to maintain this community culture as we expand in our addressable gamer communities.
We have cultivated an interactive and vibrant online social gamer community centered around amateur online gaming. We ensure a superior gamer experience by continuously improving the user interface and features of the Brag House gaming platform along with offering a multitude of competitive and recreational gaming experiences with first tier games. We believe that maintaining and promoting a vibrant community culture is critical to retaining and expanding Brag House’s gamer community. The Company has taken multiple initiatives to preserve Brag House’s community culture and values. Despite these efforts, we may be unable to maintain Brag House’s community culture and cease to be the preferred platform for its target gamers and creators as we expand Brag House’s gamer footprint, which would be detrimental to Brag House’s business operations.
92
Brag House operates in the entertainment and gaming industries, both of which are intensely competitive. Our users may prefer our competitors’ offerings over our own.
Brag House operates in the gaming industry. Competition in the amateur gaming industry generally is intense. Brag House’s competitors range from established leagues and championships owned directly, as well as leagues franchised by, well known and capitalized game publishers and developers, interactive entertainment companies and diversified media companies to emerging start-ups, and we expect new competitors to continue to emerge throughout the amateur gaming ecosystem. If our competitors develop and launch competing amateur tournaments, or develop a more successful amateur online gaming platform, Brag House’s, and as a result the Company’s, revenue, margins, and profitability will decline.
In addition, Brag House operates in the entertainment industry. Its users face a vast array of entertainment choices. Other forms of entertainment, such as television, movies, and sporting events, may be perceived by our users to offer greater variety, interactivity and enjoyment. We compete with these other forms of entertainment for the discretionary time and income of our users. If we are unable to sustain sufficient interest in our gaming platform, Brag House’s business model may not continue to be viable.
The specific industries in which Brag House operates are characterized by dynamic user demand and technological advances, and there is intense competition among online gaming platforms and entertainment providers. A number of established, well-financed companies producing gaming content and/or interactive entertainment products and services compete with our offerings, and other well-capitalized companies may introduce competitive services. Such competitors may spend more money and time on developing and testing products and services, undertake more extensive marketing campaigns, adopt more aggressive pricing or promotional policies or otherwise develop more commercially successful products or services than ours, which could negatively impact our business. Our competitors may also develop products, features, or services that are similar to ours or that achieve greater market acceptance. Such competitors may also undertake more far-reaching and successful product development efforts or marketing campaigns, or may adopt more aggressive pricing policies. If we are not able to maintain or improve our market share, or if our offerings do not continue to be popular, our Brag House business could suffer.
We currently have only limited license agreements with game publishers, and may not in the future enter into additional license agreements. Failure to do so may require us to modify, limit, or discontinue certain services, which could materially affect Brag House’s business, financial conditions and results of operations.
The size and engagement level of our online and in-person gamers are critical to Brag House’s success and are closely linked to the quality and popularity of the game publishers. Changes in consumer demand for, and acceptance of, the game titles that we offer for our tournaments and activities, as well as online multiplayer competitive gaming in general, could adversely affect our ability to attract and retain users and affect the financial condition of our Brag House business. We currently have only limited license agreements in place with game publishers for the use of certain game titles played on the Brag House platform and may not in the future enter into additional license agreements. These game publishers may unilaterally decide to prevent us from offering experiences on the platform using their game titles, as the case may be. Should those game publishers choose not to allow us to offer experiences involving their respective game titles to our users, the popularity of our tournaments may decline and the number of our gamers and creators may decrease, which could materially and adversely affect Brag House’s, and as a result the Company’s, results of operations and financial condition.
Growth of Brag House’s business will depend on our ability to attract and retain users, and the loss of our users, failure to attract new users in a cost-effective manner, or failure to effectively manage its growth could adversely affect Brag House’s, and in turn the Company’s, business, financial condition, results of operations and prospects.
Our ability to achieve growth in revenue from the Brag House business in the future will depend, in large part, upon our ability to attract new users to our offerings, retain existing users of our offerings and reactivate users in a cost-effective manner. Achieving growth in our community of users may require us to increasingly engage in sophisticated and costly sales and marketing efforts, which may not make sense in terms of return on investment. We have used and expect to continue to use a variety of free and paid marketing channels, in combination with compelling offers and exciting games to achieve our objectives.
93
Brag House’s success depends on our ability to maintain and grow the number of amateur gamers and creators attending and participating in our online tournaments, using our gaming platform, and keeping our gamers and creators highly engaged. Of particular importance is the successful deployment and expansion of our direct to consumer model to our gaming community for purposes of creating predictable recurring revenues.
In order to attract, retain and engage amateur gamers and creators and remain competitive, we must continue to develop and produce engaging tournaments, successfully leverage the newest “hit” games and titles, implement new technologies and strategies, improve features of our gaming platform and stimulate interactions in our gamer community.
A decline in the number of our amateur gamers and creators in our ecosystem may adversely affect the engagement level of our gamers and creators, the vibrancy of our gamer community, or the popularity of our amateur league play, which may in turn reduce our monetization opportunities and have a material and adverse effect on our business, financial condition and results of operations. If we are unable to attract and retain or convert gamers and creators into direct to consumer-based paying gamers and creators, our revenues may decline and our results of operations and financial condition may suffer.
We cannot assure you that our online and in-person gaming platform will remain sufficiently popular with amateur gamers and creators to offset the costs incurred to operate and expand it. It is vital to our operations that we remain sensitive and responsive to evolving gamer preferences and offer first-tier game content that attracts our amateur gamers and creators. We must also keep providing amateur gamers and creators with new features and functions to enable superior content viewing and social interaction. Further, we will need to continue to develop and improve our gaming platform and to enhance our brand awareness, which may require us to incur substantial costs and expenses. If such increased costs and expenses do not effectively translate into an improved gamer experience and direct to consumer-based, long-term engagement, our results of operations may be materially and adversely affected.
In addition, users may stop using our gaming platform at any time, including if the quality of the user experience on the Brag House platform, including our support capabilities in the event of a problem, does not meet their expectations or keep pace with the quality of the user experience generally offered by competitive offerings.
The ability to grow Brag House’s business is dependent in part on the success and availability of mass media channels developed by third parties, as well as our ability to develop commercially successful content and amateur tournaments.
The success of our business is driven in part by the commercial success and adequate supply of third-party mass media channels for which we may distribute our content, amateur league tournaments, including our social media platforms on Instagram, Facebook, LinkedIn, X (formerly Twitter), TikTok, Reddit, Snapchat and various streaming outlets, including Twitch, YouTube, Meta Platforms, and ESL.tv. Brag House’s success also depends on our ability to accurately predict which channels, games, and platforms will be successful with the gaming community, our ability to develop and distribute commercially successful content, which is presently available on Twitch, amateur tournaments for these channels and gaming platforms and our ability to effectively manage the transition of our gamers and creators from one generation or demographic to the next. Additionally, we may enter into certain exclusive licensing arrangements that affect our ability to deliver or market our amateur gaming tournaments on certain channels and platforms. A channel or platform may not succeed as expected or new channels or platforms may take market share and gamers and creators away from platforms for which we have devoted significant resources. If demand for the channels or platforms for which we are developing amateur tournaments is lower than our expectations, we may be unable to fully recover the investments we have made and our financial performance may be harmed. Alternatively, a channel or platform for which we have not devoted significant resources could be more successful than we initially anticipated, causing us to not be able to take advantage of meaningful revenue opportunities.
94
If we fail to maintain and enhance Brag House’s brand or if we incur excessive expenses in this effort, our business, results of operations and prospects may be materially and adversely affected.
We believe that maintaining and enhancing the Brag House brand is of significant importance to the success of our Brag House business. A well-recognized brand is important to increasing the number of gamers and creators and the level of engagement of our overall gaming community, which is critical in enhancing its attractiveness to advertisers, sponsors, and corporate partners. As Brag House operates in a highly competitive market, brand maintenance and enhancement directly affect our ability to maintain and enhance its market position.
Although Brag House has developed its brand and amateur tournaments through word of mouth referrals and key strategic partners, as it expands, we may conduct various marketing and brand promotion activities using various methods to continue promoting the Brag House brand. We cannot assure you, however, that these activities will be successful or that we will be able to achieve the brand promotion effect we expect.
In addition, any negative publicity in relation to our tournaments or operations, regardless of its veracity, could harm the Brag House, and the Company’s, brand and reputation. Negative publicity or public complaints from gamers and creators may harm our reputation, and if complaints against us are not addressed to their satisfaction, our reputation and our market position could be significantly harmed, which may materially and adversely affect our business, results of operations and prospects.
Negative gamer perceptions about the Brag House brand, gaming platform, amateur tournaments and/or business practices may damage its business and increase the costs incurred in addressing gamer concerns.
Gamer expectations regarding the quality, performance and integrity of our amateur tournaments are high. Gamers and creators may be critical of the Brag House or the Company’s brand or our gaming platform, tournaments and/or business practices for a wide variety of reasons. These negative gamer reactions may not be foreseeable or within our control to manage effectively, including perceptions about gameplay fairness, negative gamer reactions to game content via social media or other outlets, components and services, or objections to certain of our business practices. Negative gamer sentiment about our business practices also can lead to investigations from regulatory agencies and consumer groups, as well as litigation, which, regardless of their outcome, may be costly, damaging to our reputation and harm our business.
We rely on AWS to deliver Brag House’s offerings to users on the Brag House platform, and any disruption of or interference with our use of AWS could adversely affect Brag House, and in turn the Company’s business, financial condition, results of operations and prospects.
We currently host the Brag House gaming platform and support our operations using Amazon Web Services, or AWS, a third-party provider of cloud infrastructure services, along with other service providers traditionally used by AWS. We do not, and will not, have control over the operations of the facilities or infrastructure of the third-party service providers that we use. Such third parties’ facilities are vulnerable to damage or interruption from natural disasters, cybersecurity attacks, terrorist attacks, power outages and similar events or acts of misconduct. The Brag House platform’s continuing and uninterrupted performance will be critical to the success of our Brag House business. We have experienced, and we expect that in the future we will experience, interruptions, delays, and outages in service and availability from these third-party service providers from time to time, due to a variety of factors, including infrastructure changes, human or software errors, website hosting disruptions and capacity constraints. In addition, any changes in these third parties’ service levels may adversely affect our ability to meet the requirements of our users. Since the Brag House platform’s continuing and uninterrupted performance is critical to the success of the Brag House business, sustained or repeated system failures would reduce the attractiveness of its offerings. It may become increasingly difficult to maintain and improve our performance, especially during peak usage times, as we expand the Brag House business and the usage of its offerings increases. Any negative publicity arising from these disruptions could harm our reputation and brand and may adversely affect the usage of Brag House’s offerings.
Our commercial agreement with AWS will remain in effect until terminated by AWS or us. Either party may terminate this agreement for cause if the other party is in material breach of the agreement and the material breach remains uncured for a period of 30 days from receipt of notice by the other party. AWS may also terminate the agreement immediately upon notice (i) for cause if AWS has the right to suspend under certain circumstances as set forth in the AWS customer agreement, (ii) if AWS’ relationship with a third-party partner who provides software or other technology that AWS uses to provide its service to us expires, terminates or requires us to change the way AWS provides the software or other technology as part of its services, or (iii) in order to comply with the law or requests of governmental entities. In the event that our agreement with AWS is terminated or we add additional cloud infrastructure service providers, we may experience significant costs or downtime in connection with the transfer to, or the addition of, new cloud infrastructure service providers. Although alternative providers could host the Brag House platform on a substantially similar basis to AWS, transitioning the cloud infrastructure currently hosted by AWS to alternative providers could potentially be disruptive and we could incur significant one-time costs.
95
Any of the above circumstances or events may harm Brag House’s and our reputation and brand, reduce the availability or usage of the Brag House platform, lead to a significant loss of revenue, increase our costs and impair our ability to attract new users, any of which could adversely affect Brag House Business and the Company’s financial condition and results of operations.
We depend on servers to operate our Brag House platform with online features and its online gaming service. If we were to lose server functionality for any reason, our Brag House business may be negatively impacted.
Our Brag House business relies on the continuous operation of servers, some of which are owned and operated by third parties. Although we strive to maintain more than sufficient server capacity, and provide for active redundancy in the event of limited hardware failure, any broad-based catastrophic server malfunction, a significant service-disrupting attack or intrusion by hackers that circumvents security measures, a failure of disaster recovery service or the failure of a company on which we are relying for server capacity to provide that capacity for whatever reason could degrade or interrupt the functionality of the Brag House platform and could prevent the operation of the platform for both in-person and online gaming experiences.
We also rely on networks operated by third parties to support content on the Brag House platform, including networks owned and operated by game publishers. An extended interruption to any of these services could adversely affect the use of the platform, which would have a negative impact on our Brag House business.
Further, insufficient server capacity could also negatively impact our Brag House business. Conversely, if we overestimate the amount of server capacity required by our business, we may incur unnecessary operating costs.
Our online gaming platform and games offered through our gaming platform may contain defects.
Our Brag House online platform and the games offered through the platform are extremely complex and are difficult to develop and distribute. We have quality controls in place to detect defects in the Brag House platform before updates are released. Nonetheless, these quality controls are subject to human error, overriding, and reasonable resource or technical constraints. Further, we have not undertaken independent third-party testing, verification or analysis of the platform and associated systems and controls. Therefore, the platform and quality controls and preventative measures that we have implemented may not be effective in detecting all defects in our gaming platform. In the event that a significant defect in our gaming platform and associated systems and controls is realized, we could be required to offer refunds, suspend the availability of our tournaments and other gameplay, or expend significant resources to cure the defect, each of which could significantly harm Brag House’s business and, as a result, our operating results.
We use third-party services and technologies in connection with our Brag House business, and any disruption to the provision of these services and technologies could result in negative publicity and a slowdown in the growth of our users, which could materially and adversely affect our Brag House business and, in turn, our financial condition and results of operations.
Our Brag House business partially depends on services provided by, and relationships with, various third parties, including cloud hosting and broadband providers, among others. To this end, when our cloud hosting and broadband vendors experience outages, our gaming services will be negatively impacted and alternative resources will not be immediately available. In addition, certain third-party software that we use in our Brag House operations is currently publicly available free of charge. If the owner of any such software decides to charge users or no longer makes the software publicly available, we may need to incur significant costs to obtain licensing, find replacement software or develop it on our own. If we are unable to obtain licensing, find or develop replacement software at a reasonable cost, or at all, our Brag House business and operations may be adversely affected.
We exercise no control over the third-party vendors that we rely upon for cloud hosting, broadband and software service. If such third parties increase their prices, fail to provide their services effectively, terminate their service or agreements or discontinue their relationships with us, we could suffer service interruptions, reduced revenues or increased costs, any of which may have a material adverse effect on our Brag House business and on our financial condition and results of operations.
96
Growth and engagement of our gamer community depends upon effective interoperability with mobile operating systems, networks, mobile devices and standards that we do not control.
We make our Brag House platform available across a variety of mobile operating systems and devices. We are dependent on the interoperability of the platform with popular mobile devices and mobile operating systems that we do not control, such as Android and iOS. Any changes in such mobile operating systems or devices that degrade the functionality of our Brag House platform or give preferential treatment to competitive services could adversely affect usage of the platform. In order to deliver high quality services, it is important that the Brag House platform works well across a range of mobile operating systems, networks, mobile devices and standards that we do not control. We may not be successful in developing relationships with key participants in the mobile industry or in developing services that operate effectively with these operating systems, networks, devices and standards. In the event that it is difficult for our users to access and use the platform, particularly on their mobile devices, our user growth and user engagement could be harmed, and our Brag House business and operating results could be adversely affected.
We rely on third-party payment processors to process deposits and withdrawals made by our users into the Brag House platform, and if we cannot manage our relationships with such third parties and other payment-related risks, our Brag House business, financial condition and results of operations could be adversely affected.
We rely on a limited number of third-party payment processors to process deposits and withdrawals made by our users into the Brag House platform. If any of our third-party payment processors terminates its relationship with us or refuses to renew its agreement with us on commercially reasonable terms, we would need to find an alternate payment processor and may not be able to secure similar terms or replace such payment processors in an acceptable time frame. Further, the software and services provided by our third-party payment processors may not meet our expectations, may contain errors or vulnerabilities, may be compromised or may experience outages. Any of these risks could cause us to lose our ability to accept online payments or other payment transactions or make timely payments to users on the platform, any of which could make the platform less trustworthy and convenient and adversely affect our ability to attract and retain users.
Nearly all of our payments are made by credit card, debit card or through other third-party payment services, which subjects us to certain regulations and to the risk of fraud. We may in the future offer new payment options to users that may be subject to additional regulations and risks. We are also subject to a number of other laws and regulations relating to the payments we accept from our users, including with respect to money laundering, money transfers, privacy and information security. If we fail to comply with applicable rules and regulations, we may be subject to civil or criminal penalties, fines and/or higher transaction fees and may lose our ability to accept online payments or other payment card transactions, which could make our offerings less convenient and attractive to our users. If any of these events were to occur, our Brag House business and our financial condition and results of operations could be adversely affected.
Additionally, our payment processors require us to comply with payment card network operating rules, which are set and interpreted by the payment card networks. The payment card networks could adopt new operating rules or interpret or reinterpret existing rules in ways that might prohibit us from providing certain offerings to some users, be costly to implement or difficult to follow. We have agreed to reimburse our payment processors for fines they are assessed by payment card networks if we or the users on the Brag House platform violate these rules. The realization of any of the foregoing risks could adversely affect our Brag House business and, in turn, our financial condition and results of operations.
If the Internet and other technology-based service providers experience service interruptions, our ability to conduct our business may be impaired and our business, financial condition and results of operations could be adversely affected.
A substantial portion of our network infrastructure is provided by third parties, including Internet service providers and other technology-based service providers. We require technology-based service providers to implement cyber-attack-resilient systems and processes. If Internet service providers experience service interruptions, including because of cyber-attacks or due to an event causing an unusually high volume of Internet use, communications over the Internet may be interrupted and impair our ability to conduct our business. Internet service providers and other technology-based service providers may in the future roll out upgraded or new mobile or other telecommunications services, such as 5G or 6G services, that may not be successful and thus may impact the ability of our users to access the Brag House platform or offerings in a timely fashion or at all. In addition, our ability to process e-commerce transactions depends on bank processing and credit card systems.
97
There can be no assurance that the Internet infrastructure or our own network systems will continue to be able to meet the demand placed on us by the continued growth of the Internet, the overall online gaming industry and our users. Any difficulties that these providers face, including the potential of certain network traffic receiving priority over other traffic (i.e., lack of net neutrality), may adversely affect our business, and we exercise little control over these providers, which increases our vulnerability to problems with the services they provide. Any system failure as a result of reliance on third parties, such as network, software or hardware failure, including as a result of cyber-attacks, that causes a loss of our users’ property or personal information or a delay or interruption in our online services and products and e-commerce services, including our ability to handle existing or increased traffic, could result in a loss of anticipated revenue, interruptions to the Brag House platform and offerings, cause us to incur significant legal, remediation and notification costs, degrade the user experience and cause users to lose confidence in our offerings, any of which could have a material adverse effect on our business, financial condition, results of operations and prospects.
We generate revenue from advertising. The loss of advertisers, or reduction in spending by advertisers with Brag House, could seriously harm our business.
Currently, substantially all of our revenues from the Brag House business is generated by advertising fees related to tournaments, which we expect to further develop and expand in the near future as we increase our digital and on-campus presence at colleges and universities across the United States, expand the online and digital content offerings produced by both Brag House and users on our Brag House platform, and diversify the technology solutions we provide to corporate brands. These revenues partly depend on the continual development of the online advertising industry and advertisers’ willingness to allocate budgets to online advertising in the gaming industry. In addition, companies that decide to advertise or promote online may utilize more established methods or channels, such as more established internet portals or search engines, over advertising on our gaming platform. If the online advertising market does not continue to grow, or if we are unable to capture and retain a sufficient share of that market, our ability to increase our current level of advertising revenue and our profitability and prospects may be materially and adversely affected.
Furthermore, our core and long-term priority of optimizing the gamer experience and satisfaction may limit Brag House’s gaming platform’s ability to generate revenues from advertising, such as sponsorship. For example, in order to provide our gamers and creators with an uninterrupted competitive gaming experience, we do not place significant amounts of advertising on our streaming interface or insert pop-up advertisements during streaming. While this decision could adversely affect our operating results in the short-term, we believe that it enables us to provide a superior gamer experience on our gaming platform, which will help us expand and maintain our current base of gamers and creators and enhance our monetization potential in the long-term. This philosophy of putting our gamers and creators first, however, may also negatively impact our relationships with advertisers, sponsors or other third parties, and may not result in the long-term benefits that we expect, in which case the success of our Brag House business and our operating results could be harmed.
Our Brag House business is subject to regulation, and changes in applicable regulations may negatively impact its business.
Our Brag House business is subject to a number of foreign and domestic laws and regulations that affect companies conducting business on the Internet. In addition, laws and regulations relating to user privacy, data collection, retention, electronic commerce, virtual items and currency, consumer protection, content, advertising, localization, and information security have been adopted or are being considered for adoption by many jurisdictions and countries throughout the world. These laws could harm our business by limiting the products and services we can offer consumers or the manner in which we offer them. The costs of compliance with these laws may increase in the future as a result of changes in interpretation. Furthermore, any failure on our part to comply with these laws or the application of these laws in an unanticipated manner may harm our business and result in penalties or significant legal liability.
In addition, we include modes in our gaming platform that allow players to compete against each other. Although we structure and operate these skill-based tournaments with applicable laws in mind, our skill-based tournaments in the future could become subject to evolving rules and regulations and expose us to significant liability, penalties and reputational harm.
General Risks Related to the Company
Our management team has limited experience managing a public company.
The members of our management team have limited experience managing a publicly traded company, interacting with public company investors, and complying with the increasingly complex laws pertaining to public companies. Our management team may not successfully or efficiently manage our ongoing transition to being a public company subject to significant regulatory oversight and reporting obligations under the federal securities laws and the continuous scrutiny of securities analysts and investors. These new obligations and constituents require significant attention from our senior management and could divert their attention away from the day-to-day management of our business, which could adversely affect our business, financial condition, and operating results.
98
We have identified material weaknesses in our internal control over financial reporting, and we may not be able to successfully implement remedial measures.
We have identified control deficiencies in our financial reporting process that constitute material weaknesses in our internal control over financial reporting as of December 31, 2025 and 2024. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. We have a material weakness related to the review and approval of cash disbursements, officer expense reimbursements, and related journal entries for operating, legal, and payroll-related expenses incurred, including the failure to maintain readily accessible executed versions of significant agreements entered into by the Company or board approval of certain stock-based compensation awarded. Additionally, we have a material weakness over the reconciliation and approval of general ledger accounts, and the review and approval of related journal entries. Due to the lack of formal documentation maintained around the review and approval of these types of transactions, it was determined that we did not adhere to established controls around these processes, nor the review and approval of related journal entries recorded. Additionally, we have a material weakness related to the lack of controls over our income tax related accounts and disclosures. In the absence of such formal documentation related to our management’s review and approval of such processes, potential material misstatements may go undetected. Additionally, the Company has a material weakness related to its ability to record and disclose complex transactions with debt and/or equity features. Lastly, the Company has a material weakness related to the lack of cybersecurity policies and procedures in place. In the absence of cybersecurity controls, our operations may be negatively impacted, as all Company activities take place online.
We have started to take measures to address the material weaknesses that have been identified but believe that, as of December 31, 2025, such material weaknesses in our internal control over financial reporting have not been remediated.
We expect to complete our remediation plan within the next 12 months. We have completed the assessment of the effectiveness of our internal control over financial reporting and cannot assure you that we will be able to successfully remediate these material weaknesses and, even if we do, we cannot assure you that we will not suffer from other material weaknesses in the future.
If we fail to remediate these material weaknesses or fail to otherwise maintain effective internal control over financial reporting in the future, such failure could result in loss of investors’ confidence in the reliability of our financial statements, limit our ability to raise capital and have a negative effect on the trading price of the Common Stock. Additionally, failure to remediate the material weakness or otherwise maintain effective internal control over financial reporting may also impair our ability to file timely and accurate reports with the SEC, subject us to litigation or investigation or sanctions by authorities, and cause us to incur substantial additional costs in future periods relating to the implementation of remedial measures, including the costs of hiring additional personnel. Any of the above could negatively affect our results of operations, financial condition and cash flows.
The requirements of being a public company are costly, may strain our resources and distract our management, which could make it difficult to manage our business, particularly after we are no longer an “emerging growth company.” Complying with such regulatory requirements could have a material adverse effect on our business, results of operations and financial condition.
As a public company, we are subject to the reporting requirements of the Exchange Act. These requirements may place a strain on our systems and resources. The Exchange Act requires that we file annual, quarterly and current reports with respect to our business and financial condition. The Exchange Act requires that we maintain effective disclosure controls and procedures and internal control over financial reporting. To maintain and improve the effectiveness of our disclosure controls and procedures, we will need to commit significant resources, hire additional staff and provide additional management oversight. We will be implementing additional procedures and processes for the purpose of addressing the standards and requirements applicable to public companies. Sustaining our growth also will require us to commit additional management, operational and financial resources to identify new professionals to join our firm and to maintain appropriate operational and financial systems to adequately support expansion. These activities may divert management’s attention from other business concerns, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.
99
We have secured D&O insurance policies providing for an aggregate of $5.0 million in coverage and a Cyber policy providing for $2.0 million in coverage, which are effective into 2026. We believe that, as a result of the Merger, our costs to maintain and renew the D&O insurance will increase substantially in the foreseeable future. We may be required to accept reduced coverage or incur significantly higher costs to obtain adequate coverage in the future, which could adversely affect our financial condition. Furthermore, if we are unable to maintain adequate or cost-effective insurance coverage commensurate with the risks of our new business, we may find it more difficult to attract and retain qualified people to serve on our board of directors, our board committees, or as executive officers.
Furthermore, if we are unable to satisfy our obligations as a public company, we could be subject to delisting of the Common Stock, fines, sanctions, and other regulatory action and potentially civil litigation, which could have a material adverse effect on our financial condition and results of operations.
As an “emerging growth company” under the JOBS Act, we are permitted to, and intend to, take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies,” including, but not limited to, not being required to comply with the requirements regarding auditor attestation of our internal control over financial reporting and reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. When these exemptions cease to apply, we expect to incur additional expenses and devote increased management effort toward ensuring compliance with them.
As a result of becoming a public company, we are obligated to report on the effectiveness of our internal control over financial reporting. Such internal control over financial reporting may not be effective and our independent registered public accounting firm may not be able to certify as to their effectiveness, which could have a significant and adverse effect on our business and reputation.
Pursuant to Rule 13a-15(c) under the Exchange Act, our management is required to annually evaluate our internal control over financial reporting. Furthermore, at such time as we cease to be an “emerging growth company” and a “Smaller Reporting Company,” as defined in the rules promulgated under the Exchange Act, we will also be required to obtain an attestation from our auditor on our internal control over financial reporting. At such time, we or our auditors may identify material weaknesses that we may not be able to timely remediate. In addition, if we fail to achieve and maintain the adequacy of our internal control over financial reporting, as such standards are modified, supplemented or amended from time to time, we may not be able to ensure that we can conclude on an ongoing basis that we have effective internal control over financial reporting. We cannot be certain as to the timing of completion of our evaluation, testing and any remediation actions or the impact of the same on our operations. If we are not able to remediate any such material weaknesses in a timely manner or otherwise maintain effective internal control over financial reporting, our independent registered public accounting firm may issue an adverse opinion due to ineffective internal control over financial reporting, and we may be subject to sanctions or investigation by regulatory authorities, such as the SEC. Moreover, any material weakness or other deficiencies in our internal control over financial reporting may impede our ability to file timely and accurate reports with the SEC. Any of the above could cause a negative reaction in the financial markets due to a loss of confidence in the reliability of our financial statements. In addition, we may be required to incur costs in improving our internal control system and the hiring of additional personnel. Any such action could negatively affect our results of operations and cash flows.
From time to time we may become involved in legal proceedings.
From time to time, we may become subject to legal proceedings, claims, litigation and government investigations or inquiries, which could be expensive, lengthy, disruptive to normal business operations and occupy a significant amount of our employees’ time and attention. In addition, the outcome of any legal proceedings, claims, litigation, investigations or inquiries may be difficult to predict and could have a material adverse effect on our business, operating results, or financial condition.
Item 5. Other Information.
See above Note 18. Subsequent Events (h), (i) and (j) of the Unaudited Interim Condensed Consolidated Financial Statements which is hereby incorporated by reference in full here.
100
Item 6. Exhibits
The exhibit index set forth below is incorporated by reference in response to this Item 6.
| # | This certification is being furnished and shall not be deemed “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference. |
101
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| HOUSE OF DOGE INC. | ||
| By: | /s/ Marco Margiotta | |
| Name: | Marco Margiotta | |
| Title: | Chief Executive Officer | |
| Dated: August 14, 2026 | (Principal Executive Officer) | |
| By: | /s/ Charles Park | |
| Name: | Charles Park | |
| Title: | Chief Financial Officer | |
| Dated: August 14, 2026 | (Principal Financial and Accounting Officer) |
102
Exhibit 10.3
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (this “Agreement”) is dated as August 11, 2026, between CleanCore Solutions, Inc., a Nevada corporation (the “Company”), and each purchaser identified on the signature pages hereto (each, including its successors and assigns, a “Purchaser” and collectively the “Purchasers”).
WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to an effective registration statement under the Securities Act (as defined below), the Company desires to issue and sell to each Purchaser, and each Purchaser, severally and not jointly, desires to purchase from the Company, securities of the Company as more fully described in this Agreement.
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Company and each Purchaser agree as follows:
ARTICLE I.
DEFINITIONS
1.1 Definitions. In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms have the meanings set forth in this Section 1.1:
“Acquiring Person” shall have the meaning ascribed to such term in Section 4.5.
“Action” shall have the meaning ascribed to such term in Section 3.1(j).
“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person as such terms are used in and construed under Rule 405 under the Securities Act.
“Board of Directors” means the board of directors of the Company.
“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed.
“CMPO” shall have the meaning ascribed to such term in Section 3.2(f).
“Capital Markets Advisor” means Cantor Fitzgerald & Co.
“Closing” means the closing of the purchase and sale of the Purchased Securities pursuant to Section 2.1.
“Closing Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable parties thereto, and all conditions precedent to (i) the respective Purchasers’ obligations to pay the Subscription Amount and (ii) the Company’s obligations to deliver the Purchased Securities, in each case, have been satisfied or waived, but in no event later than the first (1st) Trading Day following the date hereof.
“Commission” means the United States Securities and Exchange Commission.
“Common Stock” means the shares of the Company’s Class B common stock, par value $0.0001 per share.
“Common Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
“Common Warrants” means, collectively, the Common Stock purchase warrants delivered to the Purchasers at the Closing in accordance with Section 2.2(a) hereof, in the form of Exhibit B attached hereto.
“Common Warrant Shares” means the shares of Common Stock issuable upon exercise of the Common Warrants.
“Company Counsel” means Lucosky Brookman LLP, 101 Wood Avenue South, Woodbridge, NJ 08830.
“Disclosure Time” means, (i) if this Agreement is signed on a day that is not a Trading Day or after 9:00a.m. (New York City time) and before midnight (New York City time) on any Trading Day, 9:01 a.m. (New York City time) on the Trading Day immediately following the date hereof, unless otherwise instructed as to an earlier time by the Placement Agent, and (ii) if this Agreement is signed between midnight (New York City time) and 9:00 a.m. (New York City time) on any Trading Day, no later than 9:01 a.m. (New York City time) on the date hereof, unless otherwise instructed as to an earlier time by the Placement Agent.
“Evaluation Date” shall have the meaning ascribed to such term in Section 3.1(s).
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
2
“Exempt Issuance” means the issuance of (a) Common Stock or options or other equity awards to employees, officers, consultants or directors of the Company pursuant to any equity incentive plan duly adopted for such purpose, by a majority of the non-employee members of the Board of Directors; provided, however, that any securities issued to consultants under this clause (a) are issued as “restricted securities” (as defined in Rule 144) and carry no registration rights that require or permit the filing of any registration statement in connection therewith during the prohibition period in Section 4.11 herein, (b) securities issued upon the exercise or exchange of or conversion of any Securities issued hereunder and/or other securities exercisable or exchangeable for or convertible into Common Stock issued and outstanding on the date of this Agreement, provided that such securities have not been amended since the date of this Agreement to increase the number of such securities or to decrease the exercise price, exchange price or conversion price of such securities (other than in connection with share splits or combinations) or to extend the term of such securities, and (c) securities issued pursuant to license agreements, acquisitions or strategic transactions approved by a majority of disinterested directors of the Company, provided that such securities are issued as “restricted securities” (as defined in Rule 144) and carry no registration rights that require or permit the filing of any registration statement in connection therewith during the prohibition period in Section 4.11 herein and provided that any such issuance shall only be to a Person (or to the equityholders of a Person) which is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic with the business of the Company and shall provide to the Company additional benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities.
“FCPA” means the Foreign Corrupt Practices Act of 1977, as amended.
“GAAP” shall have the meaning ascribed to such term in Section 3.1(h).
“Indebtedness” shall have the meaning ascribed to such term in Section 3.1(aa).
“Intellectual Property Rights” shall have the meaning ascribed to such term in Section 3.1(p).
“Liens” means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.
“Lock-Up Agreement” means the Lock-Up Agreements, dated as of the date hereof, by and among the Placement Agent and each of the Company’s directors and executive officers, in the form of Exhibit C attached hereto.
“Material Adverse Effect” shall have the meaning assigned to such term in Section 3.1(b).
“Material Permits” shall have the meaning ascribed to such term in Section 3.1(n).
“Per Share Purchase Price” equals $0.25 per Share, subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement, provided that the purchase price per Pre-Funded Warrant shall be the Per Share Purchase Price minus $0.0001.
“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Placement Agent” means Curvature Securities, LLC.
3
“Pre-Funded Warrants” means, collectively, the pre-funded Common Stock purchase warrants delivered to the Purchasers at the Closing in accordance with Section 2.2(a) hereof, in the form of Exhibit A attached hereto.
“Pre-Funded Warrant Shares” means the shares of Common Stock issuable upon exercise of the Pre-Funded Warrants.
“Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding, such as a deposition), whether commenced or threatened.
“Prospectus” means the base prospectus filed for the Registration Statement.
“Prospectus Supplement” means the supplement to the Prospectus complying with Rule 424(b) of the Securities Act that is filed with the Commission and delivered by the Company to each Purchaser prior to or at the Closing, including, but not limited to, any preliminary prospectus supplement, final prospectus supplement, pricing supplement or other supplement to the Prospectus filed in connection with purchase and sale of the Securities hereunder, as the context requires.
“Purchased Securities” means, collectively, the Shares and the Warrants.
“Purchaser Party” shall have the meaning ascribed to such term in Section 4.8.
“Registration Statement” means the effective registration statement with the Commission (File No. 333-289867) which registers the sale of the Shares, the Warrants and the Warrant Shares to the Purchasers, and includes any Rule 462(b) Registration Statement.
“Required Approvals” shall have the meaning ascribed to such term in Section 3.1(e).
“Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.
“Rule 424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.
“Rule 462(b) Registration Statement” means any registration statement prepared by the Company registering additional Securities, which was filed with the Commission on or prior to the date hereof and became automatically effective pursuant to Rule 462(b) promulgated by the Commission pursuant to the Securities Act.
“SEC Reports” shall have the meaning ascribed to such term in Section 3.1(h).
4
“Securities” means the Shares, the Warrants and the Warrant Shares.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Shares” means the shares of Common Stock issued or issuable to each Purchaser pursuant to this Agreement.
“Short Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be deemed to include locating and/or borrowing shares of Common Stock).
“Subscription Amount” means, as to each Purchaser, the aggregate amount to be paid for Shares and Warrants purchased hereunder as specified below such Purchaser’s name on the signature page of this Agreement and next to the heading “Subscription Amount,” in United States dollars and in immediately available funds.
“Subsidiary” means any subsidiary of the Company as set forth in the SEC Reports, and shall, where applicable, also include any direct or indirect subsidiary of the Company formed or acquired after the date hereof.
“Sullivan” means Sullivan & Worcester LLP with offices located at 1251 Avenue of the Americas, 19th floor, New York, New York 10020.
“Trading Day” means a day on which the principal Trading Market is open for trading.
“Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York Stock Exchange (or any successors to any of the foregoing).
“Transaction Documents” means this Agreement, the Lock-Up Agreements, the Warrants, all exhibits and schedules thereto and hereto and any other documents or agreements executed in connection with the transactions contemplated hereunder.
“Transfer Agent” means Securities Transfer Corporation, the current transfer agent of the Company, with a mailing address of 901 N Dallas Parkway, Suite 380, Plano, Texas 75093 and a telephone number of (469) 633-0101, and any successor transfer agent of the Company.
“Warrants” means the Pre-Funded Warrants and the Common Warrants.
“Warrant Shares” means the Pre-Funded Warrant Shares and the Common Warrant Shares.
5
ARTICLE II.
PURCHASE AND SALE
2.1 Closing. For the avoidance of doubt, this Agreement applies solely to those investors executing this Agreement as Purchasers. The Company may sell additional Securities in the offering to other investors pursuant to the Prospectus Supplement without execution of this Agreement by such investors. Notwithstanding anything to the contrary contained herein, the aggregate Subscription Amount of each Purchaser executing this Agreement shall be not less than $500,000, unless otherwise approved by the Company and the Placement Agent. On the Closing Date, upon the terms and subject to the conditions set forth herein, the Company agrees to sell, and the Purchasers, severally and not jointly, agree to purchase, up to an aggregate of $100,000,000.00 of Shares and, where applicable, Pre-Funded Warrants; provided, however, that, to the extent that a Purchaser determines, in its sole discretion, that such Purchaser (together with such Purchaser’s Affiliates, and any Person acting as a group together with such Purchaser or any of such Purchaser’s Affiliates and any other Persons whose beneficial ownership of the Shares would or could be aggregated with the Purchaser’s or any of its Affiliates for the purposes of Section 13(d) of the Exchange Act) would beneficially own in excess of the Beneficial Ownership Limitation, or as such Purchaser may otherwise choose, in lieu of purchasing Shares such Purchaser may elect to purchase Pre-Funded Warrants in lieu of Shares in such manner to result in the same aggregate purchase price being paid by such Purchaser to the Company. The “Beneficial Ownership Limitation” shall be 4.99% (or, at the election of the Purchaser at Closing or on the face of the applicable Pre-Funded Warrant, 9.99%) of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of the Purchased Securities on the Closing Date. Each Purchaser’s Subscription Amount as set forth on the signature page hereto executed by such Purchaser shall be made available for “Delivery Versus Payment” settlement with the Company or its designee. The Company shall deliver to each Purchaser its respective Shares and the applicable Warrants as determined pursuant to Section 2.2(a), and the Company and each Purchaser shall deliver the other items set forth in Section 2.2 deliverable at the Closing. Upon satisfaction of the covenants and conditions set forth in Sections 2.2 and 2.3, the Closing shall take place remotely by electronic transfer of the Closing documentation. Unless otherwise directed by the Placement Agent, settlement of the Purchased Securities shall occur via “Delivery Versus Payment” (“DVP”) as follows: (a) with respect to the Shares, at least one Business Day prior to the Closing Date, the applicable Purchaser shall make payment therefor by wire transfer to the Company, and upon receipt of the applicable proceeds by the Company, on the Closing Date, the Company shall deliver the Shares registered in the name of the applicable Purchaser through the Transfer Agent via DRS book-entry procedure or, if elected by such Purchaser, otherwise via The Depositary Trust Company Deposit or Withdrawal at Custodian system (“DWAC”) for the account of the applicable Purchaser and (b) with respect to the Pre-Funded Warrants, at least one Business Day prior to the Closing Date, the applicable Purchaser shall make payment therefor by wire transfer to the Company, and upon receipt of the applicable proceeds by the Company, on the Closing Date, the Company shall deliver to each Purchaser its Pre-Funded Warrants. Notwithstanding anything herein to the contrary, if at any time on or after the time of execution of this Agreement by the Company and an applicable Purchaser, through, and including the time immediately prior to the Closing (the “Pre-Settlement Period”), such Purchaser sells to any Person all, or any portion, of the Purchased Securities to be issued hereunder to such Purchaser at the Closing (collectively, the “Pre-Settlement Securities”), such Purchaser shall, automatically hereunder (without any additional required actions by such Purchaser or the Company), be deemed to be unconditionally bound to purchase, and the Company shall be deemed unconditionally bound to sell, such Pre-Settlement Securities at the Closing; provided, that the Company shall not be required to deliver any Pre-Settlement Securities to such Purchaser prior to the Company’s receipt of the purchase price of such Pre-Settlement Securities hereunder; and provided further that the Company hereby acknowledges and agrees that the foregoing shall not constitute a representation or covenant by such Purchaser as to whether or not during the Pre-Settlement Period such Purchaser shall sell any Purchased Securities to any Person and that any such decision to sell any Purchased Securities by such Purchaser shall solely be made at the time such Purchaser elects to effect any such sale, if any. In the event that the Closing has not occurred within three (3) Business Days after the expected Closing Date, unless otherwise agreed by the Company and a Purchaser solely in relation to such Purchaser’s subscription hereunder, the Company shall, promptly (but no later than one Business Day thereafter) return the previously wired Subscription Amount by wire transfer of United States dollars in immediately available funds to the account specified by each applicable Purchaser; provided that, unless this Agreement has been terminated pursuant to Section 5.1, such return of funds shall not terminate this Agreement or relieve such Purchaser of its obligation to purchase, or the Company of its obligation to issue and sell, the Securities at Closing.
6
2.2 Deliveries.
(a) On or prior to the Closing Date (except as indicated below), the Company shall deliver or cause to be delivered to each Purchaser the following:
(i) this Agreement duly executed by the Company;
(ii) a legal opinion of Company Counsel, dated as of the Closing Date, substantially in form and substance reasonably satisfactory to the Placement Agent and the Capital Markets Advisor;
(iii) subject to the last sentence of Section 2.1, the Company shall have provided each Purchaser with the Company’s wire instructions, on Company letterhead and executed by the Company’s Chief Executive Officer or Chief Financial Officer;
(iv) subject to the provision of Section 2.1, a copy of the irrevocable instructions to the Transfer Agent instructing the Transfer Agent to deliver on an expedited basis via DWAC or DRS book-entry (as specified on the signature page hereto), Shares equal to such Purchaser’s Subscription Amount applicable to the Shares divided by the Per Share Purchase Price, registered in the name of such Purchaser;
(v) if applicable, a Pre-Funded Warrant registered in the name of such Purchaser to purchase up to a number of shares of Common Stock equal to the portion of such Purchaser’s Subscription Amount applicable to Pre-Funded Warrants divided by the Per Share Purchase Price, with an exercise price equal to $0.0001 per share of Common Stock, subject to adjustment therein;
7
(vi) if applicable, a Common Warrant registered in the name of such Purchaser to purchase such number of shares of Common Stock as set forth therein, duly executed by the Company;
(vii) on the date hereof, the duly executed Lock-Up Agreements; and
(viii) the Prospectus and Prospectus Supplement (which may be delivered in accordance with Rule 172 under the Securities Act).
(b) On or prior to the Closing Date, each Purchaser shall deliver or cause to be delivered to the Company, the following:
(i) this Agreement duly executed by such Purchaser; and
(ii) such Purchaser’s Subscription Amount, which shall be made available for DVP settlement with the Company or its designee in accordance with Section 2.1.
2.3 Closing Conditions.
(a) The obligations of the Company hereunder in connection with the Closing with respect to each Purchaser are subject to the following conditions being met:
(i) the accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse Effect, in all respects) when made and on the Closing Date of the representations and warranties of such Purchaser contained herein (unless such representation or warranty is as of a specific date therein in which case they shall be accurate in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse Effect, in all respects) as of such date);
(ii) all obligations, covenants and agreements of such Purchaser required to be performed at or prior to the Closing Date shall have been performed; and
(iii) the delivery by such Purchaser of the items set forth in Section 2.2(b) of this Agreement.
(b) The respective obligations of the Purchasers hereunder in connection with the Closing are subject to the following conditions being met:
(i) the accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse Effect, in all respects) when made and on the Closing Date of the representations and warranties of the Company contained herein (unless such representation or warranty is as of a specific date therein in which case they shall be accurate in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse Effect, in all respects) as of such date);
8
(ii) all obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date shall have been performed;
(iii) the delivery by the Company of the items set forth in Section 2.2(a) of this Agreement;
(iv) there shall have been no Material Adverse Effect with respect to the Company since the date hereof;
(v) from the date hereof to the Closing Date, trading in the Common Stock shall not have been suspended by the Commission or the Company’s principal Trading Market, and, at any time prior to the Closing Date, trading in securities generally as reported by Bloomberg L.P. shall not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are reported by such service, or on any Trading Market, nor shall a banking moratorium have been declared either by the United States or New York State authorities nor shall there have occurred after the date of this Agreement any material outbreak or escalation of hostilities or other national or international calamity of such magnitude in its effect on, or any material adverse change in, any financial market which, in each case, in the reasonable judgment of such Purchaser, makes it impracticable or inadvisable to purchase the Purchased Securities at the Closing; and
(vi) the Company shall have filed an additional listing application with the principal Trading Market with respect to the Shares and Warrant Shares.
(vii) after giving effect to the issuance of the Shares pursuant to this Agreement and the sale of additional Securities to other investors pursuant to the Prospectus Supplement, on the Closing Date, no fewer than 502,090,260 shares of Common Stock of the Company will have been issued and outstanding, and all such issued and outstanding shares of Common Stock shall have been issued prior to or contemporaneously with the issuance of the Shares to the Purchasers.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of the Company. Except as set forth in the SEC Reports (other than the risk factors and forward-looking statement disclaimers, except for any factual historical statements contained therein), which SEC Reports shall be deemed a part hereof and shall qualify any representation or otherwise made herein to the extent of the disclosure contained in the corresponding section of the SEC Reports, the Company hereby makes the following representations and warranties to each Purchaser, the Placement Agent and the Capital Markets Advisor:
(a) Subsidiaries. All of the direct and indirect material subsidiaries of the Company are set forth in the SEC Reports. The Company owns, directly or indirectly, all of the capital stock or other equity interests of each Subsidiary free and clear of any Liens, and all of the issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities. If the Company has no subsidiaries, all other references to the Subsidiaries or any of them in the Transaction Documents shall be disregarded.
9
(b) Organization and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly existing and, if applicable under the laws of the jurisdiction in which they were formed, in good standing (or such similar concept) under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor any Subsidiary is in violation nor default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, would not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”) and no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.
(c) Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement and each of the other Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company, the Board of Directors, a committee of the Board of Directors or the Company’s stockholders in connection herewith or therewith other than in connection with the Required Approvals. This Agreement and each other Transaction Document to which it is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.
10
(d) No Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to which it is a party, the issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby and thereby do not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter documents, (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary pursuant to, or give to others any rights of termination, amendment, anti-dilution or similar adjustments, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect.
(e) Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local, foreign or other governmental authority or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i) the filings required pursuant to Section 4.4 of this Agreement, (ii) the filing with the Commission of the Prospectus Supplement, (iii) the notice and/or application(s) to the applicable Trading Market for the listing of the Shares and Warrant Shares for trading thereon in the time and manner required thereby, and (iv) such filings as are required to be made under applicable state securities laws (collectively, the “Required Approvals”).
11
(f) Issuance of the Securities; Registration. The Shares and Warrant Shares are duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company. The Warrants, when paid for an issued in accordance with this Agreement, will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and similar laws affecting the rights of creditors generally and subject to general principles of equity. The Warrant Shares, when issued in accordance with the terms of the Warrants, will be validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company. The Company has reserved and will keep available from its duly authorized but unissued shares of Common Stock, and at all times will have sufficient authorized but unissued shares of Common Stock to accommodate,the maximum number of shares of Common Stock issuable pursuant to this Agreement and the Warrants. The Company has prepared and filed the Registration Statement in conformity with the requirements of the Securities Act, including the Prospectus, and such amendments and supplements thereto as may have been required to the date of this Agreement. The Registration Statement is effective under the Securities Act and no stop order preventing or suspending the effectiveness of the Registration Statement or suspending or preventing the use of the Prospectus has been issued by the Commission and no proceedings for that purpose have been instituted or, to the knowledge of the Company, are threatened by the Commission. The Company, if required by the rules and regulations of the Commission, shall file the Prospectus Supplement with the Commission pursuant to Rule 424(b). At the time the Registration Statement and any amendments thereto became effective, at the date of this Agreement and at the Closing Date, the Registration Statement and any amendments thereto conformed and will conform in all material respects to the requirements of the Securities Act and did not and will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading; and the Prospectus, the documents incorporated by reference therein, and any amendments or supplements thereto, at the time the Prospectus or any amendment or supplement thereto was issued and at the Closing Date, conformed and will conform in all material respects to the requirements of the Securities Act and did not and will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The Company was at the time of the filing of the Registration Statement eligible to use Form S-3. The Company is eligible to use Form S-3 under the Securities Act and it meets the transaction requirements with respect to the aggregate market value of securities being sold pursuant to this offering, as set forth in General Instruction I.B.1 of Form S-3.
(g) Capitalization. As of July 31, 2026, the Company had 226,112,684 shares of Common Stock outstanding. The Company has not issued any capital stock since its most recently filed periodic report under the Exchange Act, other than pursuant to the exercise of employee stock options or the granting of restricted stock units, in each case under the Company’s equity incentive plans, the sale and issuance of shares of Common Stock pursuant to that certain Sales Agreement, dated as of June 8, 2026, by and between the Company, the Capital Markets Advisor and the Placement Agent (the “ATM Agreement”), the issuance of shares of Common Stock to employees pursuant to the Company’s employee stock purchase plans and pursuant to the conversion and/or exercise of Common Stock Equivalents outstanding as of the date of the most recently filed periodic report under the Exchange Act. No Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents. Except as a result of the purchase and sale of the Purchased Securities and for equity incentives issued pursuant to the Company’s equity incentive plans, there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock or the capital stock of any Subsidiary, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents or capital stock of any Subsidiary. The issuance and sale of the Securities will not obligate the Company or any Subsidiary to issue shares of Common Stock or other securities to any Person (other than the Purchasers). There are no outstanding securities or instruments of the Company or any Subsidiary with any provision that adjusts the exercise, conversion, exchange or reset price of such security or instrument upon an issuance of securities by the Company or any Subsidiary. There are no outstanding securities or instruments of the Company or any Subsidiary that contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to redeem a security of the Company or such Subsidiary. The Company does not have any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement. All of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable, have been issued in compliance with all federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. Except for the Required Approvals, no further approval or authorization of any stockholder, the Board of Directors or others is required for the issuance and sale of the Securities. There are no stockholders agreements, voting agreements or other similar agreements with respect to the Company’s capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders.
12
(h) SEC Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the 12 months preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, together with the Prospectus and the Prospectus Supplement, being collectively referred to herein as the “SEC Reports”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. There are no material outstanding or unresolved comment letters from the staff of the Division of Corporate Finance of the Commission with respect to any of the SEC reports as of the date hereof. The Company has never been an issuer subject to Rule 144(i) under the Securities Act. The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments. No other financial statements or supporting schedules are required to be included pursuant to the Exchange Act. The other financial and statistical information included in the SEC Reports present fairly the information included therein and have been prepared on a basis consistent with that of the financial statements that are included in the SEC Reports and the books and records of the Company. There are no material off-balance sheet transactions, arrangements or obligations (including contingent obligations) of the Company or other persons that would reasonably be expected to result in a Material Adverse Effect.
13
(i) Material Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included within the SEC Reports, except as disclosed in the SEC Reports filed subsequent to such audited financial statements or as disclosed to the Purchasers prior to the date hereof, (i) there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings made with the Commission, (iii) the Company has not materially altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company equity incentive plans. The Company does not have pending before the Commission any request for confidential treatment of information. Except for the issuance of the Securities contemplated by this Agreement, no event, liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably expected to occur or exist with respect to the Company or its Subsidiaries or their respective businesses, prospects, properties, operations, assets or financial condition that would be required to be disclosed by the Company under applicable securities laws at the time this representation is made or deemed made that has not been publicly disclosed at least one (1) Trading Day prior to the date that this representation is made.
(j) Litigation. There is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”), which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities or (ii) would, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission involving the Company or any current or former director or officer of the Company. The Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the Securities Act.
14
(k) Labor Relations. No labor dispute exists or, to the knowledge of the Company, is threatened or imminent with respect to any of the employees of the Company, which would reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its Subsidiaries’ employees is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe that their relationships with their employees are good. To the knowledge of the Company, no executive officer of the Company or any Subsidiary, is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third party, and the continued employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability with respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance with all applicable U.S. federal, state, local and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and hours, except where the failure to be in compliance would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(l) Compliance. Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree or order of any court, arbitrator or other governmental authority or (iii) is or has been in violation of any statute, rule, ordinance or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental protection, occupational health and safety, product quality and safety and employment and labor matters, except in each case as would not have or reasonably be expected to result in a Material Adverse Effect.
(m) Environmental Laws. The Company and its Subsidiaries (i) are in compliance with all federal, state, local and foreign laws relating to pollution or protection of human health or the environment (including ambient air, surface water, groundwater, land surface or subsurface strata), including laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands, or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations, issued, entered, promulgated or approved thereunder (“Environmental Laws”); (ii) have received all permits licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses; and (iii) are in compliance with all terms and conditions of any such permit, license or approval where in each clause (i), (ii) and (iii), the failure to so comply would be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect.
15
(n) Regulatory Permits. The Company and the Subsidiaries possess all certificates, authorizations, approvals, consents, registrations, licenses, qualifications, certifications and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports, except where the failure to possess such certificates, authorizations and permits would not reasonably be expected to result in a Material Adverse Effect (“Material Permits”), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or modification of any Material Permit.
(o) Title to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by them and good and marketable title in all personal property owned by them that is material to the business of the Company and the Subsidiaries, in each case free and clear of all Liens, except for (i) Liens as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries and (ii) Liens for the payment of federal, state, foreign or other taxes, for which appropriate reserves have been made therefor in accordance with GAAP and, the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which the Company and the Subsidiaries are in compliance in all material respects.
(p) Intellectual Property. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights necessary or required for use in connection with their respective businesses as described in the SEC Reports and which the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). None of, and neither the Company nor any Subsidiary has received a notice (written or otherwise) that any of, the Intellectual Property Rights has expired, terminated or been abandoned, or is expected to expire or terminate or be abandoned, within two (2) years from the date of this Agreement, except as would not reasonably be expected to have a Material Adverse Effect. Neither the Company nor any Subsidiary has received, since the date of the latest audited financial statements included within the SEC Reports, a written notice of a claim or otherwise has any knowledge that the Intellectual Property Rights violate or infringe upon the rights of any Person, except as could not have or reasonably be expected to not have a Material Adverse Effect. To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights. The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their intellectual properties, except where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
16
(q) Insurance. The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as the Company believes are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including, but not limited to, directors and officers insurance coverage at least equal to the aggregate Subscription Amount. Neither the Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without an increase in cost that would reasonably be expected to have a Material Adverse Effect.
(r) Transactions With Affiliates and Employees. Except as set forth in the SEC Reports, none of the officers or directors of the Company or any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, providing for the borrowing of money from or lending of money to or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee, stockholder, member or partner, in each case in excess of $120,000 other than for (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii) other employee benefits, including stock option agreements under any equity incentive plan of the Company.
(s) Sarbanes-Oxley; Internal Accounting Controls. The Company and the Subsidiaries are in compliance in all material respects with any and all applicable requirements of the Sarbanes-Oxley Act of 2002, as amended that are effective as of the date hereof, and any and all applicable rules and regulations promulgated by the Commission thereunder that are effective as of the date hereof and as of the Closing Date. Except as set forth in the SEC Reports, the Company and the Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets and liabilities is compared with the existing assets and liabilities at reasonable intervals and appropriate action is taken with respect to any differences. Except as set forth in the SEC Reports, the Company and the Subsidiaries have established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and the Subsidiaries and designed such disclosure controls and procedures to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. The Company has not received any notice of correspondence from its independent registered public accounting firm, governmental entity or other Person relating to any potential material weakness in any part of the internal controls over financial reporting of the Company. The Company’s certifying officers have evaluated the effectiveness of the disclosure controls and procedures of the Company and the Subsidiaries as of the end of the period covered by the most recently filed periodic report under the Exchange Act (such date, the “Evaluation Date”). The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date and except as set forth in the SEC Reports, there have been no changes in the internal control over financial reporting (as such term is defined in the Exchange Act) of the Company and its Subsidiaries that have materially affected, or is reasonably likely to materially affect, the internal control over financial reporting of the Company and its Subsidiaries.
17
(t) Certain Fees. Except for (i) fees payable to the Placement Agent pursuant to the Placement Agency Agreement, including any selling concessions or fee reallocations contemplated thereby, and (ii) fees payable to the Capital Markets Advisor pursuant to its engagement arrangements with the Company, no brokerage or finder’s fees or commissions are or will be payable by the Company or any Subsidiary to any broker, financial advisor, consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents. The Purchasers shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by the Transaction Documents.
(u) Investment Company. Neither the Company nor any Subsidiary is required to be registered as, and immediately following the Closing will not be required to register as, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
(v) Registration Rights. Except as set forth in the SEC Reports, no Person has any right to cause the Company or any Subsidiary to effect the registration under the Securities Act of any securities of the Company or any Subsidiary.
(w) Listing and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has taken no action designed to terminate, or which to its knowledge is likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating such registration. Except as set forth in the SEC Reports, the Company is in compliance with the applicable continued listing requirements of each Trading Market on which the Common Stock is currently listed or quoted, and the Company has not, in the 12 months preceding the date hereof, received notice from any Trading Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of such Trading Market. Except as set forth in the SEC Reports, the Company is, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance with all such listing and maintenance requirements. The Common Stock is currently eligible for electronic transfer through the Depository Trust Company or another established clearing corporation and the Company is current in payment of the fees to the Depository Trust Company (or such other established clearing corporation) in connection with such electronic transfer.
18
(x) Application of Takeover Protections. The Company and the Board of Directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Company’s certificate of incorporation (or similar charter documents) or the laws of its state of incorporation that is or could become applicable to the Purchasers as a result of the Purchasers and the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including without limitation as a result of the Company’s issuance of the Securities and the Purchasers’ ownership of the Securities.
(y) Disclosure. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Company confirms that neither it nor any other Person acting on its behalf has provided any of the Purchasers or their agents or counsel with any information that it believes constitutes or might constitute material, non-public information which is not otherwise disclosed by at or prior to the commencement of public marketing of the offering. The Company understands and confirms that the Purchasers will rely on the foregoing representation in effecting transactions in securities of the Company. All of the disclosure furnished by or on behalf of the Company to the Purchasers regarding the Company and its Subsidiaries, their respective businesses and the transactions contemplated hereby, including the SEC Reports, is true and correct in all material respects as of the date made and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. The press releases disseminated by the Company during the twelve months preceding the date of this Agreement taken as a whole do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made and when made, not misleading. The Company acknowledges and agrees that no Purchaser makes or has made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 3.2 hereof.
(z) No Integrated Offering. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2, neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the Securities to be integrated with prior offerings by the Company for purposes of any applicable shareholder approval provisions of any Trading Market on which any of the securities of the Company are listed or designated.
19
(aa) Solvency. Based on the consolidated financial condition of the Company as of the Closing Date, after giving effect to the receipt by the Company of the proceeds from the sale of the Purchased Securities hereunder, (i) the fair saleable value of the Company’s assets exceeds the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including known contingent liabilities) as they mature, (ii) the Company’s assets do not constitute unreasonably small capital to carry on its business as now conducted and as proposed to be conducted including its capital needs taking into account the particular capital requirements of the business conducted by the Company, consolidated and projected capital requirements and capital availability thereof, and (iii) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its liabilities when such amounts are required to be paid. The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt). The Company has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within one year from the Closing Date. As of the date hereof, neither the Company nor any Subsidiary has any outstanding secured or unsecured Indebtedness. For the purposes of this Agreement, “Indebtedness” means (x) any liabilities for borrowed money or amounts owed in excess of $50,000 (other than trade accounts payable incurred in the ordinary course of business), (y) all guaranties, endorsements and other contingent obligations in respect of indebtedness of others, whether or not the same are or should be reflected in the Company’s consolidated balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and (z) the present value of any lease payment in excess of $50,000 due under any lease required to be capitalized in accordance with GAAP. Neither the Company nor any Subsidiary is in default with respect to any Indebtedness.
(bb) Tax Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, the Company and its Subsidiaries each (i) has made or filed all United States federal, state and local income and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for the payment of all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company or of any Subsidiary know of no basis for any such claim.
(cc) Foreign Corrupt Practices. Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary, any agent or other person acting on behalf of the Company or any Subsidiary, has (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any person acting on its behalf of which the Company is aware) which is in violation of law, or (iv) violated in any material respect any provision of FCPA.
20
(dd) Accountants. The Company’s independent registered public accounting firm is TAAD, LLP. To the knowledge and belief of the Company, such accounting firm (i) is a registered public accounting firm as required by the Exchange Act and (ii) shall express its opinion with respect to the financial statements to be included in the Company’s Annual Report for the fiscal year ending June 30, 2026.
(ee) No Disagreements with Accountants and Lawyers. There are no disagreements of any kind presently existing, or reasonably anticipated by the Company to arise, between the Company and the accountants and lawyers formerly or presently employed by the Company and the Company is current with respect to any fees owed to its accountants and lawyers which could affect the Company’s ability to perform any of its obligations under any of the Transaction Documents.
(ff) Acknowledgment Regarding Purchasers’ Purchase of Securities. The Company acknowledges and agrees that each of the Purchasers is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated thereby. The Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any advice given by any Purchaser or any of their respective representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby is merely incidental to the Purchasers’ purchase of the Securities. The Company further represents to each Purchaser that the Company’s decision to enter into this Agreement and the other Transaction Documents has been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.
(gg) Acknowledgment Regarding Purchaser’s Trading Activity. Anything in this Agreement or elsewhere herein to the contrary notwithstanding (except for Sections 3.2(f) and 4.14 hereof), it is understood and acknowledged by the Company that: (i) none of the Purchasers has been asked by the Company to agree, nor has any Purchaser agreed, to desist from purchasing or selling, long and/or short, securities of the Company, or “derivative” securities based on securities issued by the Company or to hold the Securities for any specified term; (ii) past or future open market or other transactions by any Purchaser, specifically including, without limitation, Short Sales or “derivative” transactions, before or after the Closing of this transaction or future private placement transactions, may negatively impact the market price of the Company’s publicly-traded securities; (iii) any Purchaser, and counter-parties in “derivative” transactions to which any such Purchaser is a party, directly or indirectly, presently may have a “short” position in the Common Stock, and (iv) each Purchaser shall not be deemed to have any affiliation with or control over any arm’s length counter-party in any “derivative” transaction. The Company further understands and acknowledges that (y) one or more Purchasers may engage in hedging activities at various times during the period that the Securities are outstanding, including, without limitation, during the periods that the value of the Warrant Shares deliverable with respect to Securities are being determined, and (z) such hedging activities (if any) could reduce the value of the existing stockholders’ equity interests in the Company at and after the time that the hedging activities are being conducted. The Company acknowledges that such aforementioned hedging activities do not constitute a breach of any of the Transaction Documents.
21
(hh) Regulation M Compliance. The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any of the Securities, (ii) sold, bid for, purchased, or, paid any compensation for soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of the Company, other than, in the case of clauses (ii) and (iii), compensation paid to the Placement Agent in connection with the placement of the Securities.
(ii) [Reserved].
(jj) Cybersecurity. To the Company’s knowledge, (i)(x) there has been no security breach or other compromise of or relating to any of the Company’s or any Subsidiary’s information technology and computer systems, networks, hardware, software, data (including the data of its respective customers, employees, suppliers, vendors and any third party data maintained by or on behalf of it), equipment or technology (collectively, “IT Systems and Data”), except as would not, individually or in the aggregate, have a Material Adverse Effect and (y) the Company and the Subsidiaries have not been notified of, and has no knowledge of any event or condition that would reasonably be expected to result in, any security breach or other compromise to its IT Systems and Data that would cause a Material Adverse Effect; (ii) the Company and the Subsidiaries are presently in compliance in all material respects with all applicable laws or statutes and all judgments, orders, rules and regulations of any court or arbitrator or governmental or regulatory authority, internal policies and contractual obligations relating to the privacy and security of IT Systems and Data and to the protection of such IT Systems and Data from unauthorized use, access, misappropriation or modification, except as would not, individually or in the aggregate, have a Material Adverse Effect; (iii) the Company and the Subsidiaries have implemented and maintained commercially reasonable safeguards to maintain and protect its material confidential information and the integrity, continuous operation, redundancy and security of all IT Systems and Data; and (iv) the Company and the Subsidiaries have implemented backup and disaster recovery technology consistent with commercially reasonable industry standards and practices.
22
(kk) Compliance with Data Privacy Laws. (i) The Company and the Subsidiaries are, and at all times during the last three (3) years were, in compliance with all applicable state, federal and foreign data privacy and security laws and regulations, including, without limitation, the European Union General Data Protection Regulation (“GDPR”) (EU 2016/679) (collectively, “Privacy Laws”), except as would not, individually or in the aggregate, have a Material Adverse Effect; (ii) the Company and the Subsidiaries have in place, comply with, and take appropriate steps reasonably designed to ensure compliance in all material respects with their policies and procedures relating to data privacy and security and the collection, storage, use, disclosure, handling and analysis of Personal Data (as defined below) (the “Policies”); (iii) the Company provides accurate notice of its applicable Policies to its customers, employees, third party vendors and representatives as required by the Privacy Laws; and (iv) applicable Policies provide accurate and sufficient notice of the Company’s then-current privacy practices relating to its subject matter, and do not contain any material omissions of the Company’s then-current privacy practices, as required by Privacy Laws. “Personal Data” means (i) a natural person’s name, street address, telephone number, email address, photograph, social security number, bank information, or customer or account number; (ii) any information which would qualify as “personally identifying information” under the Federal Trade Commission Act, as amended; (iii) “personal data” as defined by GDPR; and (iv) any other piece of information that allows the identification of such natural person, or his or her family, or permits the collection or analysis of any identifiable data related to an identified person’s health or sexual orientation. (i) None of such disclosures made or contained in any of the Policies have been inaccurate, misleading, or deceptive in violation of any Privacy Laws and (ii) the execution, delivery and performance of the Transaction Documents will not result in a breach of any Privacy Laws or Policies. Neither the Company nor the Subsidiaries (i) to the knowledge of the Company, has received written notice of any actual or potential liability of the Company or the Subsidiaries under, or actual or potential violation by the Company or the Subsidiaries of, any of the Privacy Laws; (ii) is currently conducting or paying for, in whole or in part, any investigation, remediation or other corrective action pursuant to any regulatory request or demand pursuant to any Privacy Law; or (iii) is a party to any order, decree, or agreement by or with any court or arbitrator or governmental or regulatory authority that imposed any obligation or liability under any Privacy Law.
(ll) Stock Option Plans. Each stock option granted by the Company under the Company’s stock option plan was granted (i) in accordance with the terms of the Company’s stock option plan and (ii) with an exercise price at least equal to the fair market value of the Common Stock on the date such stock option would be considered granted under GAAP and applicable law. No stock option granted under the Company’s equity incentive plan has been backdated. The Company has not knowingly granted, and there is no and has been no Company policy or practice to knowingly grant, stock options prior to, or otherwise knowingly coordinate the grant of stock options with, the release or other public announcement of material information regarding the Company or its Subsidiaries or their financial results or prospects.
(mm) Office of Foreign Assets Control. Neither the Company nor any Subsidiary nor, to the Company’s knowledge, any director, officer, agent, employee or affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”).
(nn) U.S. Real Property Holding Corporation. The Company is not and has never been a U.S. real property holding corporation within the meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon Purchaser’s request.
23
(oo) Bank Holding Company Act. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding Company Act of 1956, as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the “Federal Reserve”). Neither the Company nor any of its Subsidiaries or Affiliates owns or controls, directly or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent or more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of its Subsidiaries or Affiliates exercises a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve.
(pp) Money Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money Laundering Laws”), and no Action or Proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or any Subsidiary, threatened.
(qq) Other Agreements. Any other subscription agreements entered into with any other investors in connection with such other investor’s direct or indirect investment in the Company reflect the same Purchase Price and substantially the same other material terms and conditions with respect to the purchase of the Securities that are no more favorable in the aggregate to any other purchaser than the material terms of this Agreement are to the Purchaser (other than terms particular to the regulatory requirements of such investor or its affiliates or related funds that are mutual funds or are otherwise subject to regulations related to the timing of funding and the issuance of the related Securities).
3.2 Representations and Warranties of the Purchasers. Each Purchaser, for itself and for no other Purchaser, hereby represents and warrants as of the date hereof and as of the Closing Date to the Company, the Placement Agent and the Capital Markets Advisor as follows (unless as of a specific date therein, in which case they shall be accurate as of such date):
(a) Organization; Authority. Such Purchaser is either an individual or an entity duly incorporated or formed, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership, limited liability company or similar power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of the Transaction Documents and performance by such Purchaser of the transactions contemplated by the Transaction Documents have been duly authorized by all necessary corporate, partnership, limited liability company or similar action, as applicable, on the part of such Purchaser. Each Transaction Document to which it is a party has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of such Purchaser, enforceable against it in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.
24
(b) Understandings or Arrangements. Such Purchaser is acquiring the Securities as principal for its own account and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such Securities in violation of the Securities Act or any applicable state securities law (this representation and warranty not limiting such Purchaser’s right to sell the Securities pursuant to the Registration Statement or otherwise in compliance with applicable federal and state securities laws). Such Purchaser is acquiring the Securities hereunder in the ordinary course of its business.
(c) Purchaser Status. At the time such Purchaser was offered the Securities, it was, and as of the date hereof it is, and on each date on which it exercises any Warrants, it will be an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7), (a)(8), (a)(9), (a)(12), or (a)(13) under the Securities Act.
(d) Experience of Such Purchaser. Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Securities, and has so evaluated the merits and risks of such investment. Such Purchaser is able to bear the economic risk of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment.
(e) Access to Information. Such Purchaser acknowledges that it has had the opportunity to review the Transaction Documents (including all exhibits and schedules thereto) and the SEC Reports and has been afforded, (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Securities and the merits and risks of investing in the Securities; (ii) access to information about the Company and its financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment. Such Purchaser acknowledges and agrees that neither the Placement Agent nor the Capital Markets Advisor, nor any of their respective Affiliates, has provided such Purchaser with any information or advice with respect to the Securities nor is such information or advice necessary or desired. Neither the Placement Agent nor the Capital Markets Advisor, nor any of their respective Affiliates, has made or makes any representation as to the Company or the quality of the Securities, and the Placement Agent, the Capital Markets Advisor and any of their respective Affiliates may have acquired non-public information with respect to the Company which such Purchaser agrees need not be provided to it. In connection with the issuance of the Securities to such Purchaser, neither the Placement Agent nor the Capital Markets Advisor, nor any of their respective Affiliates, has acted as a financial advisor or fiduciary to such Purchaser.
25
(f) Certain Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, such Purchaser has not, nor has any Person acting on behalf of or pursuant to any understanding with such Purchaser, directly or indirectly executed any purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that such Purchaser first received a term sheet (written or oral) or other communication containing the material pricing terms of a confidentially marketed public offering (“CMPO”) or the transactions contemplated hereby from the Company or any other Person representing the Company setting forth the material pricing terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof. Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Purchaser’s assets, the representation set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Securities covered by this Agreement. Other than to other Persons party to this Agreement or to such Purchaser’s representatives, including, without limitation, its officers, directors, partners, legal and other advisors, employees, agents and Affiliates, such Purchaser has maintained the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction). Notwithstanding the foregoing, for the avoidance of doubt, nothing contained herein shall constitute a representation or warranty, or preclude any actions, with respect to locating or borrowing shares in order to effect Short Sales or similar transactions in the future.
The Company acknowledges and agrees that the representations contained in this Section 3.2 shall not modify, amend or affect such Purchaser’s right to rely on the Company’s representations and warranties contained in this Agreement or any representations and warranties contained in any other Transaction Document or any other document or instrument executed and/or delivered in connection with this Agreement or the consummation of the transactions contemplated hereby. Notwithstanding the foregoing, for the avoidance of doubt, nothing contained herein shall constitute a representation or warranty, or preclude any actions, with respect to locating or borrowing shares in order to effect Short Sales or similar transactions in the future.
ARTICLE IV.
OTHER AGREEMENTS OF THE PARTIES
4.1 Securities. The Shares, the Warrants and, if all or any portion of a Warrant is exercised at a time when there is an effective registration statement to cover the issuance or resale of the Warrant Shares or if the Warrant is exercised via cashless exercise, the Warrant Shares issued pursuant to any such exercise, shall be issued free of all legends. If at any time following the date hereof the Registration Statement (or any subsequent registration statement registering the sale or resale of the Warrant Shares) is not effective or is not otherwise available for the sale or resale of the Warrant Shares, the Company shall promptly notify the holders of the Warrants in writing that such registration statement is not then effective and thereafter shall immediately notify such holders when the registration statement is effective again and available for the sale or resale of the Warrant Shares (it being understood and agreed that the foregoing shall not limit the ability of the Company to issue, or any Purchaser to sell, any of the Warrant Shares in compliance with applicable federal and state securities laws). The Company shall use best efforts to keep a registration statement (including the Registration Statement) registering the issuance or resale of the Warrant Shares effective during the term of the Warrants.
26
4.2 Furnishing of Information. Until the earliest of the time that (i) no Purchaser owns Securities or (ii) the Warrants have expired, the Company covenants to maintain the registration of the Common Stock under Section 12(b) or 12(g) of the Exchange Act and to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act even if the Company is not then subject to the reporting requirements of the Exchange Act.
4.3 Integration. The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities for purposes of the rules and regulations of any Trading Market such that it would require shareholder approval prior to the closing of such other transaction unless shareholder approval is obtained before the closing of such subsequent transaction.
4.4 Securities Laws Disclosure; Publicity. The Company shall by the Disclosure Time (a) issue a press release disclosing the material terms of the offering then known and (b) file with the Commission a Prospectus Supplement (or other prospectus supplement materials) relating to the offering. The Company shall file a Current Report on Form 8-K, including the applicable Transaction Documents and such press release as exhibits thereto, within the time required by the Exchange Act. The parties acknowledge and agree that the Prospectus Supplement (or other prospectus supplement materials) and the press release contemplated by this Section 4.4 are intended to publicly disclose any material non-public information disclosed in connection with the CMPO process and that the Current Report on Form 8-K is not intended to be part of the public disclosure package for purposes of such disclosure. From and after the issuance of such press release and the filing of such Prospectus Supplement (or other prospectus supplement materials), the Company represents to the Purchasers that it shall have publicly disclosed all material non-public information delivered to any of the Purchasers by the Company or any of its Subsidiaries, or any of their respective officers, directors, employees, Affiliates or agents, including, without limitation, the Placement Agent, in connection with the transactions contemplated by the Transaction Documents. In addition, effective upon the issuance of such press release and the filing of such Prospectus Supplement (or other prospectus supplement materials), the Company acknowledges and agrees that any and all confidentiality or similar obligations under any agreement, whether written or oral, between the Company, any of its Subsidiaries or any of their respective officers, directors, employees, Affiliates or agents, including, without limitation, the Placement Agent, on the one hand, and any of the Purchasers or any of their Affiliates on the other hand, shall terminate and be of no further force or effect. The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company. The Company and each Purchaser shall consult with each other in issuing any other press releases with respect to the transactions contemplated hereby, and neither the Company nor any Purchaser shall issue any such press release nor otherwise make any such public statement without the prior consent of the Company, with respect to any press release of any Purchaser, or without the prior consent of each Purchaser, with respect to any press release of the Company, which consent shall not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement or communication. Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Purchaser, or include the name of any Purchaser in any filing with the Commission or any regulatory agency or Trading Market, without the prior written consent of such Purchaser, except (a) as required by federal securities laws in connection with the filing of final Transaction Documents with the Commission and (b) to the extent such disclosure is required by law or Trading Market regulations, in which case the Company shall provide such Purchaser with prior notice of such disclosure and reasonably cooperate with such Purchaser regarding such disclosure. The parties acknowledge that the offering of the Purchased Securities may be conducted as a CMPO. Upon the issuance of the press release and the filing of the Prospectus Supplement (or other prospectus supplement materials) contemplated by this Section 4.4, the Company shall be deemed to have publicly disclosed all material terms of the offering then known and all material non-public information, if any, disclosed by or on behalf of the Company to the Purchasers in connection with the CMPO process.
27
4.5 Shareholder Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that any Purchaser is an “Acquiring Person” under any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by the Company, or that any Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Securities under the Transaction Documents or under any other agreement between the Company and the Purchasers.
4.6 Non-Public Information. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents and any other material non-public information disclosed to the Purchasers in connection with the CMPO process, which information shall be publicly disclosed pursuant to Section 4.4, the Company covenants and agrees that neither it nor any Person acting on its behalf will provide any Purchaser or its agents or counsel with any material non-public information unless such Purchaser shall have consented in writing to the receipt thereof. The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company. The Company acknowledges that following the public disclosure contemplated by Section 4.4, the Purchasers shall no longer be subject to any contractual confidentiality restrictions imposed by the Company with respect to the information disclosed in connection with the transactions contemplated hereby, provided that nothing herein shall be deemed to modify or limit any obligations arising under applicable securities laws. If the Company, any Subsidiary or any of their respective representatives provides material, non-public information to a Purchaser without such Purchaser’s prior written consent, the Company shall promptly publicly disclose such information and, if required by applicable law, file such information pursuant to a Current Report on Form 8-K. The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company. The parties acknowledge and agree that the filing of the Prospectus Supplement or other prospectus supplement materials and issuance of the press release contemplated by Section 4.4 are intended to publicly disclose any material non-public information disclosed to Purchasers in connection with the CMPO process.
4.7 Use of Proceeds. The Company shall use the net proceeds from the sale of the Securities in a manner consistent in all material respects with the use of proceeds described in the Prospectus Supplement and shall not use such proceeds: (a) for the satisfaction of any portion of the Company’s debt (other than payment of trade payables in the ordinary course of the Company’s business and prior practices), (b) for the redemption of any Common Stock or Common Stock Equivalents, (c) for the settlement of any outstanding litigation or (d) in violation of FCPA or OFAC regulations.
28
4.8 Indemnification of Purchasers. Subject to the provisions of this Section 4.8, the Company will indemnify, to the fullest extent permitted by applicable law, and hold each Purchaser and its directors, officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders, agents, members, partners, investment managers, or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title) of such controlling persons (each, a “Purchaser Party”) harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser Party may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement or in the other Transaction Documents, (b) any action instituted against the Purchaser Parties in any capacity, or any of them or their respective Affiliates, by any stockholder of the Company who is not an Affiliate of such Purchaser Party, with respect to any of the transactions contemplated by the Transaction Documents (unless such action is solely based upon a material breach of such Purchaser Party’s representations, warranties or covenants under the Transaction Documents or any agreements or understandings such Purchaser Party may have with any such stockholder or any violations by such Purchaser Party of state or federal securities laws or any conduct by such Purchaser Party which is finally judicially determined to constitute fraud, gross negligence or willful misconduct), and (c) in connection with any registration statement of the Company providing for the resale by the Purchasers of the Warrant Shares issued and issuable upon exercise of the Warrants, the Company will indemnify each Purchaser Party, to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, reasonable attorneys’ fees) and expenses, as incurred, arising out of or relating to (i) any untrue or alleged untrue statement of a material fact contained in such registration statement, any prospectus or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any prospectus or supplement thereto, in the light of the circumstances under which they were made) not misleading, except to the extent, but only to the extent, that such untrue statements or omissions are based solely upon information regarding such Purchaser Party furnished in writing to the Company by such Purchaser Party expressly for use therein, or (ii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act or any applicable state or non-U.S. securities law, or any rule or regulation thereunder in connection therewith. If any action shall be brought against any Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement, such Purchaser Party shall promptly notify the Company in writing, and the Company shall have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Purchaser Party. Any Purchaser Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Purchaser Party except to the extent that (i) the employment thereof has been specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time to assume such defense and to employ counsel reasonably acceptable to the Purchaser Party or (iii) in such action there is, in the reasonable opinion of counsel a material conflict on any material issue between the position of the Company and the position of such Purchaser Party, in which case the Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel. The Company will not be liable to any Purchaser Party under this Agreement (y) for any settlement by a Purchaser Party effected without the Company’s prior written consent, which shall not be unreasonably withheld or delayed; or (z) to the extent, but only to the extent that a loss, claim, damage or liability is attributable to any Purchaser Party’s breach of any such Purchaser Party’s representations, warranties or covenants under the Transaction Documents, as determined by a final, non-appealable judgment of a court of competent jurisdiction. The Company shall not, without the prior written consent of the Purchaser Party, effect any settlement of any pending or threatened action or proceeding in respect of which any Purchaser Party is or could have been a party and indemnity could have been sought hereunder by such Purchaser Party, unless such settlement includes an unconditional release of such Purchaser Party from all liability on claims that are the subject matter of such proceeding and does not include any statements as to or any findings of fault, culpability or failure to act by or on behalf of any Purchaser Party. The indemnification required by this Section 4.8 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or are incurred. The indemnity agreements contained herein shall be in addition to any cause of action or similar right of any Purchaser Party against the Company or others and any liabilities the Company may be subject to pursuant to law.
4.9 Reservation of Common Stock. As of the date hereof, the Company has reserved and the Company shall continue to reserve and keep available at all times, free of preemptive rights, a sufficient number of shares of Common Stock for the purpose of enabling the Company to issue Shares pursuant to this Agreement and Warrant Shares pursuant to any exercise of the Warrants.
4.10 Listing of Common Stock. The Company hereby agrees to use commercially reasonable best efforts to maintain the listing or quotation of the Common Stock on the Trading Market on which it is currently listed, and concurrently with the Closing, the Company shall apply to list or quote all of the Shares and Warrant Shares on such Trading Market and promptly secure the listing of all of the Shares and Warrant Shares on such Trading Market. The Company further agrees, if the Company applies to have the Common Stock traded on any other Trading Market, it will then include in such application all of the Shares and Warrant Shares, and will take such other action as is necessary to cause all of the Shares and Warrant Shares to be listed or quoted on such other Trading Market as promptly as possible. The Company will then take all action reasonably necessary to continue the listing and trading of its Common Stock on a Trading Market and will comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the Trading Market. The Company agrees to maintain the eligibility of the Common Stock for electronic transfer through the Depository Trust Company or another established clearing corporation, including, without limitation, by timely payment of fees to the Depository Trust Company or such other established clearing corporation in connection with such electronic transfer.
29
4.11 Subsequent Equity Sales.
(a) From the date hereof until ninety (90) days after the Closing Date, neither the Company nor any Subsidiary shall (i) issue, enter into any agreement to issue or announce the issuance or proposed issuance of any Common Stock or Common Stock Equivalents or (ii) file any registration statement or any amendment or supplement thereto, other than the Prospectus Supplement, or other than a registration statement on Form S-8 in connection with the Company’s existing equity incentive plans.
(b) From the date hereof until 180 days after the Closing Date, the Company shall be prohibited from effecting or entering into an agreement to effect any issuance by the Company or any of its Subsidiaries of Common Stock or Common Stock Equivalents (or a combination of units thereof) involving a Variable Rate Transaction. “Variable Rate Transaction” means a transaction in which the Company (i) issues or sells any debt or equity securities that are convertible into, exchangeable or exercisable for, or include the right to receive additional shares of Common Stock either (A) at a conversion price, exercise price or exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for the shares of Common Stock at any time after the initial issuance of such debt or equity securities, or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market for the Common Stock or (ii) enters into, or effects a transaction under, any agreement, including, but not limited to, an equity line of credit whereby the Company may issue securities at a future determined price regardless of whether shares pursuant to such agreement have actually been issued and regardless of whether such agreement is subsequently canceled. Any Purchaser shall be entitled to obtain injunctive relief against the Company to preclude any such issuance, which remedy shall be in addition to any right to collect damages; provided, however, that commencing ninety (90) days after the Closing Date, the Company’s issuance of Common Stock or Common Stock Equivalents pursuant to an “at the market offering” facility including the Placement Agent as sales agent shall not be deemed a Variable Rate Transaction.
(c) Notwithstanding the foregoing, this Section 4.11 shall not apply in respect of an Exempt Issuance, except that no Variable Rate Transaction shall be an Exempt Issuance.
4.12 [Reserved].
4.13 Equal Treatment of Purchasers. No consideration (including any modification of the Transaction Documents) shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of the Transaction Documents unless the same consideration is also offered to all of the parties to the Transaction Documents. For clarification purposes, this provision constitutes a separate right granted to each Purchaser by the Company and negotiated separately by each Purchaser, and is intended for the Company to treat the Purchasers as a class and shall not in any way be construed as the Purchasers acting in concert or as a group with respect to the purchase, disposition or voting of Securities or otherwise.
30
4.14 Certain Transactions and Confidentiality. Each Purchaser, severally and not jointly with the other Purchasers, covenants that neither it nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any purchases or sales, including Short Sales, of any of the Company’s securities during the period commencing as of the time such Purchaser first receives material non-public information relating to the transactions contemplated hereby, including any material pricing information regarding the CMPO process, and ending at such time as the transactions contemplated hereby are first publicly disclosed by the Company pursuant to Section 4.4. Each Purchaser, severally and not jointly with the other Purchasers, covenants that until such public disclosure pursuant to Section 4.4, such Purchaser will maintain the confidentiality of the existence and terms of this transaction (other than as disclosed to its legal and other representatives). Notwithstanding the foregoing and notwithstanding anything contained in this Agreement to the contrary, the Company expressly acknowledges and agrees that (i) no Purchaser makes any representation, warranty or covenant hereby that it will not engage in effecting transactions in any securities of the Company following the public disclosure contemplated by Section 4.4, (ii) no Purchaser shall be restricted or prohibited from effecting any transactions in any securities of the Company in accordance with applicable securities laws following the public disclosure contemplated by Section 4.4 and (iii) no Purchaser shall have any duty of confidentiality or duty not to trade in the securities of the Company to the Company, any of its Subsidiaries, or any of their respective officers, directors, employees, Affiliates, or agent, including, without limitation, the Placement Agent, following the public disclosure contemplated by Section 4.4. Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Purchaser’s assets, the covenant set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Securities covered by this Agreement.
4.15 Exercise Procedures. The form of Notice of Exercise included in the Warrants set forth the totality of the procedures required of the Purchasers in order to exercise the Warrants. No additional legal opinion, other information or instructions shall be required of the Purchasers to exercise their Warrants. Without limiting the preceding sentences, no ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise form be required in order to exercise the Warrants. The Company shall honor exercises of the Warrants and shall deliver Warrant Shares in accordance with the terms, conditions and time periods set forth in the Transaction Documents.
4.16 Lock-Up Agreements. The Company shall not amend, modify, waive or terminate any provision of any of the Lock-Up Agreements (or any substantially similar lock-up agreements signed by transferees of the initial parties to the Lock-Up Agreements) except to extend the term of the lock-up period and shall enforce the provisions of each Lock-Up Agreement (or any substantially similar lock-up agreements signed by transferees of the initial parties to the Lock-Up Agreements) in accordance with its terms. If any party to a Lock-Up Agreement (or any substantially similar lock-up agreements signed by transferees of the initial parties to the Lock-Up Agreements) breaches any provision of such agreement, the Company shall promptly use its best efforts to seek specific performance of the terms of such agreement.
31
ARTICLE V.
MISCELLANEOUS
5.1 Termination. This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder only and without any effect whatsoever on the obligations between the Company and the other Purchasers, by written notice to the other parties, if the Closing has not been consummated on or before the fifth (5th) Trading Day following the date hereof; provided, however, that no such termination will affect the right of any party to sue for any breach by any other party (or parties).
5.2 Fees and Expenses. Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall pay all Transfer Agent fees (including, without limitation, any fees required for same-day processing of any instruction letter delivered by the Company and any exercise notice delivered by a Purchaser), stamp taxes and other taxes and duties levied in connection with the delivery of any Securities to the Purchasers.
5.3 Entire Agreement. The Transaction Documents contain the entire understanding of the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.
5.4 Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of: (a) the time of transmission, if such notice or communication is delivered via email attachment at the email address as set forth on the signature pages attached hereto at or prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the time of transmission, if such notice or communication is delivered via email attachment at the email address as set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second (2nd) Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as set forth on the signature pages attached hereto. To the extent that any notice provided pursuant to any Transaction Document constitutes, or contains, material, non-public information regarding the Company or any Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K.
32
5.5 Amendments; Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in the case of an amendment, by the Company and Purchasers which purchased at least 50.1% in interest of the Shares and Pre-Funded Warrants based on the initial Subscription Amounts hereunder (or, prior to the Closing, the Company and each Purchaser) or, in the case of a waiver, by the party against whom enforcement of any such waived provision is sought, provided that if any amendment, modification or waiver disproportionately and adversely impacts a Purchaser (or multiple Purchasers), the consent of such disproportionately impacted Purchaser (or multiple Purchasers) shall also be required. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right. Any proposed amendment or waiver that disproportionately, materially and adversely affects the rights and obligations of any Purchaser relative to the comparable rights and obligations of the other Purchasers shall require the prior written consent of such adversely affected Purchaser. Any amendment effected in accordance with this Section 5.5 shall be binding upon each Purchaser and holder of Securities and the Company. Notwithstanding the foregoing or anything else herein to the contrary, no amendment, modification, alteration, change or waiver of Sections 2.2(a)(ii), 3.1, 3.2 or 5.8 shall be valid without the prior written consent of the Placement Agent and the Capital Markets Advisor, which consent may be granted or withheld in the sole discretion of the Placement Agent or the Capital Markets Advisor.
5.6 Headings. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.
5.7 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of each Purchaser (other than by merger). Any Purchaser may assign any or all of its rights under this Agreement to any Person to whom such Purchaser assigns or transfers any Securities, provided that such transferee agrees in writing to be bound, with respect to the transferred Securities, by the provisions of the Transaction Documents that apply to the “Purchasers.”
5.8 No Third-Party Beneficiaries. The Placement Agent and the Capital Markets Advisor shall be third-party beneficiaries of Sections 2.2(a)(ii), 3.1, 3.2 and 5.5. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as otherwise set forth in Section 4.8 and this Section 5.8.
33
5.9 Governing Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal Proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any Action or Proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such Action or Proceeding is improper or is an inconvenient venue for such Proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such Action or Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If any party shall commence an Action or Proceeding to enforce any provisions of the Transaction Documents, then, in addition to the obligations of the Company under Section 4.8, the prevailing party in such Action or Proceeding shall be reimbursed by the non-prevailing party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Action or Proceeding.
5.10 Survival. The representations and warranties contained herein shall survive the Closing and the delivery of the Securities.
5.11 Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to each other party, it being understood that the parties need not sign the same counterpart. In the event that any signature is delivered by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such “.pdf” signature page were an original thereof.
5.12 Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.
5.13 Rescission and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) any of the other Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction Document and the Company does not timely perform its related obligations within the periods therein provided, then such Purchaser may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights; provided, however, that, in the case of a rescission of an exercise of a Warrant, the applicable Purchaser shall be required to return any shares of Common Stock subject to any such rescinded exercise notice concurrently with the return to such Purchaser of the aggregate exercise price paid to the Company for such shares and the restoration of such Purchaser’s right to acquire such shares pursuant to such Purchaser’s Warrant (including, issuance of a replacement warrant certificate evidencing such restored right).
34
5.14 Replacement of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation), or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs (including customary indemnity) associated with the issuance of such replacement Securities.
5.15 Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Purchasers and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents and hereby agree to waive and not to assert in any Action for specific performance of any such obligation the defense that a remedy at law would be adequate.
5.16 Payment Set Aside. To the extent that the Company makes a payment or payments to any Purchaser pursuant to any Transaction Document or a Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other Person under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.
5.17 Independent Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under any Transaction Document are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance or non-performance of the obligations of any other Purchaser under any Transaction Document. Nothing contained herein or in any other Transaction Document, and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents. Each Purchaser shall be entitled to independently protect and enforce its rights including, without limitation, the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Purchaser to be joined as an additional party in any Proceeding for such purpose. Each Purchaser has been represented by its own separate legal counsel in its review and negotiation of the Transaction Documents. For reasons of administrative convenience only, each Purchaser and its respective counsel have chosen to communicate with the Company through Sullivan. Sullivan does not represent any of the Purchasers and only represents the Placement Agent. The Company has elected to provide all Purchasers with the same terms and Transaction Documents for the convenience of the Company and not because it was required or requested to do so by any of the Purchasers. It is expressly understood and agreed that each provision contained in this Agreement and in each other Transaction Document is between the Company and a Purchaser, solely, and not between the Company and the Purchasers collectively and not between and among the Purchasers.
35
5.18 Liquidated Damages. The Company’s obligations to pay any partial liquidated damages or other amounts owing under the Transaction Documents is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated damages and other amounts have been paid notwithstanding the fact that the instrument or security pursuant to which such partial liquidated damages or other amounts are due and payable shall have been canceled.
5.19 Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.
5.20 Construction. The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and every reference to share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement.
5.21 WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.
(Signature Pages Follow)
36
IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.
| CLEANCORE SOLUTIONS, INC. | Address for Notice: | |||
| By: | /s/ Tyler Hassen | 5718 Westheimer Road, Suite 1000 | ||
| Name: | Tyler Hassen | Houston, Texas 77057 | ||
| Title: | Chief Executive Officer | Attn: Tyler Hassan | ||
| E-Mail: tyler@cleancoresol.com | ||||
| With a copy to (which shall not constitute notice): | |
|
Lucosky Brookman LLP, 101 Wood Avenue South Woodbridge, NJ 08830 Attn: Joseph Lucosky and Scott Linsky E-mail: jlucosky@lucbro.com and slinsky@lucbro.com |
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOR PURCHASER FOLLOWS]
37
IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.
Name of Purchaser: House of Doge (U.S.) Inc.
Signature of Authorized Signatory of Purchaser: /s/ Marco Margiotta
Name of Authorized Signatory: Marco Margiotta
Title of Authorized Signatory: Chief Executive Officer
Email Address of Authorized Signatory: marco@houseofdoge.com with cc: charles@houseofdoge.com
Address for Notice to Purchaser:
House of Doge (U.S.) Inc.
261 NE 61st Street
Miami, Florida 33137
USA
Address for Delivery of Securities to Purchaser (if not same as address for notice):
Subscription Amount: $5,500,000
Input Purchaser DTC Account Information Here:
If no DTC Account Information is specified, settlement will occur via DRS book-entry.
Shares: 11,054,303
Pre-Funded Warrant Shares: 10,945,697 Beneficial Ownership Blocker ☒ 4.99% or ☐ 9.99%
EIN Number: 33-3934104
| ☐ | Notwithstanding anything contained in this Agreement to the contrary, by checking this box (i) the obligations of the above-signed to purchase the securities set forth in this Agreement to be purchased from the Company by the above-signed, and the obligations of the Company to sell such securities to the above-signed, shall be unconditional and all conditions to Closing shall be disregarded, (ii) the Closing shall occur on the first (1st) Trading Day following the date of this Agreement and (iii) any condition to Closing contemplated by this Agreement (but prior to being disregarded by clause (i) above) that required delivery by the Company or the above-signed of any agreement, instrument, certificate or the like or purchase price (as applicable) shall no longer be a condition and shall instead be an unconditional obligation of the Company or the above-signed (as applicable) to deliver such agreement, instrument, certificate or the like or purchase price (as applicable) to such other party on the Closing Date. |
[SIGNATURE PAGES CONTINUE]
38
Exhibit 10.4
SECURED SHORT TERM DEMAND NOTE
UP TO USD $5,500,000.00
August 12, 2026
FOR VALUE RECEIVED, HOUSE OF DOGE (U.S.) INC., a corporation formed pursuant to the laws of the State of Texas (“Borrower”), at 261 NE 61st Street Miami, Florida 33137, promises to pay to the order of GARRINGTON FINANCIAL CORP., a corporation formed pursuant to the laws of the State of Texas (“Lender”), at 921 W. New Hope Drive, Suite 702 Texas 78613 or at such other place as Lender may from time to time in writing designate, the principal sum up to, in Lender’s sole discretion, FIVE MILLION FIVE HUNDRED THOUSAND 00/100 UNITED STATES DOLLARS ($5,500,000.00), plus all interest due and payable thereon and such other amounts as provided below. All references to dollar amounts shall mean such amounts in United States Dollars.
1. Purpose. The proceeds of this Note are being advanced for the sole purpose of funding an investment in the best-efforts public offering of common stock (or pre-funded warrants to purchase shares of common stock in lieu thereof) of CleanCore Solutions, Inc. (NYSE American: ZONE) announced on August 10, 2026 (the “Offering”). All securities acquired in the Offering, together with all shares of common stock issuable upon exercise of any pre-funded warrants acquired in the Offering, and all proceeds and products of the foregoing (collectively, the “Offering Securities”), shall be pledged to Lender as Collateral in accordance with Section 7.1. Borrower shall not apply the proceeds of this Note for any other purpose without Lender’s prior written consent. If such consent is not granted the Borrower shall return the funds to the Lender immediately upon request. In addition, if the Offering is not consummated, if Borrower’s subscription in the Offering is not accepted in full, or if for any other reason any portion of the proceeds of any advance under this Note is not applied to the purchase of securities in the Offering, Borrower shall return to Lender, by wire transfer of immediately available funds and without demand, notice, deduction or set-off, an amount equal to all such unapplied proceeds together with all interest accrued thereon, not later than one (1) business day after Borrower becomes aware that such proceeds will not be so applied. Amounts so returned shall be applied to the Obligations in accordance with Section 4.1, provided that the Commitment Fee in respect of the applicable advance shall remain fully earned and non-refundable in accordance with Section 2.3. Borrower shall, and shall cause each holder of record thereof to, hold all Offering Securities in a segregated securities account maintained with a securities intermediary acceptable to Lender and subject to a control agreement in favor of Lender, and shall not commingle the Offering Securities with the shares of Class B common stock of CleanCore Solutions, Inc. acquired prior to the date of this Note, with any other securities of CleanCore Solutions, Inc., or with any other assets of Borrower or any Guarantor. Failure to return any amounts required to be returned under this Section in full when due, or any breach of the segregation obligations in this Section, shall constitute an immediate Event of Default, without notice, grace or cure period.
| 2. | Payment of Interest. |
2.1 Borrower shall pay interest on the outstanding principal amount of this Note to Lender until all principal, indebtedness, liabilities, fees, costs, expenses and obligations payable to Lender pursuant to the terms of this Note (collectively, the “Obligations”) have been finally and indefeasibly paid in cash to Lender in full. Interest shall be payable ON DEMAND, and in the absence of Lender’s demand, interest shall accrue daily on the daily unpaid principal amount of this Note, and Borrower shall pay interest to Lender monthly in arrears commencing on September 1, 2026 and on the first business day of each calendar month thereafter. The outstanding principal balance of this Note shall bear interest at a rate equal to twelve percent (12.0%) per annum. If any portion of the Obligations remain unpaid after the Maturity Date, or after the date this Note is accelerated or Lender has demanded repayment of this Note pursuant to the terms of this Note or any other Loan Document, the outstanding principal balance of this Note shall bear interest at a rate equal to seventeen and one-half percent (17.5%) per annum until all Obligations have been finally and indefeasibly paid in cash to Lender in full.
2.2 Notwithstanding anything to the contrary in this Note, in no event shall any interest paid to Lender under this Note exceed an amount that would cause the interest rate on this Note to exceed the maximum rate permitted by applicable law. Any amount of interest paid to Lender that is finally and irrevocably determined by a court of competent jurisdiction to exceed the maximum interest payable on this Note under applicable law shall be, at Lender’s sole discretion, applied to the outstanding principal amount of this Note, any fees, expenses or other amounts payable hereunder, or returned by Lender to Borrower promptly thereafter.
2.3 Commitment Fee. In consideration of Lender making the credit accommodation evidenced by this Note available to Borrower, Borrower shall pay to Lender a commitment fee equal to two percent (2.0%) of the aggregate principal amount advanced under this Note (the “Commitment Fee”). The Commitment Fee shall be fully earned and non-refundable upon the making of each advance, irrespective of any prepayment, demand or acceleration, and shall be capitalized and added to the outstanding principal amount of this Note on the date of the applicable advance, whereupon it shall bear interest in accordance with Section 2.1. The Commitment Fee shall be due and payable in full on the Maturity Date or such earlier date on which the Obligations become due, whether by demand, acceleration or otherwise. The Commitment Fee constitutes part of the Obligations, is secured by the Collateral and is subject to Section 2.2.
| 3. | Repayment of Principal. |
3.1 Bullet Payment at Maturity. Borrower agrees to repay the principal amount of this Note to Lender in one (1) installment equal to the then-outstanding and unpaid principal amount, together with accrued and unpaid interest of this Note on the earliest to occur of (a) February 12, 2027; or (b) the date Lender demands repayment of the principal amount of this Note pursuant to Section 9.1(a) (the earliest of such dates the “Maturity Date”).
Page 1
Garrington Financial Corp.-House of Doge 2026 Secured Short Term Demand Note
3.2 Monthly Repayment Milestones. Notwithstanding Section 3.1, Borrower shall repay principal in monthly instalments of Six Hundred Fifty Thousand United States Dollars ($650,000.00) each, payable on September 30, 2026 and on the last business day of each calendar month thereafter to and including January 31, 2027 (each, a “Milestone Payment”), and the entire then-outstanding balance of the Obligations, including all remaining principal, the capitalized Commitment Fee and all accrued and unpaid interest, shall be due and payable in full on the Maturity Date. If any such date is not a business day, the Milestone Payment shall be due on the immediately preceding business day. Notwithstanding Section 4.1, each Milestone Payment shall be applied solely to the outstanding and unpaid principal balance of this Note, and accrued and unpaid interest, fees and expenses shall be payable by Borrower in addition to, and not out of, each Milestone Payment. Amounts remitted to Lender under Section 3.3, and any voluntary prepayment under Section 5, shall, to the extent applied to principal, be credited against the Milestone Payments next coming due in direct order of maturity. Nothing in this Section 3.2 limits Lender’s right to demand repayment of this Note at any time or Lender’s right, following demand, to apply funds received in such order and amounts as Lender determines in its sole discretion pursuant to Section 4.2. Failure to pay any Milestone Payment in full when due shall constitute an immediate Event of Default, without notice, grace or cure period.
3.3 Mandatory Disposition of Offering Securities; Application of Proceeds. For so long as any Obligations remain outstanding, on each Trading Day either on or the day immediately following a Trading Day on which the VWAP was equal to or greater than $0.30 per share, Borrower shall, and shall cause each holder of record of the Offering Securities to, sell Offering Securities in the open market at prevailing market prices in an aggregate number not less than the Daily Sale Amount. For purposes of this Section 3.3, “VWAP” means, for any Trading Day, the daily volume weighted average price per share of the common stock of CleanCore Solutions, Inc. on the NYSE American (or such other principal securities exchange or market on which such common stock is then listed or quoted) during regular trading hours, as reported by Bloomberg L.P.; “Trading Day” means any day on which such exchange or market is open for regular trading; and “Daily Sale Amount” means the lesser of the number of Offering Securities then held by all holders of record thereof and eight percent (8%) of the composite trading volume of such common stock either on the day or on the day immediately preceding Trading Day. The net cash proceeds of each such sale, after deduction of brokerage commissions and transfer taxes actually incurred, shall be remitted to Lender within one (1) business day following settlement and applied to the Obligations in accordance with Section 4.1, without penalty or premium and notwithstanding Section 5. Sales effected in compliance with this Section 3.3 are expressly permitted notwithstanding Section 7.5(d) and the disposition covenants of the Borrower and the Guarantors in Section 8, and no consent of Lender shall be required therefor. The obligations under this Section 3.3 are subject to compliance with applicable securities laws, including Rule 144 under the Securities Act of 1933 and any applicable volume, manner-of-sale and current public information requirements, any lock-up, leak-out or similar agreement entered into in connection with the Offering and disclosed to Lender in writing prior to the date of this Note, and any prohibition on trading while in possession of material non-public information; provided that Borrower shall, and shall cause each holder of record to, use commercially reasonable efforts to obtain any waiver, consent, legal opinion or transfer agent instruction necessary to permit such sales, and shall not enter into any agreement after the date of this Note that would restrict such sales. Lender may, by written notice to Borrower, suspend or waive the obligations under this Section 3.3 in whole or in part at any time, and no such suspension or waiver shall constitute a waiver of any subsequent obligation under this Section 3.3. Any failure to effect a required sale, or to remit proceeds when due, shall constitute an immediate Event of Default.
4. Crediting of Payments. All repayments or prepayments of principal, all payments of interest and all payments of fees, costs and expenses payable in connection with this Note shall be made by Borrower, or credited to the account of Borrower by Lender, in following order as follows:
4.1 Prior to Lender’s demand for payment, all funds credited to the repayment of the Obligations will be applied in the following order:
| (a) | To unpaid fees and expenses; |
| (b) | To unpaid interest; |
| (c) | To the outstanding and unpaid principal balance of this Note, whether or not then due and payable. |
4.2 Following Lender’s demand for payment, Lender shall credit funds received to the repayment of the Obligations in such order and in such amounts as Lender determines in Lender’s sole discretion.
4.3 All funds credited to the payment of the Obligations are conditional upon final payment to Lender in cash or solvent credits of the items giving rise to such funds. If any item credited to the payment of the Obligations is not paid to Lender or payment thereof is rescinded or required to be returned by Lender, the amount of any credit given for such item shall be charged to the balance of the Obligations whether or not the item is returned.
5. Prepayments; Liquidated Damages. Borrower may prepay the principal amount of this Note, in whole or in part, plus all interest accrued and owing with respect to such prepayment of principal, at any time and from time to time without penalty or premium.
6. Guaranty
6.1 Guaranty of the Guaranteed Obligations. The Guarantors hereby, jointly and severally, irrevocably, absolutely and unconditionally agree that upon the occurrence of an event of default of the terms of this Note, the Guarantors shall promptly pay to Lender and perform the Guaranteed Obligations in full. All amounts payable by the Guarantors hereunder will be paid to the Lender as directed in writing by the Lender. Any amounts payable by the Guarantors under this Note which are not paid forthwith upon demand thereof by the Lender will bear interest from the date of such demand at the highest applicable rate or rates permitted by applicable law.
Page 2
Garrington Financial Corp.-House of Doge 2026 Secured Short Term Demand Note
6.2 Nature of Guaranty. The guaranty set out in Section 6.1 is a guaranty of payment and performance and not of collection. The Lender may enforce the terms and provisions of the guaranty set out in Section 6.1 without being required to, and the Guarantors hereby waive any and all of the Guarantors’ rights, if any, to require that the Lender (a) bring any action first against the Borrower or any other person, (b) enforce or foreclose upon, any Security Interest or Lien granted to Lender by Borrower or any Lien, charge, mortgage, pledge, Security Interest or other encumbrance granted to the Lender by any other person (including the Guarantors) in any property of such person that secures payment or performance of the Guaranteed Obligations, (c) sell, lease, license or otherwise dispose of any property or assets of any person (including the Guarantors) securing or acting as collateral for the Guaranteed Obligations, or (d) resort to any security or to any balance of any deposit account or credit on the books of the Lender in favor of the Borrower or of any other person (including the Guarantors).
6.3 Guarantors Obligations Unconditional. This Section 6 and the Guarantors’ liabilities and obligations to the Lender set forth in this Section 6 shall remain in full force and effect until the Guaranteed Obligations are finally and indefeasibly paid to the Lender in cash and performed in full. Without limiting in any way the foregoing, Guarantors’ liabilities and obligations provided in this Section 6 shall not be released, discharged, diminished, limited or otherwise affected, modified or impaired, by (and the Guarantors hereby waives, to the fullest extent permitted by applicable law) any state of facts or the happening of any event, occurrence or condition, or series of events, occurrences or conditions, including, without limitation, any of the following, whether or not with notice to or the consent of the Guarantors: (a) any extension, other indulgence, renewal, settlement, discharge, compromise, waiver, subordination or release in respect of the Guaranteed Obligations, any Collateral, Security Interest, Lien, person or otherwise; (b) any modification or amendment of or supplement to the Guaranteed Obligations, including any increase or decrease in the principal, the rates of interest or other amounts payable thereunder; (c) any release, nonperfection or invalidity of any direct or indirect Security Interest or Lien in the Collateral or any other property of any person to support payment of the Guaranteed Obligations; (d) any change in the existence, structure, constitution, name, objects, powers, business, control or ownership of the Lender, or any other person, or any insolvency, bankruptcy, reorganization or other similar proceeding affecting the Lender or any other person or its assets; (e) the existence of any claim, set-off or other rights which the Guarantors may have at any time against the Lender or any other person, whether in connection herewith or any unrelated transactions; (f) any invalidity, illegality or unenforceability relating to or against the Lender or any other person or any provision of applicable law or regulation purporting to prohibit the payment by the Borrower of the Guaranteed Obligations, in whole or in part, or the invalidity, irregularity, illegality or unenforceability of, or any defect in this Note, or any Lien, charge, mortgage, pledge, Security Interest or other Encumbrance granted to Lender in or to the Collateral; (g) any limitation, postponement, prohibition, subordination or other restriction on the rights of the Lender to payment of the Guaranteed Obligations, in whole or in part; (h) any release, substitution or addition of any cosigner, endorser or other guarantor of the Guaranteed Obligations; (i) any defense arising by reason of any failure of the Lender to make any presentment, demand for performance, notice of nonperformance, protest, and any other notice, including notice of all of the following: acceptance of this Note, partial payment or non-payment of all or any part of the Guaranteed Obligations and the existence, creation, or incurring of new or additional Guaranteed Obligations; (j) any defense arising by reason of any failure of the Lender to proceed against Borrower or any other person, to proceed against, apply or exhaust any Security Interest, Lien, Collateral, or property of any person securing the Borrower held by the Lender, to proceed against, apply or exhaust any Security Interest or Lien held by the Lender to secure the payment of the Guaranteed Obligations, or to pursue any other remedy in the power of the Lender whatsoever; (k) any applicable law which provides that the obligation of a guarantor must neither be larger in amount nor in other respects more burdensome than that of the principal obligation or which reduces a guarantor's obligation in proportion to the principal obligation; (l) any defense arising by reason of any incapacity, lack of authority, or other defense of the Borrower or any other person, or by reason of any limitation, postponement, prohibition on the Lender’s right to payment of the Guaranteed Obligations or any part thereof, or by reason of the cessation from any cause whatsoever of the liability of the Borrower or any other person with respect to all or any part of the Guaranteed Obligations, or by reason of any act or omission of the Lender or others which directly or indirectly results in the discharge or release of the Borrower or any other person or all or any part of the Guaranteed Obligations or any Collateral, property, security or guarantee therefor, whether by contract, operation of applicable law or otherwise; (m) any defense arising by reason of any failure by the Lender to obtain, perfect or maintain a perfected or prior (or any) Security interest in or Lien or Encumbrance upon any Collateral or upon any property of the Guarantors or any other person securing payment of the Guaranteed Obligations, or by reason of any interest of the Lender in any property, whether as owner thereof or the holder of a Security Interest therein or Lien or Encumbrance thereon, being invalidated, voided, declared fraudulent or preferential or otherwise set aside, or by reason of any impairment by the Lender of any right to recourse or Collateral; (n) any defense arising by reason of the failure of the Lender to marshal any assets; (o) any defense based upon any failure of Lender to give to the Borrower or the Guarantors notice of any sale or other disposition of any property securing any or all of the Guaranteed Obligations or any guarantee thereof, or any defect in any notice that may be given in connection with any sale or other disposition of any such property, or any failure of the Lender to comply with any provision of applicable law in enforcing any Security Interest in or Lien upon any such property, including any failure by Lender to dispose of any such property in a commercially reasonable manner; (p) any dealing whatsoever with the Borrower or other person or any security, whether negligently or not, or any failure to do so; (q) any defense based upon or arising out of any bankruptcy, insolvency, reorganization, moratorium, arrangement, readjustment of debt, liquidation or dissolution proceeding commenced by or against the Borrower or any other person, including any discharge of, or bar against collecting, any of the Guaranteed Obligations, in or as a result of any such proceeding; (r) the default or failure of the Guarantors to fully perform any agreement, covenant or obligation set forth in this Section 6.3; (s) any event or action that would, in the absence of this Section 6.3, result in the release or discharge of the Guarantors from the performance or observance of any obligation, covenant or agreement contained in this Note (other than payment to the Lender and performance of the Guaranteed Obligations in full or a written release provided by the Lender to Guarantors); (t) any other circumstances which might otherwise constitute a legal or equitable discharge or defense of a surety or a guarantor; or (u) any other act or omission to act or delay of any kind by the Borrower, the Lender, or any other person or any other circumstance whatsoever, whether similar or dissimilar to the foregoing, which might, but for the provisions of this Section 6.3, constitute a legal or equitable discharge, limitation or reduction of the Guarantors’ obligations hereunder (other than the payment or extinguishment in full of all of the Guaranteed Obligations). The foregoing provisions apply (and the foregoing waivers will be effective) even if the effect of any action (or failure to take action) by the Lender is to destroy or diminish the Guarantors’ subrogation rights, the Guarantors’ right to proceed against the Borrower for reimbursement, the Guarantors’ right to recover contribution from any other guarantor or any other right or remedy of or available to the Guarantors.
Page 3
Garrington Financial Corp.-House of Doge 2026 Secured Short Term Demand Note
7. Collateral and Security Interest.
7.1 Grant of Security Interest in Collateral. As security for the final and indefeasible payment to Lender in cash of the Obligations in full, each of the Borrower and the Guarantors hereby pledge to Lender, and grant to Lender a continuing general lien upon and Security Interest in and to the “Collateral” (as such term is defined below). The pledge, lien and Security Interest granted to Lender pursuant to this Note shall continue in full force and effect until all Obligations have been finally and indefeasibly paid to Lender in cash and performed in full. Any balances to the credit of Borrower in the possession of Lender, and any other property or assets of Borrower in the possession of Lender, shall be held by Lender as Collateral, and applied in whole or partial satisfaction of the Obligations when due, subject to the terms of this Note. Borrower and the Guarantors will execute and deliver to Lender security agreements, assignments (including, without limitation, assignments of specific Accounts), and other documents and instruments as Lender may at any time reasonably request to establish, evidence, attach, perfect, or protect any security interest, pledge, lien, charge, mortgage or other encumbrance granted to Lender pursuant to this Note or any other document between Lender, Borrower, and/or the Guarantors or instrument delivered to Lender in connection herewith. Borrower and the Guarantors shall cooperate with, and take such actions as required by, Lender in obtaining waivers or subordinations in favor of Lender as Lender may require from third parties having any interest in any Collateral and Borrower and Guarantors shall cooperate with, and take such actions as required by, Lender in obtaining “control” of Collateral consisting of Deposit Accounts, electronic Chattel Paper, Investment Property, or Letter-Of-Credit Rights as provided in Sections 9-104 through 9-107, inclusive, of the UCC. Borrower and the Guarantors authorize Lender to file all financing statements, and all continuations or amendments thereof, and deliver, with or without Borrower’s and/or Guarantors’ execution thereof, any Notice of Assignment to Borrower’s or the Guarantors’ Customers and Account Debtors as Lender determines in Lender’s sole discretion, to establish, evidence, attach, perfect or protect any security interest, pledge, lien, charge, mortgage or other encumbrance granted to Lender in the Collateral, and specifically acknowledges its authorization of Lender to have filed any such financing statements prior to the date of this Note. Borrower and the Guarantors agree that subject to Borrower’s rights under Section 9-509(d)(2) of the “UCC” (as such term is defined below), Borrower and the Guarantors are not and shall not be authorized to file any financing statement or amendment, termination or corrective statement with respect to any financing statement filed by Lender, or with respect to any continuation or amendment thereof, without the prior written consent of Lender, which may be granted or withheld in Lender’s sole discretion. Borrower and the Guarantors will perform any and all actions requested by Lender in Lender’s reasonable discretion to establish, attach, perfect or protect any security interest, pledge, lien, charge, mortgage or other encumbrance of Lender in Collateral, including without limitation, placing and maintaining signs, appointing custodians, maintaining stock Records and transferring Inventory to warehouses. In addition to all other rights and remedies granted to Lender pursuant to the terms of this Note, Lender shall possess all rights and remedies of a “Secured Party” (as such term is defined in the UCC) under and pursuant to the terms and provisions of the UCC and PPSA. Borrower acknowledges and agrees that the Offering Securities constitute Collateral, and hereby pledges the Offering Securities to Lender and grants to Lender a continuing lien upon and Security Interest in and to the Offering Securities, pursuant to and in accordance with this Section 7.1. As a condition precedent to, and in consideration of, Lender entering into this Note and advancing any funds hereunder, Borrower shall execute and deliver to Lender (i) a pledge agreement, and (ii) a control agreement and irrevocable power of attorney, in each case in form and substance satisfactory to Lender, with respect to the Offering Securities. Within ten (10) business days following the acquisition by Borrower or any Guarantor of any Investment Property, Securities Account, Deposit Account, Instrument or Controllable Electronic Record not in existence on the date of this Note, Borrower shall notify Lender in writing describing the same in reasonable detail and shall, together with the applicable Guarantor, execute and deliver to Lender such pledge agreements, control agreements, powers of attorney and other documents and instruments as Lender may reasonably request to perfect Lender's Security Interest therein by control.
Within five (5) business days following full repayment and satisfaction of the Obligations under this Note to Lender, the Lender shall take all necessary steps and actions to discharge, remove or unwind any pledge, lien, Security Interest, Encumbrance, mortgage and/or filing statements in connection therewith made against the Borrower and Guarantors pursuant to this Note.
7.2 Definitions. For purposes of this Note, the following terms shall have the following meanings:
(a) “Collateral” means all of Borrower’s and Guarantors’ right, title and interest in and to the following, wherever located and whether owned on the date of this Note or thereafter acquired, whether owned or held by Borrower, any of the Guarantors, or by any other Person in any manner for such Borrower’s and/or Guarantors’ account (and specifically includes all accessions to, substitutions for and all replacements, products and cash and non-cash proceeds of all of the following): (a) Accessions, Accounts (including without limitation all unearned premiums with respect to insurance policies insuring any of the Collateral and claims against any Person for loss of, damage to, or destruction of any or all of the Collateral), Certificates of Title, Chattel Paper, Commercial Tort Claims, Deposit Accounts, Documents, Equipment, Fixtures, General Intangibles, Goods, Health-care-insurance-receivables, Instruments, Inventory, Investment Property, Leases, Letter-of-Credit Rights, Money, Securities Accounts, Software and Supporting Obligations, Controllable Electronic Records, Controllable Accounts and Controllable Payment Intangibles, and all digital assets, cryptocurrency, virtual currency and tokens (together with all private keys, wallets, hosted accounts and access credentials relating thereto), (b) all books and records pertaining to any of the foregoing (including but not limited to all tangible books and records, and all recorded data of any kind or nature, regardless of the medium of recording, including, without limitation, writings, plans, specifications, schematics Customer lists, credit files, computer programs, printouts and other computer materials and records of Borrower and/or the Guarantors pertaining to any of the items or subject matter described herein), (c) all Proceeds and products of any of the foregoing, (d) all collateral security and guaranties given by any Person with respect to any of the foregoing, and (e) all property subject to any lien, Security Interest or Encumbrance in favor of Borrower and/or the Guarantors. For greater certainty, and without limiting the generality of the foregoing, the Collateral includes (i) the Offering Securities, being all securities issued or issuable in the Offering, together with all shares of common stock issuable upon exercise of any pre-funded warrants acquired in the Offering, in which Lender is granted a first-ranking Security Interest, and (ii) the Class B common stock of CleanCore Solutions, Inc. acquired by Dogecoin Ventures, Inc. prior to the date of this Note and included in the Pledged Securities, in which Lender is granted a Security Interest ranking second in priority to the existing first-ranking Security Interest therein, in each case in addition to, and not in limitation of, all other property described in this definition;
(b) “Guaranteed Obligations” means any and all indebtedness, liabilities and obligations, including without limitation, principal interests (including but not limited to, interest calculated at the default rate subject to an in accordance with this Note and post-petition interest in any proceeding under any bankruptcy law), late charges, fees (including damages) costs, expenses and other charges, and covenants, duties, and other obligations, owed or owing by the Borrower to the Lender under this Note
Page 4
Garrington Financial Corp.-House of Doge 2026 Secured Short Term Demand Note
(c) “Guarantors” means each of Dogecoin Ventures, Inc., The Official Dogecoin Treasury and Reserve Inc. and House of Doge Canada Inc.;
(d) “PPSA” means the Personal Property Security Act (Ontario), as amended, renamed or replaced and includes all regulations made under that legislation and, to the extent this Agreement is being enforced under the laws of the Province of Ontario, all defined terms herein given the meanings of such terms in the UCC, shall have the meanings ascribed thereto in the PPSA if so defined in the PPSA;
(e) “UCC” means the Uniform Commercial Code as in effect in the State of Texas as in effect on the date of this Agreement, and as may be amended or modified after the date of this Agreement; provided, however, in the event that, by reason of mandatory provisions of law, the perfection, the effect of perfection or nonperfection or priority of Lender’s Security Interest in any Collateral is governed by the Uniform Commercial Code as enacted and in effect in a jurisdiction other than the State of Texas, then the term “UCC” shall mean the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely for the purposes of the provisions hereof relating to the rights of Lender with respect to the collection of any Receivable or Account, or perfection, the effect of perfection or nonperfection or priority of Lender’s Security Interest in such Collateral; and
(f) Article 9 Definitions. The following terms have the same definitions as provided in Section 9-102 of Article 9 of the UCC, but for convenience in this Agreement such terms are capitalized: “Accession”; “Account”; “Account Debtor” (and for purposes of this Agreement, to the extent not included in the UCC definition of Account Debtor, the term “Account Debtor” includes all Persons obligated, directly or indirectly, on any account receivable); “As-extracted Collateral”; “Authenticate” (and all derivations thereof); “Certificate of Title”; “Chattel Paper”; “Commercial Tort Claim”; “Commodity Account”; “Commodity Intermediary”; “Consumer Transaction”; “Debtor”; “Deposit Account”; “Document”; “Electronic Chattel Paper”; “Encumbrance”; “Equipment”; “Financing Statement”; “Fixtures” (and the singular “Fixture” may be used in this Agreement”); “General Intangible” (and for purposes of this Agreement, to the extent not included in the UCC definition of General Intangible, the term “General Intangible” includes all patents, patent applications, trademarks, trademark applications, copyrights, copyright applications, proprietary and intellectual property rights, labels, trade secrets, trade names, rights of use of any name, advertising matter, registrations, licenses, software, franchises, Customer lists, tax refund claims, claims against carriers and shippers, guarantee claims, contracts rights, security deposits and rights to indemnification, and any property of a similar nature, all goodwill, and all rights, title and interests in and to all of the foregoing); “Goods”; “Governmental Unit”; “Health-care-insurance Receivable”; “Instrument”; “Inventory”; “Investment Property”; “Jurisdiction Of Organization”; “Letter-of-credit Right”; “Obligor”; “Payment Intangible”; “Person Related To”; “Proceeds” (as specifically defined in Section 9-102(a)(64) of the UCC); “Public Organic Record”; “Record” (and for purposes of this Agreement, to the extent not included in the UCC definition of Record, the term “Record” includes all recorded data of any kind or nature, regardless of the medium of recording, including, without limitation, writings, plans, specifications, schematics Customer lists, credit files, computer programs, printouts and other computer materials and records of a person, wherever located and whether in the custody of such Person or in the custody another Person for their benefit); “Registered Organization”; “Secondary Obligor”; “Secured Party”; “Security Agreement”; “Software”; “State”; and “Supporting Obligation”.
7.3 Security Interest. For purposes of this Agreement, the term “Security Interest” shall have the same meaning as the term “security interest” as defined in Section 1-201(b)(35) of the UCC and Section 2 of the PPSA.
7.4 Security Agreement. Borrower acknowledges and agrees that this Agreement shall constitute a “Security Agreement” for purposes of the UCC.
7.5 Interim Pledge of Pledged Securities. Pending the execution and delivery of the pledge agreement, control agreement and irrevocable power of attorney contemplated by Section 7.1, each of Dogecoin Ventures, Inc. and House of Doge (U.S.) Inc. (each, a “Pledgor”, jointly and severally) hereby pledges, assigns and transfers to Lender, and grants to Lender a continuing first-priority Security Interest in and to, all of such Pledgor’s right, title and interest in and to the securities described in Schedule “A”, together with all certificates, entitlements, dividends, distributions, substitutions, replacements, exercise and conversion rights and Proceeds thereof (collectively, the “Pledged Securities”). This Section 7.5 is intended to be self-executing and effective upon execution of this Note without any further act, filing or delivery, and shall remain in full force and effect until all Obligations have been finally and indefeasibly paid in cash in full; the subsequent execution of definitive pledge, control or account documentation shall supplement and not novate, release or otherwise impair the Security Interest granted under this Section 7.5. Each Pledgor represents and warrants that it is the sole legal and beneficial owner of the Pledged Securities recorded in its name, free and clear of all Encumbrances other than The Nordwand Foundation in its capacity as collateral agent on behalf of each of The Nordwand Foundation, Sky Ascent Financial Group Inc. and Spacely Enterprises, that no consent, approval or notice to any Person is required in connection with the pledge granted hereby that has not been obtained or given, and that the Pledged Securities are held in accounts as noted in Schedule A. No Pledgor shall sell, transfer, assign, pledge, hypothecate, lend, margin, grant an option over or otherwise encumber any Pledged Securities, or transfer any Pledged Securities to any other account, custodian or intermediary, in each case without Lender’s prior written consent, which may be granted or withheld in Lender’s sole discretion. For greater certainty, the Pledged Securities include (i) the Senior Unsecured Convertible Debentures of McQueen Labs Inc. described in Section 8.4(c), together with any shares issuable on conversion thereof, and (ii) the 2,210 Series F preferred shares of par value $1,000 per share of McQueen Labs Inc. described in Section 8.4(c), in each case as set out in Schedule “A”. Dogecoin Ventures, Inc. shall execute and deliver to Lender such pledge agreements, control agreements, powers of attorney and other documents as Lender may require to perfect Lender’s Security Interest in the securities described in the immediately preceding sentence, and shall not create, incur or permit to exist any further pledge, lien, Security Interest, hypothecation or other Encumbrance upon any of them. Within ten days following the date of this Note, each Pledgor shall (i) deliver to Lender all certificates or instruments evidencing certificated Pledged Securities, together with undated transfer powers executed in blank, and (ii) deliver to the issuer, transfer agent, broker or securities intermediary holding the Pledged Securities written notice of Lender’s Security Interest, in form and substance satisfactory to Lender, and use commercially reasonable efforts to procure such Person’s written acknowledgement thereof. Any breach of this Section 7.5 shall constitute an immediate Event of Default, without notice, grace or cure period.
Page 5
Garrington Financial Corp.-House of Doge 2026 Secured Short Term Demand Note
8. Representation, Warranties and Covenants:
8.1 Representations and Warranties of Borrower. As an inducement for Lender to extend the loan to Borrower represented by this Note, Borrower represents and warrants that the following statements are true and correct, and that the same will remain true and correct, and will comply with each covenant and other agreement of Borrower below, for so long as any of the Obligations or any other amount remains owing to Lender hereunder:
(a) Borrower is and always has been a corporation duly organized and existing under the laws of the State of Texas. Borrower is qualified to do business in every jurisdiction where the nature of its business requires it to be so qualified.
(b) The execution, delivery and performance of this Note and each of the other agreements, instruments and documents to be delivered by Borrower in connection with this Note (the “Loan Documents”), and the creation of all Security Interests, pledges, liens, charges, mortgages or other Encumbrances in favor of Lender pursuant to this Note and any other Loan Document (i) are within Borrower’s organizational power, (ii) have been duly authorized by all necessary or proper actions of or pertaining to Borrower (including the consent of directors, officers, managers, partners, shareholders and/or members, as applicable), (iii) are not in contravention of (A) any agreement or indenture to which Borrower is a party or by which Borrower is bound, or (B) Borrower’s certificate or articles of formation or operating agreement (“Charter Documents”), or (C) any provision of law, or (D) any order, writ, judgment, injunction, or decree of any court of competent jurisdiction binding on Borrower or its property, and (iv) do not require the consent or approval of any Governmental Unit or any other Person that has not been obtained, and each such consent or approval obtained by Borrower has been furnished to Lender prior to the date of this Note. Upon the execution and delivery thereof, this Note and each of the other Loan Documents shall constitute the legal, valid and binding obligation of Borrower, enforceable in accordance with its terms.
(c) Borrower has good and marketable title to the Collateral and is the sole owner thereof. None of the Collateral is subject to any prohibition against encumbering, granting a Security Interest in or to, pledging, hypothecating or assigning the same or requires notice or consent to any person in connection therewith. Upon the execution and delivery of this Note and the other Loan Documents and the filing of any UCC filings deemed necessary by Lender, Lender shall have a first-priority perfected Security Interest in the Collateral.
(d) Borrower is not in violation of any term or provision of its Charter Documents, and no event or condition or series of events or conditions has or have occurred or is or are continuing which constitutes or results in (or would constitute or result in, with the giving of notice, lapse of time or other condition) (i) a breach of, or a default under, Borrower’s Charter Documents or any agreement, undertaking or instrument to which Borrower is a party or by which it or any of the Collateral may be affected, or (ii) the imposition of any Security Interest, pledge, lien, charge, mortgage or other Encumbrance on any Collateral other than in favor of Lender.
8.2 Covenants of Borrower.
(a) Borrower will discharge all taxes, levies or assessments imposed upon it or incurred by it in the operation of its business as and when same become due; Borrower will not permit any lien, Security Interest or Encumbrance to be created upon the Collateral except for such liens, Security Interests or other Encumbrances which are secondary to the liens, Security Interests or Encumbrances of the Lender; Borrower will maintain such insurance covering Borrower’s business and/or Borrower’s property as is customary for businesses similar to the business of Borrower and, at the request of Lender; Borrower will notify Lender in writing prior to any change in Borrower’s place of business, or if Borrower has or acquires more than one place of business, or prior to any change in Borrower’s chief executive office, the office or offices where Borrower’s books and records concerning Accounts or accounts receivable are kept; and Borrower will notify Lender at least sixty (60) calendar days in advance of any proposed change of Borrower’s name, identity, legal entity or corporate structure.
(b) Borrower shall permit Lender and any authorized representatives designated by Lender, upon reasonable notice to Borrower and during Borrower’s normal business hours, to visit and inspect any of the properties of Borrower, including its financial and accounting records, and to make copies and take extracts therefrom, and to discuss its affairs, finances, and business with its officers at such times during normal business hours and as often as Lender requests. Lender may, at any time after Lender’s demand for payment, review, inspect and copy all records, files and books relating to the Collateral located at Borrower’s premises or otherwise under the control of Borrower.
(c) Borrower will not assign, transfer, sell, dispose of or otherwise hypothecate any Collateral to any other Person, or grant to any Person an option to acquire any Collateral, except for (i) obsolete, worn out or surplus property disposed of in the ordinary course of Borrower’s business as conducted on the date of this Note, (ii) Equipment replaced in the ordinary course of Borrower’s business as conducted on the date of this Note, (iii) Inventory sold in the ordinary course of Borrower’s business as conducted on the date of this Note or (iv) investments, in the normal course of business whereby fair market value is obtained in return for its sale or transfer in return as determined at the discretion of the Borrower’s board of directors (acting reasonably and in the best interest of the Borrower); provided that in no event shall clause (iv) permit the sale, transfer or other disposition of any Pledged Securities or Offering Securities; and provided further that the net proceeds of any disposition under this clause (iv) are promptly deposited into a Deposit Account or Securities Account over which Lender has control or applied in reduction of the Obligations.
(d) Borrower shall not sell, lease, transfer or otherwise dispose of all or substantially all of Borrower’s property or assets, or consolidate with or merge into or with any corporation or entity, or authorize or permit any Person not owning any equitable interests of Borrower on the date of this Note to own, directly or indirectly, equitable interests in Borrower having fifty percent (50.0%) or more (on a fully-diluted basis) of all interests entitled to vote, or otherwise manage the affairs of Borrower.
Page 6
Garrington Financial Corp.-House of Doge 2026 Secured Short Term Demand Note
(e) Borrower shall not, directly or indirectly, create, incur or guarantee, assume, or suffer to exist any Indebtedness, other than the Obligations, unless such Indebtedness is subordinate to the Obligations created herein. Similarly, the Borrower shall not permit any affiliate (including without limitation Dogecoin Ventures, Inc., The Official Dogecoin Treasury and Reserve Inc, and House of Doge Canada Inc.) to directly or indirectly, create, incur or guarantee, assume or suffer to exist any Indebtedness without prior written notice to, and consent from, Lender, such consent not to be unreasonably withheld. For purposes of this Note, “Indebtedness” of any Person means, without duplication (A) all indebtedness for borrowed money, (B) all obligations issued, undertaken or assumed as the deferred purchase price of property or services (including, without limitation, “capital leases” in accordance with GAAP) (other than trade payables entered into in the ordinary course of business), (C) all reimbursement or payment obligations with respect to letters of credit, surety bonds and other similar instruments, (D) all obligations evidenced by notes, bonds, notes or similar instruments whether convertible or not, including obligations so evidenced incurred in connection with the acquisition of property, assets or businesses, (E) all indebtedness created or arising under any conditional sale or other title retention agreement, or incurred as financing, in either case with respect to any property or assets acquired with the proceeds of such indebtedness (even though the rights and remedies of the seller or bank under such agreement in the event of default are limited to repossession or sale of such property), (F) all indebtedness referred to in clauses (A) through (E) above secured by (or for which the holder of such indebtedness has an existing right, contingent or otherwise, to be secured by) any mortgage, lien, pledge, charge, Security Interest or other Encumbrance upon or in any property or assets (including accounts and contract rights) owned by any Person, even though the Person which owns such assets or property has not assumed or become liable for the payment of such indebtedness, (G) all contingent obligations (including guarantees) in respect of Indebtedness or obligations of others of the kinds referred to in clauses (A) through (F) above; (H) banker’s acceptances; (I) the balance deferred and unpaid of the purchase price of any property or services due more than three months after such property is acquired or such services are completed, other than trade debt incurred in the ordinary course of business; and (J) obligations under convertible securities of Borrower. In addition, the term “Indebtedness” of Borrower includes (y) all Indebtedness of others secured by a mortgage, lien, pledge, charge, Security Interest or other Encumbrance on any assets of Borrower (whether or not such Indebtedness is assumed by Borrower or any of Borrower’s subsidiaries), and (z) to the extent not otherwise included, the guarantee by Borrower of any Indebtedness of any other Person.
8.3 Representations and Warranties of the Guarantors: As an inducement for Lender to extend the loan to Borrower represented by this Note, each of the Guarantors represent and warrant that the following statements are true and correct, and that the same will remain true and correct, and will comply with each covenant and other agreement of the Guarantors below, for so long as any of the Obligations or any other amount remains owing to Lender hereunder:
(a) Each of the Guarantors is and always has been a corporation duly organized and existing under the laws of the State of Texas, in the case of Dogecoin Ventures, Inc. and The Official Dogecoin Treasury and Reserve Inc., and the Province of Ontario, Canada in the case of House of Doge Canada Inc. Each of the Guarantors are qualified to do business in every jurisdiction where the nature of its business requires it to be so qualified.
(b) The execution, delivery and performance of this Note (including without limitation the guaranty set out in Section 6 of this Note) and each of the Loan Documents, and the creation of all Security Interests, pledges, liens, charges, mortgages or other Encumbrances in favor of Lender pursuant to this Note and any other Loan Document (i) are within the Guarantors’ organizational power, (ii) have been duly authorized by all necessary or proper actions of or pertaining to each of the Guarantors (including the consent of directors, officers, managers, partners, shareholders and/or members, as applicable), (iii) are not in contravention of (A) any agreement or indenture to which any Guarantor is a party or by which a Guarantor is bound, or (B) Guarantors’ Charter Documents, or (C) any provision of law, or (D) any order, writ, judgment, injunction, or decree of any court of competent jurisdiction binding on the Guarantors or their property, and (iv) do not require the consent or approval of any Governmental Unit or any other person that has not been obtained, and each such consent or approval obtained by the Guarantors has been furnished to Lender prior to the date of this Note. Upon the execution and delivery thereof, this Note and each of the other Loan Documents shall constitute the legal, valid and binding obligation of the Guarantors, enforceable in accordance with its terms.
(c) The Guarantors have good and marketable title to the Collateral and are the sole owners thereof. None of the Collateral is subject to any prohibition against encumbering, granting a Security Interest in or to, pledging, hypothecating or assigning the same or requires notice or consent to any person in connection therewith. Upon the execution and delivery of this Note and the other Loan Documents and the filing of any UCC or PPSA filings deemed necessary by Lender, Lender shall have a first-priority perfected Security Interest in the Collateral, other than in respect of the pre-funded warrants and shares described in Section 8.4(c)(i), in which Lender shall have a second-ranking perfected Security Interest.
(d) The Guarantors are not in violation of any term or provision of its Charter Documents, and no event or condition or series of events or conditions has or have occurred or is or are continuing which constitutes or results in (or would constitute or result in, with the giving of notice, lapse of time or other condition) (i) a breach of, or a default under, Guarantors’ Charter Documents or any agreement, undertaking or instrument to which a Guarantor is a party or by which it or any of the Collateral may be affected, or (ii) the imposition of any Security Interest, pledge, lien, charge, mortgage or other Encumbrance on any Collateral other than in favor of Lender.
8.4 Covenants of the Guarantors.
(a) The Guarantors will discharge all taxes, levies or assessments imposed upon them or incurred by them in the operation of its business as and when same become due; The Guarantors will not permit any lien, Security Interest or Encumbrance to be created upon the Collateral except for such liens, Security Interests or other Encumbrances which are secondary to the liens, Security Interests or Encumbrances of the Lender; the Guarantors will maintain such insurance covering Guarantors’ business and/or Guarantors’ property as is customary for businesses similar to the business of the Guarantors and, at the request of Lender; the Guarantors will notify Lender in writing prior to any change in Guarantors’ place of business, or if Guarantors of or acquire more than one place of business, or prior to any change in any Guarantor’s chief executive office, the office or offices where the Guarantors’ books and records concerning Accounts or accounts receivable are kept; and the Guarantors will notify Lender at least sixty (60) calendar days in advance of any proposed change of any Guarantor’s name, identity, legal entity or corporate structure.
(b) The Guarantors shall permit Lender and any authorized representatives designated by Lender, upon reasonable notice to the Guarantor and during Guarantors’ normal business hours, to visit and inspect any of the properties of the Guarantors, including its financial and accounting records, and to make copies and take extracts therefrom, and to discuss its affairs, finances, and business with its officers at such times during normal business hours and as often as Lender requests. Lender may, at any time after Lender’s demand for payment, review, inspect and copy all records, files and books relating to the Collateral located at the Guarantors’ premises or otherwise under the control of the Guarantors.
Page 7
Garrington Financial Corp.-House of Doge 2026 Secured Short Term Demand Note
(c) The Guarantors will not assign, transfer, sell, dispose of or otherwise hypothecate any Collateral to any other Person, or grant to any Person an option to acquire any Collateral, except for (i) obsolete, worn out or surplus property disposed of in the ordinary course of Guarantors’ business as conducted on the date of this Note, (ii) Equipment replaced in the ordinary course of Guarantors’ business as conducted on the date of this Note, (iii) Inventory sold in the ordinary course of Guarantors’ business as conducted on the date of this Note or (iv) investments, in the normal course of business whereby fair market value is obtained in return for its sale or transfer in return as determined at the discretion of the Guarantors’ board of directors (acting reasonably and in the best interest of the Borrower); provided that in no event shall clause (iv) permit the sale, transfer or other disposition of any Pledged Securities or Offering Securities; and provided further that the net proceeds of any disposition under this clause (iv) are promptly deposited into a Deposit Account or Securities Account over which Lender has control or applied in reduction of the Obligations. In addition to the foregoing, Dogecoin Ventures, Inc. hereby irrevocably agrees not to sell, transfer, pledge, lien or otherwise encumber the following equity interests, other than pursuant to the pledge in favour of Lender granted under Section 7:
| (i) | 9,968,500 Class B common stock of CleanCore Solutions, Inc. (NYSE: ZONE) acquired through an investment that closed on or about September 4, 2025. Notwithstanding the foregoing, Dogecoin Ventures, Inc. shall pledge Class B common stock of CleanCore Solutions, Inc., to Lender as Collateral, and shall execute and deliver to Lender such pledge agreements, control agreements and other documents as Lender may require to perfect its Security Interest therein. Borrower and the Guarantors acknowledge and agree that Lender’s Security Interest in such pre-funded warrants and shares shall rank second in priority to the existing first-ranking Security Interest therein held by The Nordwand Foundation in its capacity as collateral agent on behalf of each of The Nordwand Foundation, Sky Ascent Financial Group Inc. and Spacely Enterprises. |
| (ii) | 6,000,000 common shares issued by Stay Inc.; |
| (iii) | Those Senior Unsecured Convertible Debentures representing an aggregate principal amount of $1,656,943 as of June 30, 2026, and any shares convertible therefrom, issued by McQueen Labs Inc. on April 24, 2025 and June 30, 2025; |
| (iv) | 2,210 Series F preferred shares of par value $1,000 per share of McQueen Labs Inc. |
| (v) | all (approximately 43% as of the date hereof) equity ownership of LBK Triestina Holdings, LLC as set out in the Memorandum of Understanding date August 29, 2025 by and between Dogecoin Ventures, Inc. and LBK Triestina Holdings, LLC; |
| (vi) | all equity ownership (current and after-acquired) of Milano Hockey Club Societa’ Sportiva Dilettantistica S.R.L.; |
| (vii) | all equity ownership (current and after-acquired) of HC Sierre SA; and |
| (viii) | intellectual property rights, including specifically the trademark licensing rights granted to the Borrower related to “DOGECOIN” and “DOGE” pursuant to the Amended and Restated Trademark License Agreement dated May 7, 2025 (as amended) between the Borrower, Dogecoin Foundation, Inc. and MadeUpNumbers Ltd.; |
(d) Guarantors’ shall not sell, lease, transfer or otherwise dispose of all or substantially all of Guarantor’s property or assets, or consolidate with or merge into or with any corporation or entity, or authorize or permit any Person not owning an equitable interest of a Guarantor on the date of this Note to own, directly or indirectly, equitable interests in the Guarantors’ having fifty percent (50.0%) or more (on a fully-diluted basis) of all equitable interests entitled to vote, or otherwise manage the affairs of the Guarantors.
(e) The Guarantors shall not, directly or indirectly, create, incur or guarantee, assume, or suffer to exist any Indebtedness, other than the Guaranteed Obligations, unless such Indebtedness is subordinate to the Guaranteed Obligations created herein.
8.5 Financial Statements and Tax Returns. Borrower will deliver to Lender:
(a) Periodic Financial Statements and Tax Returns. Within ninety (90) calendar days after the close of each fiscal year of Borrower (i) a copy of reviewed annual financial statements of Borrower prepared by an independent certified public accountant in accordance with GAAP consisting of a balance sheet, statements of operations and retained earnings, statements of cash flow. If Borrower’s independent certified public accountant has prepared footnotes to accompany any such financial statements, Borrower shall deliver such footnotes to Lender contemporaneously with Borrower’s delivery of the associated financial statements to Lender, and (ii) copies of Borrower’s federal and state tax returns. In addition, Borrower will deliver to Lender, within fifteen (15) calendar days after the end of each calendar month financial information, operating or Collateral-related information as Lender may request, and in form acceptable by Lender, promptly and in any event within five (5) business days following Lender’s request.
(b) All financial statements delivered to Lender pursuant shall fairly present Borrower’s financial condition and results of operations as of the dates and for the periods covered, and shall not contain any material misstatements.
8.6 Indemnification of Lender. Borrower agrees to indemnify and hold all “Indemnified Persons” (as hereinafter defined) harmless against any breach by Borrower of any representation, warranty or covenant of Borrower contained in this Note, and against any claims or damages arising out of the manufacture, sale, possession or use of, or otherwise relating to, goods, or the performance of services, associated with or relating to Collateral hereunder. The term “Indemnified Persons” shall mean Lender and its officers, directors, members, managers, shareholders, employees, attorneys, representatives, agents, affiliates, successors and assigns. To the extent that Borrower’s undertaking to indemnify, pay and hold harmless Lender as set forth in this Section 8.6 may be unenforceable because it violates any law or public policy, Borrower shall contribute the maximum portion which it is permitted to pay and satisfy under applicable law to the payment and satisfaction of all matters referred to under this Section 8.6.
Page 8
Garrington Financial Corp.-House of Doge 2026 Secured Short Term Demand Note
8.7 Survival of Representations, Warranties and Covenants. All representations and warranties of Borrower contained in this Note shall be true, accurate and complete at the time of Borrower’s execution of this Note, and shall be true, accurate and complete on each date prior to the date that all Obligations have been finally and indefeasibly paid to Lender in cash and performed in full. Borrower shall comply with all covenants of Borrower contained in this Note until all Obligations have been finally and indefeasibly paid to Lender in cash and performed in full. Lender’s right to bring an action for breach of any such representation or warranty or violation of any covenant or to exercise any right or remedy under this Note based upon the breach of any such representation or warranty or violation of such covenant shall survive the execution, delivery and acceptance of this Note until the Obligations are finally and indefeasibly paid to Lender in cash and performed in full.
9. Remedies of Lender.
9.1 Rights and Remedies with Respect to the Obligations.
(a) Termination of Lending Obligations. Lender may in the event of default or breach of the terms of this Note by the Borrower, demand payment in full of all or any portion of the Obligations at any time, and upon such demand (i) terminate this Note and correspondingly terminate its obligations to otherwise lend to or extend credit to Borrower under this Note, and/or (ii) increase the amount of interest payable under this Note to the applicable default rate, and/or (iii) increase any or all fees payable to Borrower under this Note that may be increased following Lender’s demand for payment pursuant to the terms of this Note, and/or (iv) take all other and further actions and avail itself of any and all rights, powers, remedies and privileges available to Lender under this Note, under law or in equity. In addition, upon the occurrence of any Event of Default, including without limitation any Event of Default arising under Section 3.2, Section 3.3 or Section 7.5, all Obligations shall, at Lender’s election, become immediately due and payable without any requirement of demand, presentment, protest, notice of dishonour or further notice of any kind (each of which is hereby expressly waived by Borrower and the Guarantors), and Lender may immediately exercise all rights, powers, remedies and privileges under Section 9.2, under this Note and under applicable law.
(b) Obligations Immediately Due. Notwithstanding the provisions of Section 9.1(a) immediately above, if:
(i) Borrower shall (A) cease to be solvent, (B) make an assignment for the benefit of its creditors, (C) call a meeting of its creditors to obtain any general financial accommodation, (D) suspend business, or (E) commence any case under any provision of the Bankruptcy Code, or under any federal, state, local or other applicable law including provisions for reorganizations or liquidations;
(ii) (A) any case under any provision of the Bankruptcy Code, or under any under federal, state, local or other applicable law including provisions for reorganizations or liquidations, shall be commenced against Borrower, or (B) a receiver, trustee or equivalent officer under the Bankruptcy Code, or under any federal, state, local or other applicable law including provisions for reorganizations or liquidations, shall be appointed for Borrower or for all or any of the Collateral or for all or any of Borrower’s property; or
(iii) without notice, demand or other action by Lender (v) all of Borrower’s Obligations to Lender, including but not limited to, all outstanding and unpaid principal of this Note, interest due thereon, and all fees, costs and expenses payable with respect thereto, shall immediately become due and payable whether or not payable on demand prior to the occurrence of such event, and (w) all interest payable on the Obligations shall immediately increase to the applicable default rate, and (x) all fees payable to Borrower under this Note that may be increased following Lender’s demand for payment shall immediately increase to their applicable amount after occurrence of such event, (y) all obligations to lend to or extend credit to Borrower under this Note shall immediately terminate, and (z) Lender may take all other and further actions and avail itself of any and all rights, powers, remedies and privileges available to Lender under this Note, under law or in equity.
9.2 Rights and Remedies with Respect to Collateral. Without limiting any rights, powers, remedies or privileges Lender may have pursuant to this Note, under applicable law or otherwise, and in addition to all rights, powers, remedies and privileges granted to Lender as a Secured Party under the UCC and the PPSA, under applicable law or otherwise, upon the occurrence of any Event of Default or upon Lender’s demand for payment:
(a) Notification of Account Debtors. (i) Lender may, and without any notice to, consent of or any other action by Borrower or the Guarantors (such notice, consent or other action being expressly waived), notify Account Debtors of Lender’s security interest in and to Accounts and direct Account Debtors to make payment directly to Lender without notice to, consent of, or any other action by Borrower or the Guarantors, or (ii) Borrower and/or the Guarantors, at the request of Lender, shall notify Account Debtors of Lender’s security interest in Borrower’s Accounts and direct Account Debtors to make payment directly to Lender. Borrower and the Guarantors hereby authorizes Account Debtors to make payments directly to Lender and to rely on notice from Lender without further inquiry. Lender may on Borrower’s and/or Guarantors’ behalf endorse all items of payment received by Lender that are payable to Borrower and/or the Guarantors for the purposes described above.
(b) Collections; Modifications of Terms. Lender may but shall be under no obligation to: (i) notify all appropriate parties that the Collateral, or any part thereof, has been assigned to Lender; (ii) demand, sue for, collect and give receipts for and take all necessary or desirable steps to collect any Collateral or Proceeds in its or Borrower’s name, and apply any such collections against the Obligations in such amounts and in such order as Lender determines in Lender’s sole discretion; (iii) take control of any Collateral and any cash and non-cash Proceeds of any Collateral; (iv) enforce, compromise, extend, renew settle or discharge any rights or benefits of Borrower with respect to or in and to any Collateral, or deal with the Collateral as Lender may deem advisable; and (v) make any compromises, exchanges, substitutions or surrenders of Collateral Lender deems necessary or proper in its reasonable discretion, including without limitation, extending the time of payment, permitting payment in installments, or otherwise modifying the terms or rights relating to any of the Collateral, all of which may be effected without notice to, consent of, or any other action of Borrower and without otherwise discharging or affecting the Obligations, the Collateral or the security interests granted to Lender under this Agreement or any other Loan Document.
(c) Insurance. Lender may file proofs of loss and claim with respect to any of the Collateral with the appropriate insurer, and may endorse in its own and Borrower’s name any checks or drafts constituting Proceeds of insurance. Any Proceeds of insurance received by Lender may be applied by Lender against payment of all or any portion of the Obligations as Lender may elect in its reasonable discretion.
Page 9
Garrington Financial Corp.-House of Doge 2026 Secured Short Term Demand Note
(d) Possession and Assembly of Collateral. Lender may take possession of the Collateral and/or without removal render Borrower’s Equipment unusable. Upon Lender’s request, Borrower shall assemble the Collateral and make it available to Lender at a place or places to be designated by Lender that is reasonably convenient to Lender and Borrower.
(e) Set-off. Lender may, and without any notice to, consent of or any other action by Borrower (such notice, consent or other action being expressly waived), set-off or apply (i) any and all deposits (general or special, time or demand, provisional or final) at any time held by or for the account of Lender, and/or (ii) any Indebtedness at any time owing by Lender or any Affiliate of Lender or any participant in the Loans to or for the credit or the account of Borrower, to the repayment of the Obligations irrespective of whether any demand for payment of the Obligations has been made.
(f) Disposition of Collateral; Directed Sales. Upon the occurrence of any Event of Default, Lender may deliver written notice thereof to Borrower, and if such Event of Default has not been cured in full by 5:00 p.m. (Central time) on the first business day following delivery of such notice, Lender may thereafter, without any further notice to, consent of, demand upon or other action by Borrower or any Guarantor (each of which is hereby expressly waived to the fullest extent permitted by applicable law), (i) sell, transfer, assign, liquidate or otherwise dispose of all or any part of the Collateral, including without limitation the Offering Securities and the shares of Class B common stock of CleanCore Solutions, Inc. included in the Pledged Securities (collectively, the “CleanCore Shares”), in one or more transactions, at public or private sale, on any securities exchange, in the over-the-counter market or otherwise, for cash or on credit, at such prices and on such terms as Lender determines in its sole discretion, and/or (ii) deliver written notice (which may be given by e-mail) to Borrower directing the sale of all or any portion of the Collateral specified in such notice, whereupon Borrower and the Guarantors shall, and shall cause each holder of record, custodian, broker or securities intermediary in respect thereof to, effect such sale in the open market or otherwise as directed by Lender and remit the net proceeds thereof to Lender, in each case not later than one (1) business day following delivery of such notice. Lender shall apply the net proceeds of any such disposition to the Obligations in such order and amounts as Lender determines in its sole discretion. Borrower and the Guarantors shall promptly take all actions and deliver all instructions, transfer agent directions, broker authorizations, legal opinions, consents and other documents necessary or desirable to give effect to any sale directed under this Section, and any failure to comply with such a direction within such one (1) business day period shall constitute a further immediate Event of Default. Borrower and the Guarantors agree, pursuant to Section 9-603 of the UCC, that the notice periods provided in this Section constitute reasonable notification of disposition and are not manifestly unreasonable, and waive any longer notice period to the fullest extent permitted by applicable law. Borrower and the Guarantors further acknowledge that the Collateral consists in substantial part of securities subject to rapid and material fluctuations in market value, and agree, pursuant to Section 9-603 of the UCC, that it is not manifestly unreasonable for Lender to dispose of, or to direct the disposition of, such Collateral promptly and without regard to the effect of such disposition on the prevailing market price.
10. General Provisions.
10.1 Expenses; Taxes.
(a) Reimbursable Expenses. If, at any time or times subsequent to the date of this Note Lender employs counsel for advice or other representation, incurs legal fees or expenses, consulting fees or expenses, fees, costs or expenses of external professionals engaged by Lender, or other out-of-pocket costs or expenses in connection with: (i) the exercise of any right, power, remedy or privilege of Lender described in this Note or any other Loan Document; (ii) the negotiation and preparation of any amendment, modification or restatement of this Note or any other Loan Document; (iii) the administration of this Note or any other Loan Document and the transactions contemplated hereby and thereby; (iv) periodic field exams or audits and appraisals performed by Lender; (v) any litigation, contest, dispute, suit, proceeding or action (whether instituted by Lender, Borrower or any other Person) in any way relating to the Collateral, this Note, or any other Loan Document or Borrower’s business or affairs; (vi) the establishment, attachment, perfection or protection of any security interest or lien on the Collateral; (vii) any attempt to enforce any right, power, remedy or privilege of Lender against Borrower or any other Person who may be obligated to Lender by virtue of this Note or any other Loan Document including, without limitation, Account Debtors, including but not limited to, collection of all or any portion of the Obligations; or (viii) any attempt to inspect, verify, protect, preserve, restore, collect, sell, lease, license, liquidate or otherwise dispose of or realize upon the Collateral; then, in any such event, all reasonable attorneys’ fees arising from such services and all expenses, costs and charges of such counsel, all fees, costs, expenses and charges of consultants and professionals engaged by Lender, and all other costs and out-of-pocket expenses of Lender relating to any of the events or actions described above shall be payable by Borrower to Lender, and shall be additional Obligations under this Note secured by the Collateral, provided reasonable and valid third party receipts for the aforementioned costs and expenses incurred are provided to the Borrower by the Lender in connection thereof.
(b) Taxes. Additionally, if any tax, levy or charge (including any intangibles tax, stamp tax or recording tax) shall be imposed upon or payable by Lender in connection with the execution or delivery of this Note or any other Loan Document, or the creation of any of the Obligations under this Note, or the creation, perfection or priority of any lien or Security Interest granted to Lender (i) Borrower will pay (or will promptly reimburse Lender for the payment of) all such taxes, levies and charges including, but not limited to, any interest and penalties thereon, (ii) following receipt of notice from Lender regarding the claim for payment of, or imposition of, any such tax, levy or charge, with the consent of Lender, which consent may not be unreasonably withheld, conditioned or delayed, Borrower shall have the right, at its own cost and expense, to contest the imposition of such tax, levy or charge, and with the consent of the Lender, which consent may not be unreasonably withheld, conditioned or delayed, to compromise or settle such claim for such tax, levy or charge and pay the same following such compromise or settlement, and (iii) in any circumstance described in clause (i) or (ii) above, Borrower will indemnify, defend and hold Lender harmless from and against any liability in connection therewith.
(c) Survival. Borrower’s obligations under this Section 10.1 shall survive termination of the Loans and the termination of this Note.
Page 10
Garrington Financial Corp.-House of Doge 2026 Secured Short Term Demand Note
10.2 Governing Law; Jurisdiction; No Jury Trial. All questions concerning the construction, validity, enforcement and interpretation of this Note shall be governed by the internal laws of the State of Texas, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Texas or any other jurisdictions) that would cause the application of the laws of any jurisdiction other than the State of Texas. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN WILLIAMSON COUNTY, TEXAS FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN, AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT, THAT SUCH SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM OR THAT THE VENUE OF SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Note and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS NOTE OR ANY TRANSACTIONS CONTEMPLATED HEREBY.
10.3 Rights and Remedies Cumulative. Lender’s rights, remedies benefits and privileges under this Note and each other Loan Document shall be cumulative and not alternative or exclusive, irrespective of any other rights, remedies benefits and privileges that may be available to Lender under this Note or any other Loan Document, by operation of law or otherwise, and may be exercised by Lender at such time or times and in such order as Lender in Lender’s sole discretion may determine, and are for the sole benefit of Lender. Lender’s failure to exercise or delay in exercising any right or remedy shall not (a) preclude Lender from exercising such right or remedy thereafter, (b) preclude Lender from exercising any other right or remedy of Lender, or (c) result in liability to Lender or Lender’s affiliates or their respective members, managers, shareholders, directors, officers, partners, employees, consultants or agents.
10.4 Reinstatement.
10.4.1 Lender’s rights, powers, remedies, benefits and privileges under this Note and each other Loan Document, the covenants, liabilities and obligations of the Borrower set forth in this Note (including, but not limited to, the final and indefeasible payment of the Obligations of Borrower to Lender in cash and performance of the Obligations in full), and all Security Interests, liens, charges and other Encumbrances granted to Lender under this Note and each other Loan Document, shall continue to be effective, or be reinstated, as the case may be, if at any time any payment of the Obligations of Borrower to Lender hereunder or proceeds of any collection action or other enforcement action by Lender is subsequently invalidated, rescinded, declared to be fraudulent or preferential, set aside, recovered from, or disgorged by Lender, or is or are required to be returned, refunded, repaid or otherwise restored to Borrower, a trustee, receiver or any other Person by reason of any bankruptcy, reorganization, arrangement, composition or similar proceeding, or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, Borrower or any other Person, or for or with respect to any property of Borrower or any other Person, under any law (including, without limitation, any bankruptcy law, foreign, state or federal law, common law or equitable cause of action), or otherwise, all as though such payment had not been made.
10.4.2 Furthermore to the extent that Borrower or any other Person makes a payment or payments to Lender with respect to Obligations payable to Lender hereunder, or Lender enforces or forecloses on (as the case may be) any right, power, remedy, benefit, privilege, Security Interest, lien, charge or other Encumbrance, or exercises any right of setoff, granted to Lender under this Note or any other Loan Document, and such payment or payments or the proceeds of such enforcement or setoff or any part thereof are subsequently invalidated, rescinded, declared to be fraudulent or preferential, set aside, recovered from, or disgorged by Lender, or is or are required to be returned, refunded, repaid or otherwise restored to Borrower, a trustee, receiver or any other Person by reason of any bankruptcy, reorganization, arrangement, composition or similar proceeding, or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, Borrower or any other person, or for or with respect to any property of Borrower or any other person, under any law (including, without limitation, any bankruptcy law, foreign, state or federal law, common law or equitable cause of action), then, to the extent of such recovery, the Obligations or part thereof originally intended to be satisfied, or remaining unpaid, as applicable, and all rights, powers, remedies, benefits, privileges, Security Interests, liens, charges and other Encumbrances, granted to Lender under this Note, under any other Loan Document, and under any applicable law, shall be revived and continued in full force and effect (x) as if such payment or payments had not been made or such enforcement or setoff had not occurred, and/or (y) until such payment or payments have been paid to Lender in cash in full.
10.5 Successors and Assigns. This Note is entered into for the benefit of Lender and its successors and assigns and shall be binding upon the Borrower and its successors and assigns. Lender shall have the right, without the necessity of any consent, authorization or other action by Borrower, to sell, assign, securitize or grant participations in all or a portion of Lender’s interest in this Note and the other Loan Documents, and the transactions described herein and therein, to other financing parties and/or financial institutions of Lender’s choice and on such terms as are acceptable to Lender in Lender’s sole discretion. Borrower shall not assign, exchange or otherwise hypothecate any rights, liabilities or obligations under this Note, in whole or in part, without the prior written consent of Lender, which consent may be granted or withheld in Lender’s sole discretion, and any attempted assignment, exchange or hypothecation without Lender’s written consent shall be void and be of no effect.
10.6 Headings. The headings of this Note are for convenience of reference and shall not form part of, or affect the interpretation of, this Note.
10.7 Severability. If any provision of this Note shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Note in that jurisdiction or the validity or enforceability of any provision of this Note in any other jurisdiction.
Page 11
Garrington Financial Corp.-House of Doge 2026 Secured Short Term Demand Note
10.8 Notice. Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Note must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile (provided, confirmation of transmission is mechanically or electronically generated and kept on file by the sending party) or e-mail (provided, confirmation of receipt is verified by return email from the receiver or by other written means); or (iii) one business day after deposit with an overnight courier service, in each case properly addressed to the party to receive the same at the address, e-mail address and attention party set forth for such party under the heading “Notice Addresses” on the signature pages to this Note, or at such other address as such party may designate by written notice given in accordance with this Section 10.8.
10.9 Strict Performance. The failure or delay by Lender at any time to require Borrower’s strict compliance with or performance of any provision of this Note shall not waive, affect, impair or diminish any right of Lender thereafter to demand Borrower’s strict compliance with and performance of such provision. Any suspension or waiver by Lender of any matter by Lender shall not suspend, waive or affect any other matter before Lender, whether the same is prior or subsequent to such suspension or waiver and whether of the same or a different type. No failure or delay on the part of Lender in the exercise of any right, power, remedy, benefit or privilege of Lender hereunder or under any of the other Notes, documents or instruments delivered to Lender in connection herewith shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power, remedy, benefit or privilege preclude other or further exercise thereof or of any other right, power, remedy, benefit or privilege.
10.10 Construction of Note. The parties hereto agree that the terms, provisions and language of this Note were the result of negotiations between the parties, and, as a result, there shall be no presumption that any ambiguities in this Note shall be resolved against either party. Any controversy over the construction of this Note shall be decided without regard to events of authorship or negotiation.
10.11 Entire Note; Amendments; Lender’s Consent. This Note (including the Schedules and Exhibits hereto) constitutes the entire Note between Lender and Borrower with respect to the subject matter hereof, and supersedes all prior and contemporaneous Notes, understandings, inducements or conditions between Lender and Borrower, whether express or implied, oral or written, with respect to the subject matter hereof. The Schedules and Exhibits identified in this Note are incorporated herein by reference and made a part hereof. No amendment or waiver of any provision of this Note, nor consent to any departure by Borrower therefrom, shall in any event be effective unless the same shall be Authenticated by Lender in a record, and then such amendment, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.
[Remainder of page intentionally left blank]
[Signature page follows]
Page 12
Garrington Financial Corp.-House of Doge 2026 Secured Short Term Demand Note
IN WITNESS WHEREOF, the undersigned has executed this Note on the day and year first above written.
NOTICE ADDRESSES:
| If to Borrower or any Guarantor: | BORROWER: | |
| House of Doge (U.S.) Inc. | ||
| 261 NE 61st Street | HOUSE OF DOGE (U.S.) INC. | |
| Miami, Florida 33137 | ||
| USA | By: | /s/ Marco Margiotta |
| Attention: Marco Margiotta, Chief Executive Officer | Name: | Marco Margiotta |
| E-mail: marco@houseofdoge.com, with cc: | Title: | Chief Executive Officer |
| charles@houseofdoge.com and | ||
| legal@houseofdoge.com | GUARANTORS: | |
| DOGECOIN VENTURES, INC. | ||
| By: | /s/ Marco Margiotta | |
| Name: | Marco Margiotta | |
| Title: | Chief Executive Officer | |
| THE OFFICIAL DOGECOIN TREASURY AND RESERVE INC. | ||
| By: | /s/ Marco Margiotta | |
| Name: | Marco Margiotta | |
| Title: | Chief Executive Officer | |
| HOUSE OF DOGE CANADA INC. | ||
| By: | /s/ Marco Margiotta | |
| Name: | Marco Margiotta | |
| Title: | Chief Executive Officer | |
| If to Lender: | ACCEPTED BY LENDER: | |
| Garrington Financial Corp. | GARRINGTON FINANCIAL CORP. | |
| 921 West New Hope Drive, Suite 702 | ||
| Cedar Park, Texas 78613 | By: | /s/ Tammy Kemp |
| Attention: Tammy Kemp, President | Name: | Tammy Kemp |
| E-mail: tammy.kemp@garringtonco.com | Title: | President |
[House Of Doge Secured Short Term Demand Note Signature Page]
Page 13
Garrington Financial Corp.-House of Doge 2026 Secured Short Term Demand Note
SCHEDULE “A”
PLEDGED SECURITIES
The following securities constitute the Pledged Securities for purposes of Section 7.5 of the Note.
| Pledgor | Issuer | Class / description | Number of shares or units | Certificate or account no. | Custodian / intermediary |
| Dogecoin Ventures, Inc. | CleanCore Solutions, Inc. (NYSE: ZONE) | Class B common stock | 9,968,500 | acct #39549086 | Revere Securities LLC/Stonex |
| House of Doge (U.S.) Inc. (formerly House of Doge Inc.) | CleanCore Solutions, Inc. (NYSE: ZONE) |
Class B common stock (x2); Pre-funded warrants Warrants |
11,054,303; 10,945,697; 22,000,000 |
acct #85620367 | Revere Securities LLC/Stonex |
| Dogecoin Ventures, Inc. | McQueen Labs Inc. | Senior Unsecured Convertible Debentures issued April 24, 2025 and June 30, 2025 (and any shares convertible therefrom); Series F preferred shares, par value $1,000 per share | $1,656,943 aggregate principal (as of June 30, 2026); 2,210 Series F preferred shares | Book Entry | N/A |
| Dogecoin Ventures, Inc. | Stay Inc. | Common shares | 6,000,000 | DRS (Acct No: SH2604011265 | N/A |
Page 14
Garrington Financial Corp.-House of Doge 2026 Secured Short Term Demand Note
Exhibit 31.1
SECTION 302 CERTIFICATION
I, Marco Margiotta, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q for the period ended on June 30, 2026, of House of Doge Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on House of Doge Inc.’s most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (of persons performing the equivalent functions): |
| a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer’s internal control over financial reporting. |
| Date: August 14, 2026 | By: | /s/ Marco Margiotta |
| Marco Margiotta | ||
| Chief Executive Officer |
Exhibit 31.2
SECTION 302 CERTIFICATION
I, Charles Park, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q for the period ended on June 30, 2026, of House of Doge Inc. |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on House of Doge Inc.’s most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (of persons performing the equivalent functions): |
| a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer’s internal control over financial reporting. |
| Date: August 14, 2026 | By: | /s/ Charles Park |
| Charles Park | ||
|
Chief Financial Officer (Principal Financial and Accounting Officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of House of Doge Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2026 (the “Report”) I, Marco Margiotta, Chief Executive Officer of the Company, certify, pursuant to 18 USC Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge and belief:
| (1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| Date: August 14, 2026 | By: | /s/ Marco Margiotta |
| Marco Margiotta | ||
| Chief Executive Officer |
This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of House of Doge Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2026 (the “Report”) I, Charles Park, Chief Financial Officer of the Company, certify, pursuant to 18 USC Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge and belief:
| (1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| Date: August 14, 2026 | By: | /s/ Charles Park |
| Charles Park | ||
|
Chief Financial Officer (Principal Financial and Accounting Officer) |
This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.