UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the quarterly period ended
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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) |
(IRS Employer Identification No.) |
(Address of principal executive offices) (Zip Code)
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| N/A | N/A | N/A |
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 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, a 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 Exchange Act). ☐Yes
As of August 13, 2025, the registrant had shares of common stock issued and outstanding.
TABLE OF CONTENTS
| PART I — FINANCIAL INFORMATION | 1 | |
| Item 1. | Financial Statements. | 1 |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations. | 43 |
| Item 3. | Quantitative and Qualitative Disclosure About Market Risk. | 74 |
| Item 4. | Controls and Procedures. | 74 |
| PART II — OTHER INFORMATION | 75 | |
| Item 1. | Legal Proceedings. | 75 |
| Item 1A. | Risk Factors. | 75 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds. | 77 |
| Item 3. | Defaults Upon Senior Securities. | 78 |
| Item 4. | Mine Safety Disclosures. | 80 |
| Item 5. | Other Information. | 80 |
| Item 6. | Exhibits. | 80 |
| Signatures | 81 | |
| i |
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements.
LOOP MEDIA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
| June 30, 2025 | September 30, 2024 | |||||||
| (unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable, net | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Content assets – current | ||||||||
| Total current assets | ||||||||
| Non-current assets | ||||||||
| Deposits | ||||||||
| Content assets – non-current | ||||||||
| Property and equipment, net | ||||||||
| Right-of-use assets | ||||||||
| Intangible assets, net | ||||||||
| Total non-current assets | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued liabilities | ||||||||
| Accrued royalties and revenue share | ||||||||
| Equipment financing liability – current | ||||||||
| License content liabilities – current | ||||||||
| Deferred income | ||||||||
| Lease liability – current | ||||||||
| Revolving line of credit – current | ||||||||
| Non-revolving line of credit – current | ||||||||
| Non-revolving line of credit, related party – current | ||||||||
| Convertible debt – current | ||||||||
| Convertible debt, related party – current | ||||||||
| Other debt – current | ||||||||
| Other liabilities - current | ||||||||
| Total current liabilities | ||||||||
| Non-current liabilities | ||||||||
| License content liabilities – non-current | ||||||||
| Equipment financing liability – non-current | ||||||||
| Lease liability – non-current | ||||||||
| Revolving line of credit, related party – non-current | ||||||||
| Non-revolving line of credit – non-current | ||||||||
| Total non-current liabilities | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (Note 9) | ||||||||
| Stockholders’ deficit | ||||||||
| Common Stock, $ par value per share, shares authorized, and shares issued and outstanding as of June 30, 2025, and September 30, 2024, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ deficit | ( | ) | ( | ) | ||||
| Total liabilities and stockholders’ deficit | $ | $ | ||||||
See the accompanying notes to the unaudited condensed consolidated financial statements.
| 1 |
LOOP MEDIA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Three Months Ended June 30, | Nine Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||
| Cost of revenue | ||||||||||||||||
| Cost of revenue – Advertising and Legacy and other revenue | ||||||||||||||||
| Cost of revenue – depreciation and amortization | ||||||||||||||||
| Total cost of revenue | ||||||||||||||||
| Gross profit | ||||||||||||||||
| Operating expenses | ||||||||||||||||
| Sales, general and administrative | ||||||||||||||||
| Stock-based compensation – sales, general and administrative | ||||||||||||||||
| Depreciation and amortization | ||||||||||||||||
| Restructuring costs | ||||||||||||||||
| Loss on disposal of assets | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other (expense) income | ||||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Loss on extinguishment of debt | ( | ) | ||||||||||||||
| Other income | ||||||||||||||||
| Total other expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Loss before income taxes | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Income tax expense | ( | ) | ( | ) | ||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Basic and diluted net loss per common share (Note 2) | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| Weighted average number of common shares outstanding | ||||||||||||||||
See the accompanying notes to the unaudited condensed consolidated financial statements.
| 2 |
LOOP MEDIA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIT
FOR THE NINE MONTHS ENDED JUNE 30, 2025, AND 2024
(unaudited)
| Common Stock | Additional Paid-in | Accumulated | ||||||||||||||||||
| Shares | Amount | Capital | Deficit | Total | ||||||||||||||||
| Balances, September 30, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Stock-based compensation | — | |||||||||||||||||||
| Shares issued for capital raise costs | ||||||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||
| Balances, December 31, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Stock-based compensation | — | |||||||||||||||||||
| Shares issued for debt conversion | ||||||||||||||||||||
| Shares issued for vested RSUs | ( | ) | ||||||||||||||||||
| Share issuance costs for vested RSUs | — | ( | ) | ( | ) | |||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||
| Balances, March 31, 2025 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Stock-based compensation | — | |||||||||||||||||||
| Shares issued for debt conversion | ||||||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||
| Balances, June 30, 2025 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Common Stock | Additional Paid-in | Accumulated | ||||||||||||||||||
| Shares | Amount | Capital | Deficit | Total | ||||||||||||||||
| Balances, September 30, 2023 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Stock-based compensation | — | |||||||||||||||||||
| Warrants issued for debt | — | |||||||||||||||||||
| Warrants issued for consulting fees | — | |||||||||||||||||||
| Shares issued for consulting fees | ||||||||||||||||||||
| Shares issued for debt conversion | ||||||||||||||||||||
| Shares issued for capital raise costs | ||||||||||||||||||||
| Shares issued upon warrant exercises | ||||||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||
| Balances, December 31, 2023 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Stock-based compensation | — | |||||||||||||||||||
| Shares issued for vested RSUs | ( | ) | ||||||||||||||||||
| Shares issued for capital raise costs | ||||||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||
| Balances, March 31, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Stock-based compensation | — | |||||||||||||||||||
| Pre-funded warrants issued for cash | — | |||||||||||||||||||
| Shares issuance costs | — | ( | ) | ( | ) | |||||||||||||||
| Shares issued for cash | ||||||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||
| Balances, June 30, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
See the accompanying notes to the unaudited condensed consolidated financial statements.
| 3 |
LOOP MEDIA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
| Nine Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Amortization of debt discount | ||||||||
| Depreciation and amortization expense, property and equipment | ||||||||
| Amortization of deferred at-the-market offering cost | ||||||||
| Amortization of content assets | ||||||||
| Amortization of right-of-use assets | ||||||||
| Bad debt expense | ||||||||
| Loss on extinguishment of debt converted to equity | ||||||||
| Loss on disposal of assets | ||||||||
| Stock-based compensation | ||||||||
| Shares issued for consulting fees | ||||||||
| Change in operating assets and liabilities: | ||||||||
| Accounts receivable | ||||||||
| Prepaid expenses | ||||||||
| Deposit | ( | ) | ||||||
| Accounts payable | ||||||||
| Accrued liabilities | ( | ) | ||||||
| Accrued royalties and revenue share | ( | ) | ||||||
| License content liability | ( | ) | ( | ) | ||||
| Operating lease liabilities | ( | ) | ( | ) | ||||
| Deferred income | ( | ) | ||||||
| NET CASH USED IN OPERATING ACTIVITIES | ( | ) | ( | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Purchase of property and equipment | ( | ) | ( | ) | ||||
| NET CASH USED IN INVESTING ACTIVITIES | ( | ) | ( | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Proceeds from issuance of common stock, registered direct offering | ||||||||
| Proceeds from exercise of warrants | ||||||||
| Proceeds from issuance of pre-funded warrants | ||||||||
| Proceeds from convertible debt | ||||||||
| Proceeds from other debt | ||||||||
| Proceeds from lines of credit | ||||||||
| Proceeds from working capital advance | ||||||||
| Repayments on lines of credit | ( | ) | ( | ) | ||||
| Repayments on other debt | ( | ) | ||||||
| Repayments on equipment financing | ( | ) | ( | ) | ||||
| Shares withheld for taxes for vested RSUs | ( | ) | ( | ) | ||||
| Deferred costs | ||||||||
| Shares issuance costs | ( | ) | ||||||
| Debt issuance costs | ( | ) | ||||||
| NET CASH PROVIDED BY FINANCING ACTIVITIES | ||||||||
| Change in cash and cash equivalents | ( | ) | ( | ) | ||||
| Cash, beginning of period | ||||||||
| Cash, end of period | $ | $ | ||||||
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW STATEMENTS | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Cash paid for income taxes | $ | $ | ||||||
| SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES | ||||||||
| Shares issued for debt conversion | $ | $ | ||||||
| Deferred costs for warrants issued for debt | $ | $ | ||||||
| Unpaid additions to licensed content and internally developed content | $ | $ | ||||||
| Unpaid deferred costs | $ | $ | ||||||
| Unpaid additions to property and equipment | $ | $ | ||||||
| Leased assets obtained in exchange for new operating lease liabilities | $ | $ | ||||||
See the accompanying notes to the unaudited condensed consolidated financial statements.
| 4 |
LOOP MEDIA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2025
(unaudited)
NOTE 1. BUSINESS
Loop Media, Inc., a Nevada corporation (collectively, “Loop Media,” the “Company,” “we,” “us” or “our”), is a multichannel digital video platform media company that uses marketing technology to generate our revenue and offer our services. Our technology and vast library of videos and licensed content enable us to curate and distribute short-form videos to connected televisions (“CTV”) in out-of-home (“OOH”) dining, hospitality and retail establishments, convenience stores and other locations and venues to enable the operators of those locations to inform, entertain and engage their customers. Our technology also provides businesses the ability to promote and advertise their products via digital signage and provides third-party advertisers with a targeted marketing and promotional tool for their products and services. We also allow our business clients to access our service without advertisements by paying a monthly subscription fee.
Although we offer hand-curated music video content licensed from major and independent record labels, as well as non-music video content, there have been recent changes to content partners and content offerings. Our non-music video content is predominantly licensed or acquired from third parties, including action sports clips, drone and nature footage, trivia, news headlines, lifestyle channels and kid-friendly videos, as well as movie, television and video game trailers, among other content. We distribute our content and advertising inventory to digital screens located in OOH locations primarily through (i) our owned and operated platform (the “O&O Platform”) of Loop Media-designed “small-box” streaming Android media players (“Loop Players”) and legacy ScreenPlay (as defined below) computers and (ii) through screens (“Partner Screens”) on digital platforms owned and operated by third parties (each a “Partner Platform” and collectively, the “Partner Platforms,” and together with the O&O Platform, the “Loop Platform”).
As
of June 30, 2025, we had approximately
We define an “active unit” as (i) an ad-supported Loop Player or digital out-of-home (“DOOH”) location using our ad- supported service through our “Loop for Business” application or using a DOOH venue-owned computer screening our content, that is online, used on our O&O Platform, playing content and has checked into the Loop Media analytics system at least once in the 90-day period ending on the date of measurement, or (ii) a DOOH location customer using our subscription service on our O&O Platform at any time during the 90-day period. We do not count toward our QAUs any Loop Players or screens used on our Partner Platform.
Liquidity and Management’s Plan
As shown in the accompanying unaudited condensed consolidated financial statements, we have incurred recurring losses resulting in an accumulated deficit. We anticipate further losses in the foreseeable future. We also had negative cash flows used in operations. These factors raise substantial doubt about our ability to continue as a going concern. The accompanying unaudited 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. These unaudited condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary if we are unable to continue as a going concern.
| 5 |
Our primary source of operating funds since inception has been cash proceeds from the sale of our common stock and debt and equity financing transactions. We have received notices of default and acceleration letters from certain lenders related to outstanding debt obligations. While these payments remain past due, we are evaluating available options, including discussions with the lenders. However, the timing and outcome of any lender enforcement actions, if pursued, cannot be predicted.
Our ability to continue as a going concern is dependent upon our ability to generate sufficient revenue and our ability to raise additional funds from equity investments and debt transactions while maintaining reduced spending levels. We continue to explore potential strategic alternatives to maximize shareholder value and to evaluate potential financing opportunities.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Interim Financial Statements
The (a) unaudited condensed consolidated balance sheet as of June 30, 2025, (b) audited condensed consolidated balance sheet as of September 30, 2024, and (c) unaudited condensed consolidated interim financial statements for the nine months ended June 30, 2025, have been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”) for interim financial information and the instructions to Form 10-Q and Rule 8-03 of Regulation S-X of the Securities Act of 1933, as amended. Accordingly, they do not include all of the information and footnotes required by US GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine months ended June 30, 2025, are not necessarily indicative of results that may be expected for the year ending September 30, 2025.
These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended September 30, 2024, included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on December 12, 2024.
Basis of presentation
The unaudited condensed consolidated financial statements include our accounts and our wholly owned subsidiary Retail Media TV, Inc. As of June 30, 2025, wholly owned subsidiary EON Media Group Pte. Ltd. had been liquidated and wound up. The unaudited condensed consolidated financial statements are prepared using the accrual basis of accounting in accordance with US GAAP. All inter-company transactions and balances have been eliminated on consolidation.
Use of estimates
The preparation of the unaudited condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include assumptions used in the fair value of stock-based compensation awards and income taxes.
Segment reporting
We
report as
Cash
Cash
and cash equivalents include all highly liquid monetary instruments with original maturities of three months or less when purchased.
These investments are carried at cost, which approximates fair value. Financial instruments that potentially subject us to concentrations
of credit risk consist primarily of cash deposits. We maintain our cash in institutions insured by the Federal Deposit Insurance Corporation
(“FDIC”). At times, our cash and cash equivalent balances may be uninsured or in amounts that exceed the FDIC insurance limits.
We have not experienced any losses on such accounts. On June 30, 2025, and September 30, 2024, we had
| 6 |
As
of June 30, 2025, and September 30, 2024, approximately $
Accounts receivable
Accounts
receivable represent amounts due from customers. We assess the collectability of receivables on an ongoing basis. A provision for the
impairment of receivables involves significant management judgment and includes the review of individual receivables based on individual
customers, current economic trends and analysis of historical bad debts. As of June 30, 2025, and September 30, 2024, we recorded an
allowance for expected credit losses of $
Concentration of credit risk
During
the nine months ended June 30, 2025, we had two customers which individually comprised greater than 10% of net revenue. These customers
represented
During
the nine months ended June 30, 2024, we had two customers which each individually comprised greater than 10% of net revenue. These customers
represented
As
of June 30, 2025, two customers accounted for a total of
As
of June 30, 2024, two customers accounted for a total of
We grant credit in the normal course of business to our customers. Periodically, we review past due accounts and make decisions about future credit on a customer-by-customer basis. Credit risk is the risk that one party to a financial instrument will cause a loss for the other party by failing to discharge an obligation.
Prepaid expenses
Expenditures paid in one accounting period which will not be consumed until a future period such as insurance premiums and annual subscription fees are accounted for on the balance sheet as a prepaid expense. When the asset is eventually consumed, it is charged to expense.
Content Assets
We capitalize the fixed content fees and corresponding liability when the license period begins, the cost of the content is known and the content is accepted and available for streaming. If the licensing fee is not determinable or reasonably estimable, no asset or liability is recorded, and licensing costs are expensed as incurred. We amortize licensed content assets into cost of revenue, using the straight-line method over the contractual period of availability. The liability is paid in accordance with the contractual terms of the arrangement. Internally-developed content costs are capitalized in the same manner as licensed content costs, when the cost of the content is known and the content is ready and available for streaming. We amortize internally-developed content assets into cost of revenue, using the straight-line method over the estimated period of streaming.
Long-lived assets
We
evaluate the recoverability of long-lived assets, including intangible assets, for impairment when events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable. Conditions that would necessitate an impairment assessment include
a significant decline in the observable market value of an asset, a significant change in the extent or manner that an asset is used,
or a significant adverse change that would indicate that the carrying amount of an asset or group of assets is not recoverable. For long-lived
assets to be held and used, we recognize an impairment loss only if their carrying amount is not recoverable through the undiscounted
cash flows. The impairment loss is based on the difference between the carrying amount and estimated fair value as determined by discounted
future cash flows. Our finite long-lived intangible assets are amortized on a straight-line basis over their estimated useful lives,
which range from
| 7 |
Property and equipment, net
Property
and equipment are stated at cost, less accumulated depreciation. Depreciation is calculated using the straight-line method over the asset’s
estimated useful life. Our capitalization policy is to capitalize property and equipment purchases greater than $
Loop Players are capitalized as fixed assets and depreciated over the estimated period of use.
See below for estimated useful lives:
| Loop Players | ||||
| Equipment | ||||
| Software |
Operating leases
We determine if an arrangement is a lease at inception. Operating lease right-of-use assets (“ROU assets”) and short-term and long-term lease liabilities are included on the face of the condensed consolidated balance sheet.
ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. We have lease agreements with lease and non-lease components, which are accounted for as a single lease component. For lease agreements with terms less than twelve (12) months, we have elected the short-term lease measurement and recognition exemption, and we recognize such lease payments on a straight-line basis over the lease term.
Fair value measurement
We determine the fair value of our assets and liabilities using a hierarchy established by the accounting guidance that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). The three levels of valuation hierarchy are defined as follows:
| ● | Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets. | |
| ● | Level 2 inputs to the valuation methodology included quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in inactive markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. | |
| ● | Level 3 inputs to the valuation methodology is one or more unobservable inputs which are significant to the fair value measurement. |
| 8 |
The carrying amount of our financial instruments, including cash, accounts receivable, deposits, short-term portion of notes receivable and notes payable, and current liabilities approximate fair value due to their short-term nature. We do not have financial assets or liabilities that are required under US GAAP to be measured at fair value on a recurring basis. We have not elected to use fair value measurement option for any assets or liabilities for which fair value measurement is not presently required.
We record assets and liabilities at fair value on a nonrecurring basis as required by US GAAP. Assets recognized or disclosed at fair value in the condensed consolidated financial statements on a nonrecurring basis include items such as property and equipment, operating lease assets, goodwill, and other intangible assets, which are measured at fair value if determined to be impaired.
Advertising costs
We expense all advertising costs as incurred.
Advertising
and marketing costs for the three months ended June 30, 2025, and 2024, were $
Advertising
and marketing costs for the nine months ended June 30, 2025, and 2024, were $
Revenue recognition
We recognize revenue in accordance with the Financial Accounting Standards Board’s (the “FASB”) Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers, when it satisfies a performance obligation by transferring control over a product to a customer. Revenue is measured based on the consideration we expect to receive in exchange for those products. In instances where final acceptance of the product is specified by the client, revenue is deferred until all acceptance criteria have been met. For example, we bill subscription services in advance of when the service is performed and revenue is treated as deferred revenue until the service is performed and/or the performance obligation is satisfied. Revenues are recognized under Topic 606 in a manner that reasonably reflects the delivery of our products and services to clients in return for expected consideration and includes the following elements:
| ● | executed contracts with our customers that we believe are legally enforceable; | |
| ● | identification of performance obligations in the respective contract; | |
| ● | determination of the transaction price for each performance obligation in the respective contract; | |
| ● | allocation of the transaction price to each performance obligation; and | |
| ● | recognition of revenue only when we satisfy each performance obligation. |
Our revenue can be categorized into two revenue streams: Advertising revenue and Legacy and other revenue.
| 9 |
The following table disaggregates our revenue by major type for each of the periods indicated:
Three Months Ended June 30, | Nine Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Advertising revenue | $ | $ | $ | $ | ||||||||||||
| Legacy and other revenue | ||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
Performance obligations and significant judgments
Our performance obligations and recognition patterns for each revenue stream are as follows:
Advertising revenue
For
the three months ended June 30, 2025, and 2024, advertising revenue accounted for
For
the nine months ended June 30, 2025, and 2024, advertising revenue accounted for
For all advertising revenue sources, we evaluate whether we should be considered the principal (i.e., report revenues on a gross basis) or an agent (i.e., report revenues on a net basis). Our role as principal or agent differs based on our performance obligation for each revenue share arrangement.
For both the O&O and Partner Platforms businesses, advertising inventory provided to advertisers through the use of an advertising demand partner or agency, with whose fees or commission is calculated based on a stated percentage of gross advertising spending, we are considered the agent and our revenues are reported net of agency fees and commissions. We are considered the agent because the demand partner or agency controls all aspects of the transaction (i.e., pricing risk, inventory risk, obligation for fulfillment) except for the devices used to show the advertisements, therefore we report this advertising revenue net of agency fees and commissions.
We are considered the principal in our arrangements with content providers in our O&O Platform business and with our arrangements with our third-party partners in our Partner Platforms business and thus report revenues on a gross basis (net of agency fees and commissions), wherein the amounts billed to our advertising demand partners, advertising agencies, and direct advertisers and sponsors are recorded as revenues, and amounts paid to content providers and third-party partners are recorded as expenses. We are considered the principal because we control the advertising space, are primarily responsible to our advertising demand partners and other parties filling our advertising inventory, have discretion in pricing and advertising fill rates and typically have an inventory risk.
For advertising revenue, we recognize revenue at the time the digital advertising impressions are filled and the advertisements are played, and for sponsorship revenue, we generally recognize revenue ratably over the term of the sponsorship arrangement as the sponsored advertisements are played.
Legacy and other business revenue
For
the three months ended June 30, 2025, and 2024, legacy and other business revenue accounted for the remaining
| 10 |
For
the nine months ended June 30, 2025, and 2024, legacy and other business revenue accounted for the remaining
| ○ | Delivery of streaming services including content encoding and hosting. We recognize revenue over the term of the service based on bandwidth usage. Revenue from streaming services is insignificant. | |
| ○ | Delivery of subscription content services in customized formats. We recognize revenue straight-line over the term of the service. | |
| ○ | Delivery of hardware for ongoing subscription content delivery through software. We recognize revenue at the point of hardware delivery. Revenue from hardware sales is insignificant. |
Transaction prices for performance obligations are explicitly outlined in relevant agreements; therefore, we do not believe that significant judgments are required with respect to the determination of the transaction price, including any variable consideration identified.
Our customers are obligated to pay within normal industry terms specified within each contract for both advertising revenue and legacy and other business revenue.
Customer acquisition costs
Customer acquisition costs consist of marketing costs and affiliate fees associated with the O&O Platform business. They are included in operating expenses and expensed as incurred.
Cost of revenue
Cost of revenue for the O&O Platform and legacy businesses represents the amortized cost of ongoing licensing and hosting fees, which is recognized over time based on usage patterns. The depreciation expense associated with the Loop Players is not included in cost of sales.
Cost of revenue for the Partner Platform business represents hosting fees, amortized costs of internally-developed content and the revenue share with third party partners (after deduction of allocated infrastructure costs). The cost of revenue is higher with partners within the Partner Platform versus those within the O&O Platform because we leverage our Partner Platform partners’ network of customers and their screens to deliver content and advertising inventory rather than using our own Loop Players.
Deferred income
Deferred income represents our accounting for the timing difference between when fees are received and when the performance obligation is satisfied.
We account for net loss per share in accordance with ASC subtopic 260-10, Earnings Per Share (“ASC 260-10”), which requires presentation of basic and diluted earnings per share (“EPS”) on the face of the statement of operations for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS.
Basic net loss per share is computed by dividing net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding during each period. It excludes the dilutive effects of any potentially issuable shares of common stock.
Diluted net loss per share is calculated by including any potentially dilutive share issuances in the denominator.
| 11 |
| June 30, | September 30, | |||||||
| 2025 | 2024 | |||||||
| Options to purchase common stock | ||||||||
| Warrants to purchase common stock | ||||||||
| Restricted Stock Units (RSUs) | ||||||||
| Convertible debentures | ||||||||
| Series A preferred stock | ||||||||
| Series B preferred stock | ||||||||
| Total common stock equivalents | ||||||||
On
December 14, 2023, we entered into Warrant Reprice Letter Agreements with certain holders to amend the exercise price of existing exercisable
warrants to $
Three Months Ended June 30, | Nine Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Numerator: | ||||||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Plus: Deemed dividend on warrants | ( | ) | ||||||||||||||
| Net loss attributable to common stockholders | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Denominator: | ||||||||||||||||
| Weighted average number of common shares outstanding | ||||||||||||||||
| Basic and diluted net loss per common share | ) | ) | $ | ) | $ | ) | ||||||||||
Shipping and handling costs
Loop Players are provided at no cost to our customers. Loop Media absorbs any associated costs of shipping and handling and records as an operational expense at the time of service.
Income taxes
We account for income taxes in accordance with ASC Topic 740, Income Taxes (“ASC 740”). ASC 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all of, the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effect of changes in tax laws and rates on the date of enactment.
Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. We have no material uncertain tax positions for any of the reporting periods presented.
| 12 |
We recognize accrued interest and penalties related to unrecognized tax benefits as part of income tax expense. We have also made a policy election to treat the income tax with respect to global intangible low-tax income as a period expense when incurred.
Stock-based compensation issued to employees is measured at the grant date, based on the fair value of the award and is recognized as an expense over the requisite service period. We measure the fair value of the stock-based compensation issued to non-employees using the stock price observed in the trading market (for stock transactions) or the fair value of the award (for non-stock transactions), which were more reliably determinable measures of fair value than the value of the services being rendered.
Deferred costs
Deferred costs represent legal, accounting and other direct costs related to our efforts to raise capital through a public or private sale of our common stock. Costs related to the public sale of our common stock are deferred until the completion of the applicable offering, at which time such costs are reclassified to additional paid-in-capital as a reduction of the proceeds. Costs related to the private sale of our common stock are deferred until the completion of the applicable offering, at which time such costs are amortized over the term of the applicable purchase agreement.
Cost saving measures
As previously disclosed, we took steps in fiscal years 2023, 2024 and 2025 to increase efficiency and cut costs, while maintaining our focus on, and dedication to, the continued growth of our business. These cuts and adjustments across several aspects of our business, including reductions in headcount and organizational restructuring, continue through the date of this Quarterly Report on Form 10-Q.
Reclassifications
Certain prior year amounts have been reclassified to conform to the current year presentation. These reclassifications have no effect on the previously reported financial position, results of operations, or cash flows.
Recently adopted accounting pronouncements
In November 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, that would enhance disclosures for significant segment expenses for all public entities required to report segment information in accordance with ASC 280. ASC 280 requires a public entity to report for each reportable segment a measure of segment profit or loss that its chief operating decision maker (“CODM”) uses to assess segment performance and to make decisions about resource allocations. The amendments in ASU 2023-07 improve financial reporting by requiring disclosure of incremental segment information on an annual and interim basis for all public entities to enable investors to develop more useful financial analyses. Currently, Topic 280 requires that a public entity disclose certain information about its reportable segments. For example, a public entity is required to report a measure of segment profit or loss that the CODM uses to assess segment performance and make decisions about allocating resources. ASC 280 also requires other specified segment items and amounts such as depreciation, amortization and depletion expense to be disclosed under certain circumstances. The amendments in ASU 2023-07 do not change or remove those disclosure requirements. The amendments in ASU 2023-07 also do not change how a public entity identifies its operating segments, aggregates those operating segments or applies the quantitative thresholds to determine its reportable segments. The amendments in ASU 2023-07 are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. A public entity should apply the amendments in ASU 2023-07 retrospectively to all prior periods presented in the financial statements. Effective January 1, 2025, we adopted this ASU and there is no material impact to our unaudited condensed consolidated financial statements and related disclosures as of June 30, 2025.
| 13 |
Recent accounting pronouncements
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 is intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in ASU 2023-09 address investor requests for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information. ASU 2023-09 will be effective for us in the annual period beginning October 1, 2025, though early adoption is permitted. We are still evaluating the presentational effect that ASU 2023-09 will have on our unaudited condensed consolidated financial statements, but we expect considerable changes to our income tax footnote.
NOTE 3. CONTENT ASSETS
Content Assets
The
content we stream to our users is generally acquired by securing the intellectual property rights to the content through licenses from,
and paying royalties or other consideration to, rights holders or their agents. The licensing can be for a fixed fee or can be a revenue
sharing arrangement. The licensing arrangements specify the period when the content is available for streaming, the territories, the
platforms, the fee structure and other standard content licensing terms defining the rights and/or restrictions for how the licensed
content can be used by Loop Media. We also develop original content internally, which is capitalized when the content is ready and available
for streaming and generally amortized over a period of
As of June 30, 2025, content assets were recorded on our unaudited condensed consolidated balance sheets as follows:
| June 30, 2025 | ||||
| Content assets, net – current | $ | |||
| Content assets, net - noncurrent | ||||
| Total | $ | |||
Of
the $
We recorded amortization expense in cost of revenue, in our unaudited condensed consolidated statements of operations, related to capitalized content assets:
Three Months Ended June 30, | Nine Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Licensed content assets | $ | $ | $ | $ | ||||||||||||
| Internally-developed assets | ||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
Our
content license contracts are typically
| Fiscal Year 2025 | Fiscal Year 2026 | Fiscal Year 2027 | Fiscal Year 2028 | |||||||||||||
| Licensed content assets | $ | $ | $ | $ | ||||||||||||
| Internally-developed assets | ||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
| 14 |
License Content Liabilities
At June 30, 2025, we had obligations on our unaudited condensed consolidated balance sheets comprised of:
| June 30, 2025 | ||||
| License content liability – current | $ | |||
| License content liability – noncurrent | ||||
| License content liability in accounts payable | ||||
| Total | $ | |||
Payments
for content liabilities for the nine months ended June 30, 2025, were $
| Fiscal Year 2025 | Fiscal Year 2026 | |||||||
| Licensed content liabilities | $ | $ | ||||||
NOTE 4. PROPERTY AND EQUIPMENT
Our property and equipment, net consisted of the following as of June 30, 2025, and September 30, 2024:
| June 30, | September 30, | |||||||
| 2025 | 2024 | |||||||
| Loop players | $ | $ | ||||||
| Equipment | ||||||||
| Software | ||||||||
| Less: accumulated depreciation | ( | ) | ( | ) | ||||
| Total property and equipment, net | $ | $ | ||||||
Depreciation expense, calculated using straight line method, was charged to operations as follows:
Three Months Ended June 30, | Nine Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Depreciation expense | $ | $ | $ | $ | ||||||||||||
| 15 |
NOTE 5. INTANGIBLE ASSETS
Our intangible assets, each definite lived assets, consisted of the following as of June 30, 2025, and September 30, 2024:
| Useful life | June 30, 2025 | September 30, 2024 | ||||||||
| Customer relationships | $ | $ | ||||||||
| Content library | ||||||||||
| Total intangible assets, gross | ||||||||||
| Less: accumulated amortization | ( | ) | ( | ) | ||||||
| Total | ( | ) | ( | ) | ||||||
| Total intangible assets, net | $ | $ | ||||||||
Amortization expense was charged to operations as follows:
Three Months Ended June 30, | Nine Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Amortization expense | $ | $ | $ | $ | ||||||||||||
Annual amortization expense for the next five years and thereafter is estimated as:
| Remaining in fiscal year 2025 | $ | |||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| Total | $ |
The
weighted average life of the intangible assets subject to amortization is
NOTE 6. OPERATING LEASES
Operating leases
We have operating leases for office space and office equipment. Some of our leases include one or more options to renew, options to extend for a long-term period, and options to terminate within 30 days. In certain of our lease agreements, the rental payments were adjusted periodically to reflect actual charges incurred for capital area maintenance, utilities, inflation and/or changes in other indexes.
Our lease liability consisted of the following as of June 30, 2025, and September 30, 2024:
June 30, 2025 | September 30, 2024 | |||||||
| Short term portion | $ | $ | ||||||
| Long term portion | ||||||||
| Total lease liability | $ | $ | ||||||
| 16 |
Maturity analysis under these lease agreements are as follows for fiscal years:
| Remaining in fiscal year 2025 | $ | |||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| Total undiscounted cash flows | ||||
| Less: | ( | ) | ||
| Lease liability | $ |
We recorded lease expense, cash payments against lease liabilities and accretion on lease liability in sales, general and administration expenses in our unaudited condensed consolidated statement of operations:
Three Months Ended June 30, | Nine Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Operating lease expense | $ | $ | $ | $ | ||||||||||||
| Short-term lease expense | ||||||||||||||||
| Total lease expense | $ | $ | $ | $ | ||||||||||||
Three Months Ended June 30, | Nine Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Cash payments against lease liabilities | $ | $ | $ | $ | ||||||||||||
Three Months Ended June 30, | Nine Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Accretion on lease liability | $ | $ | $ | $ | ||||||||||||
Weighted-average remaining lease term and discount rate for operating leases are as follows:
| Weighted-average remaining lease term | ||||
| Weighted-average discount rate | % |
NOTE 7. ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts payable and accrued expenses consisted of the following as of June 30, 2025, and September 30, 2024:
| June 30, | September 30, | |||||||
| 2025 | 2024 | |||||||
| Accounts payable | $ | $ | ||||||
| Performance bonuses | ||||||||
| Interest payable | ||||||||
| Professional fees | ||||||||
| Marketing | ||||||||
| Insurance liabilities | ||||||||
| Other accrued liabilities | ||||||||
| Accrued liabilities | ||||||||
| Accrued royalties and revenue share | ||||||||
| Total accounts payable and accrued expenses | $ | $ | ||||||
| 17 |
NOTE 8. DEBT
As of June 30, 2025, and September 30, 2024, our debt consisted of revolving and non-revolving lines of credit, convertible debt, other debt instruments as well as equipment leases and software financings.
We have received notices of default and acceleration letters from certain lenders related to outstanding debt obligations. While these payments remain past due, we are evaluating available options, including discussions with the lenders. However, the timing and outcome of any lender enforcement actions, if pursued, cannot be predicted. See “Note 12 – Subsequent Events.”
Lines of Credit, Convertible Debt and Other Debt as of June 30, 2025:
| Net Carrying Value | Unpaid Principal | Contractual Interest | Contractual Maturity | Warrants | ||||||||||||||||||
| Related party lines of credit: | Current | Long Term | Balance | Rates | Date | issued | ||||||||||||||||
| $ | $ | $ | $ | % | 12 months prior written notice | |||||||||||||||||
| $ | % | Paid Off | — | |||||||||||||||||||
| Total related party lines of credit, net | $ | $ | ||||||||||||||||||||
| Related party convertible debt: | ||||||||||||||||||||||
| $ | $ | $ | — | $ | % | — | ||||||||||||||||
| Total related party convertible debt, net | $ | $ | — | $ | ||||||||||||||||||
| Lines of credit: | ||||||||||||||||||||||
| $ non-revolving line of credit, May 13, 2022 | $ | $ | — | $ | % | — | ||||||||||||||||
| $ revolving line of credit, July 29, 2022 | — | Greater of % or Prime | — | — | ||||||||||||||||||
| $ non-revolving line of credit, May 10, 2023 | — | % | ||||||||||||||||||||
| $ revolving line of credit, February 3, 2025 | % | — | ||||||||||||||||||||
| Total lines of credit, net | $ | $ | $ | |||||||||||||||||||
| Convertible debt: | ||||||||||||||||||||||
| $ convertible promissory note, October 18, 2024 | $ | $ | — | $ | % | — | ||||||||||||||||
| $ promissory note, May 13, 2025 | % | — | ||||||||||||||||||||
| Total convertible debt, net | $ | $ | — | $ | ||||||||||||||||||
| Other debt: | ||||||||||||||||||||||
| $ | — | — | — | % | — | |||||||||||||||||
| $ | — | — | — | % | Paid Off | — | ||||||||||||||||
| $ | — | — | — | % | Paid Off | — | ||||||||||||||||
| $ | — | % | — | |||||||||||||||||||
| $ | — | % | — | |||||||||||||||||||
| $ | — | % | — | |||||||||||||||||||
| $ | — | % | — | |||||||||||||||||||
| $ | — | % | — | |||||||||||||||||||
| $ | — | % | ||||||||||||||||||||
| Total other debt, net | $ | $ | $ | |||||||||||||||||||
| Total debt, net | $ | $ | $ | |||||||||||||||||||
| 18 |
Lines of Credit, Convertible Debt and Other Debt as of September 30, 2024:
| Net Carrying Value | Unpaid Principal | Contractual Interest | Contractual Maturity | Warrants | ||||||||||||||||||
| Related party lines of credit: | Current | Long Term | Balance | Rates | Date | issued | ||||||||||||||||
| $ | $ | $ | $ | % | 12 months prior written notice | |||||||||||||||||
| $ | — | % | — | |||||||||||||||||||
| Total related party lines of credit, net | $ | $ | $ | |||||||||||||||||||
| Lines of credit: | ||||||||||||||||||||||
| $ non-revolving line of credit, May 13, 2022 | $ | $ | — | $ | % | |||||||||||||||||
| $ revolving line of credit, July 29, 2022 | — | Greater of % or Prime | — | |||||||||||||||||||
| $ non-revolving line of credit, May 10, 2023 | — | % | ||||||||||||||||||||
| $ non-revolving line of credit, August 26, 2024 | — | % | — | |||||||||||||||||||
| $ non-revolving line of credit, August 22, 2024 | — | % | — | |||||||||||||||||||
| Total lines of credit, net | $ | $ | $ | |||||||||||||||||||
| Total debt, net | $ | $ | $ | |||||||||||||||||||
The following table presents the interest expense related to the contractual interest coupon and the amortization of debt discounts on the lines of credit:
Three Months Ended June 30, | Nine Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Interest expense | $ | $ | $ | $ | ||||||||||||
| Amortization of debt discounts | ||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
Maturity analysis under the line of credit agreements for the fiscal years ended September 30,
| 2025 | $ | |||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Lines of credit, related and non-related party | ||||
| Less: Debt discount on lines of credit payable | ( | ) | ||
| Total Lines of credit payable, related and non-related party, net | $ |
| 19 |
Revolving Lines of Credit
Excel $2.5M Revolving Line of Credit
Effective
as of December 14, 2023, we entered into a Secured Revolving Line of Credit Loan Agreement with Excel Family Partners, LLLP, an entity
managed by Bruce Cassidy (“Mr. Cassidy”), Executive Chairman of our Board of Directors and our majority stockholder, (“Excel”
and the “Excel $2.5M Revolving Line of Credit Agreement”) for up to a principal sum of $
Under
the terms of the Excel $2.5M Revolving Line of Credit Agreement, on December 14, 2023, we issued to Excel a warrant to purchase up to
an aggregate of
On
December 3, 2024, and effective retroactively to July 1, 2024, we entered into a Secured Revolving Line of Credit Loan Agreement Amendment
with Excel to extend the date on which the first payment of interest is due under the Excel Revolving Line of Credit by one (
The
Excel $2.5 Revolving Line of Credit had a balance, including accrued interest, amounting to $
GemCap Revolving Line of Credit Agreement
Effective
as of July 29, 2022, we entered into a Loan and Security Agreement with Industrial Funding Group, Inc. (the “Initial Lender”)
for a revolving loan credit facility for the initial principal sum of up to $
Effective
as of October 27, 2022, we entered into Amendment Number 1 to the Loan and Security Agreement and to the Revolving Loan Agreement Schedule,
and the Amended and Restated Secured Promissory Note (Revolving Loans) with the Senior Lender to increase the principal sum available
under the GemCap Revolving Line of Credit Agreement from $
The
GemCap Revolving Line of Credit had an original maturity date of July 29, 2024, and began accruing interest on the unpaid principal balance
of advances, payable monthly in arrears, on September 7, 2022, at an annual rate equal to the greater of (I) the sum of (i) the “Prime
Rate” as reported in the “Money Rates” column of The Wall Street Journal, adjusted as and when such Prime Rate changes,
plus (ii)
Under
the GemCap Revolving Line of Credit Agreement, we granted to the Senior Lender a first-priority security interest in all of our present
and future property and assets, including products and proceeds thereof. In connection with the loan, our existing secured lenders, some
of whom are the RAT Lenders under our RAT Non-Revolving Line of Credit (each as defined below) (collectively, the “Subordinated
Lenders”) delivered subordination agreements (the “GemCap Subordination Agreements”) to the Senior Lender. We are permitted
to make regularly scheduled payments, including payments upon maturity, to such subordinated lenders and potentially other payments subject
to a measure of cash flow and receiving certain financing activity proceeds, in accordance with the terms of the GemCap Subordination
Agreements. In connection with the delivery of the GemCap Subordination Agreements by the Subordinated Lenders, on July 29, 2022, we
issued warrants to each Subordinated Lender on identical terms for an aggregate of up to
| 20 |
Effective July 29, 2024, we entered into Amendment Number 2 to the Loan and Security Agreement, the Loan Agreement Schedule, the Revolving Loan Note and to the other Loan Documents (the “Loan Agreement Amendment No. 2”) to amend certain material terms, including (i) to extend the maturity date of the Loan Agreement by one (1) year from July 29, 2024, to July 29, 2025, and (ii) to make Retail Media TV, Inc., our wholly-owned subsidiary (“RMTV”), a co-borrower thereunder.
The
GemCap Revolving Line of Credit had a balance, including accrued interest, amounting to $
Pursuant to the Settlement Agreement and Mutual Release entered into between us and GemCap on November 27, 2024, all amounts, including principal and accrued interest, owing to GemCap were paid off and all of our obligations to GemCap have been extinguished (as discussed below).
The GemCap Litigation Settlement
On October 29, 2024, we, along with RMTV, received a notice and reservation of rights letter (the “Reservation of Rights Notice”) from GemCap Solutions, LLC (“GemCap” or the “Senior Lender”) under its revolving line of credit facility (the “GemCap Revolving Line of Credit Agreement”) informing us that events of default had occurred and were continuing under the GemCap Revolving Line of Credit Agreement as a result of our incurrence of indebtedness under the Bellino Trust $2M Convertible Note (defined below), which, was not expressly subordinated to our indebtedness to the Senior Lender pursuant to a subordination agreement in form and substance satisfactory to the Senior Lender.
On November 5, 2024, we received an acceleration notice (the “Acceleration Notice”) from GemCap demanding payment of the full amount outstanding on the Revolving Loan Facility by November 8, 2024 (the “Demand”). On November 7, 2024, the Senior Lender orally agreed to suspend the Demand deadline to allow us to enter into negotiations with it for a forbearance of the Demand for a period of time to work toward a mutually agreeable resolution. On November 13, 2024, GemCap rescinded its offer to negotiate a forbearance of the Demand and delivered to us the Lender a Notice of Secured Party Public Sale Pursuant to Section 9-610 of the Uniform Commercial Code (“UCC” and such notice, the “Public Sale Notice”) purporting to set a sale, under the UCC, of our personal property in order to foreclose the security interest it held in and to our assets. Concurrently with the delivery of the Public Sale Notice, GemCap issued a press release announcing the same.
Also on November 13, 2024, we filed a lawsuit in the United States District Court for the Western District of Texas San Antonio Division (the “US District Court”) seeking relief against GemCap for breach of contract and breach of implied duty of good faith and fair dealing, and an Application for an Emergency Temporary Restraining Order and Preliminary Injunction seeking preliminary injunctive relief to prevent GemCap from exercising or continuing to exercise its default remedies under the Loan Documents (the “Federal Court Lawsuit”). On November 15, 2024, the US District Court issued an order (the “US District Court Order”) regarding our application for preliminary injunctive relief, granting in part our application, temporarily enjoining GemCap from auctioning our personal property, but denied the application in all other respects.
Following receipt of notice that the US District Court lacked subject matter jurisdiction to hear our Federal Court Lawsuit, we filed a Notice of Voluntary Dismissal in the US District Court and on November 21, 2024, we refiled our lawsuit and application for temporary and permanent injunctive relief in the District Court for Bexar County, Texas (the “State Court Lawsuit”). On November 25, 2024, GemCap filed a counterclaim against us, claiming breach of contract and common law fraud and seeking economic and exemplary damages, as well as fees and costs (the “GemCap Counterclaim”). On the same day, we were granted a hearing in the Bexar County District Court in San Antonio, at which our petition for temporary relief was denied (the “Texas State Court Order”).
Following
the Texas State Court Order, we entered into settlement negotiations with GemCap, and on November 27, 2024, we reached a payoff arrangement
pursuant to which we agreed to pay to GemCap a total payoff amount, including outstanding principal, accrued interest and fees and a
legal reserve, of $
| 21 |
Capital Foundry Revolving Line of Credit
Effective
as of February 3, 2025, we entered into a Loan and Security Agreement with Capital Foundry Funding, LLC (“Capital Foundry”
and such agreement, the “Capital Foundry Loan Agreement”) for a revolving line of credit facility for the principal sum of
up to $
The
loan matures on February 2, 2028, or if the term of the Capital Foundry Loan Agreement has been extended, the end of the then current
Renewal Term (as such term is defined in the Capital Foundry Loan Agreement) and accrues interest on the unpaid principal balance of
advances, payable monthly in arrears, at an annual rate equal to the sum of (i) the “Prime Rate” as reported in the “Money
Rates” column of The Wall Street Journal, adjusted as and when such Prime Rate changes, plus (ii)
Under the Capital Foundry Loan Agreement, we granted to Capital Foundry a first-priority security interest in all of our present and future property and assets, including products and proceeds thereof. In connection with the Capital Foundry Loan, certain of our existing secured lenders, including Excel, and certain equipment financing lenders, have delivered subordination agreements to Capital Foundry (each lender, a “Subordinated Lender” and together, the “Subordinated Lenders”), in form and substance satisfactory, and on terms acceptable, to Capital Foundry (each a “Subordination Agreement”).
The
Capital Foundry Loan Agreement had a balance, including accrued interest, amounting to $
Non-Revolving Lines of Credit
RAT Non-Revolving Line of Credit
Effective
as of May 13, 2022, we entered into a Secured Non-Revolving Line of Credit Loan Agreement (the “RAT Non-Revolving Line of Credit
Agreement”) with several institutions and individuals (each a “RAT Lender” and collectively, the “RAT Lenders”)
and RAT Investment Holdings, LP, as administrator of the loan (the “Loan Administrator”) for an aggregate principal amount
of $
| 22 |
Effective
as of November 13, 2023, we entered into a Non-Revolving Line of Credit Loan Agreement Amendment (the “RAT Non-Revolving Line of
Credit Agreement Amendment”) with the RAT Lenders to: (i) extend the Original RAT Line of Credit Maturity Date from eighteen (
On
April 18, 2024, we entered into that certain Non-Revolving Line of Credit Loan Agreement Amendment #2 (the “RAT Non-Revolving Line
of Credit Agreement Amendment #2”) with the RAT Lenders to: (i) extend the Original RAT Line of Credit Maturity Date from eighteen
(
On
May 31, 2024, we entered into a Non-Revolving Line of Credit Waiver and Consent Agreement (the “Waiver and Consent”), with
the Loan Administrator, effective as of and contingent upon the closing of the Offerings (each as defined and described below), waiving
certain provisions of the RAT Non-Revolving Line of Credit Agreement Amendment #1, pursuant to which the RAT Lenders agreed to irrevocably
waive their rights to receive one-third (1/3) of the net proceeds of any non-affiliate capital raise, including the Offerings, and consent
to us not paying any of such proceeds to the RAT Lenders. In consideration for entering into the Waiver and Consent, we agreed to reduce
the exercise price of the RAT Loan Warrants and the Subordination Agreement Warrants held by the RAT Lenders to purchase an aggregate
of
On
November 21, 2024, the outstanding principal and accrued interest in the amount of $
The
RAT Non-Revolving Line of Credit had a balance, including accrued interest, amounting to $
| 23 |
May 2023 Secured Loan
Effective
as of May 10, 2023, we entered into a Secured Non-Revolving Line of Credit Loan Agreement (the “May 2023 Secured Line of Credit
Agreement”) with several individuals and institutional lenders for aggregate loans of up to $
In
connection with the May 2023 Secured Line of Credit, on May 10, 2023, we agreed to issue to each lender under the May 2023 Secured Line
of Credit Agreement, upon drawdown, a warrant to purchase up to an aggregate of
As
of May 10, 2023, Excel committed to be a lender under the May 2023 Secured Line of Credit Agreement for an aggregate loan of $
As
of December 14, 2023, the outstanding principal and interest on Excel’s portion of the May 2023 Secured Line of Credit was $
On
December 31, 2023, one of the remaining lenders under the May 2023 Secured Line of Credit converted $
The
May 2023 Secured Line of Credit matured on May 10, 2025 (the “Maturity Date”) with a principal balance, including accrued
interest, amounting to $
On
June 10, 2025, in response to our failure to pay the balances owed on the Maturity Date, we received a demand notice and reservation
of rights letter (the “June 10 Notice”) from one of the lenders under the May 2023 Secured Line of Credit Agreement ( “Lender
No. 1”) declaring the loan thirty (30) days past due and demanding payment of the full balance, including outstanding principal
and interest, owed to Lender No. 1 within ten (10) days of the date of the June 10 Notice, failing which, Lender No. 1 may proceed with
exercising all rights and remedies available to it at law, in equity, and pursuant to the applicable loan documents. The aggregate principal
amount owed to Lender No. 1 on the Maturity Date was $
Pursuant
to the terms of the May 2023 Secured Line of Credit Agreement, after the occurrence and during the continuance of an Event of Default
thereunder (and after giving of any required notice and the expiration of any applicable cure period), the per annum effective rate of
interest on all outstanding principal under the May 2023 Secured Note, which is
The
May 2023 Secured Note had a principal balance, including accrued interest, amounting to $
| 24 |
Excel $1.0M Line of Credit
On
March 28, 2024, we entered into a Secured Non-Revolving Line of Credit Loan Agreement with Excel, an entity managed by Mr. Cassidy (“Excel
$1.0M Secured Line of Credit Agreement”) for an aggregate principal amount of up to $
Under the Excel $1.0M Secured Line of Credit Agreement, we granted to Excel a security interest in all of our present and future assets and properties, real or personal, tangible or intangible, wherever located, including products and proceeds thereof, which security interest was subordinate in rights to GemCap under the GemCap Revolving Line of Credit Agreement. As a result of the GemCap Litigation Settlement (as described above), this subordination no longer applies. See “—GemCap Revolving Line of Credit.”
On
May 31, 2024, we entered into a Waiver and Consent Letter Agreement with Excel (the “Excel Waiver Agreement”), effective
as of and contingent upon the closing of the Registered Offering (as defined and described below), waiving certain provisions of the
Excel $1.0M Secured Line of Credit Agreement, pursuant to which Excel irrevocably agreed to waive its rights to receive $
On December 3, 2024, and effective retroactively to September 24, 2024, we entered into a Secured Non-Revolving Line of Credit Loan Agreement Amendment with Excel and issued to Excel an Amended and Restated Non-Revolving Line of Credit Promissory Note to Excel to extend the Original Excel $1.0M Line of Credit Maturity Date by twelve (12) months, from one hundred eighty (180) days from the date of the Excel $1.0M Secured Line of Credit Agreement to one hundred eighty (180) days plus twelve (12) months from the Excel $1.0M Secured Line of Credit Agreement, or to September 24, 2025.
On
February 20, 2025, we entered into an Exchange Agreement pursuant to which the outstanding principal and accrued interest in the amount
of $
The
Excel $1.0M Line of Credit had a balance, including accrued interest, amounting to $
Convertible Notes
The Bellino Trust $2.0M Convertible Note
On
October 18, 2024, we issued a Convertible Promissory Note to the Joseph G. Bellino Trust Dated November 30, 2023 (the “Bellino
Trust”), in the principal amount of $
| 25 |
The
Bellino Trust shall have the right, at any time, to convert all or any portion of the principal and interest due on the date of conversion
into shares of our common stock at a conversion price that is
On June 16, 2025, in response to our failure to make a payment on June 1, 2025, we received written notice from the Bellino Trust declaring a default on our payment obligations under the Bellino Trust $2M Convertible Note and stating that it would proceed with the necessary actions in accelerating repayment of all principal and interest due under the Bellino Trust $2M Convertible Note. While these payments remain past due, we are evaluating available options. However, there can be no assurance as to whether the Bellino Trust will seek to enforce its rights under the Bellino Trust $2M Convertible Note.
The
Bellino Trust $2.0M Convertible Note had a principal balance, with no accrued interest, amounting to $
The Excel $3.0M Line of Credit Convertible Note
On
November 27, 2024, we entered into a Non-Revolving Line of Credit Loan Agreement with Excel (the “Excel $3.0M Line of Credit Loan
Agreement”), for an aggregate principal amount of up to $
The
Excel $3.0M Line of Credit Convertible Note accrues interest at
Excel
shall have the right, at any time, to convert all or any portion of the principal and interest due on the date of conversion into shares
of our common stock at a conversion price that is
The
Excel $3.0M Line of Credit Convertible Note had a balance, including accrued interest, amounting to $
Red Road Holdings Corporation
Effective
as of May 13, 2025, we entered into a Securities Purchase Agreement with Red Road Holdings Corporation (“Red Road” and such
agreement, the “Red Road Securities Purchase Agreement”) for the principal amount of $
| 26 |
The
Red Road Convertible Note matures on February 28, 2026, with an interest rate of
Red
Road may convert all or part of the outstanding and unpaid amount of the Red Road Convertible Note into fully paid and non-assessable
shares of our common stock. The number of shares of our common stock to be issued upon each conversion shall be determined by dividing
the Conversion Amount (as defined below) by the applicable Conversion Price (as defined below) then in effect on the date specified in
the notice of conversion. The Conversion Amount equals the sum of the principal amount of the Red Road Convertible Note plus accrued
and unpaid interest. The Conversion Price equals
During the period the conversion right exists, we will reserve from our authorized and unissued common stock a sufficient number of shares, free from preemptive rights, to provide for the issuance of common stock upon the full conversion of the Red Road Convertible Note. We are required at all times to have authorized and reserved three times the number of shares that are actually issuable upon full conversion of the Red Road Convertible Note, based on the Conversion Price in effect from time to time.
The
Red Road Convertible Note had a balance, including accrued interest, amounting to $
Other Debt Instruments
Agile Capital Finding, LLC
Agile $525,000 Loan
On
August 26, 2024, we, along with our wholly-owned subsidiary, RMTV, entered into a Subordinated Business Loan and Security Agreement (the
“Agile $525,000 Loan Agreement”) with Agile Capital Funding, LLC, a Virginia limited liability company (“Agile”)
and Agile Capital Funding, LLC, as collateral agent (the “Agile Collateral Agent”), evidenced by a Subordinated Secured Promissory
Note in the principal amount of $
| 27 |
Pursuant
to the terms of the Agile $660,000 Loan (defined below), on December 27, 2024, we refinanced the outstanding principal and interest of
the Agile $525,000 Loan, amounting to $
Agile $388,500 Loan
On
October 14, 2024, we, along with RMTV, entered into a Subordinated Business Loan and Security Agreement (the “Agile $388,500 Loan
Agreement”) with Agile and the Agile Collateral Agent, evidenced by a Subordinated Secured Promissory Note in the principal amount
of $
Pursuant
to the terms of the Agile $800,000 Loan (defined below), on March 25, 2025, we refinanced the outstanding principal and interest of the
Agile $388,500 Loan, amounting to $
Agile $660,000 Loan
On
December 27, 2024 (the “Agile $660,000 Agreement Effective Date”), we, along with RMTV, entered into a Subordinated Business
Loan and Security Agreement (the “Agile $660,000 Loan Agreement” and together with the Agile $388,500 Loan Agreement, the
“Agile Agreements”) with Agile and the Agile Collateral Agent, evidenced by a Subordinated Secured Promissory Note in the
principal amount of $
The
Agile $660,000 Loan had a balance, including accrued interest, amounting to $
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Agile $800,000 Loan
On
March 25, 2025 (the “Agile $800,000 Agreement Effective Date”), we, along with RMTV, entered into a Subordinated Business
Loan and Security Agreement (the “Agile $800,000 Loan Agreement” and together with the Agile $388,500 Loan Agreement, the
Agile $660,000 Loan Agreement, the “Agile Agreements”) with Agile and the Agile Collateral Agent, evidenced by a Subordinated
Secured Promissory Note in the principal amount of $
The
Agile $800,000 Loan had a balance, including accrued interest, amounting to $
Each of the Agile Agreements contains certain affirmative covenants, including but not limited to delivery of certain financial statements and providing Agile with prompt notice upon the occurrence of certain events as set forth in the Agile Agreements. We also agreed to certain negative covenants, including but not limited to a prohibition on the creation of additional liens with respect to the collateral and the sale of assets outside of the ordinary course of business, without Agile’s prior written consent. We granted the Agile Collateral Agent a security interest, for the benefit of Agile, in certain properties, our rights and assets, as set forth in each Agile Agreement. The Agile Collateral Agent shall only be permitted to perfect its interest in and file a financing statement upon an Event of Default (as defined in the Agile Agreements).
The
Agile Agreements provide for certain standard events of defaults, including but not limited to the (i) failure to make any required payment
under the Agile Notes, (ii) occurrence of a material adverse change in the business, operations, or condition of the Company or the Company
and our subsidiaries, as a whole, and (iii) the filing of any notice of a lien, levy, or assessment against us or our material subsidiaries
by any government agency. In addition to the fixed per annum rate that is otherwise applicable under the Agile Notes, a default interest
rate of
CFG Purchase Agreement
On
August 27, 2024, we entered into a Purchase Agreement (the “CFG Purchase Agreement”) with CFG Merchant Solutions, LLC (“CFG”),
and Mr. Cassidy, as guarantor (the “CFG Guarantor”). The CFG Purchase Agreement provides for the purchase by CFG of our future
receipts (the “Future Receipts”) valued at $
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The CFG Purchase Agreement contains certain customary covenants, including but not limited to the delivery of financial statements to CFG and providing CFG prompt notice upon the occurrence of certain events as set forth in the CFG Purchase Agreement. We also agreed to certain negative covenants, including but not limited to a prohibition on the creation of additional liens with respect to the collateral and the sale of assets outside of the ordinary course of business, without the prior written consent of CFG. The CFG Guarantor has given a personal guaranty of our performance and obligations under the CFG Purchase Agreement.
The
CFG Purchase Agreement provides for penalties upon the occurrence of a breach of the CFG Purchase Agreement, including but not limited
to the (i) interference with CFG’s right to collect the Purchased Percentage or Daily Amount, (ii) breach of any terms or covenants
contained in the CFG Purchase Agreement, and (iii) failure to provide bank statements within seven (7) calendar days after request from
CFG. In addition to the Purchased Percentage that is otherwise applicable under the CFG Purchase Agreement, the greater of an amount
equal to
The
CFG Purchase Agreement had a balance, including accrued interest, amounting to $
1800 Diagonal Lending, LLC
1800 Diagonal $138,000 Promissory Note
On
October 11, 2024, we entered into a Securities Purchase Agreement (the “1800 Diagonal $138,000 Promissory Note Agreement”)
with 1800 Diagonal Lending, LLC (the “1800 Diagonal Lender”), pursuant to which the 1800 Diagonal Lender made a loan to us,
evidenced by a Promissory Note in the aggregate principal amount of $
The
1800 Diagonal $138,000 Promissory Note Agreement had a balance, including accrued interest, amounting to $
1800 Diagonal $49,200 Bridge Note
On
October 11, 2024, we entered into a Securities Purchase Agreement with the 1800 Diagonal Lender (the “1800 Diagonal $49,200 Bridge
Note Agreement”) pursuant to which the 1800 Diagonal Lender made a loan to us, evidenced by a Bridge Note in the aggregate principal
amount of $
The
1800 Diagonal $49,200 Bridge Note Agreement had a balance, including accrued interest, amounting to $
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1800 Diagonal $31,200 Promissory Note
On
December 17, 2024, we entered into a Securities Purchase Agreement (the “1800 Diagonal $31,200 Promissory Note Agreement”)
with 1800 Diagonal Lender, pursuant to which the 1800 Diagonal Lender made a loan to us, evidenced by a Promissory Note in the aggregate
principal amount of $
The
1800 Diagonal $31,200 Promissory Note Agreement had a balance, including accrued interest, amounting to $
1800 Diagonal $96,000 Bridge Note
On
December 17, 2024, we entered into a Securities Purchase Agreement with the 1800 Diagonal Lender (the “1800 Diagonal $96,000 Bridge
Note Agreement,” and together with the 1800 Diagonal $138,000 Promissory Note Agreement, the 1800 Diagonal $49,200 Bridge Note
Agreement and the 1800 Diagonal $31,200 Promissory Note Agreement, the “1800 Diagonal Loan Agreements”) pursuant to which
the 1800 Diagonal Lender made a loan to us, evidenced by a Bridge Note in the aggregate principal amount of $
The
1800 Diagonal $96,000 Bridge Note Agreement had a balance, including accrued interest, amounting to $
The
1800 Diagonal Agreements contain certain customary representations, warranties, and covenants made by us, and contain customary events
of default. Upon the occurrence and during the continuation of any such event of default, the respective 1800 Diagonal Note will become
immediately due and payable, and we are obligated to pay to the 1800 Diagonal Lender an amount equal to 150% times the sum of (w) the
then outstanding principal amount of the respective 1800 Diagonal Note No. 1 plus (x) accrued and unpaid interest on the unpaid principal
amount of such 1800 Diagonal Note No. 1 to the date of payment plus (y) default interest at
1800 Diagonal Note Defaults and Debt to Equity Conversions
On June 20, 2025, in response
to our failure to make payments due on June 16, 2025, in the aggregate amount of $
| ● | 1800 Diagonal $138,000 Promissory Note: |
| ○ | On June 20, 2025, 1800 Diagonal Lender converted $ |
| ○ | On June 24, 2025, 1800 Diagonal Lender converted $ |
There can be no assurance as to whether the 1800 Diagonal Lender will continue to enforce its rights under the 1800 Diagonal Notes, including converting additional amounts under the 1800 Diagonal Notes into shares of our common stock and sell those shares in the public market.
See Note 12 – Stock Options, Restricted Stock Units (RSUs) and Warrants for discussion on the repricing of certain existing warrants and the issuance of prefunded warrants.
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Equipment Leases and Software Financings
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Equipment Leases and Software Financings as of June 30, 2025: | Principal Balance | Interest Rates | Maturity Date | |||||||
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Balboa Capital
On
February 27, 2024, we entered into an equipment financing agreement with Ameris Bank dba Balboa Capital (“Balboa Capital Equipment
Financing Agreement”), which provides the terms and conditions for the debt financing of certain equipment (“Collateral”)
for a cost of $
De Lage Landen Financial Services
On
April 10, 2024, we entered into an equipment lease financing agreement with De Lage Landen Financial Services (“De Lage Landen
Equipment Lease Financing Agreement #1”), for a cost of $
On
August 2, 2024, we entered into a closed-end financing agreement for software with De Lage Landen Financial Services (“De Lage
Landen Software Financing Agreement), for a cost of $
On
August 19, 2024, we entered into a closed-end financing agreement for software with De Lage Landen Financial Services (“De Lage
Landen Software Financing Agreement #2”), for a cost of $
On
September 12, 2024, we entered into a closed-end financing agreement for software and services with De Lage Landen Financial Services
(“De Lage Landen Software Financing Agreement #3”), for a cost of $
| 32 |
On
January 6, 2025, financing was initiated on a closed-end financing agreement for software and services with De Lage Landen Financial
Services, (“De Lage Landen Software Financing Agreement #12”), for a cost of $
On
February 21, 2025, we entered into a closed-end financing agreement for software and services with De Lage Landen Financial Services,
(“De Lage Landen Software Financing Agreement #13”), for a cost of $
On
February 13, 2025, we entered into a closed-end financing agreement for software and services with De Lage Landen Financial Services,
(“De Lage Landen Software Financing Agreement #14”), for a cost of $
On
April 4, 2025, we entered into a closed-end financing agreement for software and services with De Lage Landen Financial Services, (“De
Lage Landen Software Financing Agreement #16”), for a cost of $
On
May 15, 2025, we entered into a closed-end financing agreement for software and services with De Lage Landen Financial Services, (“De
Lage Landen Software Financing Agreement #17”), for a cost of $
WinTrust Specialty Finance
On
May 23, 2024, we entered into an equipment financing agreement with WinTrust Specialty Finance a division of Beverly Bank & Trust
Company, N.A. (“WinTrust Equipment Financing Agreement), which provides the terms and conditions for the debt financing of certain
equipment (“Collateral”) for a cost of $
BMO Bank N.A.
On
August 15, 2024, we entered into an equipment financing agreement with BMO Bank N.A. (“BMO Equipment Financing Agreement”),
which provides the terms and conditions for the debt financing of certain equipment (“Collateral”) for a cost of $
Alliance Funding Group
On
October 9, 2024, we entered into an equipment financing agreement with Alliance Funding Group. (“AFG Equipment Financing Agreement
No. 1”), which provides the terms and conditions for the debt financing of certain equipment (“Collateral”) for a cost
of $
On
October 9, 2024, we entered into an equipment financing agreement with Alliance Funding Group. (“AFG Equipment Financing Agreement
No. 2”), which provides the terms and conditions for the debt financing of certain equipment (“Collateral”) for a cost
of $
| 33 |
Dell
On
January 7, 2025, we entered into an equipment financing agreement with Dell Financing Group, (“Dell Equipment Financing Agreement”),
which provides the terms and conditions for the debt financing of certain equipment (“Collateral”) for a cost of $
PEAC
On
February 5, 2025, we entered into an equipment financing agreement with Dell Financing Group, (“PEAC Equipment Financing Agreement”),
which provides the terms and conditions for the debt financing of certain equipment (“Collateral”) for a cost of $
NOTE 9. COMMITMENTS AND CONTINGENCIES
We may be involved in legal proceedings, claims and assessments arising in the ordinary course of business. Such matters are subject to many uncertainties, and outcomes are not predictable with assurance. There are no such loss contingencies that are included in the financial statements as of June 30, 2025.
NOTE 10. RELATED PARTY TRANSACTIONS
Related parties are natural persons or other entities that have the ability, directly or indirectly, to control another party or exercise significant influence over the party making financial and operating decisions. Related parties include other parties that are subject to common control or that are subject to common significant influences.
500 Limited
We
paid 500 Limited for programming services provided to Loop Media in the amount of $
500 Limited is an entity controlled by Liam McCallum, our former Chief Product and Technology Officer. Mr. McCallum stepped down from his role as Chief Product and Technology Officer effective May 31, 2024, and resigned as our advisor on December 31, 2024.
Excel Family Partners, LLLP (“Excel”)
For the nine months ended June 30, 2025, and 2024, we were a party to multiple debt and equity transactions with Excel, an entity managed by Bruce Cassidy, the Executive Chairman of our Board of Directors and our majority stockholder.
On
June 18, 2025, Mr. Cassidy provided a working capital advance directly to the Company in the amount of $
See Note 8 – Debt and Note 11 – Stockholders’ Deficit for discussion on the following transactions:
| ● | Revolving Lines of Credit | ||
| ● | Excel $2.5M Revolving Line of Credit | ||
| ● | Non-Revolving Lines of Credit | ||
| ● | May 2023 Secured Loan | ||
| ● | Excel $1.0M Line of Credit | ||
| 34 |
| ● | Convertible Notes | ||
| ● | The Bellino Trust $2.0M Convertible Note | ||
| ● | Excel $3.0M Line of Credit Convertible Note | ||
| ● | Other Debt Instruments | ||
| ● | CFG Purchase Agreement | ||
| ● | Equity Issuances | ||
| ● | Excel Registered Offering and Concurrent Private Placement Offering | ||
Also see Note 12 – Stock Options, Restricted Stock Units (RSUs) and Warrants for discussion on the repricing and exercise of certain existing warrants and the issuance of prefunded warrants.
NOTE 11. STOCKHOLDERS’ DEFICIT
Capital Stock Authorized for Issuance
As of June 30, 2025, our authorized capital stock consists of (i) shares of common stock, $ par value per share, (ii) shares of Series A preferred stock, $ par value per share and (iii) shares of Series B preferred stock, $ par value per share.
On September 19, 2024, the Loop stockholders voted at our 2024 Annual Meeting of Stockholders to approve an amendment to our Restated Articles of Incorporation to increase the number of shares of common stock, authorized for issuance thereunder from shares to .
Capital Stock Issued and Outstanding
As of June 30, 2025, and 2024, there were and , respectively, shares of common stock issued and outstanding.
As of June 30, 2025, and 2024, there were shares of Series A preferred stock or Series B preferred stock issued and outstanding.
NYSE American Delisting
Our common stock was delisted from the NYSE American on August 8, 2024, and began trading under the symbol “LPTV” on the OTC Pink Market on August 9, 2024. We intend to have our common stock quoted on the OTCQB Venture Market (the “OTCQB”).
Nine months ended June 30, 2025
During the nine months ended June 30, 2025, we issued shares of common stock through a Private Placement Offering.
During
the nine months ended June 30, 2025, we issued shares of common stock upon the conversion of non-revolving line of credit
plus accrued interest in the amount of $
During the nine months ended June 30, 2025, we issued shares of common stock for vested RSUs.
During
the nine months ended June 30, 2025, we issued shares of common stock upon the conversion of a promissory note in the amount
of $
| 35 |
Nine months ended June 30, 2024
During
the nine months ended June 30, 2024, we issued
During
the nine months ended June 30, 2024, we issued
During the nine months ended June 30, 2024, we issued shares of common stock to a board member upon the conversion of non-revolving line of credit plus accrued interest.
During the nine months ended June 30, 2024, we issued shares of common stock upon the conversion of non-revolving line of credit plus accrued interest.
During the nine months ended June 30, 2024, we issued shares of common stock for capital raise costs.
During the nine months ended June 30, 2024, we issued shares of common stock for consulting fees.
During the nine months ended June 30, 2024, we issued shares of common stock for vested RSUs.
See Note 12 – Stock Options, Restricted Stock Units (RSUs) and Warrants for stock compensation discussion.
The Registered Offering and the Concurrent Private Placement Offering
On May 31, 2024, we entered into a Securities Purchase Agreement (the “Institutional Purchase Agreement”) with the purchaser named therein (the “Institutional Investor”) and a Securities Purchase Agreement (the “Private Placement Purchase Agreement,” and together with the Institutional Purchase Agreement, the “Purchase Agreements”) with Excel (the “Private Placement Entity,” together with the Institutional Investor, the “Investors”).
Pursuant
to the Institutional Purchase Agreement, we agreed to sell and issue, in a registered direct offering (the “Registered Offering”)
shares (the “Registered Shares”) of our common stock at a purchase price per share of $ and pre-funded warrants
(the “Registered Pre-Funded Warrants”) to purchase up to an aggregate of
Pursuant
to the Private Placement Purchase Agreement, in a concurrent private placement (the “Concurrent Private Placement Offering,”
together with the Registered Offering, the “Offerings”), we agreed to sell and issue to the Private Placement Entity pre-funded
warrants (the “Private Pre-Funded Warrants”) to purchase up to an aggregate of
The Purchase Agreements contain customary representations, warranties and agreements of ours and the Investors and customary indemnification rights and obligations of the parties. Pursuant to the terms of the Institutional Purchase Agreement, we have agreed to certain restrictions, subject to certain exceptions, on the issuance and sale of our common stock and securities convertible into shares of common stock during the 90-day period following the closing of the Registered Offering. We also agreed not to effect or enter into an agreement to effect any issuance of common stock or any securities convertible into or exercisable or exchangeable for shares of common stock involving a variable rate transaction (as defined in the Institutional Purchase Agreement), subject to certain exceptions, until the six-month anniversary of the closing of the Registered Offering.
| 36 |
In addition, until the date that is the eighteenth (18) month anniversary of the closing of the Registered Offering, the Institutional Investor is entitled to a participation right in any subsequent financing (as defined in the Institutional Purchase Agreement ) effected by us or any of our subsidiaries of common stock or common stock equivalents for cash consideration, or a combination of units thereof, up to an amount equal to 35% of such subsequent financing on the same terms, conditions and price provided for in the subsequent financing, subject to certain carve-outs as set forth in the Institutional Purchase Agreement.
In
connection with the Offerings, on May 31, 2024, we also entered into a placement agency agreement (the “Placement Agency Agreement”)
with Roth Capital Partners, LLC the “Placement Agent”). Pursuant to the terms of the Placement Agency Agreement, the Placement
Agent agreed to use its reasonable best efforts to arrange for the sale of the Registered Shares, the Registered Pre-Funded Warrants,
the Registered Pre-Funded Warrant Shares, the Private Pre-Funded Warrants and the Private Pre-Funded Warrant Shares (the “Securities”).
We paid the Placement Agent a cash fee equal to
Pursuant
to the terms of the Placement Agency Agreement, we issued to the Placement Agent warrants (“Placement Agent Warrants”) to
purchase up to
The
Registered Offering closed on June 3, 2024, and on July 1, 2024, the Institutional Investor delivered a Notice of Exercise to us to purchase
the
The Registered Shares and the Registered Pre-Funded Warrants were offered pursuant to our effective Shelf Registration Statement on Form S-3 (File No. 333-268957), which was previously filed and declared effective by the SEC, the accompanying base prospectus dated January 11, 2023, and a prospectus supplement dated May 31, 2024.
Private Placement Offering
On
December 5, 2024, we entered into a Securities Purchase Agreement (the “Purchase Agreement”) with an accredited investor
pursuant to which we sold, in a private placement offering, made pursuant to Section 4(a)(2) under the Securities Act and Rule 506(c)
promulgated thereunder, shares of our common stock, par value $ per share, at a per share price of $, the closing
price per share as quoted on the OTC Pink Market, on December 4, 2024, for an aggregate purchase price of $
See Note 12 – Stock Options, Restricted Stock Units (RSUs) and Warrants for stock compensation discussion.
Options
Option valuation models require the input of highly subjective assumptions. The fair value of stock-based payment awards was estimated using the Black-Scholes option model with a volatility figure derived from using the average standard deviation method based on the average volatility of a selected peer group of similar companies. We account for the expected life of options based on the contractual life of options in accordance with the “simplified” method, which is used for “plain-vanilla” options, as defined in the accounting standards codification. The risk-free interest rate was determined from a blended interest rate based on the federal interest rate on the grant/measurement date and the expected life of options.
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| Number of | Weighted Average | Weighted Average Remaining | Aggregate | ||||||||||||||
| Options | Exercise Price | Contractual Term | Intrinsic Value | ||||||||||||||
| Outstanding at September 30, 2024 | $ | $ | |||||||||||||||
| Grants | — | ||||||||||||||||
| Exercised | — | ||||||||||||||||
| Expired | ( | ) | — | ||||||||||||||
| Forfeited | ( | ) | — | ||||||||||||||
| Outstanding at June 30, 2025 | $ | $ | |||||||||||||||
| Exercisable at June 30, 2025 | $ | $ | |||||||||||||||
The aggregate intrinsic value in the preceding tables represents the total pretax intrinsic value, based on options with an exercise price less than our stock price of $ as of June 30, 2025, and $ as of June 30, 2024, which would have been received by the option holders had those option holders exercised their options as of that date.
We recognize compensation expense for all stock options granted using the fair value-based method of accounting. During the nine months ended June 30, 2025, options were issued.
The stock-based compensation expense related to option grants was $ and $, for the nine months ended June 30, 2025, and 2024, respectively.
As of June 30, 2025, the total compensation cost related to nonvested awards not yet recognized is $ and the weighted average period over which expense is expected to be recognized in months is .
We calculate the fair value of options using the Black-Scholes option pricing model, however, no options were granted for the nine months ended June 30, 2025.
Repricing of Certain Employee Stock Options
As previously disclosed, our common stock was delisted from the NYSE American on August 8, 2024, and began trading on the OTC Pink Current operated on the OTC Markets system effective on August 9, 2024. As an incentive to retain employees, on September 30, 2024, the Board of Directors approved the reduction of the exercise price of stock options (the “Stock Option Repricing”) previously granted under the Plan that are held by certain current non-executive employees to $ per share, which was the closing price of our common stock on September 27, 2024, as reported on the OTC Pink.
Restricted Stock Units
On September 18, 2022, the Compensation Committee of our Board of Directors approved Restricted Stock Unit (“RSU”) awards to certain officers and key employees pursuant to the terms of the Loop Media, Inc. Amended and Restated 2020 Equity Incentive Compensation Plan (the “2020 Plan”).
On September 22, 2022, we granted an aggregate of RSUs, which vest over time subject to continued service. Each RSU was valued at the public offering price during our initial public offering of $ per share, and 25% of the RSUs vest on the one-year anniversary of the grant date and the remainder in equal quarterly installments over the following three-year period.
On January 3, 2023, the Compensation Committee of our Board of Directors approved RSU awards as compensation to members of our Board of Directors pursuant to the 2020 Plan.
On January 3, 2023, we granted an aggregate of RSUs which vest over time subject to continued service. Each RSU was valued at $ per share. % of RSUs vest on the one-year anniversary of the grant date and the remainder in equal quarterly installments over the following three-year period. All of RSUs vest on the day after the end of the fiscal year in which the grant was made.
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On July 1, 2023, we granted an aggregate of RSUs which fully vested on the grant date. Each RSU was valued at $ per share.
On January 1, 2024, we granted an aggregate of RSUs which vest in equal semi-annual installments over a two-year term, beginning on the six-month anniversary of the grant date until all RSUs are fully vested. Each RSU was valued at $ per share.
On March 15, 2024, we granted an aggregate of RSUs which vest over a two-year period with % vesting on the one-year anniversary of the grant date and the remainder at % on a quarterly basis thereafter until all RSUs are fully vested. Each RSU was valued at $ per share.
On March 15, 2024, we granted RSUs, which vest over a four-year period, with % of the shares subject to the RSUs vesting on the one-year anniversary of the grant date and the remaining shares vesting equally on a quarterly basis beginning three months after the one-year anniversary until all RSUs are fully vested. Each RSU was valued at $ per share.
On April 1, 2024, we granted RSUs, which vest over a year and four months period, with % of the shares subject to the RSUs vesting on the one-year anniversary of the grant date and the remaining shares vesting equally on a quarterly basis beginning three months after the one-year anniversary until all RSUs are fully vested. Each RSU was valued at $ per share.
On September 30, 2024, we granted RSUs, which vest in equal quarterly installments over a one-year term, beginning on the three-month anniversary of the grant date until all RSUs are fully vested. Each RSU was valued at $ per share.
On March 15, 2025, we granted RSUs, which vest over an eighteen-month period. ; will ; and the remaining . Each RSU was valued at $ per share.
On March 15, 2025, we granted RSUs, which vest over a one-year period. % vested immediately on the grant date and the remaining shares vest equally on a quarterly basis thereafter until all RSUs are fully vested. Each RSU was valued at $ per share.
| Number of | Weighted Average | Aggregate | |||||||||||
| RSUs | Fair Value | Intrinsic Value | |||||||||||
| Outstanding at September 30, 2024 | $ | $ | |||||||||||
| Granted | |||||||||||||
| Vested | ( | ) | |||||||||||
| Expired | |||||||||||||
| Forfeited | ( | ) | |||||||||||
| Outstanding at June 30, 2025 | $ | $ | |||||||||||
The aggregate intrinsic value in the preceding tables represents the total pretax intrinsic value, based on our stock price of $ as of June 30, 2025, and $ as of June 30, 2024, which would have been received by the RSU holders as of that date.
The stock-based compensation expense related to RSU grants was $ and $, for the nine months ended June 30, 2025, and 2024, respectively.
As of June 30, 2025, the total compensation cost related to nonvested RSU awards not yet recognized was $ and the weighted average period over which expense is expected to be recognized in months was .
Warrants
The following table summarizes the warrant activity for the nine months ended June 30, 2025:
| Number of | Weighted average exercise | ||||||||
| shares | price per share | ||||||||
| Outstanding at September 30, 2024 | $ | ||||||||
| Issued | |||||||||
| Exercised | |||||||||
| Expired | ( | ) | |||||||
| Outstanding at June 30, 2025 | $ | ||||||||
We record all warrants granted using the fair value-based method of accounting.
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During the nine months ended June 30, 2025, no warrants were issued in conjunction with lines of credit. When warrants are issued, we allocate the fair value of the warrants at inception as deferred costs. Once we draw down funds on the revolving line of credit, we re-allocate the fair value of the warrants as debt discount and record the straight-line amortization ratably over the life of the debt as interest expense.
During
the nine months ended June 30, 2025, we recorded consulting expense of $
We calculate the fair value of warrants using the Black-Scholes option pricing model, however, no warrants were granted for the nine months ended June 30, 2025.
Repricing and Exercise of Certain Existing Warrants
On
December 14, 2023, we agreed to offer to amend certain existing warrants exercisable for an aggregate of up to
As
of June 30, 2025, holders of Existing Warrants (including those held by Mr. Cassidy and Ms. Penz) had exercised warrants for
RAT Warrant Repricing
On
May 31, 2024, we entered into a Non-Revolving Line of Credit Waiver and Consent Agreement (the “Waiver and Consent”), with
the Loan Administrator, effective as of and contingent upon the closing of the Offerings, waiving certain provisions of the RAT Non-Revolving
Line of Credit Agreement Amendment #1, pursuant to which the RAT Lenders agreed to irrevocably waive their rights to receive one-third
(1/3) of the net proceeds of any non-affiliate capital raise, including the Offerings, and consent to us not paying any of such proceeds
to the RAT Lenders. In consideration for entering into the Waiver and Consent, we agreed to reduce the exercise price of the RAT Loan
Warrants and the Subordination Agreement Warrants held by the RAT Lenders to purchase an aggregate of
NOTE 13. SUBSEQUENT EVENTS
We have evaluated all subsequent events through the date of this quarterly report on Form 10-Q to ensure that this filing includes appropriate disclosure of events both recognized in our unaudited condensed financial statements as of June 30, 2025, and events that occurred after June 30, 2025, but which were not recognized in our unaudited condensed financial statements as indicated below.
The Bellino Trust $2.0M Convertible Note
As
previously reported, we issued a Convertible Promissory Note to the Joseph G. Bellino Trust Dated November 30, 2023 (the “Bellino
Trust”), in the principal amount of $
On June 16, 2025, in response to our failure to make a payment on June 1, 2025, we received written notice from the Bellino Trust declaring a default on our payment obligations under the Bellino Trust $2.0M Convertible Note and stating that it would proceed with the necessary actions in accelerating repayment of all principal and interest due under the Bellino Trust $2.0M Convertible Note.
In a private transaction on July 15, 2025, the Bellino Trust $2.0M Convertible Note was assigned to Mr. Cassidy with no changes to the terms. As of the date of this Report, no further action has been taken against the Company with respect to the Bellino Trust $2.0M Convertible Note.
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1800 Diagonal Lending Promissory and Bridge Notes – Defaults and Debt to Equity Conversions
As
previously reported, we entered into loan agreements with and issued promissory notes to 1800 Diagonal Lending, LLC (“1800 Diagonal”).
On June 20, 2025, we received a notice of default and demand letter from 1800 Diagonal in response to our failure to make payments in
the aggregate amount of $
| ● | 1800
Diagonal $138,000 Promissory Note (Securities Purchase Agreement dated October 11, 2024,
in the aggregate principal amount of $ |
| ○ | On
June 20, 2025, 1800 Diagonal Lender converted $ | |
| ○ | On
June 24, 2025, 1800 Diagonal Lender converted $ | |
| ○ | On
July 10, 2025, 1800 Diagonal converted $ | |
| ○ | On
July 17, 2025, 1800 Diagonal converted $ |
| ● | 1800
Diagonal $ |
| ○ | On
July 22, 2025, 1800 Diagonal converted $ | |
| ○ | On
July 28, 2025, 1800 Diagonal converted $ |
| ● | 1800
Diagonal $96,000 Bridge Note (Securities Purchase Agreement dated December 17, 2024, in the
aggregate principal amount of $ |
| ○ | On
July 30, 2025, 1800 Diagonal converted $ | |
| ○ | On
August 6, 2025, 1800 Diagonal converted $ | |
| ○ | On
August 12, 2025, 1800 Diagonal converted $ |
American Society of Composers, Authors and Publishers
On
July 8, 2025, we received a demand letter from the American Society of Composers, Authors and Publishers (“ASCAP” and such letter, the “July 8 ASCAP Notice”)
declaring the full amount owed to it under the Settlement Agreement entered into by and between us and ASCAP, effective December 6,
2024 (the “Settlement Agreement”), immediately due and payable. Pursuant to the Settlement Agreement, should we fail to
cure a default on our payment obligations, ASCAP shall be entitled to accelerate any portion of the amount that remains due so that
the remaining balance becomes immediately due and payable. The amount owed to ASCAP under the Settlement Agreement is $
Balboa Capital
As previously reported, we entered
into an equipment financing agreement with Ameris Bank dba Balboa Capital (“Balboa” and such agreement, the “Balboa
Financing Agreement”) on February 27, 2024, at a collateral cost of $
Cara Communications Corporation
On
July 15, 2025, we received a formal and final demand for payment from Cara Communications Corporation (“CCC” and such demand,
the “July 15 CCC Notice”) declaring the full amount owed to it under the Fee-Based License Agreement by and between us and
CCC, dated January 20, 2023, as amended (the “License Agreement”), immediately due and payable within five (5) business days
of the July 15 CCC Notice. The amount owed to CCC under the License Agreement is $
Capital Foundry Revolving Line of Credit
As
previously reported, we entered into a Loan and Security Agreement with Capital Foundry Funding, LLC (“Capital Foundry” and
such agreement, the “Capital Foundry Loan Agreement”) for a revolving line of credit facility for the principal sum of up
to $
| ● | On
July 28, 2025, in the amount of $ | |
| ● | On
August 7, 2025, in the amount of $ |
As
of August 12, 2025, our current balance with Capital Foundry was $
Working Capital Advance by Mr. Cassidy
On July 15, 2025, Mr. Cassidy
provided a working capital advance directly to the Company in the amount of $
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Agile Lending
As previously reported, we entered into the following loan agreements with and issued the following promissory notes to Agile Lending, LLC:
| ● | Subordinated
Business Loan and Security Agreement dated December 27, 2024, evidenced by a Subordinated Secured Promissory Note in the original
principal amount of $ | |
| ● | Subordinated
Business Loan and Security Agreement dated March 25, 2025, evidenced by a Subordinated Secured Promissory Note in the original principal
amount of $ | |
| (collectively, the “Agile Agreements”). |
On
July 21, 2025, we received a notice of default and acceleration letter from Agile Lending (the “July 21 Agile Notice”) for
our failure to make payments when and as due. Agile Lending accelerated all amounts owed in the aggregate amount of $
Alliance Funding Group
As previously reported, we entered into the following equipment financing agreements with Alliance Funding Group (“AFG”):
| ● | AFG
Equipment Financing Agreement No. 1 dated October 9, 2024, which provides the terms and conditions for the debt financing of certain
equipment for a cost of $ | |
| ● | AFG
Equipment Financing Agreement No. 2” dated October 9, 2024, which provides the terms and conditions for the debt financing
of certain equipment for a cost of $ |
(together, the “AFG Agreements”).
On August 6,
2025, we received formal Notices of Acceleration from AFG (the “August 6 AFG Notices”) declaring the full remaining
balance owing on the AFG Agreements immediately due and payable. AFG has demanded an aggregate amount of $
National Retail Solutions, Inc. Civil Action
On August 1, 2022, we entered into an Advertising Sales Service and Content License Agreement with National Retail Solutions, Inc. (“NRS” and such agreement, the “NRS Advertising Agreement”), for the provision of certain services related to our programmatic advertising sales inventory. On June 26, 2024, we entered into a Payment Plan Agreement and Confession of Judgment dated June 26, 2024 (the “NRS Payment Plan”), pursuant to which NRS agreed to forbear its rights under the NRS Advertising Agreement in consideration of us remitting to NRS outstanding amounts due to NRS in monthly installment payments. The NRS Payment Plan contains a confession of judgment provision whereby, if any event of default occurs under the NRS Payment Plan, we authorized any attorney designated by NRS and admitted to practice before New Jersey courts to appear on our behalf in any court in New Jersey in one or any more proceedings, or before any clerk thereof or other court official, and to confess judgment against the Company in the full amount of the balance due under the NRS Payment Plan, plus attorneys’ fees, court costs and interest accrued as of the date of entry of judgment.
On August 11, 2025, we received notification that on July 28, 2025, in response to our failure to remit to NRS the amounts due under the NRS Payment Plan, NRS filed the following documents commencing a Civil Action to enforce the confession of judgment against the Company in the Superior Court of New Jersey, Law Division of Essex County:
| ○ | Certification in Support of Confessing Judgment, | |
| ○ | Complaint for Entry of Judgment by Confession Pursuant to R. 4:45-2 and | |
| ○ | Summons, |
collectively, the “Civil Action.”
In the Civil Action, NRS seeks
an order for a confession of judgement against the Company and in favor of NRS for $
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
STATEMENT ON FORWARD-LOOKING INFORMATION
This Quarterly Report on Form 10-Q (this “Report”) contains certain statements that are, or may deemed to be, “forward-looking statements” regarding our plans, expectations, thoughts, beliefs, estimates, goals and outlook for the future. All statements other than statements of historical fact are “forward-looking statements” for purposes of these provisions, including any projections of earnings, revenues, or other financial items; any statements of the plans, strategies, and objectives of management for future operations; any statements concerning proposed new products, services, or developments; any statements regarding future economic conditions or performance; statements of belief; and any statement of assumptions underlying any of the foregoing. Such forward-looking statements are subject to inherent risks and uncertainties, and actual results could differ materially from those anticipated by the forward-looking statements.
These forward-looking statements involve significant risks and uncertainties, including, but not limited to, the following: competition, promotional costs and risk of declining revenues. Our actual results could differ materially from those anticipated in such forward-looking statements as a result of a number of factors. These forward-looking statements are made as of the date of this filing, and we assume no obligation to update such forward-looking statements. The following discusses our financial condition and results of operations based upon our financial statements which have been prepared in conformity with accounting principles generally accepted in the United States of America. It should be read in conjunction with our financial statements and the notes thereto included elsewhere herein.
The following discussion and analysis provides information which our management believes to be relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read together with our financial statements and the notes to the financial statements, which are included in this Report.
Overview
We are a multichannel digital video platform media company that uses marketing technology to generate revenue and offer our services. Our technology and vast library of videos and licensed content enable us to curate and distribute short-form videos to connected televisions (“CTV”) in out-of-home (“OOH”) dining, hospitality and retail establishments, convenience stores and other locations and venues to enable the operators of those locations to inform, entertain and engage their customers. Our technology also provides businesses the ability to promote and advertise their products via digital signage and provides third-party advertisers with a targeted marketing and promotional tool for their products and services. We also allow our business clients to access our service without advertisements by paying a monthly subscription fee.
Although we offer hand-curated music video content licensed from major and independent record labels as well as non-music video content, there have been recent changes to content partners and content offerings. Our non-music video content is predominantly licensed or acquired from third parties, including live sports, action sports clips, drone and nature footage, trivia, news headlines, lifestyle channels and kid-friendly videos, as well as movie, television and video game trailers, among other content. We distribute our content and advertising inventory to digital screens located in OOH locations primarily through (i) our owned and operated platform (the “O&O Platform”) of Loop Media-designed “small-box” streaming Android media players (“Loop Players”) and legacy ScreenPlay (as defined below) computers and (ii) through screens (“Partner Screens”) on digital platforms owned and operated by third parties (each a “Partner Platform” and collectively the “Partner Platforms,” and together with the O&O Platform, the “Loop Platform”).
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As of June 30, 2025, we had approximately 135,000 active Loop Players and Partner Screens across the Loop Platform, which included 17,996 quarterly active Loop Players (we refer to our quarterly active units herein as “QAUs”) across our O&O Platform. See “— Key Performance Indicators – Quarterly Active Units.” We launched our Partner Platforms business in May 2022 and had approximately 117,000 Partner Screens across our Partner Platforms as of June 30, 2025.
We have two primary constituents that are included in our customer base: the OOH locations we service and the advertisers who purchase advertising inventory on the Loop Platform. We earn revenue from these customers primarily by selling advertising inventory on the Loop Platform and by collecting subscription fees from our O&O Platform owners and operators that are streaming advertising-free content.
The O&O Platform
We deliver content across our O&O Platform to the owners and operators of OOH locations who sign up for our media service. We sell advertising impressions contained in the content streams to demand sources, including demand-side platforms (“DSPs”), supply-side platforms (“SSPs”) and advertisers, who pay us to fill those impressions and have their ads delivered into the OOH locations that utilize our services. We also allow OOH locations on our O&O Platform to access our content without advertisements by paying a monthly subscription fee.
From a business operations standpoint, for the O&O Platform business, we view our customers as the owners and operators of the OOH locations that use our content services to engage and entertain the customers that visit the OOH locations. Our customer services team works with the owners and operators of OOH locations in our O&O Platform business to ensure our customers are being properly serviced and address any questions about the service, content, advertising performance and other matters.
From an accounting standpoint, for the O&O Platform business, our customers are considered to be those persons that provide revenue to us, which includes the owners and operators of the OOH locations that utilize a subscription-based service, and the advertising demand sources (including DSPs, SSPs and advertisers) that purchase our advertising inventory on the O&O Platform. The owners and operators of the OOH locations utilizing a free advertising-based service on our O&O Platform are not our customers. Instead, the advertising demand sources are our customers because they provide revenue to us (by way of purchasing advertising inventory) for the streaming of content to those OOH locations utilizing an ad-free service.
We record as cost of revenue in the O&O Platform business certain costs and expenses associated with operating such business, including the cost of content, streaming costs and content hosting fees. We procure content from third parties though licensing fees or by purchasing the content outright. Certain of our content, including our music video and certain third-party non-music content, are under licenses that contain a revenue share arrangement. We and the licensor of the content negotiate and pre-agree to the percentage of revenue to which each party will be entitled. The cost of content, including any payments to licenses under a revenue share license, is the single largest component of the cost of revenue associated with the O&O Platform business.
The Partner Platforms
The screens in our Partner Platforms business may deliver content that we curate and deliver or content that is provided by the owners and operators of third-party digital platforms. We make available to our Partner Platforms clients’ channels of original content developed using licensed or purchased content that is then reformatted into short-form content suitable for commercial use.
We provide advertising demand services to third parties by selling ad impressions available on the Partner Platforms to advertising demand sources (including DSPs, SSPs and advertisers) who pay us to fill those impressions and have ads delivered across the Partner Platforms. If the advertising impressions are filled with advertisements, we will fulfill our obligation and be paid as the publisher of the advertisement. If advertising impressions are not purchased, the content will play without advertisements and no revenue will be earned by us.
From a business operations standpoint, we view our customers for our Partner Platforms services as the owners and operators of the third-party digital platforms that utilize our content and advertising services and enable such third parties to better monetize the screens on their digital platforms. We may, in certain instances, also provide content across the Partner Platforms.
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Our customer services team works with the owners and operators of the third-party digital platforms in our Partner Platforms business to ensure our customers are being properly serviced and address any questions about the service, content, advertising performance and other matters.
From an accounting standpoint for the Partner Platforms business, our customers are the advertising demand sources (including DSPs, SSPs and advertisers) because they provide revenue to us (by way of purchasing advertising inventory) for the streaming of content across the Partner Platforms. The Partner Platforms business operates a free ad- supported business model with no subscription fees.
The revenue share arrangements in the O&O Platform business are included in the cost of revenue. The content streamed on the Partner Platforms is content we procure on licenses that do not contain an element of revenue share or content provided by the third-party partner who owns and operates the screens on the Partner Platforms. As such, no content partner revenue share arrangements exist on the Partner Platforms. There is, however, a revenue share arrangement with the third-party partner who owns and operates the screens on the Partner Platforms. We deduct from the revenue we generate in the Partner Platforms business certain costs and expenses associated with operating such business (including streaming costs and content hosting) and then allocate the remaining revenue between us and the third-party digital platform provider, based on pre-agreed negotiated percentages. The percentage of revenue we pass along to third-party digital platform providers is recorded as cost of revenue and is our single largest cost of revenue component for the Partner Platforms business.
Recent Developments
May 2023 Secured Line of Credit
As previously reported, effective as of May 10, 2023, we entered into a Secured Non-Revolving Line of Credit Loan Agreement (the “May 2023 Secured Line of Credit Agreement”) with several individuals and institutional lenders for loans of up to an aggregate of $4.0 million (the “May 2023 Secured Line of Credit”), as evidenced by that certain Secured Non-Revolving Line of Credit Promissory Note issued May 10, 2023 (the “May 2023 Secured Note”). The May 2023 Secured Line of Credit matured 24 months from the date of the May 2023 Secured Line of Credit, on May 10, 2025 (the “Maturity Date”). We granted to the lenders under the May 2023 Secured Line of Credit Agreement a security interest in all of our present and future assets and properties, real or personal, tangible or intangible, wherever located, including products and proceeds thereof. On the Maturity Date, the May 2023 Secured Line of Credit had a principal balance, including accrued interest, amounting to $889,000 owed to three remaining lenders.
On June 10, 2025, in response to our failure to pay the balances owed on the Maturity Date, we received a demand notice and reservation of rights letter (the “June 10 Notice”) from one of the lenders under the May 2023 Secured Line of Credit Agreement ( “Lender No. 1”) declaring the loan 30 days past due and demanding payment of the full balance, including outstanding principal and interest, owed to Lender No. 1 within 10 days of the date of the June 10 Notice, failing which, Lender No. 1 may proceed with exercising all rights and remedies available to it at law, in equity, and pursuant to the applicable loan documents. The aggregate principal amount owed to Lender No. 1 on the Maturity Date was $300,000.
Pursuant to the terms of the May 2023 Secured Line of Credit Agreement, after the occurrence and during the continuance of an Event of Default thereunder (and after giving of any required notice and the expiration of any applicable cure period), the per annum effective rate of interest on all outstanding principal under the May 2023 Secured Note, which is 12%, shall be increased by 500 basis points. All such increases may be applied retroactively to the date of the occurrence of such Event of Default. While we are evaluating our options regarding the June 10 Notice, as of the date of this Report, this default has not yet been cured; however, no further action has been taken against the Company with respect to the May 2023 Secured Note. There can be no assurance as to whether Lender No. 1 or any other lender under the May 2023 Secured Line of Credit Agreement will enforce its rights by seeking all available legal and equitable remedies available to it.
The Bellino Trust $2.0M Convertible Note
As previously reported, we issued a Convertible Promissory Note to the Joseph G. Bellino Trust Dated November 30, 2023 (the “Bellino Trust”), in the principal amount of $2,000,000 (the “Bellino Trust $2.0M Convertible Note”) on October 18, 2024, which was guaranteed personally by Bruce Cassidy, the Executive Chairman of our Board of Directors and our majority stockholder (“Mr. Cassidy”).
On June 16, 2025, in response to our failure to make a payment on June 1, 2025, we received written notice from the Bellino Trust declaring a default on our payment obligations under the Bellino Trust $2.0M Convertible Note and stating that it would proceed with the necessary actions in accelerating repayment of all principal and interest due under the Bellino Trust $2.0M Convertible Note.
In a private transaction on July 15, 2025, the Bellino Trust $2.0M Convertible Note was assigned to Mr. Cassidy, with no changes to the terms. As of the date of this Report, no further action has been taken against the Company with respect to the Bellino Trust $2.0M Convertible Note.
1800 Diagonal Lending Promissory and Bridge Notes
As previously reported, we entered into loan agreements with and issued promissory notes to 1800 Diagonal Lending, LLC (“1800 Diagonal”). On June 20, 2025, we received a notice of default and demand letter from 1800 Diagonal in response to our failure to make payments in the aggregate amount of $79,260 due on June 16, 2025. The June 20 1800 Diagonal Lender Notice called a default under all of the 1800 Diagonal notes and demand was made for immediate payment of a sum representing 150% of the remaining outstanding principal balance under each 1800 Diagonal note (150% representing the multiplier upon the occurrence of an event of default), for an aggregate principal amount of $286,326, plus accrued interest and default interest at the rate of twenty-two percent (22%) as provided in the 1800 Diagonal notes. Additionally, 1800 Diagonal has enforced its rights under the promissory notes by converting amounts owed into shares of our common stock as indicated below:
| ● | 1800 Diagonal $138,000 Promissory Note (Securities Purchase Agreement dated October 11, 2024, in the aggregate principal amount of $138,000): |
| ○ | On June 20, 2025, 1800 Diagonal Lender converted $15,000 of the principal amount into 1,152,073 shares of our common stock at a conversion price of $0.01302. The remaining principal balance due after this conversion was $54,810, including default interest. |
| ○ | On June 24, 2025, 1800 Diagonal Lender converted $20,000 of the principal amount into 1,498,127 shares of our common stock at a conversion price of $0.01335. The remaining principal balance due after this conversion was $36,310, including default interest. |
| ○ | On July 10, 2025, 1800 Diagonal converted $20,000 of the principal amount due into 2,792,126 shares of our common stock at a conversion price of $0.007163. The remaining principal balance due after this conversion was $17,810, including default interest. |
| ○ | On July 17, 2025, 1800 Diagonal converted $19,310 of the principal amount due into 3,662,052 shares of our common stock at a conversion price of $0.005273. There was no remaining principal balance due after this conversion. |
| ● | 1800 Diagonal $49,200 Bridge Note (Securities Purchase Agreement dated October 11, 2024, in the aggregate principal amount of $49,200): |
| ○ | On July 22, 2025, 1800 Diagonal converted $27,260 of the principal amount due into 5,991,209 shares of our common stock at a conversion price of $0.00455. The remaining principal balance due after this conversion was $5,236, including default interest. |
| ○ | On July 28, 2025, 1800 Diagonal converted $6,736 of the principal amount due into 1,621,960 shares of our common stock at a conversion price of $0.004153. There was no remaining principal balance due after this conversion. |
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| ● | 1800 Diagonal $96,000 Bridge Note (Securities Purchase Agreement dated December 17, 2024, in the aggregate principal amount of $96,000): |
| ○ | On July 30, 2025, 1800 Diagonal converted $22,895 of the principal amount due into 6,289,835 shares of our common stock at a conversion price of $0.00364. The remaining principal balance due after this conversion was $139,885, including default interest. |
| ○ | On August 6, 2025, 1800 Diagonal converted $15,375 of the principal amount due into 6,684,783 shares of our common stock at a conversion price of $0.0023. The remaining principal balance due after this conversion was $126,010, including default interest. |
| ○ | On August 12, 2025, 1800 Diagonal converted $9,490 of the principal amount due into 7,014,043 shares of our common stock at a conversion price of $0.001353. The remaining principal balance due after this conversion was $118,020, including default interest. |
American Society of Composers, Authors and Publishers
On July 8, 2025, we received a demand letter from the American Society of Composers, Authors and Publishers (“ASCAP” and such letter, the “July 8 ASCAP Notice”) declaring the full amount owed to it under the Settlement Agreement entered into by and between us and ASCAP, effective December 6, 2024 (the “Settlement Agreement”), immediately due and payable. Pursuant to the Settlement Agreement, should we fail to cure a default on our payment obligations, ASCAP shall be entitled to accelerate any portion of the amount that remains due so that the remaining balance becomes immediately due and payable. The amount owed to ASCAP under the Settlement Agreement is $1,175,000. While we are evaluating our options regarding the July 8 ASCAP Notice, as of the date of this Report, this default has not yet been cured, and no further action has been taken against the Company with respect to the Settlement Agreement. There can be no assurance, however, as to whether ASCAP will enforce its rights by seeking all available legal and equitable remedies available to it.
Balboa Capital
As previously reported, on February 27, 2024, we entered into an equipment financing agreement with Ameris Bank dba Balboa Capital (“Balboa” and such agreement, the “Balboa Financing Agreement”) at a collateral cost of $112,379. On July 11, 2025, we received an acceleration demand letter from Balboa (the “July 11 Balboa Notice”) for our failure to make payments when and as due. Balboa accelerated and declared immediately due and payable the entire unpaid balance of $82,427, plus the return of the equipment no later than three business days from date of the July 11 Balboa Notice. While we are evaluating our options regarding the July 11 Balboa Notice, as of the date of this Report, this default has not yet been cured; however, no further action has been taken against the Company with respect to the Balboa Financing Agreement. There can be no assurance as to whether Balboa will enforce its rights by seeking all available legal and equitable remedies available to it.
Working Capital Advance by Mr. Cassidy
On July 15, 2025, Mr. Cassidy provided a working capital advance directly to the Company in the amount of $217,183.
Cara Communications Corporation
On July 15, 2025, we received a formal and final demand for payment from Cara Communications Corporation (“CCC” and such demand, the “July 15 CCC Notice”) declaring the full amount owed to it under the Fee-Based License Agreement by and between us and CCC, dated January 20, 2023, as amended (the “License Agreement”), immediately due and payable within five (5) business days of the July 15 CCC Notice. The amount owed to CCC under the License Agreement is $361,800. While we are evaluating our options regarding the July 15 CCC Notice, as of the date of this Report, this default has not yet been cured; however, no further action has been taken against the Company with respect to the License Agreement. There can be no assurance as to whether CCC will enforce its rights by seeking all available legal and equitable remedies available to it.
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Agile Lending
As previously reported, we entered into the following loan agreements with, and issued the following promissory notes to, Agile Lending, LLC, a Virginia limited liability company (“Agile Lending”), and Agile Capital Funding, LLC, as collateral agent (the “Agile Collateral Agent” and together with Agile Lending, the “Agile Lender”):
| ● | Subordinated Business Loan and Security Agreement dated December 27, 2024, evidenced by a Subordinated Secured Promissory Note in the original principal amount of $660,000; and | |
| ● | Subordinated Business Loan and Security Agreement dated March 25, 2025, evidenced by a Subordinated Secured Promissory Note in the original principal amount of $800,000. | |
| (collectively, the “Agile Agreements”). |
On July 21, 2025, we received a notice of default and acceleration letter from the Agile Lender (the “July 21 Agile Notice”) for our failure to make payments when and as due. The Agile Lender accelerated all amounts owed in the aggregate amount of $1,000,476, which includes default interest, due and payable within seven days of the July 21 Agile Notice. While we are evaluating our options regarding the July 21 Agile Notice, as of the date of this Report, this default has not yet been cured; however, no further action has been taken against the Company with respect to the Agile Agreements. There can be no assurance as to whether the Agile Lender will enforce its rights by seeking all available legal and equitable remedies available to it.
Capital Foundry Revolving Line of Credit
As previously reported, we entered into a Loan and Security Agreement with Capital Foundry Funding, LLC (“Capital Foundry” and such agreement, the “Capital Foundry Loan Agreement”) for a revolving line of credit facility for the principal sum of up to $2.0 million (the “Capital Foundry Loan”), evidenced by a Promissory Note (the “Capital Foundry Note”), both effective as of February 3, 2025.
Additional draws on the Capital Foundry Loan were made subsequent to June 30, 2025, as follows:
| ● | On July 28, 2025, in the amount of $262,921 | |
| ● | On August 7, 2025, in the amount of $25,000 |
As of August 12, 2025, our current balance with Capital Foundry was $1,715,180.
Alliance Funding Group
As previously reported, we entered into the following equipment financing agreements with Alliance Funding Group (“AFG”):
| ● | AFG Equipment Financing Agreement No. 1 dated October 9, 2024, which provides the terms and conditions for the debt financing of certain equipment for a cost of $99,972. | |
| ● | AFG Equipment Financing Agreement No. 2” dated October 9, 2024, which provides the terms and conditions for the debt financing of certain equipment for a cost of $99,972, |
(together, the “AFG Agreements”).
On August 6, 2025, we received formal Notices of Acceleration from AFG (the “August 6 AFG Notices”) declaring the full remaining balance owing on the AFG Agreements immediately due and payable. AFG has demanded an aggregate amount of $268,035 to be paid within fifteen (15) days of the date of the August 6 AFG Notices. While we are evaluating our options regarding the August 6 AFG Notices, as of the date of this Report, this default has not yet been cured; however, no further action has been taken against the Company with respect to the AFG Agreements. There can be no assurance as to whether AFG will enforce its rights by seeking all available legal and equitable remedies available to it.
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National Retail Solutions, Inc. Civil Action
On August 1, 2022, we entered into an Advertising Sales Service and Content License Agreement with National Retail Solutions, Inc. (“NRS” and such agreement, the “NRS Advertising Agreement”), for the provision of certain services related to our programmatic advertising sales inventory. On June 26, 2024, we entered into a Payment Plan Agreement and Confession of Judgment dated June 26, 2024 (the “NRS Payment Plan”), pursuant to which NRS agreed to forbear its rights under the NRS Advertising Agreement in consideration of us remitting to NRS outstanding amounts due to NRS in monthly installment payments. The NRS Payment Plan contains a confession of judgment provision whereby, if any event of default occurs under the NRS Payment Plan, we authorized any attorney designated by NRS and admitted to practice before New Jersey courts to appear on our behalf in any court in New Jersey in one or any more proceedings, or before any clerk thereof or other court official, and to confess judgment against the Company in the full amount of the balance due under the NRS Payment Plan, plus attorneys’ fees, court costs and interest accrued as of the date of entry of judgment.
On August 11, 2025, we received notification that on July 28, 2025, in response to our failure to remit to NRS the amounts due under the NRS Payment Plan, NRS filed the following documents commencing a Civil Action to enforce the confession of judgment against the Company in the Superior Court of New Jersey, Law Division of Essex County:
| ○ | Certification in Support of Confessing Judgment, | |
| ○ | Complaint for Entry of Judgment by Confession Pursuant to R. 4:45-2 and | |
| ○ | Summons, |
collectively, the “Civil Action.”
In the Civil Action, NRS seeks an order for a confession of judgement against the Company and in favor of NRS for $827,825 as principal, together with post judgment interest at the statutory rate thereafter and costs of suit. According to the Summons, we have thirty-five (35) days from the date we received the Summons to file a written answer or motion and proof of service with the Superior Court of New Jersey, failing which the court may enter a judgment against us for the relief NRS demands, plus interest and costs of suit. If such a judgment is entered, there may be a seizure of money, wages or property to pay all or part of the judgment. As of the date of this Report, we are considering our options with respect to the Civil Action.
Key Performance Indicators
We review our quarterly active units (“QAUs”) and average revenue per unit player (“ARPU”), among other key performance indicators, to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections and make strategic decisions.
Quarterly Active Units
We define an “active unit” as (i) an ad-supported Loop Player DOOH (defined below) location using our ad- supported service through our “Loop for Business” application or using a DOOH venue-owned computer screening our content) that is online, used on our O&O Platform, playing content and has checked into the Loop Media analytics system at least once in the 90-day period ending on the date of measurement, or (ii) a DOOH location customer using our subscription service on our O&O Platform at any time during the 90-day period. We use “QAU” to refer to the number of such active units during such period. We do not count towards our QAUs any Loop Players or screens used on our Partner Platforms.
Digital out-of-home (“DOOH”) is a form of media that is delivered digitally outside of the home on billboards, signage, displays, televisions and other devices in OOH locations, including restaurants, retail shops, healthcare facilities, sports and entertainment venues, and other public or non-residential spaces.
As of June 30, 2025, we had approximately 135,000 active Loop Players and Partner Screens across the Loop Platform, representing an increase of 11% in active Loop Players and Partner Screens from over 122,000 Loop Players and Partner Screens as of March 31, 2025. This included 17,996 QAUs across our O&O Platform and approximately 117,000 Partner Screens across our Partner Platforms.
In the three months ended June 30, 2025, QAUs decreased 14% to 17,996 compared to 21,035 in the three months ended March 31, 2025. There was relatively limited growth in QAUs quarter on quarter as we looked to prioritize and incentivize the distribution of Loop Players in key advertising markets and geographies, as well as into more desirable out-of-home location types, like convenience stores, restaurants, bars, and other retail establishments. We also looked to reduce our presence in less desirable out-of-home locations, which offset and reduced our net distribution growth. QAUs were 23,225 as of the three months ended December 31, 2024, and 27,811 as of the three months ended September 30, 2024.
As of June 30, 2025, Partner Screens in our Partner Platforms business increased by approximately 16,000 Partner Screens to approximately 117,000 Partner Screens, over approximately 101,000 Partner Screens as of March 31, 2025.
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Average Revenue Per Unit
We define a “unit player” as (i) an ad-supported Loop Player (or a DOOH location using our ad-supported service through our “Loop for Business” application or using a DOOH location-owned computer screening our content) that is online, used on our O&O Platform, playing content and has checked into the Loop Media analytics system at least once in the 90-day period or (ii) a DOOH location customer using our paid subscription service on our O&O Platform at any time during the 90-day period. A unit player that is supported by our advertising-based revenue model is an ad-supported unit player and a unit player that is supported by a subscription-based revenue model is a subscription unit player. We calculate advertising ARPU (“AD ARPU”) by dividing quarterly revenues from our DOOH ad-supported service on our O&O Platform for the period by QAUs for our ad-supported unit players on our O&O Platform. We calculate subscription ARPU (“SUB ARPU”) by dividing quarterly revenues from our DOOH subscription-supported service on our O&O Platform for the period by QAUs for our subscription-supported unit players on our O&O Platform. We do not include in our unit players count, AD ARPU or SUB ARPU any Loop Players or screens used on our Partner Platform.
Our AD ARPU fluctuates based on a number of factors, including the length of time in a quarter that a unit player is activated and operating, the cost-per-thousand ad impressions (“CPMs”) we are able to achieve for our advertising impressions, and the advertising fill rates that we are able to achieve. Our SUB ARPU fluctuates based on a number of factors, including the timing of the start of a customer subscription for a subscription-supported unit player, the number of ad-supported unit players we have, and the price clients pay for those subscriptions. An increase in the number of unit players over the course of a quarterly period may have the effect of decreasing quarterly ARPU, particularly if such players are added toward the end of the quarterly period. Increases or decreases in ARPU may not correspond with increases or decreases in our revenue, and ARPU may be calculated in a manner different than any similar key performance indicator used by other companies.
For the three months ended June 30, 2025, AD ARPU was $34 compared to $32 for the three months ended March 31, 2025, a 6% increase. AD ARPU was $97 for the three months ended December 31, 2024, and $80 for the three months ended September 30, 2024.
For the three months ended June 30, 2025, SUB ARPU was $550 compared to $442 for the three months ended March 31, 2025, a 24% increase. SUB ARPU was $484 for the three months ended December 31, 2024, and $464 for the three months ended September 30, 2024.
Components of Results of Operations
Revenue
The majority of our revenue is generated from ad sales, which is recognized at the time the digital advertising impressions are filled and the advertisements are played. Revenue generated from content subscription services in customized formats is recognized over the term of the service. The revenue generated from hardware for ongoing subscription content delivery is recognized at the point of the hardware delivery. Revenue generated from content and streaming services, including content encoding and hosting, are recognized over the term of the service based on bandwidth usage.
Cost of Revenue
Cost of revenue for the O&O Platform and legacy businesses represents the amortized cost of ongoing licensing and hosting fees, which is recognized over time based on usage patterns. Licensing fees include fees paid under both our revenue share and fixed-fee arrangements. The depreciation expense associated with the Loop players is not included in cost of sales.
Cost of revenue for the Partner Platforms business represents hosting fees, amortized costs of internally-developed content, and the revenue share with third party partners (after deduction of allocated infrastructure costs). The cost of revenue is higher with partners within the Partner Platform versus those within the O&O Platform because we leverage our Partner Platforms clients’ network of customers and their screens to deliver content and advertising inventory, rather than using our own Loop players.
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Total Operating Expenses
Operating expenses are attributable to the general overhead related to all the products and services that we provide to our clients and, as a result, they are presented in an aggregate total. Our operating expenses include sales, general and administrative expenses.
Sales, General and Administrative Expenses
Sales and marketing expenses consist primarily of employee compensation and related costs associated with our sales and marketing staff, including salaries, benefits, bonuses and commissions as well as costs relating to our marketing and business development. We intend to continue to invest resources in our sales and marketing initiatives to drive growth and extend our market position.
General and administrative expenses consist of employee compensation and related costs for executive, finance/accounting, legal, human resources, recruiting and employee-related information technology and administrative personnel, including salaries, benefits and bonuses, as well as depreciation, facilities, recruiting and other corporate services.
Cost Saving Measures
As previously disclosed, we began taking steps in fiscal year 2023 to increase efficiency and cut costs, while still maintaining our focus on, and dedication to, the continued growth of our business. These cuts and adjustments across several aspects of our business, including reductions in headcount and organizational restructuring, were implemented throughout fiscal year 2024 and through the first half of fiscal year 2025 and continue through the date of this Report.
Other Income/Expense
Interest Expense
Interest expense consists of interest expense on our outstanding indebtedness and amortization of debt issuance costs.
Other (Expense) Income
Other (expense) income consists of employee retention credits, foreign currency translation adjustment, realized foreign current gains/losses and unrealized gains/losses.
Income Taxes
We account for income taxes in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 740, Income Taxes (“ASC 740”). ASC 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all of, the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effect of changes in tax laws and rates on the date of enactment.
Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. We have no material uncertain tax positions for any of the reporting periods presented.
We recognize accrued interest and penalties related to unrecognized tax benefits as part of income tax expense. We have also made a policy election to treat the income tax with respect to global intangible low-tax income as a period expense when incurred.
In December 2019, the FASB issued Accounting Standards Update (“ASU”) No. 2019-12, Simplifying the Accounting for Income Taxes, as part of its initiative to reduce complexity in accounting standards. The amendments in the ASU are effective for fiscal years beginning after December 15, 2020, including interim periods therein. The adoption of this standard in the first quarter of 2022 had no impact on our unaudited condensed consolidated financial statements.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 is intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in ASU 2023-09 address investor requests for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information. ASU 2023-09 will be effective for us in the annual period beginning October 1, 2025, though early adoption is permitted. We are still evaluating the presentational effect that ASU 2023-09 will have on our unaudited condensed consolidated financial statements, but we expect considerable changes to our income tax footnote.
Liquidity and Management’s Plan
As shown in our unaudited Consolidated Results of Operations discussed below, we have incurred recurring losses and anticipate further losses in the foreseeable future. We also had negative cash flows used in operations. These factors raise substantial doubt about our ability to continue as a going concern.
We have received notices of default and acceleration letters from certain lenders related to outstanding debt obligations. While these payments remain past due, we are evaluating available options, including discussions with the lenders. However, the timing and outcome of any lender enforcement actions, if pursued, cannot be predicted.
Our ability to continue as a going concern is dependent upon our ability to generate sufficient revenue and our ability to raise additional funds by way of our debt and equity financing efforts while maintaining reduced spending levels. We continue to explore potential strategic alternatives to maximize shareholder value and to evaluate potential financing opportunities.
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Unaudited Consolidated Results of Operations
The following tables set forth our unaudited results of operations for the periods presented. The period-to-period comparison of financial results is not necessarily indicative of future results.
For the three months ended June 30, 2025, compared to the three months ended June 30, 2024:
| Three Months Ended June 30, | ||||||||||||||||
| 2025 | 2024 | $ Variance | % Variance | |||||||||||||
| Revenue | $ | 1,285,262 | $ | 4,350,570 | $ | (3,065,308 | ) | (70 | )% | |||||||
| Cost of revenue | 1,014,017 | 3,440,213 | (2,426,196 | ) | (71 | )% | ||||||||||
| Gross profit | 271,245 | 910,357 | (639,112 | ) | (70 | )% | ||||||||||
| Total operating expenses | 2,539,237 | 5,690,692 | (3,151,455 | ) | (55 | )% | ||||||||||
| Loss from operations | (2,267,992 | ) | (4,780,335 | ) | 2,512,343 | (53 | )% | |||||||||
| Other (expense) income: | ||||||||||||||||
| Interest expense | (1,136,869 | ) | (670,981 | ) | (465,888 | ) | 69 | % | ||||||||
| Other income (expense) | — | 34 | (34 | ) | (100 | )% | ||||||||||
| Total other expense | (1,136,869 | ) | (670,947 | ) | (465,922 | ) | 69 | % | ||||||||
| Income tax expense | — | (335 | ) | 335 | (100 | )% | ||||||||||
| Net loss | $ | (3,404,861 | ) | $ | (5,451,617 | ) | $ | 2,046,756 | (38 | )% | ||||||
Revenue
Our revenue for the three months ended June 30, 2025, was $1,285,262, a decrease of $3,065,308, or 70%, from $4,350,570 for the three months ended June 30, 2024. This decrease was primarily driven by: (i) a slowdown in digital advertising spend due to the challenging macroeconomic environment; (ii) a challenging ad market environment starting in the second quarter of fiscal year 2024 due to one of the largest ad demand participants changing their terms of business with ad publishers, including us, which resulted in a material negative impact on our ad demand partner revenue; (iii) decrease in Loop players year-over-year primarily due to the cost-cutting measures taken to eliminate our customer reward program and restructure our affiliate program and (iv) the reduction in ad demand partners that view our Loop Platform as a CTV platform on which CTV ad budgets can be spent. CTV advertising budgets are generally significantly higher; thus, CTV ad demand is generally associated with higher fill rates and CPMs, compared to DOOH ad budgets and DOOH ad demand.
Cost of Revenue
Our cost of revenue for the three months ended June 30, 2025, was $1,014,017, a decrease of $2,426,196, or 71%, from $3,440,213 for the three months ended June 30, 2024. This decrease in cost of revenue was primarily due to decreased revenue, which resulted in lower variable costs.
During fiscal years 2024 and 2025, we continued a company-wide operational and cost-cutting review, which we believed would provide the framework to make us more competitive in the CTV for business/DOOH industry and would accelerate our potential path to break even and achieve operating profitability. These measures included: (1) discussions with certain of our third-party content providers and other licensors with a view to (i) restructuring existing or new license agreements and (ii) eliminating certain fixed fee content licenses, in each case to more closely align payments to content licensors with revenue associated with such content; (2) the development and promotion of lower cost channels to reduce or eliminate third-party content license fees, where possible; and (3) a continued review of existing third-party vendor products and services with a view to eliminating ongoing yearly costs and expenses during the first half of fiscal year 2025.
These efforts are ongoing and as these initiatives and changes continue to take effect, we believe we will see improved margins for the business. There can be no assurances, however, that we will be able to effect all changes that we have identified or that any such changes will achieve the desired results.
Gross Profit Margin
Our gross profit margin for the three months ended June 30, 2025, was $271,245, a decrease of $639,112, or 70%, from $910,357 for the three months ended June 30, 2024. Our gross profit margin as a percentage of total revenue for the three months ended June 30, 2025, was approximately 21.1% compared to 20.9% for the three months ended June 30, 2024. The percentage increase was primarily driven by the cost-cutting measures as noted above.
Based on the breadth of the Loop Platform and the amount of streaming done across that platform, certain of our content license agreements provide for license fees to be paid at the greater of a percentage of revenue or some other non-revenue metric. In times of reduced revenue, our ability to match more closely revenue and expenses is reduced, as our license fees may not be paid out as a percentage of revenue, but on other less advantageous metrics. In addition, our fixed fee content license agreements may reduce our gross profit margins, as the fixed fees paid are a greater percentage of lower revenue than they would be on higher revenue.
The relative contributions to total revenue of our O&O Platform and Partner Platforms businesses will impact our gross profit margin as a percentage of total revenue in future periods. Each of these businesses have different cost of revenue components with a lower gross profit margin in our Partner Platforms business, offset by lower operating and selling costs.
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Total Operating Expenses
Our operating expenses for the three months ended June 30, 2025, were $2,539,237, a decrease of $3,151,455, or 55%, from $5,690,692 for the three months ended June 30, 2024. This decrease in operating expenses was primarily due to a decrease in sales, general and administrative expenses as well as a reduction in stock-based compensation as follows:
Sales, General and Administrative Expenses
Our sales, general and administrative expenses for the three months ended June 30, 2025, were $1,920,835, a decrease of $2,195,351, or 53%, from $4,116,186 for the three months ended June 30, 2024. This decrease in sales, general and administrative expenses was primarily due to a reduction in payroll costs, marketing costs, professional fees and administration fees resulting in lower expenditures.
More specifically:
| ● | Our payroll costs for the three months ended June 30, 2025, were $1,037,478, a decrease of $1,011,442, or 49%, from $2,048,920 for the three months ended June 30, 2024, primarily driven by a reduction in headcount. | |
| ● | Our marketing costs for the three months ended June 30, 2025, were $256,143, a decrease of $701,584, or 73%, from $957,727 for the three months ended June 30, 2024, primarily due to a reduction and restructuring of affiliate fees, elimination of the customer rewards program and reduction in trade shows fees which resulted in overall lower marketing expenditures. | |
| ● | Our professional fees for the three months ended June 30, 2025, were $196,224, a decrease of $202,122, or 51%, from $398,346 for the three months ended June 30, 2024, primarily due to a decrease in legal, accounting and recruiting fees as well as dues and subscriptions as part of the cost savings initiatives. | |
| ● | Our administration fees for the three months ended June 301, 2025, were $135,840, a decrease of $117,325, or 46%, from $253,165 for the three months ended June 30, 2024, primarily due to a decrease in insurance premiums and board fees. |
Sales, general and administrative expenses as a percentage of total revenue for the three months ended June 30, 2025, was 149.5% compared to 94.6% for the three months ended June 30, 2024.
Stock-Based Compensation
Our stock compensation (non-cash) for the three months ended June 30, 2025, was $349,642, a decrease of $581,929, or 62%, from $931,571 for the three months ended June 30, 2024, primarily due to decrease of stock award grants and forfeitures.
Loss on Disposal of Assets
For the three months ended June 30, 2025, we incurred costs of $43,672 related to the disposal of Loop Players. We had no loss on disposal of assets costs for the three months ended June 30, 2024.
Depreciation and Amortization
Our depreciation and amortization expenses for the three months ended June 30, 2025, were $225,088, a decrease of $197,794, or 47%, from $422,882 for the three months ended June 30, 2024, primarily driven by the disposal of Loop Players.
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Non-Recurring Expenses
Our non-recurring expenses for the three months ended June 30, 2025, were $0, a decrease of $159,425, or 100%, from $159,425 for the three months ended June 30, 2024, primarily driven by decreased capital raise expenses.
Total Other Expense
Our total other expenses for the three months ended June 30, 2025, were $1,136,869, an increase of $465,922, or 69%, from $670,947 total other expenses for the three months ended June 30, 2024. This increase in other expenses was primarily driven by interest expense.
For the nine months ended June 30, 2025, compared to the nine months ended June 30, 2024:
| Nine Months Ended June 30, | ||||||||||||||||
| 2025 | 2024 | $ Variance | % Variance | |||||||||||||
| Revenue | $ | 6,696,901 | $ | 18,524,289 | $ | (11,827,388 | ) | (64 | )% | |||||||
| Cost of revenue | 4,760,412 | 13,571,229 | (8,810,817 | ) | (65 | )% | ||||||||||
| Gross profit | 1,936,489 | 4,953,060 | (3,016,571 | ) | (61 | )% | ||||||||||
| Total operating expenses | 10,875,535 | 20,832,798 | (9,957,263 | ) | (48 | )% | ||||||||||
| Loss from operations | (8,939,046 | ) | (15,879,738 | ) | 6,940,692 | (44 | )% | |||||||||
| Other (expense) income: | ||||||||||||||||
| Interest expense | (3,239,703 | ) | (2,402,444 | ) | (837,259 | ) | 35 | % | ||||||||
| Loss on extinguishment of debt | — | (25,424 | ) | 25,424 | (100 | )% | ||||||||||
| Other income | 14 | 289 | (275 | ) | (95 | )% | ||||||||||
| Total other expense | (3,239,689 | ) | (2,427,579 | ) | (812,110 | ) | 33 | % | ||||||||
| Income tax expense | — | (335 | ) | 335 | (100 | )% | ||||||||||
| Net loss | $ | (12,178,735 | ) | $ | (18,307,652 | ) | $ | 6,128,917 | (33 | )% | ||||||
Revenue
Our revenue for the nine months ended June 30, 2025, was $6,696,901, a decrease of $11,827,388, or 64%, from $18,524,289 for the nine months ended June 30, 2024. This decrease was primarily driven by: (i) a slowdown in digital advertising spend due to the challenging macroeconomic environment; (ii) a challenging ad market environment starting in the second quarter of fiscal year 2024 due to one of the largest ad demand participants changing their terms of business with ad publishers, including us, which resulted in a material negative impact on our ad demand partner revenue; (iii) decrease in Loop players year-over-year primarily due to the cost-cutting measures taken to eliminate our customer reward program and restructure our affiliate program; and (iv) the reduction in ad demand partners that view our Loop Platform as a CTV platform on which CTV ad budgets can be spent. CTV advertising budgets are generally significantly higher; thus, CTV ad demand is generally associated with higher fill rates and CPMs, compared to DOOH ad budgets and DOOH ad demand.
Cost of Revenue
Our cost of revenue for the nine months ended June 30, 2025, was $4,760,412, a decrease of $8,810,817, or 65%, from $13,571,229 for the nine months ended June 30, 2024. This decrease in cost of revenue was primarily due to decreased revenue, which resulted in lower variable costs, in addition to fixed fee and minimum fee licensing costs.
During fiscal years 2024 and 2025, we continued a company-wide operational and cost-cutting review, which we believed would provide the framework to make us more competitive in the CTV for business/DOOH industry and would accelerate our potential path to break even and achieve operating profitability. These measures included: (1) discussions with certain of our third-party content providers and other licensors with a view to (i) restructuring existing or new license agreements and (ii) eliminating certain fixed fee content licenses, in each case to more closely align payments to content licensors with revenue associated with such content; (2) the development and promotion of lower cost channels to reduce or eliminate third-party content license fees, where possible; and (3) a continued review of existing third-party vendor products and services with a view to eliminating ongoing yearly costs and expenses during the second half of fiscal year 2025.
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These efforts are ongoing and as these initiatives and changes continue to take effect, we believe we will see improved margins for the business. There can be no assurances, however, that we will be able to effect all changes that we have identified or that any such changes will achieve the desired results.
Gross Profit Margin
Our gross profit margin for the nine months ended June 30, 2025, was $1,936,489, a decrease of $3,016,571, or 61%, from $4,953,060 for the nine months ended June 30, 2024. Our gross profit margin as a percentage of total revenue for the nine months ended June 30, 2025, was approximately 28.9% compared to 26.7% for the nine months ended June 30, 2024. The percentage increase was primarily driven by revenue mix, as the current period included a larger portion of our O&O Platforms business which carries a higher gross margin, compared to year-ago period, in addition to the cost-cutting measures to reduce the cost of revenue as noted above.
Based on the breadth of the Loop Platform and the amount of streaming done across that platform, certain of our content license agreements provide for license fees to be paid at the greater of a percentage of revenue or some other non-revenue metric. In times of reduced revenue, our ability to match more closely revenue and expenses is reduced, as our license fees may not be paid out as a percentage of revenue, but on other less advantageous metrics. In addition, our fixed fee content license agreements may reduce our gross profit margins, as the fixed fees paid are a greater percentage of lower revenue than they would be on higher revenue.
The relative contributions to total revenue of our O&O Platform and Partner Platforms businesses will impact our gross profit margin as a percentage of total revenue in future periods. Each of these businesses have different cost of revenue components with a lower gross profit margin in our Partner Platforms business, offset by lower operating and selling costs.
Total Operating Expenses
Our operating expenses for the nine months ended June 30, 2025, were $10,875,535, a decrease of $9,957,263, or 48%, from $20,832,798 for the nine months ended June 30, 2024. This decrease in operating expenses was primarily due to a decrease in sales, general and administrative expenses as well as a reduction in stock-based compensation as follows:
Sales, General and Administrative Expenses
Our sales, general and administrative expenses for the nine months ended June 30, 2025, were $7,885,348, a decrease of $8,137,509, or 51%, from $16,022,857 for the nine months ended June 30, 2024. This decrease in sales, general and administrative expenses was primarily due to a reduction in payroll costs, marketing costs, professional fees and administration fees resulting in lower expenditures.
More specifically:
| ● | Our payroll costs for the nine months ended June 30, 2025, were $4,216,399, a decrease of $2,805,415, or 40%, from $7,021,814 for the nine months ended June 30, 2024, primarily driven by a reduction in headcount. | |
| ● | Our marketing costs for the nine months ended June 30, 2025, were $952,969, a decrease of $3,930,977, or 80%, from $4,883,946 for the nine months ended June 30, 2024, primarily due to a reduction and restructuring of affiliate fees, elimination of the customer rewards program and reduction in trade shows fees which resulted in overall lower marketing expenditures. |
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| ● | Our professional fees for the nine months ended June 30, 2025, were $745,728, a decrease of $687,641, or 48%, from $1,433,369 for the nine months ended June 30, 2024, primarily due to a decrease in legal, accounting and recruiting fees as well as dues and subscriptions as part of the cost savings initiatives. | |
| ● | Our administration fees for the nine months ended June 30, 2025, were $420,048, a decrease of $335,457, or 44%, from $755,505 for the nine months ended June 30, 2024, primarily due to a decrease in insurance premiums and board fees. |
Sales, general and administrative expenses as a percentage of total revenue for the nine months ended June 30, 2025, was 117.7% compared to 86.5% for the nine months ended June 30, 2024.
Stock-Based Compensation
Our stock compensation (non-cash) for the nine months ended March 31, 2025, was $2,094,857, a decrease of $1,277,076, or 38%, from $3,371,933 for the nine months ended June 30, 2024, primarily due to decrease of stock award grants and forfeitures.
Loss on Disposal of Assets
For the nine months ended June 30, 2025, we incurred costs of $161,481 related to the disposal of Loop Players. We had no loss on disposal of assets costs for the nine months ended June 30, 2024.
Depreciation and Amortization
Our depreciation and amortization expenses for the nine months ended June 30, 2025, were $733,849, a decrease of $484,106, or 40%, from $1,217,955 for the nine months ended June 30, 2024, primarily driven by the disposal of Loop Players.
Non-Recurring Expenses
Our non-recurring expenses for the nine months ended June 30, 2025, were $565,272, an increase of $127,434, or 29%, from $437,838 for the nine months ended June 30, 2024, primarily driven by one-time GemCap debt settlement costs and employee severance costs.
Total Other Expense
Our total other expenses for the nine months ended June 30, 2025, were $3,239,689, an increase of $812,110 or 33%, from $2,427,579 total other expenses for the nine months ended June 30, 2024. This increase in other expenses was primarily driven by interest expense.
EBITDA - Non-GAAP Financial Measure
We believe that the presentation of EBITDA (as defined below), a financial measure that is not part of U.S. generally accepted accounting principles (“U.S. GAAP”) provides investors with additional information about our financial results. EBITDA is an important supplemental measure used by our Board of Directors and management to evaluate our operating performance from period-to-period on a consistent basis and as a measure for planning and forecasting overall expectations and for evaluating actual results against such expectations. We define EBITDA as earnings before interest expense (income), income tax (expense)/benefit, depreciation and amortization.
EBITDA is not measured in accordance with, or an alternative to, measures prepared in accordance with U.S. GAAP. In addition, this non-GAAP measure is not based on any comprehensive set of accounting rules or principles. As a non-GAAP measure, EBITDA has limitations in that it does not reflect all of the amounts associated with our results of operations as determined in accordance with U.S. GAAP. In particular:
| ● | EBITDA does not reflect the amounts we paid in interest expense on our outstanding debt; |
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| ● | EBITDA does not reflect the amounts we paid in taxes or other components of our tax provision; | |
| ● | EBITDA does not include depreciation expense from fixed assets; and | |
| ● | EBITDA does not include amortization expense of content assets for cost of revenue and operating expenses and ATM facility. |
Because of these limitations, you should consider EBITDA alongside other financial performance measures including net income (loss) and our financial results presented in accordance with U.S. GAAP.
The following table provides a reconciliation of net loss to EBITDA for each of the periods indicated:
Three Months Ended June 30, | Nine Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| GAAP net loss | $ | (3,404,861 | ) | $ | (5,451,617 | ) | $ | (12,178,735 | ) | $ | (18,307,652 | ) | ||||
| Adjustments to reconcile to EBITDA: | ||||||||||||||||
| Interest expense | 1,136,869 | 670,981 | 3,239,703 | 2,402,444 | ||||||||||||
| Depreciation and amortization expense* | 391,690 | 1,221,316 | 1,287,491 | 3,574,672 | ||||||||||||
| Income tax expense | — | 335 | — | 335 | ||||||||||||
| EBITDA | $ | (1,876,302 | ) | $ | (3,558,985 | ) | $ | (7,651,541 | ) | $ | (12,330,201 | ) | ||||
*Includes amortization of content assets for cost of revenue and operating expenses and ATM facility.
Adjusted EBIDTA - Non-GAAP Financial Measure
We believe that the presentation of Adjusted EBITDA, a financial measure that is not part of U.S. GAAP, provides investors with additional information about our financial results. Adjusted EBITDA is an important supplemental measure used by our Board of Directors and management to evaluate our operating performance from period-to-period on a consistent basis and as a measure for planning and forecasting overall expectations and for evaluating actual results against such expectations.
We define Adjusted EBITDA as earnings before interest expense (income), income tax (expense) benefit, depreciation and amortization, adjusted for stock-based compensation and non-recurring income and expenses, if any.
Adjusted EBITDA is not measured in accordance with, or an alternative to, measures prepared in accordance with U.S. GAAP. In addition, this non-GAAP measure is not based on any comprehensive set of accounting rules or principles. As a non-GAAP measure, Adjusted EBITDA has limitations in that it does not reflect all of the amounts associated with our results of operations as determined in accordance with U.S. GAAP. In particular:
| ● | Adjusted EBITDA does not reflect the amounts we paid in interest expense on our outstanding debt; | |
| ● | Adjusted EBITDA does not include depreciation expense from fixed assets; | |
| ● | Adjusted EBITDA does not include amortization expense of content assets for cost of revenue and operating expenses and ATM facility; | |
| ● | Adjusted EBITDA does not reflect the amounts we paid in taxes or other components of our tax provision; | |
| ● | Adjusted EBITDA does not include the impact of stock-based compensation; | |
| ● | Adjusted EBITDA does not include the impact of non-recurring expense; | |
| ● | Adjusted EBITDA does not include the impact of restructuring costs; | |
| ● | Adjusted EBITDA does not include the impact of the loss on disposal of assets; and | |
| ● | Adjusted EBITDA does not include the impact of other income (expense). |
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Because of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures including net income (loss) and our financial results presented in accordance with U.S. GAAP.
The following table provides a reconciliation of net loss to Adjusted EBITDA for each of the periods indicated:
Three Months Ended June 30, | Nine Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| GAAP net loss | $ | (3,404,861 | ) | $ | (5,451,617 | ) | $ | (12,178,735 | ) | $ | (18,307,652 | ) | ||||
| Adjustments to reconcile to Adjusted EBITDA: | ||||||||||||||||
| Interest expense | 1,136,869 | 670,981 | 3,239,703 | 2,402,444 | ||||||||||||
| Depreciation and amortization expense* | 391,690 | 1,221,316 | 1,287,491 | 3,574,672 | ||||||||||||
| Income tax expense | — | 335 | — | 335 | ||||||||||||
| Stock-based compensation** | 349,642 | 931,571 | 2,094,857 | 3,371,933 | ||||||||||||
| Non-recurring expense | — | 159,425 | 565,272 | 437,838 | ||||||||||||
| Restructuring costs | — | 220,053 | — | 220,053 | ||||||||||||
| Loss on extinguishment of debt | — | — | — | 25,424 | ||||||||||||
| Loss on disposal of assets | 43,672 | — | 161,481 | — | ||||||||||||
| Other expense | — | (34 | ) | (14 | ) | (289 | ) | |||||||||
| Adjusted EBITDA | $ | (1,482,988 | ) | $ | (2,247,970 | ) | $ | (4,829,945 | ) | $ | (8,275,242 | ) | ||||
* Includes amortization of content assets for cost of revenue and operating expenses and ATM facility.
** Includes options, restricted stock units (“RSUs”) and warrants.
Liquidity and Capital Resources
As of June 30, 2025, we had cash of $109,692.
The following table provides a summary of our net cash flows from operating, investing, and financing activities.
| Nine Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| Net cash used in operating activities | $ | (4,230,300 | ) | $ | (5,310,707 | ) | ||
| Net cash used in investing activities | (66,766 | ) | (348,708 | ) | ||||
| Net cash provided by financing activities | 3,582,100 | 4,136,808 | ||||||
| Change in cash | (714,966 | ) | (1,522,607 | ) | ||||
| Cash, beginning of period | 824,658 | 3,068,696 | ||||||
| Cash, end of period | $ | 109,692 | $ | 1,546,089 | ||||
Cash Flows for the Nine Months Ended June 30, 2025, and 2024
Historically, our principal sources of cash have included revenues from our operations, proceeds from the issuance of our common stock, preferred stock and warrants as well as proceeds from the issuance of debt. We have received notices of default and acceleration letters from certain lenders related to outstanding debt obligations. While these payments remain past due, we are evaluating available options, including discussions with the lenders. However, the timing and outcome of any lender enforcement actions, if pursued, cannot be predicted.
Although historically we have reported significant recurring losses as well as negative cash flows used in operations, we intend to meet future cash requirements and maintain operations by reducing overall operating expenses, continuing to focus on increasing the scope and size of the Partner Platforms and exploring alternative revenue generating sources to generate cash through operations while continuing to fund through financing activities and the use of equity and debt instruments available to us.
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For the next twelve (12) months, we anticipate that we will need to supplement our cash from revenues with additional cash raised from equity investment or debt transactions, while maintaining reduced spending levels, to ensure that we will have adequate cash to support our minimum operating cash requirements and thus to continue as a going concern.
There can be no guarantee or assurance that we can raise adequate capital from outside sources. If we are unable to raise funds when required or on acceptable terms, we may have to significantly reduce or discontinue our operations.
Net Cash Flow Used in Operating Activities
Our net cash used in operating activities during the nine months ended June 30, 2025, was $4,230,300, a decrease of $1,080,407, or 20%, from $5,310,707 for the nine months ended June 30, 2024, primarily due to a reduction in net loss, driven by lower selling, general and administrative expenses, decreased stock compensation expense and amortization of content assets offset by an increase in loss on disposal of assets and a reduction in working capital efficiency, as sales declined.
Net Cash Flow Used in Investing Activities
Our net cash used in investing activities during the nine months ended June 30, 2025, was $66,766, a decrease of $281,942, or 81%, from $348,708 for the nine months ended June 30, 2024, primarily driven by a decrease in the purchase of property and equipment.
Net Cash Flow Provided by Financing Activities
Our net cash provided by financing activities during the nine months ended June 30, 2025, was $3,582,100, a decrease of $554,708, or 13%, from $4,136,808 for the nine months ended June 30, 2024, primarily due to increased net debt proceeds. See “–Future Capital Requirements.”
As a result of the above activities, for the nine months ended June 30, 2025, we recorded a cash balance of $109,692, a decrease of $1,436,397, or 93%, from $1,546,089 for the nine months ended June 30, 2024.
Future Capital Requirements
We have generated limited revenue, and as of June 30, 2025, our cash totaled $109,692, and we had an accumulated deficit of $164,959,880. We anticipate further losses as well as negative cash flows used in operations in the foreseeable future. These factors raise substantial doubt about our ability to continue as a going concern for a period of at least one year from the date of issuance of the accompanying unaudited condensed consolidated financial statements.
Historically, our principal sources of cash and operating funds have included proceeds from the issuance of common stock, preferred stock and warrants and proceeds from debt and equity financing transactions. We have received notices of default and acceleration letters from certain lenders related to outstanding debt obligations. While these payments remain past due, we are evaluating available options, including discussions with the lenders. However, the timing and outcome of any lender enforcement actions, if pursued, cannot be predicted.
Our ability to continue as a going concern is dependent upon our ability to generate sufficient revenue and our ability to raise additional funds by way of our debt and equity financing efforts. Our principal uses of cash and operating funds have included cash used in operations, payments for license rights and payments relating to purchases of property and equipment. We expect that the future principal uses of cash will be for continuing operations and general working capital requirements.
We continue to explore potential strategic alternatives to maximize shareholder value as well as evaluate potential financing opportunities. We expect that we will need to raise additional capital in order to sustain our current operations and seek to any growth.
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Revolving Lines of Credit
Excel $2.5M Revolving Line of Credit
Effective as of December 14, 2023, we entered into a Secured Revolving Line of Credit Loan Agreement with Excel Family Partners, LLLP, an entity managed by Bruce Cassidy (“Mr. Cassidy”), Executive Chairman of our Board and our majority stockholder (“Excel” and the “Excel $2.5M Revolving Line of Credit Agreement”) for up to a principal sum of $2,500,000, under which we may pay down and re-borrow up to the maximum amount of the $2,500,000 limit (the “Excel $2.5M Revolving Line of Credit”). Our drawdown on the Excel $2.5M Revolving Line of Credit is limited to no more than 25% of the last three full months’ revenue, not to exceed $1,250,000 in any quarter, and not to exceed in aggregate the outstanding debt amount of $2,500,000. The Excel $2.5M Revolving Line of Credit is a perpetual loan, with a maturity date that is twelve (12) months from the date of formal notice of termination by Excel, and accrues interest, payable semi-annually in arrears, at a fixed rate of interest equal to 10% per year. Under the Excel $2.5M Revolving Line of Credit Agreement, we granted to Excel a security interest in all of our present and future assets and properties, real or personal, tangible or intangible, wherever located, including products and proceeds thereof, which security interest was pari passu with the May 13, 2022 Secured Non-Revolving Line of Credit Loan Agreement (the “RAT Non-Revolving Line of Credit Agreement”) entered into with several institutions and individuals (each, a “RAT Lender”) for an aggregate principal amount of $2,200,000 (the “RAT Non-Revolving Line of Credit”) and the May 2023 Secured Line of Credit (as defined below), but was subordinate in rights to GemCap under the GemCap Revolving Line of Credit Agreement (each as defined below). As a result of the GemCap Litigation Settlement, this subordination no longer applies.
Under the terms of the Excel $2.5M Revolving Line of Credit Agreement, on December 14, 2023, we issued to Excel a warrant to purchase up to an aggregate of 3,125,000 shares of our common stock. The warrant has an exercise price of $0.80 per share, which was the closing price of our common stock on December 13, 2023, expires on December 14, 2026, and is exercisable at any time prior to such date, to the extent that after giving effect to such exercise, Excel and its affiliates would beneficially own, for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended, no more than 29.99% of the outstanding shares of our common stock.
On December 3, 2024, and effective retroactively to July 1, 2024, we entered into a Secured Revolving Line of Credit Loan Agreement Amendment with Excel to extend the date on which the first payment of interest is due by one (1) year, from July 1, 2024, to July 1, 2025.
The Excel $2.5M Revolving Line of Credit had a balance, including accrued interest, amounting to $2,837,451 and $2,646,479 as of June 30, 2025, and September 30, 2024, respectively. We incurred interest expense for the Excel $2.5M Revolving Line of Credit in the amount of $146,800 and $146,800 for the three months ended June 30, 2025, and 2024, respectively, and $441,789 and $265,084 for the nine months ended June 30, 2025, and 2024, respectively.
GemCap Revolving Line of Credit Agreement
Effective as of July 29, 2022, we entered into a Loan and Security Agreement with Industrial Funding Group, Inc. (the “Initial Lender”) for a revolving loan credit facility for the initial principal sum of up to $4,000,000, and through the exercise of an accordion feature, a total sum of up to $10,000,000 (the “GemCap Revolving Line of Credit Agreement”), evidenced by a Revolving Loan Secured Promissory Note, also effective as of July 29, 2022 (the “GemCap Revolving Line of Credit”). In connection with the GemCap Revolving Line of Credit Agreement and the GemCap Revolving Line of Credit, we also executed and delivered to the Initial Lender the Loan Agreement Schedule dated as of July 29, 2022 (the “Loan Agreement Schedule”) and other Loan Documents (as defined in the GemCap Revolving Line of Credit Agreement). Shortly after the effective date of the GemCap Revolving Line of Credit Agreement, the Initial Lender assigned the GemCap Revolving Line of Credit Agreement, and the Loan Documents, to GemCap Solutions, LLC (“GemCap” or the “Senior Lender”).
Effective as of October 27, 2022, we entered into Amendment Number 1 to the Loan and Security Agreement and to the Revolving Loan Agreement Schedule, and the Amended and Restated Secured Promissory Note (Revolving Loans) with the Senior Lender to increase the principal sum available under the GemCap Revolving Line of Credit Agreement from $4,000,000 to $6,000,000.
The GemCap Revolving Line of Credit had an original maturity date of July 29, 2024, and began accruing interest on the unpaid principal balance of advances, payable monthly in arrears, on September 7, 2022, at an annual rate equal to the greater of (I) the sum of (i) the “Prime Rate” as reported in the “Money Rates” column of The Wall Street Journal, adjusted as and when such Prime Rate changes, plus (ii) 0.00%, and (II) 4.00%. Availability for borrowing under the GemCap Revolving Line of Credit is dependent upon our assets in certain eligible accounts and measures of revenue, subject to reduction for reserves that the Senior Lender may require in its discretion, and the accordion feature is a provision whereby we were able to request that the Senior Lender increase availability under the GemCap Revolving Line of Credit, subject to its sole discretion.
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Under the GemCap Revolving Line of Credit Agreement, we granted to the Senior Lender a first-priority security interest in all of our present and future property and assets, including products and proceeds thereof. In connection with the loan, our existing secured lenders, some of whom were the RAT Lenders under our RAT Non-Revolving Line of Credit (each as defined below) (collectively, the “Subordinated Lenders”), delivered subordination agreements (the “GemCap Subordination Agreements”) to the Senior Lender. We were permitted to make regularly scheduled payments, including payments upon maturity, to such subordinated lenders and potentially other payments subject to a measure of cash flow and receiving certain financing activity proceeds, in accordance with the terms of the GemCap Subordination Agreements. In connection with the delivery of the GemCap Subordination Agreements by the Subordinated Lenders, on July 29, 2022, we issued warrants to each Subordinated Lender on identical terms for an aggregate of up to 296,329 shares of our common stock (each, a “Subordination Agreement Warrant”). Each Subordination Agreement Warrant has an exercise price of $5.25 per share, expires on July 29, 2025, and is exercisable at any time prior to such date. One warrant for 191,570 warrant shares was issued to Eagle Investment Group, LLC, an entity managed by Mr. Cassidy, as directed by its affiliate, Excel, one of the Subordinated Lenders. The Subordinated Lenders receiving warrants for the remaining 104,759 warrant shares were also entitled to receive a cash payment of $22,000 six months from the date of the GemCap Subordination Agreements, representing 1.00% of the outstanding principal amount of the loan held by such Subordinated Lenders. This cash payment was made to those Subordinated Lenders on January 25, 2023.
Effective July 29, 2024, we entered into Amendment Number 2 to the Loan and Security Agreement, the Loan Agreement Schedule, the Revolving Loan Note and to the other Loan Documents (the “Loan Agreement Amendment No. 2”) to amend certain material terms, including (i) to extend the maturity date of the Loan Agreement by one (1) year, from July 29, 2024, to July 29, 2025, and (ii) to make Retail Media TV, Inc., our wholly-owned subsidiary (“RMTV”), a co-borrower thereunder.
The GemCap Revolving Line of Credit had a balance, including accrued interest, amounting to $0 and $2,916,763 as of June 30, 2025, and September 30, 2024, respectively. We incurred interest expense for the GemCap Revolving Line of Credit in the amount of $0 and $304,038 for the three months ended March 31, 2025, and 2024, respectively, and $98,367 and $1,012,000 for the nine months ended June 30, 2025, and 2024, respectively.
Pursuant to the Settlement Agreement and Mutual Release entered into between us and GemCap on November 27, 2024 (the “GemCap Litigation Settlement”), all amounts, including principal and accrued interest, owing to GemCap were paid off and all of our obligations to GemCap have been extinguished.
Capital Foundry Revolving Line of Credit
Effective as of February 3, 2025, we entered into a Loan and Security Agreement with Capital Foundry Funding, LLC (“Capital Foundry” and such agreement, the “Capital Foundry Loan Agreement”) for a revolving line of credit facility for the principal sum of up to $2.0 million (the “Capital Foundry Loan”), evidenced by a Promissory Note (the “Capital Foundry Note”), also effective as of February 3, 2025.
The loan matures on February 2, 2028, or if the term of the Capital Foundry Loan Agreement has been extended, the end of the then current Renewal Term (as such term is defined in the Capital Foundry Loan Agreement) and accrues interest on the unpaid principal balance of advances, payable monthly in arrears, at an annual rate equal to the sum of (i) the “Prime Rate” as reported in the “Money Rates” column of The Wall Street Journal, adjusted as and when such Prime Rate changes, plus (ii) 7.5% per annum.
Under the Capital Foundry Loan Agreement, we granted to Capital Foundry a first-priority security interest in all of our present and future property and assets, including products and proceeds thereof. In connection with the Capital Foundry Loan, certain of our existing secured lenders, including Excel, and certain equipment financing lenders, have delivered subordination agreements to Capital Foundry (each lender, a “Subordinated Lender” and together, the “Subordinated Lenders”), in form and substance satisfactory, and on terms acceptable, to Capital Foundry (each a “Subordination Agreement”).
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The Capital Foundry Loan Agreement had a balance, including accrued interest, amounting to $2,016,390 and $0 as of June 30, 2025, and September 30, 2024, respectively. We incurred interest expense under the Capital Foundry Loan Agreement in the amount of $77,799 and $0 for the three months ended June 30, 2025, and 2024, respectively, and $107,246 and $0 for the nine months ended June 30, 2025, and 2024, respectively.
Additional draws on the Capital Foundry Loan were made subsequent to June 30, 2025, as follows:
| ● | On July 28, 2025, in the amount of $262,921 | |
| ● | On August 7, 2025, in the amount of $25,000 |
As of August 12, 2025, our current balance with Capital Foundry was $1,715,180.
Non-Revolving Lines of Credit
RAT Non-Revolving Line of Credit
Effective as of May 13, 2022, we entered into a Secured Non-Revolving Line of Credit Loan Agreement (the “RAT Non-Revolving Line of Credit Agreement”) with several institutions and individuals (each a “RAT Lender” and collectively, the “RAT Lenders”) and RAT Investment Holdings, LP, as administrator of the loan (the “Loan Administrator”) for an aggregate principal amount of $2,200,000 (the “RAT Non-Revolving Line of Credit”), evidenced by a Non-Revolving Line of Credit Promissory Note (the “RAT Note”), also effective as of May 13, 2022. Pursuant to the terms of the RAT Non-Revolving Line of Credit Agreement, the RAT Non-Revolving Line of Credit matured eighteen (18) months from the effective date of the RAT Non-Revolving Line of Credit Agreement (the “Original RAT Line of Credit Maturity Date”) and accrued interest, payable semi-annually in arrears, at a fixed rate of interest equal to 12% per year. Under the RAT Non-Revolving Line of Credit Agreement, we granted to the RAT Lenders a security interest in all of our present and future assets and properties, real or personal, tangible or intangible, wherever located, including products and proceeds thereof, which security interest was pari passu with the Excel $2.5M Revolving Line of Credit Agreement (as defined above) and the May 2023 Secured Line of Credit Agreement (as defined below) and (each of which were subordinated in connection with our GemCap Revolving Line of Credit Agreement (as defined above)). As a result of the GemCap Litigation Settlement, this subordination no longer applies. In connection with the RAT Non-Revolving Line of Credit Agreement, on May 13, 2022, we issued a warrant to each RAT Lender (collectively, the “RAT Loan Warrants”) for an aggregate of up to 209,522 shares of our common stock. Each RAT Loan Warrant has an exercise price of $5.25 per share, expires on May 13, 2025, and is exercisable at any time prior to the expiration date.
Effective as of November 13, 2023, we entered into a Non-Revolving Line of Credit Loan Agreement Amendment (the “RAT Non-Revolving Line of Credit Agreement Amendment #1”) with the RAT Lenders to: (i) extend the Original RAT Line of Credit Maturity Date from eighteen (18) months to twenty-seven (27) months from the date of the RAT Non-Revolving Line of Credit Agreement, or August 13, 2024 (the “First Extended RAT Line of Credit Maturity Date”); and (ii) amend the payment terms of the RAT Non-Revolving Line of Credit such that payments of interest or principal under the RAT Non-Revolving Line of Credit Agreement and the RAT Note would be due and payable from November 13, 2023, to the First Extended RAT Line of Credit Maturity Date as follows: (a) one payment of $374,000 (comprised of accrued interest of $132,000 due through November 13, 2023, an initial payment of principal of $220,000 and $22,000 as consideration to extend the Original RAT Line of Credit Maturity Date) due on November 13, 2023; and (b) nine (9) monthly payments of principal of $220,000 plus accrued interest, commencing December 13, 2023. In consideration for the extension of the Original RAT Line of Credit Maturity Date, we agreed to amend the terms of the RAT Loan Warrants as well as the Subordination Agreement Warrants issued to the RAT Lenders in connection with the GemCap Subordination Agreements described above to reduce the respective exercise prices thereof to $1.00. See “— GemCap Revolving Line of Credit.” We also agreed to apply one-third (1/3) of the net proceeds of any capital raise that takes place subsequent to the date of the RAT Non-Revolving Line of Credit Agreement Amendment #1, other than proceeds from an equity offering under any at-the-market (“ATM”) program or from an affiliate or insider, toward paying down the then outstanding principal amount due under the RAT Non-Revolving Line of Credit. Pursuant to the RAT Non-Revolving Line of Credit Agreement Amendment #1, each RAT Lender agreed to enter into a lock-up agreement restricting the disposal of any shares of our common stock that are issued in connection with the exercise of the RAT Loan Warrants or the Subordination Agreement Warrants for a period of twelve (12) months from the date of the RAT Non-Revolving Line of Credit Agreement Amendment #1. Effective as of November 13, 2023, we issued an Amended and Restated Non-Revolving Line of Credit Promissory Note Amendment to the Lenders reflecting the extension of the Original RAT Line of Credit Maturity Date.
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On April 18, 2024, we entered into that certain Non-Revolving Line of Credit Loan Agreement Amendment #2 (the “RAT Non-Revolving Line of Credit Agreement Amendment #2”) with the RAT Lenders to: (i) extend the Original RAT Line of Credit Maturity Date from eighteen (18) months to thirty-two (32) months from the date of the RAT Non-Revolving Line of Credit Agreement, or January 13, 2025 (the “Second Extended RAT Line of Credit Maturity Date”); and (ii) amend the payment terms of the RAT Non-Revolving Line of Credit such that payments of interest and principal under the RAT Non-Revolving Line of Credit Agreement and the RAT Note would be due and payable from April 13, 2024, to the Second Extended RAT Line of Credit Maturity Date, as follows: (a) one payment of $121,000, comprised of accrued interest of $11,000 through April 13, 2024, and an initial payment of principal of $110,000, due on April 13, 2024; and (b) nine (9) monthly payments of principal of $110,000, plus accrued interest, commencing on May 13, 2024. We issued a Second Amended and Restated Non-Revolving Line of Credit Promissory Note, effective April 13, 2024, to the RAT Lenders reflecting the extension of the Original RAT Line of Credit Maturity Date.
On May 31, 2024, we entered into a Non-Revolving Line of Credit Waiver and Consent Agreement (the “Waiver and Consent”), with the Loan Administrator, effective as of and contingent upon the closing of a non-affiliate capital raise, waiving certain provisions of the RAT Non-Revolving Line of Credit Agreement Amendment #1, pursuant to which the RAT Lenders agreed to irrevocably waive their rights to receive one-third (1/3) of the net proceeds of any non-affiliate capital raise, including the Offerings (as defined below), and consented to us not paying any of such proceeds to the RAT Lenders. In consideration for entering into the Waiver and Consent, we agreed to reduce the exercise price of the RAT Loan Warrants and the Subordination Agreement Warrants held by the RAT Lenders to purchase an aggregate of 314,281 shares of common stock from $1.00 to $0.24. See “ – The Registered Offering and the Concurrent Private Placement Offering.”
On November 21, 2024, the outstanding principal and accrued interest in the amount of $334,575.50 on the RAT Non-Revolving Line of Credit was paid off and all of our obligations under the RAT Non-Revolving Line of Credit Agreement were extinguished.
The RAT Non-Revolving Line of Credit had a balance, including accrued interest, amounting to $0 and $442,107 as of June 30, 2025, and September 30, 2024, respectively. We incurred interest expense for the RAT Non-Revolving Line of Credit in the amount of $0 and $99,156 for the three months ended June 30, 2025, and 2024, respectively, and $6,583 and $409,165 for the nine months ended June 30, 2025, and 2024, respectively.
May 2023 Secured Loan
Effective as of May 10, 2023, we entered into a Secured Non-Revolving Line of Credit Loan Agreement (the “May 2023 Secured Line of Credit Agreement”) with several individuals and institutional lenders for aggregate loans of up to $4.0 million (the “May 2023 Secured Line of Credit”), evidenced by the Secured Non-Revolving Line of Credit Promissory Notes (each a “May 2023 Secured Note” and collectively, the “May 2023 Secured Notes”), also effective as of May 10, 2023. The May 2023 Secured Line of Credit matures twenty-four (24) months from the date of the May 2023 Secured Line of Credit and accrues interest, payable semi-annually in arrears, at a fixed rate of interest equal to 12% per year. We granted to the lenders under the May 2023 Secured Line of Credit Agreement a security interest in all of our present and future assets and properties, real or personal, tangible or intangible, wherever located, including products and proceeds thereof, which security interest was pari passu with the RAT Non-Revolving Line of Credit Agreement and the Excel $2.5M Revolving Line of Credit Agreement, but subordinate in rights to GemCap under the GemCap Revolving Line of Credit Agreement. As a result of the GemCap Litigation Settlement, this subordination no longer applies.
In connection with the May 2023 Secured Line of Credit, on May 10, 2023, we agreed to issue to each lender under the May 2023 Secured Line of Credit Agreement, upon a drawdown, a warrant to purchase up to an aggregate of 369,517 shares of our common stock. Each warrant has an exercise price of $4.33 per share, expires on May 10, 2026, and is exercisable at any time prior to such date.
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As of May 10, 2023, Excel committed to be a lender under the May 2023 Secured Line of Credit Agreement for an aggregate loan of $2.65 million, and as of September 11, 2023, Excel had not loaned any funds under the May 2023 Secured Line of Credit. On May 31, 2023, we entered into a Secured Non-Revolving Line of Credit Loan Agreement (the “Excel $2.2M Secured Line of Credit Agreement”) with Excel for an aggregate principal amount of up to $2,200,000 (the “Excel $2.2M Line of Credit”), evidenced by a Non-Revolving Line of Credit Promissory Note (the “Excel $2.2M Note”). Pursuant to the terms of a Pay Off Letter Agreement with Excel dated September 12, 2023, we refinanced the outstanding principal and interest of the Excel $2.2M Line of Credit to be included as part of the obligations of the May 2023 Secured Line of Credit Agreement. As a result of such refinancing, as of September 12, 2023, no principal or interest remained outstanding under the Excel $2.2M Secured Line of Credit, and the Excel $2.2M Secured Line of Credit Agreement was terminated, and as of September 12, 2023, Excel had loaned $2,266,733 under the May 2023 Secured Line of Credit Agreement and received a warrant to purchase 209,398 shares of our common stock.
As of December 14, 2023, the outstanding principal and interest on Excel’s portion of the May 2023 Secured Line of Credit was $2,328,617 (the “Excel May 2023 Secured Line of Credit Pay Off-Amount”) of the total aggregate principal and interest outstanding under the May 2023 Secured Line of Credit of $3,262,817. On December 14, 2023, Excel agreed to convert the Excel May 2023 Secured Line of Credit Pay-Off Amount owed under the May 2023 Secured Line of Credit Agreement into 2,910,771 shares of our common stock at a conversion price per share of $0.80. In addition, in connection with the Warrant Repricing (as defined below), on December 14, 2023, Excel agreed to reprice the per share warrant exercise price of the warrant for 209,398 shares of our common stock to $0.80 per warrant share and immediately exercised the warrant, delivering the net proceeds of $167,518.40 to us. See “—Repricing and Exercise of Certain Warrants.”
On December 31, 2023, one of the remaining lenders under the May 2023 Secured Line of Credit converted $101,700 in outstanding principal and interest into 127,124 shares of our common stock at a conversion price per share of $0.80. As of December 31, 2024, warrants for a total of 83,142 warrant shares had been issued to the remaining lenders in connection with the May 2023 Secured Line of Credit and remain outstanding.
The May 2023 Secured Line of Credit matured on May 10, 2025 (the “Maturity Date”) with a principal balance, including accrued interest, amounting to $889,000 owed to three remaining lenders.
On June 10, 2025, in response to our failure to pay the balances owed on the Maturity Date, we received a demand notice and reservation of rights letter (the “June 10 Notice”) from one of the lenders under the May 2023 Secured Line of Credit Agreement ( “Lender No. 1”) declaring the loan thirty (30) days past due and demanding payment of the full balance, including outstanding principal and interest, owed to Lender No. 1 within ten (10) days of the date of the June 10 Notice, failing which, Lender No. 1 may proceed with exercising all rights and remedies available to it at law, in equity, and pursuant to the applicable loan documents. The aggregate principal amount owed to Lender No. 1 on the Maturity Date was $300,000.
Pursuant to the terms of the May 2023 Secured Line of Credit Agreement, after the occurrence and during the continuance of an Event of Default thereunder (and after giving of any required notice and the expiration of any applicable cure period), the per annum effective rate of interest on all outstanding principal under the May 2023 Secured Note, which is twelve percent (12%), shall be increased by 500 basis points. All such increases may be applied retroactively to the date of the occurrence of such Event of Default. While we are evaluating our options regarding the June 10 Notice, as of the date of this Report, this default has not yet been cured; however, no further action has been taken against the Company with respect to the May 2023 Secured Note. There can be no assurance as to whether Lender No. 1 or any other lender under the May 2023 Secured Line of Credit Agreement will enforce its rights by seeking all available legal and equitable remedies available to it.
The May 2023 Secured Note had a principal balance, including accrued interest, amounting to $813,549 and $885,333 as of June 30, 2025, and September 30, 2024, respectively. We incurred interest expense for the 2023 Secured Note in the amount of $66,418 and $80,179 for the three months ended June 30, 2025, and 2024, respectively, and $226,775 and $293,521 for the nine months ended June 30, 2025, and 2024, respectively.
Excel $1.0M Line of Credit
On March 28, 2024, we entered into a Secured Non-Revolving Line of Credit Loan Agreement with Excel, an entity managed by Mr. Cassidy (the “Excel $1.0M Secured Line of Credit Agreement”), for an aggregate principal amount of up to $1,000,000 (the “Excel $1.0M Line of Credit”), evidenced by a Secured Non-Revolving Line of Credit Promissory Note (the “Excel $1.0M Note”). The Excel $1.0M Line of Credit matures one hundred eighty (180) days from the date of the Excel $1.0M Secured Line of Credit Agreement (the “Excel $1.0M Line of Credit Maturity Date”) and accrues interest, payable in arrears on the Excel $1.0M Line of Credit Maturity Date, at a fixed rate of interest equal to 12% per year.
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Under the Excel $1.0M Secured Line of Credit Agreement, we granted to Excel a security interest in all of our present and future assets and properties, real or personal, tangible or intangible, wherever located, including products and proceeds thereof, which security interest was subordinate in rights to GemCap under the GemCap Revolving Line of Credit Agreement. As a result of the GemCap Litigation Settlement, this subordination no longer applies.
On May 31, 2024, we entered into a Waiver and Consent Letter Agreement with Excel (the “Excel Waiver Agreement”), effective as of and contingent upon the closing of the Registered Offering (as defined and described below), waiving certain provisions of the Excel $1.0M Secured Line of Credit Agreement, pursuant to which Excel irrevocably agreed to waive its rights to receive $500,000 of the net proceeds of any non-affiliate capital raise, including the Registered Offering, and consented to us not paying any of such proceeds to it, contingent upon the closing of such a non-affiliate capital raise, including the Registered Offering. See “ – The Registered Offering and the Concurrent Private Placement Offering.”
On December 3, 2024, and effective retroactively to September 24, 2024, we entered into a Secured Non-Revolving Line of Credit Loan Agreement Amendment with Excel and issued to Excel an Amended and Restated Non-Revolving Line of Credit Promissory Note to Excel to extend the Original Excel $1.0M Line of Credit Maturity Date by twelve (12) months, from one hundred eighty (180) days from the date of the Excel $1.0M Secured Line of Credit Agreement to one hundred eighty (180) days plus twelve (12) months from the Excel $1.0M Secured Line of Credit Agreement, or to September 24, 2025. See “—The Excel $1M Line of Credit.”
On February 20, 2025, we entered into an Exchange Agreement pursuant to which the outstanding principal and accrued interest in the amount of $1,103,000 under the Excel $1.0M Note was exchanged into 26,261,905 restricted shares of our common stock at an exchange rate of $0.042 per share. As a result, our obligations under the Excel $1.0M Note were extinguished.
The Excel $1.0M Line of Credit had a balance, including accrued interest, amounting to $0 and $1,060,000 as of June 30, 2025, and September 30, 2024, respectively. We incurred interest expense for the Excel $1.0M Line of Credit in the amount of $0 and $30,333 for the three months ended June 30, 2025, and 2024, respectively, and $43,000 and $31,333 for the nine months ended June 30, 2025, and 2024, respectively.
Convertible Notes
The Bellino Trust $2.0M Convertible Note
On October 18, 2024, we issued a Convertible Promissory Note to the Joseph G. Bellino Trust Dated November 30, 2023 (the “Bellino Trust”), in the principal amount of $2,000,000 (the “Bellino Trust $2.0M Convertible Note”). The Bellino Trust $2.0M Convertible Note accrues interest at 30% per annum, and unless converted into our common stock. The entire principal amount of the Bellino Trust $2.0M Convertible Note, plus accrued and unpaid interest, are due and payable by us on the date that is twelve (12) months after the issue date (the “Bellino Trust Convertible Note Maturity Date”). The Bellino Trust $2.0M Convertible Note is guaranteed personally by Mr. Cassidy.
The Bellino Trust shall have the right, at any time, to convert all or any portion of the principal and interest due on the date of conversion into shares of our common stock at a conversion price that is 70% of the lowest volume-weighted average price of the common stock on any trading day during the ten (10) trading days prior to the respective conversion date; provided, however, that the Bellino Trust shall not have the right to convert any portion of the Bellino Trust $2.0M Convertible Note to the extent that after giving effect to such conversion, the Bellino Trust or its affiliates would beneficially own in excess of 29.99% of our outstanding shares of common stock at the time of such conversion (a “Beneficial Ownership Limitation”), as set forth in the Bellino Trust $2.0M Convertible Note. We may prepay the Bellino Trust $2.0M Convertible Note at any time prior to the Bellino Trust Convertible Note Maturity Date, subject to a prepayment fee equal to the aggregate and actual amount of interest remaining to be paid through the Bellino Trust Convertible Note Maturity Date.
The Bellino Trust $2.0M Convertible Note contains customary representations and warranties by us, and provides for certain standard events of defaults, including but not limited to: (i) the failure to pay timely any of the principal or accrued interest due under the Bellino Trust $2.0M Convertible Note or in connection with any other indebtedness on the date the same becomes due and payable; (ii) the occurrence of a default that is not cured in performance of any material covenant or material agreement under the Bellino Trust $2.0M Convertible Note or in connection with any other indebtedness; (iii) the adoption by our Board of Directors or shareholders of a resolution for the liquidation, dissolution or winding up of the Company; (iv) the filing of any petition or action for relief under any bankruptcy, reorganization, insolvency or moratorium law or any other law for the relief of, or relating to, debtors, now or hereafter in effect, or makes any assignment for the benefit of creditors or takes any corporate action in furtherance of any of the foregoing; or (v) the entry of a decree or an order for relief by a court having jurisdiction against or with respect to us in an involuntary case under the federal bankruptcy laws or any state insolvency or similar laws ordering: (a) the liquidation of the Company; (b) a reorganization of the Company or our business and affairs; or (c) the appointment of a receiver, liquidator, assignee, custodian, trustee, or similar official for us or any of our property; and, in any such event, the failure to have such decree, order or appointment discharged or dismissed within sixty (60) days from the date of entry.
On June 16, 2025, in response to our failure to make a payment on June 1, 2025, we received written notice from the Bellino Trust declaring a default on our payment obligations under the Bellino Trust $2.0M Convertible Note and stating that it would proceed with the necessary actions in accelerating repayment of all principal and interest due under the Bellino Trust $2.0M Convertible Note.
In a private transaction on July 15, 2025, the Bellino Trust $2.0M Convertible Note was assigned to Mr. Cassidy, with no changes to the terms. As of the date of this Report, no further action has been taken against the Company with respect to the Bellino Trust $2.0M Convertible Note.
The Bellino Trust $2.0M Convertible Note had a principal balance, with no accrued interest, amounting to $2,000,000 and $0 as of June 30, 2025, and September 30, 2024, respectively. We incurred interest expense for the Bellino Trust $2.0M Convertible Note in the amount of $150,000 and $0 for the three months ended June 30, 2025, and 2024, respectively, and $416,667 and $0 for the nine months ended June 30, 2025, and 2024, respectively.
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Excel $3.0M Line of Credit Convertible Note
On November 27, 2024, we entered into a Non-Revolving Line of Credit Loan Agreement with Excel (the “Excel $3.0M Line of Credit Loan Agreement”), for an aggregate principal amount of up to $3,000,000 (the “Excel $3.0M Line of Credit”), evidenced by a Line of Credit Convertible Promissory Note (the “Excel $3.0M Line of Credit Convertible Note”).
The Excel $3.0M Line of Credit Convertible Note accrues interest at 20% per annum unless converted into our common stock. The entire principal amount of the Excel $3.0M Convertible Note, plus accrued and unpaid interest, will be due and payable by us on the date that is twelve (12) months after the issue date (the “Excel $3.0M Convertible Note Maturity Date”); provided, however, that the Excel $3.0M Convertible Note Maturity Date may be extended by an additional twelve (12) months at our request and upon written consent by the Excel, which consent shall not be unreasonably withheld.
Excel shall have the right, at any time, to convert all or any portion of the principal and interest due on the date of conversion into shares of our common stock at a conversion price that is 70% of the lowest volume-weighted average price of the common stock on any trading day during the ten (10) trading days prior to the respective conversion date; provided, however, that Excel shall not have the right to convert any portion of the Excel $3.0M Line of Credit Convertible Note to the extent that after giving effect to such conversion, Excel or its affiliates would beneficially own in excess of 29.99% of our outstanding shares of common stock at the time of such conversion (a “Beneficial Ownership Limitation”), as set forth in the Excel $3.0M Line of Credit Convertible Note. We may prepay the Excel $3.0M Line of Credit Convertible Note at any time prior to the Excel $3.0M Convertible Note Maturity Date. The Excel $3.0M Line of Credit Convertible Note contains customary representations and warranties by us and provides for certain standard events of defaults.
The Excel $3.0M Line of Credit Convertible Note had a balance, including accrued interest, amounting to $3,362,461 and $0 as of June 30, 2025, and September 30, 2024, respectively. We incurred interest expense for the Excel $3.0M Line of Credit Convertible Note in the amount of $151,667 and $0 for the three months ended June 30, 2025, and 2024, respectively, and $362,461 and $0 for the nine months ended June 30, 2025, and 2024, respectively.
Red Road Holdings Corporation
Effective as of May 13, 2025, we entered into a Securities Purchase Agreement with Red Road Holdings Corporation (“Red Road” and such agreement, the “Red Road Securities Purchase Agreement”) for the principal amount of $165,900, which is convertible into shares of our common stock upon the terms and subject to the limitations and conditions set forth in the Convertible Promissory Note (the “Red Road Convertible Note”), also effective as of May 13, 2025.
The Red Road Convertible Note matures on February 28, 2026, with an interest rate of 10% per annum accruing from May 13, 2025, until maturity, upon acceleration or by prepayment. The Red Road Convertible Note may be prepaid as follows: (1) the period beginning on May 13, 2025, and ending on the date which is 120 days with a prepayment percentage of 120%; or (2) the period beginning on the date which is 121 days following May 13, 2025, and ending on the date which is 180 days following with a prepayment percentage of 125%.
Red Road may convert all or part of the outstanding and unpaid amount of the Red Road Convertible Note into fully paid and non-assessable shares of our common stock. The number of shares of our common stock to be issued upon each conversion shall be determined by dividing the Conversion Amount (as defined below) by the applicable Conversion Price (as defined below) then in effect on the date specified in the notice of conversion. The Conversion Amount equals the sum of the principal amount of the Red Road Convertible Note plus accrued and unpaid interest. The Conversion Price equals 70% multiplied by the Market Price (as defined below), representing a discount rate of 30%. The Market Price means the average of the three (3) lowest Trading Prices (as defined below) for our common stock during the fifteen (15) Trading Day period ending on the latest complete trading day prior to the conversion date. Trading Price means the closing bid price on the OTCQB, OTCQX, Pink Sheets electronic quotation system or applicable trading market as reported by a reliable reporting service. In no event shall Red Road be entitled to convert any portion of the Red Road Convertible Note such that the number of shares of our common stock issuable upon the conversion would result in beneficial ownership by Red Road and its affiliates of more than 4.99% of the outstanding shares of our common stock.
During the period the conversion right exists, we will reserve from our authorized and unissued common stock a sufficient number of shares, free from preemptive rights, to provide for the issuance of common stock upon the full conversion of the Red Road Convertible Note. We are required at all times to have authorized and reserved three times the number of shares that are actually issuable upon full conversion of the Red Road Convertible Note, based on the Conversion Price in effect from time to time.
The Red Road Convertible Note had a balance, including accrued interest, amounting to $168,127 and $0 as of June 30, 2025, and September 30, 2024, respectively. We incurred interest expense for the Red Road Convertible Note in the amount of $4,895 and $0 for the three months ended June 30, 2025, and 2024, respectively, and $4,895 and $0 for the nine months ended June 30, 2025, and 2024, respectively.
Other Debt Instruments
Agile Capital Finding, LLC
Agile $525,000 Loan
On August 26, 2024, we, along with our wholly-owned subsidiary, RMTV, entered into a Subordinated Business Loan and Security Agreement (the “Agile $525,000 Loan Agreement”) with Agile Capital Funding, LLC (“Agile Lending”) and Agile Capital Funding, LLC, as collateral agent (the “Agile Collateral Agent” and together with Agile Lending, the “Agile Lender”), evidenced by a Subordinated Secured Promissory Note in the principal amount of $525,000 (the “Agile $525,000 Note” and such loan, the “Agile $525,000 Loan”). Principal and interest in the aggregate amount of $756,000 under the Agile $525,000 Note was to be repaid in weekly payments of $27,000 and be repaid on or before the maturity date of March 10, 2025 (the “Agile $525,000 Loan Maturity Date”). We had the ability to prepay the Agile $525,000 prior to the Agile $525,000 Loan Maturity Date, subject to a prepayment fee equal to the aggregate and the actual amount of interest remaining to be paid through the Agile $525,000 Loan Maturity Date. Payments under the Agile $525,000 Note were expressly subordinated to our obligations under the GemCap Revolving Line of Credit Agreement and we granted the Agile Collateral Agent a security interest, for the benefit of the Agile, in certain of our properties, rights and assets, which security interest was subordinate in rights to GemCap under the GemCap Revolving Line of Credit Agreement. As a result of the GemCap Litigation Settlement, this subordination no longer applies.
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Pursuant to the terms of the Agile $660,000 Loan (defined below), on December 27, 2024, we refinanced the outstanding principal and interest of the Agile $525,000 Loan, amounting to $297,175, to be included as part of the obligations of the Agile $660,000 Loan. See “—Agile $660,000 Loan.” As a result of such refinancing, as of December 31, 2024, no principal or interest remained outstanding under the Agile $525,000 Loan, and the Agile $525,000 Loan Agreement was terminated.
Agile $388,500 Loan
On October 14, 2024, we, along with RMTV, entered into a Subordinated Business Loan and Security Agreement (the “Agile $388,500 Loan Agreement”) with the Agile Lender, evidenced by a Subordinated Secured Promissory Note in the principal amount of $388,500 (the “Agile $388,500 Note” and such loan, the “Agile $388,500 Loan”). Principal and interest in the aggregate amount of $559,440 under the Agile $388,500 Note is repaid in weekly payments of $17,483 and shall be repaid on or before the maturity date of May 26, 2025 (the “Agile $388,500 Loan Maturity Date”). The Agile $388,500 Note may be prepaid prior to the Agile $388,500 Loan Maturity Date, subject to a prepayment fee equal to the aggregate and the actual amount of interest remaining to be paid through the Agile $388,500 Loan Maturity Date. Payments under the Agile $388,500 Note were expressly subordinated to our obligations under the GemCap Revolving Line of Credit Agreement and we granted the Agile Collateral Agent a security interest, for the benefit of the Agile, in certain of our properties, rights and assets, which security interest was subordinate in rights to GemCap under the GemCap Revolving Line of Credit Agreement. As a result of the GemCap Litigation Settlement, this subordination no longer applies.
Pursuant to the terms of the Agile $800,000 Loan (defined below), on March 25, 2025, we refinanced the outstanding principal and interest of the Agile $388,500 Loan, amounting to $157,417, to be included as part of the obligations of the Agile $800,000 Loan. See “—Agile $800,000 Loan.” As a result of such refinancing, as of March 31, 2025, no principal or interest remained outstanding under the Agile $388,500 Loan, and the Agile $388,500 Loan Agreement was terminated.
Agile $660,000 Loan
On December 27, 2024 (the “Agile $660,000 Agreement Effective Date”), we, along with RMTV, entered into a Subordinated Business Loan and Security Agreement (the “Agile $660,000 Loan Agreement” and together with the Agile $388,500 Loan Agreement, the “Agile Agreements”) with the Agile Lender, evidenced by a Subordinated Secured Promissory Note in the principal amount of $660,000 (the “Agile $660,000 Note” and such loan, the “Agile $660,000 Loan”). (The Agile $388,500 Note and the Agile $660,000 Note are together referred to as the “Agile Notes.”) Of the $660,000 proceeds from the Agile Loan, $297,175 was used to repay the outstanding balance of principal and interest on the Agile $525,000 Loan, with the balance, net an administration fee, of $329,825 being used for general operations. Principal and interest in the aggregate amount of $917,400 under the Agile $660,000 Note is repaid in weekly payments of $30,580 and shall be repaid on or before the maturity date of July 29, 2025 (the “Agile $660,000 Loan Maturity Date”). The Agile $660,000 Note may be prepaid prior to the Agile $660,000 Loan Maturity Date, subject to a prepayment fee equal to the aggregate and the actual amount of interest remaining to be paid through the Agile $660,000 Loan Maturity Date.
The Agile $660,000 Loan had a balance, including accrued interest, amounting to $241,645 and $0 as of June 30, 2025, and September 30, 2024, respectively. We incurred interest expense for the Agile $660,000 Loan in the amount of $104,993 and $0 for the three months ended June 30, 2025, and 2024, respectively, and $282,953 and $0 for the nine months ended June 30, 2025, and 2024, respectively.
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Agile $800,000 Loan
On March 25, 2025 (the “Agile $800,000 Agreement Effective Date”), we, along with RMTV, entered into a Subordinated Business Loan and Security Agreement (the “Agile $800,000 Loan Agreement” and together with the Agile $388,500 Loan Agreement, the Agile $660,000 Loan Agreement, the “Agile Agreements”) with Agile and the Agile Collateral Agent, evidenced by a Subordinated Secured Promissory Note in the principal amount of $800,000 (the “Agile $800,000 Note” and such loan, the “Agile $800,000 Loan”). (The Agile $388,500 Note, the Agile $660,000 Note and the Agile $800,000 Note are together referred to as the “Agile Notes.”) Of the $800,000 proceeds from the Agile Loan, $157,418 was used to repay the outstanding balance of principal and interest on the Agile $525,000 Loan, with the balance, net an administration fee, of $602,583 being used for general operations. Principal and interest in the aggregate amount of $1,112,000 under the Agile $800,000 Note is repaid in weekly payments of $37,067 commencing on April 3, 2025, and shall be repaid on or before the maturity date of October 23, 2025 (the “Agile $800,000 Loan Maturity Date”).
The Agile $800,000 Loan had a balance, including accrued interest, amounting to $640,468 and $0 as of June 30, 2025, and September 30, 2024, respectively. We incurred interest expense for the Agile $800,000 Loan in the amount of $215,508 and $0 for the three months ended June 30, 2025, and 2024, respectively, and $229,542 and $0 for the nine months ended June 30, 2025, and 2024, respectively.
Each of the Agile Agreements contains certain affirmative covenants, including but not limited to delivery of certain financial statements and providing the Agile Lender with prompt notice upon the occurrence of certain events as set forth in the Agile Agreements. We also agreed to certain negative covenants, including but not limited to a prohibition on the creation of additional liens with respect to the collateral and the sale of assets outside of the ordinary course of business, without the Agile Lender’s prior written consent. We granted the Agile Collateral Agent a security interest, for the benefit of Agile, in certain of our properties, rights and assets, as set forth in each Agile Agreement. The Agile Collateral Agent shall only be permitted to perfect its interest in and file a financing statement upon an Event of Default (as defined in the Agile Agreements).
The Agile Agreements provide for certain standard events of defaults, including but not limited to the (i) failure to make any required payment under the Agile Notes, (ii) occurrence of a material adverse change in the business, operations, or condition of the Company or the Company and our subsidiaries, as a whole, and (iii) the filing of any notice of a lien, levy, or assessment against us or our material subsidiaries by any government agency. In addition to the fixed per annum rate that is otherwise applicable under the Agile Notes, a default interest rate of 5% will become effective upon the occurrence of an event of default under the Agile Notes.
On July 21, 2025, we received a notice of default and acceleration letter from the Agile Lender (the “July 21 Agile Notice”) for our failure to make payments when and as due. The Agile Lender accelerated all amounts owed in the aggregate amount of $1,000,476, which includes default interest, due and payable within seven days of the July 21 Agile Notice. While we are evaluating our options regarding the July 21 Agile Notice, as of the date of this Report, this default has not yet been cured; however, no further action has been taken against the Company with respect to the Agile Agreements. There can be no assurance as to whether the Agile Lender will enforce its rights by seeking all available legal and equitable remedies available to it.
CFG Purchase Agreement
On August 27, 2024, we entered into a Purchase Agreement (the “CFG Purchase Agreement”) with CFG Merchant Solutions, LLC, a Delaware limited liability company, as buyer (“CFG”), and Mr. Cassidy, our Executive Chairman and our majority stockholder, as guarantor (the “CFG Guarantor”). The CFG Purchase Agreement provides for the purchase by CFG of our future receipts (the “Future Receipts”) valued at $962,500 (the “Amount Sold”) for a total purchase price of $700,000 (the “Purchase Price”). The percentage of Future Receipts to be paid back on a daily basis is 14.44% (the “Purchased Percentage”), which equals $4,813 (the “Daily Amount”). CFG is entitled to collect the Daily Amounts at the end of each week by debiting our bank account by an amount equaling $24,063 (the “Weekly Payment”) until the Amount Sold is paid in full. We granted the Buyer a security interest in certain of our properties, rights and assets, as set forth in the CFG Purchase Agreement, which security interest was subordinate in rights to GemCap under the GemCap Revolving Line of Credit Agreement. See “– Revolving Lines of Credit – GemCap Revolving Line of Credit.” As a result of the GemCap Litigation Settlement, this subordination no longer applies.
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The CFG Purchase Agreement contains certain customary covenants, including but not limited to the delivery of financial statements to CFG and providing CFG prompt notice upon the occurrence of certain events as set forth in the CFG Purchase Agreement. We also agreed to certain negative covenants, including but not limited to a prohibition on the creation of additional liens with respect to the collateral and the sale of assets outside of the ordinary course of business, without the prior written consent of CFG. The Guarantor has given a personal guaranty of our performance and obligations under the CFG Purchase Agreement.
The CFG Purchase Agreement provides for penalties upon the occurrence of a breach of the CFG Purchase Agreement, including but not limited to the (i) interference with CFG’s right to collect the Purchased Percentage or Daily Amount, (ii) breach of any terms or covenants contained in the CFG Purchase Agreement, and (iii) failure to provide bank statements within seven (7) calendar days after request from CFG. In addition to the Purchased Percentage that is otherwise applicable under the CFG Purchase Agreement, the greater of an amount equal to 5% of the undelivered Amount Sold at the time of the breach or $2,500 will become assessed upon the occurrence of a breach under the Agreement.
The
CFG Purchase Agreement had a balance, including accrued interest, amounting to $
1800 Diagonal Lending, LLC
The 1800 Diagonal Agreements contain certain customary representations, warranties, and covenants made by us, and contain customary events of default. Upon the occurrence and during the continuation of any such event of default, the respective 1800 Diagonal Note will become immediately due and payable, and we are obligated to pay to the 1800 Diagonal Lender an amount equal to 150% times the sum of (w) the then outstanding principal amount of the respective 1800 Diagonal Note No. 1 plus (x) accrued and unpaid interest on the unpaid principal amount of such 1800 Diagonal Note No. 1 to the date of payment plus (y) default interest at 22% per annum on the amounts referred to in clauses (w) and/or (x) plus (z) any amounts owed to the 1800 Diagonal Lender pursuant to Article IV of each of the 1800 Diagonal Notes (amounts set forth in clauses (w), (x), (y) and (z) are collectively referred to as the “Default Amount”). If an event of default under a respective 1800 Diagonal Note occurs, the 1800 Diagonal Lender has the right to convert the balance owed pursuant to the respective 1800 Diagonal Note, including the Default Amount, into shares of our common stock at a conversion price equal to 70% of the average of the three (3) lowest trading prices for the common stock during the fifteen (15) trading days prior to the conversion date; provided, however, that each 1800 Diagonal Note contains a beneficial ownership limitation restricting the 1800 Diagonal Lender and its affiliates from owning greater than 4.99% of our outstanding shares of common stock at the time of such conversion, as set forth in each of the 1800 Diagonal Notes.
1800 Diagonal $138,000 Promissory Note
On October 11, 2024, we entered into a Securities Purchase Agreement (the “1800 Diagonal $138,000 Promissory Note Agreement”) with 1800 Diagonal Lending, LLC (the “1800 Diagonal Lender”), pursuant to which the 1800 Diagonal Lender made a loan to us, evidenced by a Promissory Note in the aggregate principal amount of $138,000, including an original issue discount of $23,000 (the “1800 Diagonal $138,000 Promissory Note”). Under the 1800 Diagonal $138,000 Promissory Note, we are required to make 10 monthly payments of $15,180, which includes a one-time interest charge of 10% ($13,800). The 1800 Diagonal $138,000 Promissory Note is not secured by any collateral and matures on August 15, 2025.
On each of June 20, 2024, and June 24, 2025, the 1800 Diagonal Lender elected to convert $15,000 and $20,000, respectively, of the amount owed under the 1800 Diagonal $138,000 Promissory Note into 1,152,073 shares and 1,498,127 shares of Common Stock, respectively, as provided for in Article IV of the 1800 Diagonal $138,000 Promissory Note (together, the “Conversions”). As a result of these Conversions, an aggregate of $36,310 remains due under the 1800 Diagonal $138,000 Promissory Note. If we are unable to comply with the demands set out in the June 20 1800 Diagonal Lender Notice, there can be no assurance as to whether the 1800 Diagonal Lender will seek to enforce its rights under the 1800 Diagonal Notes, including converting additional amounts under the 1800 Diagonal Notes into shares of our Common Stock and sell those shares in the public market.
The 1800 Diagonal $138,000 Promissory Note Agreement had a balance, including accrued interest, amounting to $36,310 and $0 as of June 30, 2025, and September 30, 2024, respectively. We incurred interest expense under the 1800 Diagonal $138,000 Promissory Note Agreement in the amount of $45,194 and $0 for the three months ended June 30, 2025, and 2024, respectively, and $87,667 and $0 for the nine months ended June 30, 2025, and 2024, respectively.
1800 Diagonal $49,200 Bridge Note
On October 11, 2024, we entered into a Securities Purchase Agreement with the 1800 Diagonal Lender (the “1800 Diagonal $49,200 Bridge Note Agreement”) pursuant to which the 1800 Diagonal Lender made a loan to us, evidenced by a Bridge Note in the aggregate principal amount of $49,200, including an original issue discount of $23,000 (the “1800 Diagonal $49,200 Bridge Note”). Under the 1800 Diagonal $49,200 Bridge Note, we are required to make an initial payment of $27,552, which includes a one-time interest charge of 12% ($5,904), on April 15, 2025, with four (4) subsequent payments of $6,888 due each month thereafter. The 1800 Diagonal $49,200 Bridge Note is not secured by any collateral and matures on August 15, 2025. Payments under the 1800 Diagonal Agreements No. 1 were expressly subordinated to our obligations under the GemCap Revolving Line of Credit Agreement; however, as a result of the GemCap Litigation Settlement, this subordination no longer applies. See “—GemCap Revolving Line of Credit.”
The 1800 Diagonal $49,200 Bridge Note Agreement had a balance, including accrued interest, amounting to $24,108 and $0 as of June 30, 2025, and September 30, 2024, respectively. We incurred interest expense under the 1800 Diagonal $49,200 Bridge Note Agreement in the amount of $13,228 and $0 for the three months ended June 30, 2025, and 2024, respectively, and $24,925 and $0 for the nine months ended June 30, 2025, and 2024, respectively.
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1800 Diagonal $31,200 Promissory Note
On December 17, 2024, we entered into a Securities Purchase Agreement (the “1800 Diagonal $31,200 Promissory Note Agreement”) with the 1800 Diagonal Lender, pursuant to which the 1800 Diagonal Lender made a loan to us, evidenced by a Promissory Note in the aggregate principal amount of $31,200, including an original issue discount of $5,200 (the “1800 Diagonal $31,200 Promissory Note”). Under the 1800 Diagonal $31,200 Promissory Note, we are required to make 10 monthly payments of $3,432, which includes a one-time interest charge of 10% ($3,120). The 1800 Diagonal $31,200 Promissory Note is not secured by any collateral and matures on October 15, 2025.
The 1800 Diagonal $31,200 Promissory Note Agreement had a balance, including accrued interest, amounting to $22,308 and $0 as of June 30, 2025, and September 30, 2024, respectively. We incurred interest expense under the 1800 Diagonal $31,200 Promissory Note Agreement in the amount of $10,271 and $0 for the three months ended June 30, 2025, and 2024, respectively, and $15,645 and $0 for the nine months ended June 30, 2025, and 2024, respectively.
1800 Diagonal $96,000 Bridge Note
On December 17, 2024, we entered into a Securities Purchase Agreement with the 1800 Diagonal Lender (the “1800 Diagonal $96,000 Bridge Note Agreement” and together with the 1800 Diagonal $138,000 Promissory Note Agreement, the 1800 Diagonal $49,200 Bridge Note Agreement and the 1800 Diagonal $31,200 Promissory Note Agreement, the “1800 Diagonal Loan Agreements”) pursuant to which the 1800 Diagonal Lender made a loan to us, evidenced by a Bridge Note in the aggregate principal amount of $96,000, including an original issue discount of $16,000 (the “1800 Diagonal $96,000 Bridge Note” and together with the 1800 Diagonal $138,000 Promissory Note, the 1800 Diagonal $49,200 Bridge Note and the 1800 Diagonal $31,200 Promissory Note, each a “1800 Diagonal Note” and collectively, the “1800 Diagonal Notes”). Under the 1800 Diagonal $96,000 Bridge Note, we are required to make an initial payment of $53,760, which includes a one-time interest charge of 12% ($11,520), on June 15, 2025, with four (4) subsequent payments of $13,440 due each month thereafter. The 1800 Diagonal $96,000 Bridge Note is not secured by any collateral and matures on October 15, 2025.
The 1800 Diagonal $96,000 Bridge Note Agreement had a balance, including accrued interest, amounting to $107,520 and $0 as of June 30, 2025, and September 30, 2024, respectively. We incurred interest expense under the 1800 Diagonal $96,000 Bridge Note Agreement in the amount of $59,487 and $0 for the three months ended June 30, 2025, and 2024, respectively, and $78,644 and $0 for the nine months ended June 30, 2025, and 2024, respectively.
1800 Diagonal Note Defaults and Debt to Equity Conversions
On June 20, 2025, in response to our failure to make payments due on June 16, 2025, in the aggregate amount of $79,260, which breach continued for five (5) days without cure, we received a notice of default and demand letter from the 1800 Diagonal Lender (the “June 20 1800 Diagonal Lender Notice”). The June 20 1800 Diagonal Lender Notice calls a default under the 1800 Diagonal Notes and demand was made for immediate payment of a sum representing 150% of the remaining outstanding principal balance under each 1800 Diagonal Note (150% representing the multiplier upon the occurrence of an event of default), for an aggregate principal amount of $286,326, plus accrued interest and default interest as provided in the 1800 Diagonal Notes. Additionally, 1800 Diagonal has enforced its rights under the 1800 Diagonal Notes by converting amounts owed into shares of our common stock as indicated below:
| · | 1800 Diagonal $138,000 Promissory Note: |
| ○ | On June 20, 2025, 1800 Diagonal Lender converted $15,000 of the principal amount into 1,152,073 shares of our common stock at a conversion price of $0.01302. The remaining principal balance due after this conversion was $54,810, including default interest. |
| ○ | On June 24, 2025, 1800 Diagonal Lender converted $20,000 of the principal amount into 1,498,127 shares of our common stock at a conversion price of $0.01335. The remaining principal balance due after this conversion was $36,310, including default interest. |
| ○ | On July 10, 2025, 1800 Diagonal converted $20,000 of the principal amount due into 2,792,126 shares of our common stock at a conversion price of $0.007163. The remaining principal balance due after this conversion was $17,810, including default interest. |
| ○ | On July 17, 2025, 1800 Diagonal converted $19,310 of the principal amount due into 3,662,052 shares of our common stock at a conversion price of $0.005273. There was no remaining principal balance due under the 1800 Diagonal $138,000 Promissory Note after this conversion. |
| ● | 1800 Diagonal $49,200 Bridge Note: |
| ○ | On July 22, 2025, 1800 Diagonal converted $27,260 of the principal amount due into 5,991,209 shares of our common stock at a conversion price of $0.00455. The remaining principal balance due under the 1800 Diagonal $42,900 Bridge Note after this conversion was $5,236, including default interest. |
| ○ | On July 28, 2025, 1800 Diagonal converted $6,736 of the principal amount due into 1,621,960 shares of our common stock at a conversion price of $0.004153. There was no remaining principal balance due under the 1800 Diagonal $42,900 Bridge Note after this conversion. |
| ● | 1800 Diagonal $96,000 Bridge Note: |
| ○ | On July 30, 2025, 1800 Diagonal converted $22,895 of the principal amount due into 6,289,835 shares of our common stock at a conversion price of $0.00364. The remaining principal balance due under the 1800 Diagonal $96,000 Bridge Note after this conversion was $139,885, including default interest. |
| ○ | On August 6, 2025, 1800 Diagonal converted $15,375 of the principal amount due into 6,684,783 shares of our common stock at a conversion price of $0.0023. The remaining principal balance due under the 1800 Diagonal $96,000 Bridge Note after this conversion was $126,010, including default interest. |
| ○ | On August 12, 2025, 1800 Diagonal converted $9,490 of the principal amount due into 7,014,043 shares of our common stock at a conversion price of $0.001353. The remaining principal balance due under the 1800 Diagonal $96,000 Bridge Note after this conversion was $118,020, including default interest. |
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Repricing and Exercise of Certain Existing Warrants
On December 14, 2023, we agreed to offer to amend certain existing warrants exercisable for an aggregate of up to 4,055,240 shares of our common stock (each such warrant an “Existing Warrant”) to reduce the respective exercise prices thereof to $0.80 per share (such new price being referred to as the “Amended Warrant Exercise Price”), which was the closing price per share of our common stock as quoted on the NYSE American on December 13, 2023, on the condition that the holder of each Existing Warrant would commit to exercise the Existing Warrant within eight (8) business days from the date the warrant holder entered into a binding agreement, or some other number of days to be agreed by the Existing Warrant holder (the “Warrant Reprice Letter Agreement”), paying the aggregate Amended Warrant Exercise Price of each respective Existing Warrant in cash to us (the “Warrant Repricing”). Holders of Existing Warrants had until December 31, 2023, to enter into a Warrant Reprice Letter Agreement, after which time the original per share warrant exercise price of Existing Warrants would remain unchanged. Existing Warrants exercisable for an aggregate of up to 786,482 shares of our common stock were held by Excel Family Partners, LLLP, and Eagle Investment Group, LLC, entities managed by Mr. Cassidy. Existing Warrants exercisable for an aggregate of up to 443,332 shares of our common stock were held by Denise Penz, a member of our Board of Directors. Each of Mr. Cassidy and Ms. Penz entered into Warrant Reprice Letter Agreements to exercise their Existing Warrants, and as of December 31, 2023, each exercised their Existing Warrants resulting in net proceeds to us of $983,851.
As of June 30, 2025, holders of Existing Warrants (including those held by Mr. Cassidy and Ms. Penz) had exercised an aggregate of 1,850,874 shares for an aggregate exercise price of $1,480,699. We do not expect any other warrants to be repriced and exercised under the Warrant Repricing.
The Registered Offering and the Concurrent Private Placement Offering
On May 31, 2024, we entered into a Securities Purchase Agreement (the “Institutional Purchase Agreement”) with the purchaser named therein (the “Institutional Investor”) and a Securities Purchase Agreement (the “Private Placement Purchase Agreement,” and together with the Institutional Purchase Agreement, the “Purchase Agreements”) with Excel (the “Private Placement Entity,” together with the Institutional Investor, the “Investors”).
Pursuant to the Institutional Purchase Agreement, we agreed to sell and issue, in a registered direct offering (the “Registered Offering”) 7,875,000 shares (the “Registered Shares”) of our common stock at a purchase price per share of $0.15 and pre-funded warrants (the “Registered Pre-Funded Warrants”) to purchase up to an aggregate of 1,777,174 shares of common stock (the “Registered Pre-Funded Warrant Shares”) at a purchase price per Registered Pre-Funded Warrant of $0.1499, for aggregate gross proceeds to us of approximately $1.45 million, before deducting placement agent fees and offering expenses payable by us.
Pursuant to the Private Placement Purchase Agreement, in a concurrent private placement (the “Concurrent Private Placement Offering,” together with the Registered Offering, the “Offerings”), we agreed to sell and issue to the Private Placement Entity pre-funded warrants (the “Private Pre-Funded Warrants”) to purchase up to an aggregate of 4,347,826 shares of common stock (the “Private Pre-Funded Warrant Shares”) at a purchase price of $0.2308 per Private Pre-Funded Warrant, for aggregate gross proceeds to us of approximately $1.0 million, before deducting offering expenses payable by us. The Private Pre-Funded Warrants are immediately exercisable at an exercise price of $0.0001 per share and will expire when the Private Pre-Funded Warrants are fully exercised. The Concurrent Private Placement Offering closed on June 10, 2024.
The Purchase Agreements contain customary representations, warranties and agreements from us and the Investors and customary indemnification rights and obligations of the parties. Pursuant to the terms of the Institutional Purchase Agreement, we have agreed to certain restrictions, subject to certain exceptions, on the issuance and sale of our common stock and securities convertible into shares of common stock during the 90-day period following the closing of the Registered Offering. We also agreed not to effect or enter into an agreement to effect any issuance of common stock or any securities convertible into or exercisable or exchangeable for shares of common stock involving a variable rate transaction (as defined in the Institutional Purchase Agreement), subject to certain exceptions, until the six-month anniversary of the closing of the Registered Offering.
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In addition, until the date that is the eighteen (18) month anniversary of the closing of the Registered Offering, the Institutional Investor is entitled to a participation right in any subsequent financing (as defined in the Institutional Purchase Agreement ) effected by us or any of our subsidiaries of common stock or common stock equivalents for cash consideration, or a combination of units thereof, up to an amount equal to 35% of such subsequent financing on the same terms, conditions and price provided for in the subsequent financing, subject to certain carve-outs as set forth in the Institutional Purchase Agreement.
In connection with the Offerings, on May 31, 2024, we also entered into a placement agency agreement (the “Placement Agency Agreement”) with Roth Capital Partners, LLC the “Placement Agent”). Pursuant to the terms of the Placement Agency Agreement, the Placement Agent agreed to use its reasonable best efforts to arrange for the sale of the Registered Shares, the Registered Pre-Funded Warrants, the Registered Pre-Funded Warrant Shares, the Private Pre-Funded Warrants and the Private Pre-Funded Warrant Shares (the “Securities”). We paid the Placement Agent a cash fee equal to 6.5% of the gross proceeds generated from the Offerings and agreed to reimburse the Placement Agent for certain of its expenses in an amount up to $50,000. The Placement Agent did not receive cash placement agent fees on the sale of the Private Pre-Funded Warrants and the Private Pre-Funded Warrant Shares. The Placement Agency Agreement contains customary representations, warranties and agreements from us and the Placement Agent and customary indemnification rights and obligations of the parties.
Pursuant to the terms of the Placement Agency Agreement, we issued to the Placement Agent warrants (“Placement Agent Warrants”) to purchase up to 700,000 shares of common stock, or 5.0% of the aggregate shares of common stock (or common stock equivalents) issued in the Offerings, exercisable at a price per share of $0.25399. The Placement Agent Warrants are exercisable commencing six months after the closing date of the Registered Offering (around December 3, 2024) and expiring on May 31, 2029.
The Registered Offering closed on June 3, 2024, and on July 1, 2024, the Institutional Investor delivered a Notice of Exercise to us to purchase the 1,777,174 Registered Pre-Funded Warrant Shares.
The Registered Shares and the Registered Pre-Funded Warrants were offered pursuant to our effective Shelf Registration Statement on Form S-3 (File No. 333-268957), which was previously filed and declared effective by the SEC, the accompanying base prospectus dated January 11, 2023, and a prospectus supplement dated May 31, 2024.
Private Placement Offering
On December 5, 2024, we entered into a Securities Purchase Agreement (the “Purchase Agreement”) with an accredited investor pursuant to which we sold, in a private placement offering, made pursuant to Section 4(a)(2) under the Securities Act and Rule 506(c) promulgated thereunder, 2,127,659 shares of our common stock, par value $0.0001 per share, at a per share price of $0.0470, the closing price per share as quoted on the OTC Pink Market, on December 4, 2024, for an aggregate purchase price of $100,000, which proceeds will be used for general corporate purposes.
Future Use of Operating Cash and Capital Requirements
Our future use of operating cash and capital requirements will depend on many forward-looking factors, including the following:
| ● | our ability to raise capital when needed and on acceptable terms and conditions; | |
| ● | our ability to be quoted on the OTCQB; | |
| ● | our ability to regain and maintain compliance with the continued listing requirements of the NYSE American or another national stock exchange; | |
| ● | our ability to attract and retain management with experience in digital media including digital video music streaming, and similar emerging technologies; | |
| ● | our ability to negotiate, finalize and maintain economically feasible agreements with the major and independent music labels, publishers and performance rights organizations; |
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| ● | our ability to attract prospective users and to retain existing users; | |
| ● | our expectations regarding market acceptance of our products in general, and our ability to penetrate digital video music streaming in particular; | |
| ● | volatility in digital programmatic advertising spend which can affect our revenues; | |
| ● | the scope, validity and enforceability of our and third-party intellectual property rights; | |
| ● | our ability to comply with governmental regulations and changes in legislation or governmental regulations affecting us; | |
| ● | the intensity of competition in the markets in which we operate and those that we may seek to enter; | |
| ● | changes in the political and regulatory environment and in business and fiscal conditions in the United States and overseas; | |
| ● | our dependence upon third-party licenses for sound recordings and musical compositions; | |
| ● | our lack of control over the providers of our content and their effect on our access to music and other content; | |
| ● | our ability to comply with the many complex license agreements to which we are a party; | |
| ● | our ability to accurately estimate the amounts payable under our license agreements; | |
| ● | the limitations on our operating flexibility due to the minimum guarantees required under certain of our license agreements; | |
| ● | our ability to obtain accurate and comprehensive information about music compositions in order to obtain necessary licenses or perform obligations under our existing license agreements; | |
| ● | potential breaches of our security systems; | |
| ● | assertions by third parties of infringement or other violations by us of their intellectual property rights; | |
| ● | our ability to generate sufficient revenue to be profitable or to generate positive cash flow on a sustained basis; | |
| ● | our ability to continue as a going concern; | |
| ● | our ability to accurately estimate our user metrics; | |
| ● | the manipulation of stream counts and user accounts and unauthorized access to our services; | |
| ● | our ability to hire and retain key personnel; | |
| ● | our ability to maintain, protect and enhance our brand; | |
| ● | risks associated with our potential international expansion, including difficulties obtaining rights to stream music on favorable terms; | |
| ● | risks relating to the acquisition, investment and disposition of companies or technologies; | |
| ● | dilution resulting from additional share issuances; | |
| ● | tax-related risks; |
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| ● | the concentration of voting power among our founders who have and will continue to have substantial control over our business; | |
| ● | international, national, or local economic, social or political conditions; and | |
| ● | risks associated with accounting estimates, currency fluctuations and foreign exchange controls. |
We have evaluated and expect to continue to evaluate a wide array of strategic transactions as part of our plan to acquire or license and develop additional products and services to augment our current business operations. Strategic transaction opportunities that we may pursue could materially affect our liquidity and capital resources and may require us to incur additional indebtedness, seek equity capital or both. Accordingly, we expect to continue to opportunistically seek access to additional capital to license or acquire additional products, services or companies to expand our operations, or for general corporate purposes. Strategic transactions may require us to raise additional capital through one or more public or private debt or equity financings or could be structured as a collaboration or partnering arrangement. We have no arrangements, agreements, or understandings in place at the present time to enter into any acquisition, licensing or similar strategic business transaction.
If we raise additional funds by issuing equity securities, our stockholders will experience dilution. Debt financing, if available, would result in increased fixed payment obligations and may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends. Any debt financing or additional equity that we raise may contain terms, such as liquidation and other preferences that are not favorable to us or our stockholder.
As of June 30, 2025, our cash totaled $109,692. During the nine months ended June 30, 2025, we incurred a net loss of $12,178,735 and used $4,230,300 of cash in operations. We have incurred significant operating losses in the past and, as of June 30, 2025, we had an accumulated deficit of $164,959,880. We do not expect to experience positive cash flows from operations in the near future as we continue to invest in the distribution of our Loop Players and the expansion of our Partner Platforms business.
There is uncertainty regarding our ability to grow our business without additional financing. Our long-term future growth and success are dependent upon our ability to continue selling our services, generate cash from operating activities and obtain additional financing. We may be unable to continue selling our products and services, generate sufficient cash from operations, sell additional shares of common stock or borrow additional funds. Our inability to obtain additional cash could have a material adverse effect on our ability to grow our business to a greater extent than we can with our existing financial resources.
Use of Estimates and Assumptions
The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include assumptions used in the fair value of stock-based compensation awards and income taxes.
Stock-Based Compensation
Stock-based compensation awarded to employees is measured at the award date, based on the fair value of the award, and is recognized as an expense over the requisite vesting period. We measure the fair value of the stock-based compensation issued to non-employees using the stock price observed in the trading market (for stock transactions) or the fair value of the award (for non-stock transactions), which were more reliably determinable measures of fair value than the value of the services being rendered. The measurement date is the earlier of (1) the date at which commitment for performance by the counterparty to earn the equity instruments is reached, or (2) the date at which the counterparty’s performance is complete.
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Income Taxes
We account for income taxes in accordance with ASC 740. ASC 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all of, the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effect of changes in tax laws and rates on the date of enactment.
Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. We have no material uncertain tax positions for any of the reporting periods presented.
We recognize accrued interest and penalties related to unrecognized tax benefits as part of income tax expense. We have also made a policy election to treat the income tax with respect to global intangible low-tax income as a period expense when incurred.
In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes, as part of its initiative to reduce complexity in accounting standards. The amendments in the ASU are effective for fiscal years beginning after December 15, 2020, including interim periods therein. The adoption of this standard in the first quarter of 2022 had no impact on our condensed consolidated financial statements.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 is intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in ASU 2023-09 address investor requests for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information. ASU 2023-09 will be effective for us in the annual period beginning October 1, 2025, though early adoption is permitted. We are still evaluating the presentational effect that ASU 2023-09 will have on our condensed consolidated financial statements, but we expect considerable changes to our income tax footnote.
Recently Adopted Accounting Pronouncements
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, that would enhance disclosures for significant segment expenses for all public entities required to report segment information in accordance with ASC 280. ASC 280 requires a public entity to report for each reportable segment a measure of segment profit or loss that its chief operating decision maker (“CODM”) uses to assess segment performance and to make decisions about resource allocations. The amendments in ASU 2023-07 improve financial reporting by requiring disclosure of incremental segment information on an annual and interim basis for all public entities to enable investors to develop more useful financial analyses. Currently, Topic 280 requires that a public entity disclose certain information about its reportable segments. For example, a public entity is required to report a measure of segment profit or loss that the CODM uses to assess segment performance and make decisions about allocating resources. ASC 280 also requires other specified segment items and amounts such as depreciation, amortization and depletion expense to be disclosed under certain circumstances. The amendments in ASU 2023-07 do not change or remove those disclosure requirements. The amendments in ASU 2023-07 also do not change how a public entity identifies its operating segments, aggregates those operating segments or applies the quantitative thresholds to determine its reportable segments. The amendments in ASU 2023-07 are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. A public entity should apply the amendments in ASU 2023-07 retrospectively to all prior periods presented in the financial statements. Effective January 1, 2025, we adopted this ASU and there is no material impact to our unaudited condensed consolidated financial statements and related disclosures as of June 30, 2025.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), consisting of controls and other procedures designed to give reasonable assurance that information we are required to disclose in the reports we file or submit 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 management, including our Chief Executive Officer and our Chief Financial Officer, to allow timely decisions regarding such required disclosure. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Our Chief Executive Officer and Chief Financial Officer have evaluated such disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q and have determined that such disclosure controls and procedures were effective as of June 30, 2025.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during our last fiscal quarter that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.
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PART II — OTHER INFORMATION
Item 1. Legal Proceedings
National Retail Solutions, Inc. Civil Action
On August 1, 2022, we entered into an Advertising Sales Service and Content License Agreement with National Retail Solutions, Inc. (“NRS” and such agreement, the “NRS Advertising Agreement”), for the provision of certain services related to our programmatic advertising sales inventory. On June 26, 2024, we entered into a Payment Plan Agreement and Confession of Judgment dated June 26, 2024 (the “NRS Payment Plan”), pursuant to which NRS agreed to forbear its rights under the NRS Advertising Agreement in consideration of us remitting to NRS outstanding amounts due to NRS in monthly installment payments. The NRS Payment Plan contains a confession of judgment provision whereby, if any event of default occurs under the NRS Payment Plan, we authorized any attorney designated by NRS and admitted to practice before New Jersey courts to appear on our behalf in any court in New Jersey in one or any more proceedings, or before any clerk thereof or other court official, and to confess judgment against the Company in the full amount of the balance due under the NRS Payment Plan, plus attorneys’ fees, court costs and interest accrued as of the date of entry of judgment.
On August 11, 2025, we received notification that on July 28, 2025, in response to our failure to remit to NRS the amounts due under the NRS Payment Plan, NRS filed the following documents commencing a Civil Action to enforce the confession of judgment against the Company in the Superior Court of New Jersey, Law Division of Essex County:
| ○ | Certification in Support of Confessing Judgment, | |
| ○ | Complaint for Entry of Judgment by Confession Pursuant to R. 4:45-2 and | |
| ○ | Summons, |
collectively, the “Civil Action.”
In the Civil Action, NRS seeks an order for a confession of judgement against the Company and in favor of NRS for $827,825 as principal, together with post judgment interest at the statutory rate thereafter and costs of suit. According to the Summons, we have thirty-five (35) days from the date we received the Summons to file a written answer or motion and proof of service with the Superior Court of New Jersey, failing which the court may enter a judgment against us for the relief NRS demands, plus interest and costs of suit. If such a judgment is entered, there may be a seizure of money, wages or property to pay all or part of the judgment. As of the date of this Report, we are considering our options with respect to the Civil Action.
Item 1A. Risk Factors
Factors that could cause our actual results to differ materially from those in this Quarterly Report on Form 10-Q are any of the risks described in our Annual Report on Form 10-K for the fiscal year ended September 30, 2024, filed with the SEC on December 12, 2024. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations.
Except as set forth below, there have been no material changes from the risk factors previously disclosed under the heading “Risk Factors” in our Annual Report on Form 10-K filed with the SEC on December 12, 2024.
There is substantial doubt about our ability to continue as a going concern and if we are unable to generate significant revenue or secure additional financing, we may have to significantly reduce or discontinue our operations.
We are a small and emerging media company that is in the early stages of our business plans to capture a significant portion of the out of home market and related advertising sales revenue. Historically, we have not generated sufficient revenues to operate our business. We have a significant accumulated deficit and have incurred operating losses for years and expect losses to continue during the remainder of the fiscal year ending September 30, 2025, and beyond. Our independent registered public accounting firm indicated in its report on our Annual Report on Form 10-K for the fiscal year ended September 30, 2024, that these conditions raised substantial doubt about our ability to continue as a going concern for a period of 12 months from the issuance date of our financial statements for the 12 months ended September 30, 2024. Our primary source of operating funds since inception has been cash proceeds from sales of our common stock and from debt and equity financing transactions. Our ability to continue as a going concern is dependent upon our ability to generate sufficient revenue and our ability to raise additional funds by way of its debt and equity financing efforts. There can be no assurance that adequate financing will be available in a timely manner, on acceptable terms, or at all.
We anticipate that we will need to supplement our cash from revenues with additional cash raised from equity investment or debt transactions, while maintaining reduced spending levels, to ensure that we will have adequate cash to support our minimum operating cash requirements and thus to continue as a going concern. We have based this estimate on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we expect.
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We have no agreements, commitments, or understandings to secure additional financing at this time and there can be no guarantee or assurance that we can raise adequate capital from outside sources. Our long-term future growth and success are dependent upon our ability to continue selling our services, generate cash from operating activities and obtain additional financing. We may be unable to continue selling our products and services, generate sufficient cash from operations, sell additional shares of common stock or borrow additional funds.
If we are unable to continue as a going concern, we may have to liquidate our assets and the value we receive for our assets in liquidation or dissolution could be significantly lower than the values reflected in our financial statements, and it is likely that investors will lose all or part of their investment.
Any additional capital raising efforts may divert our management from their day-to-day activities, which may adversely affect our ability to move forward with our business plans. The perception that we might be unable to continue as a going concern may also make it more difficult to obtain financing for the continuation of our operations on terms that are favorable to us, or at all, and could result in the loss of confidence by investors and employees. Our inability to obtain additional cash by raising funds when required or on acceptable terms, or otherwise, could have a material adverse effect on our ability to grow our business to a greater extent than we can with our existing financial resources and we may have to significantly reduce, or discontinue our operations, or seek bankruptcy protection. If we seek additional financing to fund our business activities and there remains substantial doubt about our ability to continue as a going concern, investors or other financing sources may be unwilling to provide funding to us on commercially reasonable terms, if at all.
If we are unable to generate significant revenue or secure additional financing, we may be unable to implement our business plan and grow our business.
We are a small and emerging media company that is in the early stages of our business plans to capture a significant portion of the out of home market and related advertising sales revenue. Historically, we have not generated sufficient revenues to operate our business. We have a significant accumulated deficit and have incurred operating losses for years and expect losses to continue. Our primary source of operating funds since inception has been cash proceeds from debt and equity financing transactions. Our ability to continue as a going concern is dependent upon our ability to generate sufficient revenue and our ability to raise additional funds by way of our debt and equity financing efforts. There can be no assurance that adequate financing will be available to us in a timely manner, on acceptable terms, or at all.
There is uncertainty regarding our ability to grow our business without additional financing. Our long-term future growth and success are dependent upon our ability to continue selling our services, generate cash from operating activities and obtain additional financing. If we are unable to continue selling our products and services, generate sufficient cash from operations, sell additional shares of common stock or borrow additional funds on acceptable terms, if at all, we would be required to, among other things, significantly delay, scale back, or discontinue some of our content creation, marketing, or advertisement initiatives, and if such efforts are insufficient, to seek bankruptcy protection.
We have incurred substantial debt wherein we may not be able to generate sufficient cash to service our indebtedness, and we may be forced to take other actions to satisfy our obligations under applicable debt instruments, which may not be successful.
We have incurred substantial debt which may limit our ability to use our cash flow or borrow additional funds for working capital, capital expenditures, and other general business purposes. We will be required to use a substantial portion of our cash flow from operations to make debt service payments. This may limit our flexibility to plan for, or react to, changes in our business and industry, or our ability to take specified actions to take advantage of certain business opportunities that may be presented to us. We received notices of default and acceleration letters from certain lenders related to outstanding debt obligations. While these payments remain past due, we are evaluating available options, including discussions with the lenders. However, the timing and outcome of any lender enforcement actions, if pursued, cannot be predicted. Our ability to meet our debt service obligations depends on our financial condition and operating performance.
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We may not be able to maintain a level of cash flows from operating activities sufficient to permit us to pay the principal and interest on our indebtedness. If we are unable to meet our debt service obligations or should we fail to comply with our financial and other negative covenants contained in the agreements governing our indebtedness, we may be required to refinance all or part of our debt, sell strategic assets at unfavorable prices, incur additional indebtedness or issue common stock or other equity securities.
We may not be able to consummate those dispositions, and the proceeds of any such disposition may not be adequate to meet any debt service obligations then due. These alternative measures may not be successful and may not permit us to meet scheduled debt service obligations, which could have a material adverse effect on our financial condition and results of operations.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
1800 Diagonal Defaults and Debt to Equity Conversions
As previously reported, we entered into loan agreements with and issued promissory notes to 1800 Diagonal Lending, LLC (“1800 Diagonal”). On June 20, 2025, we received a notice of default and demand letter from 1800 Diagonal in response to our failure to make payments in the aggregate amount of $79,260 due on June 16, 2025. The June 20 1800 Diagonal Lender Notice called a default under all of the 1800 Diagonal notes and demand was made for immediate payment of a sum representing 150% of the remaining outstanding principal balance under each 1800 Diagonal note (150% representing the multiplier upon the occurrence of an event of default), for an aggregate principal amount of $286,326, plus accrued interest and default interest at the rate of twenty-two percent (22%) as provided in the 1800 Diagonal notes. Additionally, 1800 Diagonal has enforced its rights under the promissory notes by converting amounts owed into shares of our common stock as indicated below:
| · | 1800 Diagonal $138,000 Promissory Note (Securities Purchase Agreement dated October 11, 2024, in the aggregate principal amount of $138,000): |
| ○ | On June 20, 2025, 1800 Diagonal Lender converted $15,000 of the principal amount into 1,152,073 shares of our common stock at a conversion price of $0.01302. The remaining principal balance due after this conversion was $54,810, including default interest. |
| ○ | On June 24, 2025, 1800 Diagonal Lender converted $20,000 of the principal amount into 1,498,127 shares of our common stock at a conversion price of $0.01335. The remaining principal balance due after this conversion was $36,310, including default interest. |
| ○ | On July 10, 2025, 1800 Diagonal converted $20,000 of the principal amount due into 2,792,126 shares of our common stock at a conversion price of $0.007163. The remaining principal balance due after this conversion was $17,810, including default interest. |
| ○ | On July 17, 2025, 1800 Diagonal converted $19,310 of the principal amount due into 3,662,052 shares of our common stock at a conversion price of $0.005273. There was no remaining principal balance due under the 1800 Diagonal $138,000 Promissory Note after this conversion. |
| ● | 1800 Diagonal $49,200 Bridge Note (Securities Purchase Agreement dated October 11, 2024, in the aggregate principal amount of $49,200): |
| ○ | On July 22, 2025, 1800 Diagonal converted $27,260 of the principal amount due into 5,991,209 shares of our common stock at a conversion price of $0.00455. The remaining principal balance due under the 1800 Diagonal $42,900 Bridge Note after this conversion was $5,236, including default interest. | |
| ○ | On July 28, 2025, 1800 Diagonal converted $6,736 of the principal amount due into 1,621,960 shares of our common stock at a conversion price of $0.004153. There was no remaining principal balance due under the 1800 Diagonal $42,900 Bridge Note after this conversion. |
| ● | 1800 Diagonal $96,000 Bridge Note (Securities Purchase Agreement dated December 17, 2024, in the aggregate principal amount of $96,000): |
| o | On July 30, 2025, 1800 Diagonal converted $22,895 of the principal amount due into 6,289,835 shares of our common stock at a conversion price of $0.00364. The remaining principal balance due under the 1800 Diagonal $96,000 Bridge Note after this conversion was $139,885, including default interest. | |
| o | On August 6, 2025, 1800 Diagonal converted $15,375 of the principal amount due into 6,684,783 shares of our common stock at a conversion price of $0.0023. The remaining principal balance due under the 1800 Diagonal $96,000 Bridge Note after this conversion was $126,010, including default interest. | |
| o | On August 12, 2025, 1800 Diagonal converted $9,490 of the principal amount due into 7,014,043 shares of our common stock at a conversion price of $0.001353. The remaining principal balance due under the 1800 Diagonal $96,000 Bridge Note after this conversion was $118,020, including default interest. |
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Item 3. Defaults Upon Senior Securities.
As previously reported, we received notices of default and acceleration letters from certain lenders related to outstanding debt obligations. While we are evaluating our options regarding the notices we have received, as of the date of this Report, these defaults have not yet been cured; however, no further action has been taken against the Company with respect to these defaults. There can be no assurance as to whether these lenders will enforce their rights by seeking all available legal and equitable remedies available to them.
May 2023 Secured Loan
As previously reported, effective as of May 10, 2023, we entered into a Secured Non-Revolving Line of Credit Loan Agreement (the “May 2023 Secured Line of Credit Agreement”) with several individuals and institutional lenders for aggregate loans of up to $4.0 million (the “May 2023 Secured Line of Credit”), evidenced by Secured Non-Revolving Line of Credit Promissory Notes (each a “May 2023 Secured Note” and collectively, the “May 2023 Secured Notes”), also effective as of May 10, 2023. The May 2023 Secured Line of Credit matured on May 10, 2025 (the “Maturity Date”) with a principal balance, including accrued interest, amounting to $889,000 owed to three remaining lenders.
On June 10, 2025, in response to our failure to pay the balances owed on the Maturity Date, we received a demand notice and reservation of rights letter (the “June 10 Notice”) from one of the lenders under the May 2023 Secured Line of Credit Agreement ( “Lender No. 1”) declaring the loan thirty (30) days past due and demanding payment of the full balance, including outstanding principal and interest, owed to Lender No. 1 within ten (10) days of the date of the June 10 Notice, failing which, Lender No. 1 may proceed with exercising all rights and remedies available to it at law, in equity, and pursuant to the applicable loan documents. The aggregate principal amount owed to Lender No. 1 on the Maturity Date was $300,000.
Pursuant to the terms of the May 2023 Secured Line of Credit Agreement, after the occurrence and during the continuance of an Event of Default thereunder (and after giving of any required notice and the expiration of any applicable cure period), the per annum effective rate of interest on all outstanding principal under the May 2023 Secured Note, which is 12%, shall be increased by 500 basis points. All such increases may be applied retroactively to the date of the occurrence of such Event of Default. While we are evaluating our options regarding the June 10 Notice, as of the date of this Report, this default has not yet been cured; however, no further action has been taken against the Company with respect to the May 2023 Secured Note. There can be no assurance as to whether Lender No. 1 or any other lender under the May 2023 Secured Line of Credit Agreement will enforce its rights by seeking all available legal and equitable remedies available to it.
The Bellino Trust $2.0M Convertible Note
As previously reported, we issued a Convertible Promissory Note to the Joseph G. Bellino Trust Dated November 30, 2023 (the “Bellino Trust”), in the principal amount of $2,000,000 (the “Bellino Trust $2.0M Convertible Note”) on October 18, 2024, which was guaranteed personally by Bruce Cassidy, the Executive Chairman of our Board of Directors and our majority stockholder (“Mr. Cassidy”).
On June 16, 2025, in response to our failure to make a payment on June 1, 2025, we received written notice from the Bellino Trust declaring a default on our payment obligations under the Bellino Trust $2M Convertible Note and stating that it will proceed with the necessary actions in accelerating repayment of all principal and interest due under the Bellino Trust $2M Convertible Note.
In a private transaction on July 15, 2025, the Bellino Trust $2.M Convertible Note was assigned to Mr. Cassidy, with no changes to the terms. As of the date of this Report, no further action has been taken against the Company with respect to the Bellino Trust $2.0M Convertible Note.
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Agile Lending
As previously reported, we entered into the following loan agreements with, and issued the following promissory notes to, Agile Lending, LLC, a Virginia limited liability company (“Agile Lending”), and Agile Capital Funding, LLC, as collateral agent (the “Agile Collateral Agent” and together with Agile Lending, the “Agile Lender”):
| ● | Subordinated Business Loan and Security Agreement dated December 27, 2024, evidenced by a Subordinated Secured Promissory Note in the original principal amount of $660,000; and |
| ● | Subordinated Business Loan and Security Agreement dated March 25, 2025, evidenced by a Subordinated Secured Promissory Note in the original principal amount of $800,000, |
(collectively, the “Agile Agreements”).
On July 21, 2025, we received a notice of default and acceleration letter from the Agile Lender (the “July 21 Agile Notice”) for our failure to make payments when and as due. The Agile Lender accelerated all amounts owed in the aggregate amount of $1,000,476, which includes default interest, due and payable within seven days of the July 21 Agile Notice. While we are evaluating our options regarding the July 21 Agile Notice, as of the date of this Report, this default has not yet been cured; however, no further action has been taken against the Company with respect to the Agile Agreements. There can be no assurance as to whether the Agile Lender will enforce its rights by seeking all available legal and equitable remedies available to it.
1800 Diagonal Lending Promissory and Bridge Notes
As previously reported, we entered into loan agreements with and issued promissory notes to 1800 Diagonal Lending, LLC (“1800 Diagonal”). On June 20, 2025, we received a notice of default and demand letter from 1800 Diagonal in response to our failure to make payments in the aggregate amount of $79,260 due on June 16, 2025. The June 20 1800 Diagonal Lender Notice called a default under all of the 1800 Diagonal notes and demand was made for immediate payment of a sum representing 150% of the remaining outstanding principal balance under each 1800 Diagonal note (150% representing the multiplier upon the occurrence of an event of default), for an aggregate principal amount of $286,326, plus accrued interest and default interest at the rate of twenty-two percent (22%) as provided in the 1800 Diagonal notes. Additionally, 1800 Diagonal has enforced its rights under the promissory notes by converting amounts owed into shares of our common stock as indicated below:
| ● | 1800 Diagonal $138,000 Promissory Note (Securities Purchase Agreement dated October 11, 2024, in the aggregate principal amount of $138,000): |
| ○ | On June 20, 2025, 1800 Diagonal Lender converted $15,000 of the principal amount into 1,152,073 shares of our common stock at a conversion price of $0.01302. The remaining principal balance due after this conversion was $54,810, including default interest. |
| ○ | On June 24, 2025, 1800 Diagonal Lender converted $20,000 of the principal amount into 1,498,127 shares of our common stock at a conversion price of $0.01335. The remaining principal balance due after this conversion was $36,310, including default interest. |
| ○ | On July 10, 2025, 1800 Diagonal converted $20,000 of the principal amount due into 2,792,126 shares of our common stock at a conversion price of $0.007163. The remaining principal balance due after this conversion was $17,810, including default interest. |
| ○ | On July 17, 2025, 1800 Diagonal converted $19,310 of the principal amount due into 3,662,052 shares of our common stock at a conversion price of $0.005273. There was no remaining principal balance due after this conversion. |
| · | 1800 Diagonal $49,200 Bridge Note (Securities Purchase Agreement dated October 11, 2024, in the aggregate principal amount of $49,200): | |
| ○ | On July 22, 2025, 1800 Diagonal converted $27,260 of the principal amount due into 5,991,209 shares of our common stock at a conversion price of $0.00455. The remaining principal balance due after this conversion was $5,236, including default interest. | |
| ○ | On July 28, 2025, 1800 Diagonal converted $6,736 of the principal amount due into 1,621,960 shares of our common stock at a conversion price of $0.004153. There was no remaining principal balance due after this conversion. |
| · | 1800 Diagonal $96,000 Bridge Note (Securities Purchase Agreement dated December 17, 2024, in the aggregate principal amount of $96,000): |
| ○ | On July 30, 2025, 1800 Diagonal converted $22,895 of the principal amount due into 6,289,835 shares of our common stock at a conversion price of $0.00364. The remaining principal balance due after this conversion was $139,885, including default interest. | |
| ○ | On August 6, 2025, 1800 Diagonal converted $15,375 of the principal amount due into 6,684,783 shares of our common stock at a conversion price of $0.0023. The remaining principal balance due after this conversion was $126,010, including default interest. | |
| ○ | On August 12, 2025, 1800 Diagonal converted $9,490 of the principal amount due into 7,014,043 shares of our common stock at a conversion price of $0.001353. The remaining principal balance due after this conversion was $118,020, including default interest. |
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Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
(a) Balboa Capital
As previously reported, on February 27, 2024, we entered into an equipment financing agreement with Ameris Bank dba Balboa Capital (“Balboa” and such agreement, the “Balboa Financing Agreement”) at a collateral cost of $112,379. On July 11, 2025, we received an acceleration demand letter from Balboa (the “July 11 Balboa Notice”) for our failure to make payments when and as due. Balboa accelerated and declared immediately due and payable the entire unpaid balance of $82,427, plus the return of the equipment no later than three business days from date of the July 11 Balboa Notice. While we are evaluating our options regarding the July 11 Balboa Notice, as of the date of this Report, this default has not yet been cured; however, no further action has been taken against the Company with respect to the Balboa Financing Agreement. There can be no assurance as to whether Balboa will enforce its rights by seeking all available legal and equitable remedies available to it.
(b) None.
(c)
None of our directors or officers
Item 6. Exhibits
* Filed herewith.
** Furnished herewith.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.
| Loop Media, Inc. | ||
| Date: August 14, 2025 | By: | /s/ Justis Kao |
| Justis Kao | ||
| Interim Chief Executive Officer | ||
| (Principal Executive Officer) | ||
| Date: August 14, 2025 | By: | /s/ Ari Olgun |
| Ari Olgun | ||
| Interim Chief Financial Officer | ||
| (Principal Financial and Accounting Officer) | ||
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