XML 48 R28.htm IDEA: XBRL DOCUMENT v3.26.1
Note 18 - Subsequent Events
12 Months Ended
Dec. 31, 2025
Notes to Financial Statements  
Subsequent Events [Text Block]

Note 18. Subsequent Events

 

Director and Officer Liability Insurance 

 

The Company purchased director and officer liability insurance coverage on January 31, 2026 for $277 thousand. A down payment of $55 thousand was made and the remaining balance of $222 thousand was financed over 9 months through a short-term financing arrangement with its insurance carrier. The interest rate on the loan was 9.39%.  

 

February 2026 Private Placement 

 

In February 2026, the Company entered into a Securities Purchase Agreement with certain accredited investors for a private placement financing and issued an aggregate of (i) 392,608 shares of the Company's common stock, par value $0.0001 per share, at a per share purchase price of $1.43 and (ii) 1,616.33 shares of newly designated Series C-1 Convertible Preferred Stock par value $0.0001 per share, with a stated value of $1,000 per share for gross proceeds of $2.2 million. The investors agreed to purchase newly designated Series C-2 and Series C-3 Convertible Preferred Stock, par value $0.0001 per share, with stated values of $1,000 per share, under additional closings for aggregate gross proceeds of $1.6 million per closing. The additional closings are subject to certain closing conditions, including stockholder approval to issue shares of common stock in excess of 19.99% of the Company’s issued and outstanding shares of common stock and to effect a reverse stock split (“Stockholder Approval”) and, solely with respect to the closing of the Series C-3 Convertible Preferred Stock, declaration of the effectiveness of the Registration Statement filed for the resale of the common stock underlying the Series C-1, C-2, and C-3 Convertible Preferred Stock. The investors also have the right, but not the obligation, to purchase up to an aggregate of $39.2 million of Series C-4 Convertible Preferred Stock, par value $0.0001 per share, with stated value of $1,000 per share in one or more closings.

 

February 2026 Warrant Exercise and Series B Convertible Preferred Stock Conversion Inducement

 

In February 2026, the Company agreed to lower the exercise price of existing warrants and the conversion price of the Series B Convertible Preferred Stock to $1.78 per share for certain holders as consideration for exercising the existing warrants and converting the Series B Convertible Preferred Stock, resulting in aggregate proceeds of $0.4 million. On March 11, 2026, certain holders of the Series B Convertible Preferred Stock converted 578.916 shares of Series B Convertible Preferred Stock into 335,346 of common stock. 

 

March 2026 Private Placement

 

In March 2026, the Company entered into an additional Securities Purchase Agreement with certain accredited investors for a private placement financing pursuant to which the investors agreed to purchase 1,853 shares of Series C-1 Convertible Preferred Stock, par value of $0.0001 per share and stated value of $1,000 per share, for aggregate gross proceeds of $1.9 million. The investors agreed to purchase newly designated Series C-2 and Series C-3 Convertible Preferred Stock, par value $0.0001 per share, with stated values of $1,000 per share, under additional closings for aggregate gross proceeds of $1.9 million per closing. The additional closings are subject to closing conditions, including approval from the Company’s stockholders to issue shares of common stock in excess of 19.99% of the Company’s issued and outstanding shares of common stock and, solely with respect to the closing for the Series C-3 Convertible Preferred Stock, effectiveness of the Registration Statement filed to register the resale of common stock underlying the Series C-1, C-2, and C-3 Convertible Preferred Stock. The investors also have the right, but not the obligation, to purchase up to an aggregate of $35.6 million of Series C-4 Convertible Preferred Stock, par value $0.0001 per share, with stated value of $1,000 per share in one or more closings.

 

FLYTE Acquisition

 

In connection with the February 2026 Private Placement, the Company entered into an Acquisition Purchase Agreement with SEG Jets LLC ("SEG Jets"), whereby the Company agreed to acquire 19.98% of the issued and outstanding shares of common stock of Fly Flyte, Inc. ("FLYTE") held by SEG Jets in exchange for 5,250 shares of the Company’s newly designated Series D Convertible Preferred Stock, with a par value of $0.0001 per share and a stated value of $1,000 per share, for an aggregate stated value of $5.3 million, subject to customary closing conditions, including stockholder approval.

 

On March 9, 2026, the Company entered into a Securities Purchase Agreement with Creatd, Inc. ("Creatd"), whereby the Company acquired 80.02% of the remaining issued and outstanding shares of common stock of FLYTE and 100% of the membership interests of Ponderosa Air, LLC ("Ponderosa"), subject to closing conditions. As of March 9, 2026, the Company owned 100% of the issued and outstanding FLYTE common stock and 100% of the membership interests of Ponderosa. As consideration for the acquired equity interests in FLYTE and Ponderosa, the Company agreed to pay $11.6 million as follows: (A) cash consideration $0.8 million due at closing, (B) $5.0 million in principal amount of a promissory note, and (C) 5,778 shares of Series D Convertible Preferred Stock for an aggregate stated value of $5.8 million.

 

The promissory note bears an interest rate of 0% per annum and is payable in installments through December 15, 2026. If any payment is not made within three business days following the applicable installment date, interest will accrue at a rate equal to 4% per annum. Upon the occurrence and continuation of an event of default, the holder may declare the entire unpaid principal balance, together with all accrued interest, penalties and late fees, immediately due and payable, and the outstanding principal balance will bear default interest at 18% per annum. The issuance of the Series D Convertible Preferred Stock is subject to stockholder approval.

 

The Company further entered into registration rights agreements requiring the Company to file resale registration statements covering the common stock underlying the Series D Convertible Preferred stock, within specified timeframes.