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Subsequent Events
6 Months Ended
Jun. 30, 2025
Subsequent Events [Abstract]  
Subsequent Events

23. Subsequent Events

The Company has evaluated subsequent events through the financial statement issuance date, pursuant to ASC 855-10 Subsequent Events.

Acquisition of Wattbike Holdings Limited

 

On April 8, 2025, the Company entered into an Agreement for the Sale and Purchase of the Entire Issued Share Capital and Loan Notes of Wattbike (Holdings) Limited (“Wattbike”) (the “Purchase Agreement”) with the shareholders of Wattbike (the “Shareholders”) and holders of certain promissory notes (the “Notes’) issued by Wattbike (the “Noteholders,” and together with the Shareholders, the “Sellers”) to acquire the entire issued share capital and Notes of Wattbike (the “Transaction”). On July 1, 2025, pursuant to the Purchase Agreement, the Company acquired all of the issued and outstanding shares of Wattbike held by the Shareholders in exchange for £1.00, payable at the closing of the Transaction (the “Closing”). In addition, the Company acquired the Notes in exchange for paying the Noteholders (a) shares of the Company’s Series E Preferred Stock, par value $0.0001 per share (“Series E Preferred Stock”), which upon the mandatory conversion date of June 15, 2026, will be convertible into the Company’s common stock, par value $0.0001 per share (“Common Stock”), payable at Closing (the “Initial Consideration”), and (b) subject to the satisfaction of applicable milestones as described below, additional consideration consisting of Common Stock (the “Additional Consideration”). The Additional Consideration shall be payable as follows:

 

(i) If the revenues of Wattbike for the period from October 1, 2025 to September 30, 2026 (“FY26”) (“FY26 Revenues”) exceed £17,500,000, the additional consideration for FY26 shall be an amount equal to 50% of the amount by which FY26 revenues exceeded £17,500,000, subject to a cap of £1,500,000. If FY26 Revenues did not exceed £17,500,000, there shall be no additional consideration paid for FY26.

 

(ii) If the revenues of Wattbike for the period from October 1, 2026 to September 30, 2027 (“FY27”) (“FY27 Revenues”) exceed £20,000,000, the additional consideration for FY27 shall be an amount equal to 50% of the amount by which FY26 revenues exceeded £20,000,000, subject to a cap of £1,500,000. If FY27 Revenues did not exceed £20,000,000, there shall be no additional consideration paid for FY27.

 

The Company incurred $0.1 million and $0.1 million of related acquisition costs in the three and six months ended June 30, 2025 which are reflected in general and administrative costs in the condensed consolidated statement of operations. The acquisition qualifies as a business combination and will be accounted for using the acquisition method of accounting.

 

On July 1, 2025, the Company issued 1.3 million designated shares of Series E Preferred Stock in connection with the closing of the acquisition of Wattbike.

 

As a result of limited access to Wattbike information required to prepare initial accounting, together with the limited time since the acquisition date and the effort required to conform the financial statements to the Company's practices and policies, the initial accounting for the business combination is incomplete at the time of this filing. As a result, the Company is unable to provide the amounts recognized as of the Acquisition date for the major classes of assets acquired and liabilities assumed, pre-acquisition contingencies and goodwill. Also, the Company is unable to provide pro forma revenues and earnings of the combined entity. This information will be included in the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2025.

Warrant Inducement

 

On July 7, 2025, the Company entered into an inducement offer letter agreement with the holder of the January 2025 Warrants to exercise 18,450 warrants at an exercise price of $5.42 per share, the Nasdaq Official Closing Price on July 3, 2025 for total proceeds of $0.1 million.

Digital Asset Purchases

 

From July 1, 2025 to July 15, 2025 the Company used the remaining $27.25 million proceeds from the June 2025 Convertible Exchangeable Notes to purchase 37,809,264 FET for the benefit of the Company.

 

 

Class A Incremental Warrant Exercise

 

On July 25, 2025, the Investor elected to exercise Class A Incremental Warrants to purchase Class A Incremental Notes for an aggregate principal amount of $3,000,000 and, as a result, was issued Class A Incremental Common Warrants to purchase an aggregate of 304,428 shares of Common Stock.

Loss Restoration Settlement

On August 5, 2025, the Company and the Lender entered into a Settlement Agreement, pursuant to which the Company paid cash in the amount of $0.6 million and issued 195,732 shares of the Company’s Series C Preferred Stock, par value $0.0001 per share, to the Lender as payment of the $1.0 million Net Trade Value as of the settlement date pursuant to the Loss Restoration Agreement.

Exchange Agreement

On August 8, 2025, the Company and the Lender entered into a new Exchange Agreement. Pursuant to the Exchange Agreement, the Company and Lender agreed to reduce the Term Loan Amount by $0.3 million in exchange for the issuance of 60,000 shares of Common Stock to the Lender at a price per Exchange Share of $5.50.

 

Loan Extension

On July 25, 2025, Sportstech extended the term of the loan to December 30, 2025.