Subscriber and Revenue Trends - Subscriber numbers increased from 925,270 on December 31, 2024, to 1,006,203 on December 31, 2025[133] - Subscription revenue decreased by 60%, or $23,376, to $15,687 for the three months ended December 31, 2025, compared to $39,063 for the same period in 2024[157] - FAST revenue decreased by 26%, or $15,964, to $46,381 for the three months ended December 31, 2025, compared to $62,345 for the same period in 2024[158] - Ad revenue decreased by 99.96%, or $50,110, to $22 for the three months ended December 31, 2025, compared to $50,132 for the same period in 2024[159] - Other revenue decreased by 100% or $5, to $0 in the three months ended December 31, 2025, compared to $5 for the same period in 2024[166] - For the three months ended December 31, 2025, total revenue was $62,090, a decrease from $151,545 in the same period of 2024, representing a decline of approximately 59%[226] - Membership revenue for the three months ended December 31, 2025, was $15,687, down from $39,063 in 2024, indicating a decrease of about 60%[226] - FAST revenue from related parties for the three months ended December 31, 2025, was $46,381, compared to $62,345 in 2024, reflecting a decline of approximately 25.6%[226] - Ad revenue for the three months ended December 31, 2025, was $22, significantly lower than $50,132 in 2024, marking a decrease of about 56.1%[226] - For the six months ended December 31, 2025, total revenue was $257,950, slightly down from $269,952 in 2024, a decrease of approximately 4.4%[226] - Ad revenue for the six months ended December 31, 2025, was $119,036, which included $125,000 recognized as Ad Agency Revenue under the Launch That Experimental Media Plan Agreement[226] Financial Position and Cash Flow - Cash balance as of December 31, 2025, was $433,363, with a working capital deficit of $3,839,068[134] - The company plans to raise additional equity financing to meet obligations for the next 12 months[134] - The company has incurred recurring losses and its ability to continue as a going concern is contingent upon obtaining additional financing[173] - Cash used in operations was $5,232,881 for the six months ended December 31, 2025, compared to $6,663,663 for the same period in 2024[170] - Cash used in operating activities decreased by $1,430,782 or 21.5% for the six months ended December 31, 2025, primarily due to a decrease in net loss[205] - Cash provided by financing activities increased by $1,456,098 or 39.7% for the six months ended December 31, 2025, mainly due to increased proceeds from convertible notes payable[207] - Cash used in investing activities decreased by $13,067 or 60% for the six months ended December 31, 2025, attributed to reduced cash used for purchasing property and equipment[206] Losses and Deficits - The company sustained a net loss of $2,783,982 for the three months ended December 31, 2025, compared to a net loss of $3,929,518 for the same period in 2024[173] - The total accumulated deficit reached $200,881,532 as of December 31, 2025[170] Equity and Financing Activities - The company entered into an Equity Purchase Agreement with a commitment to purchase up to $50 million in shares of Class A common stock[177] - The company may seek additional capital through various means, including private or public equity offerings and debt financings[175] - The company plans to file a registration statement for the resale of shares under the Equity Purchase Agreement within 30 days following the trading day after the Direct Listing date[185] - The total outstanding principal and accrued interest of $118,714 from a loan with Public Wire was converted into 29,679 shares of Class B common stock at a conversion price of $4.00 per share[189] - The company recognized a debt extinguishment loss of $118,714 upon the conversion of the loan with Public Wire[189] - The company received an additional $1,110,000 from Nextelligence between the agreement date and December 31, 2025[188] - As of December 31, 2025, the total outstanding principal on the revolving convertible note payable is $2,425,552, with accrued interest of $21,144, totaling $2,446,696[188] Operational Changes and Strategic Initiatives - The transition to a free registration subscription service has impacted subscription revenue, which is now supported by advertising revenue[157] - The company is strategically reinvesting in its proprietary Platform-as-a-Service (PaaS) infrastructure to enhance long-term enterprise value[160] - The recent decline in advertising revenue is attributed to the migration to the new in-house Zer0Gap Ads platform, which is expected to stabilize and improve revenue performance[162] - Major streaming platforms are expanding their first-party advertising ecosystems, impacting the competitive landscape for advertising revenue[164] - The company discontinued its SelectTV paid subscription service in October 2022 and rebranded to FreeCast.com, launching SmartGuide as a free registration subscription service[212] - Beginning in 2024, the company started recognizing contracts with customers from product sales requiring performance up to delivery, impacting revenue recognition practices[224] Legal and Accounting Considerations - The company assesses loss contingencies related to legal proceedings and unasserted claims, which may result in material losses[237] - If a material loss is probable and can be estimated, the estimated liability will be accrued in the financial statements[238] - Remote loss contingencies are generally not disclosed unless they involve guarantees[239] - Modifications to equity-classified instruments are accounted for based on the fair value difference before and after the modification[240] - Preferred stock subject to mandatory redemption is classified as a liability and measured at fair value, while conditionally redeemable preferred stock is classified as mezzanine equity[241] - The Series A Preferred Stock was reclassified from mezzanine equity to permanent equity after amending its terms on December 26, 2024[242] - The company does not anticipate that recently issued accounting standards will materially impact its financial position or results of operations upon adoption[243] - As a smaller reporting company, the company is not required to provide detailed market risk disclosures[244]
Freecast(CAST) - 2026 Q2 - Quarterly Report