# FreeCast, Inc. (CAST) 10-Q SEC filing - Q3 FY2026

- Filed: May 14, 2026, 8:00 PM EDT
- Fiscal quarter: Q3 FY2026
- Calendar quarter: Q1 2026
- Accession: 0001213900-26-056942
- OpenCapital page: https://www.opencapital.sh/filings/0001213900-26-056942
- Markdown URL: https://www.opencapital.sh/filings/0001213900-26-056942.md
- Official SEC filing index: https://www.sec.gov/Archives/edgar/data/1633369/0001213900-26-056942-index.htm

## Filing documents

- [10-Q (ea0290026-10q_freecast.htm)](https://www.sec.gov/Archives/edgar/data/1633369/000121390026056942/ea0290026-10q_freecast.htm)

---

## 10-Q

SEC source: [ea0290026-10q_freecast.htm](https://www.sec.gov/Archives/edgar/data/1633369/000121390026056942/ea0290026-10q_freecast.htm)

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**Form 10-Q**

**☒ QUARTERLY REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the quarterly period ended March 31, 2026**

**☐ TRANSITION REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**Commission File Number: 001-43122**

**FreeCast, Inc.**

(Exact name of registrant as specified in its charter)

**Florida** **45-2787251**

(State or other jurisdiction of<br>incorporation or organization) (I.R.S. Employer<br>Identification No.)

| 6901 TPC Drive, Suite 100 Orlando, Florida | 32822 |
| --- | --- |
| (Address of principal executive offices) | (Zip Code) |

Registrant’s telephone number: **(407)374-1607**

Securities registered pursuant to Section 12(b)
of the Act:

**Title of each class** **Trading Symbol** **Name of each exchange on which registered**

Class A common stock, $0.0001 par value CAST The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements
for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant
has submitted electronically and every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the
preceding 12 months (or for such shorter period that the registrant has been required to submit and post such files). Yes ☒ No
☐

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 ☐

Non-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 ☐ No ☒

There were 27,416,174 shares of Class A common
stock outstanding as of May 11, 2026.

There were 13,925,640 shares of Class B common
stock outstanding as of May 11, 2026.

**TABLE OF CONTENTS**

|  |  | **Page** |
| --- | --- | --- |
| PART I. | [FINANCIAL INFORMATION](#a_001) | 1 |
| Item 1. | [Condensed Financial Statements (unaudited)](#a_002) | 1 |
|  | [Condensed Balance Sheets as of March 31, 2026 (unaudited), and June 30, 2025](#a_003) | 1 |
|  | [Condensed Statements of Operations for the three and nine months ended March 31, 2026, and 2025 (unaudited)](#a_004) | 2 |
|  | [Condensed Statements of Stockholders’ Deficit for the three months and nine months ended March 31, 2026, and 2025 (unaudited)](#a_005) | 3 |
|  | [Condensed Statements of Cash Flows for the nine months ended March 31, 2026, and 2025 (unaudited)](#a_006) | 4 |
|  | [Notes to Condensed Financial Statements (unaudited)](#a_007) | 5 |
| Item 2. | [Management’s Discussion and Analysis of Financial Condition and Results of Operations.](#a_008) | 17 |
| Item 3. | [Quantitative and Qualitative Disclosures About Market Risk.](#a_009) | 29 |
| Item 4. | [Controls and Procedures.](#a_010) | 29 |
| PART II. | [OTHER INFORMATION](#a_011) |  |
| Item 1. | [Legal Proceedings.](#a_012) | 30 |
| Item 1A. | [Risk Factors.](#a_013) | 30 |
| Item 2. | [Unregistered Sales of Equity Securities and Use of Proceeds.](#a_014) | 30 |
| Item 3. | [Defaults Upon Senior Securities.](#a_015) | 30 |
| Item 4. | [Mine Safety Disclosures.](#a_016) | 30 |
| Item 5. | [Other Information.](#a_017) | 30 |
| Item 6. | [Exhibits.](#a_018) | 31 |
|  | [Signatures](#a_019) | 32 |

i

**PART I – FINANCIAL INFORMATION**

## Item 1. Condensed Financial Statements (unaudited)

**Item 1. Financial Statements**

**FREECAST, INC.**

### CONDENSED BALANCE SHEETS

| Line item | March 31, 2026 | June 30, 2025 |
| --- | --- | --- |
|  | (Unaudited) |  |
| Current Assets: |  |  |
| Cash | $119,302 | $549,249 |
| Accounts receivable, net | 137,647 | 131,432 |
| Accounts receivable - related party | 52,362 | 146,303 |
| Prepaid assets – related party | 40,000 | - |
| Prepaid assets | 213,028 | - |
| Other current assets | 60,508 | 46,314 |
| Total current assets | 622,847 | 873,298 |
| Non-current assets: |  |  |
| Property and equipment, net | 28,804 | 26,105 |
| Prepaid assets, net of current portion – related party | 50,000 | - |
| Security deposits | 126,145 | 126,145 |
| Operating lease, right-of-use asset | 293,783 | 362,968 |
| Total non-current assets | 498,732 | 515,218 |
| Total assets | $1,121,579 | $1,388,516 |
| Current liabilities: |  |  |
| Accounts payable and accrued expenses | $2,270,021 | $1,528,327 |
| Accounts payable and accrued expenses - related party | 381,316 | 330,108 |
| Current portion of operating lease liabilities | 104,886 | 91,220 |
| Current portion of deferred revenue | 38,569 | 135,273 |
| Note payable - current | 143,949 | - |
| Notes payable - related party | 80,991 | - |
| Convertible Note Payable - Related Party | 4,889,052 | 3,865,555 |
| Total current liabilities | 7,908,784 | 5,950,483 |
| Long term liabilities: |  |  |
| Deferred revenue, net of current portion | 701 | 2,705 |
| Operating lease liabilities, net of current portion | 208,328 | 288,836 |
| Total long-term liabilities | 209,029 | 291,541 |
| Total liabilities | 8,117,813 | 6,242,024 |
| Preferred stock, $0.0001 par value, 5,000,000 shares authorized |  |  |
| Series A Preferred Stock, par value $0.0001, 4,000,000 and 4,000,000 shares issued and outstanding as of March 31, 2026, and June 30, 2025, respectively | 400 | 400 |
| Class A common stock, $0.0001 par value, 320,000,000 authorized; 26,931,820 and 25,947,813 shares issued and outstanding as of March 31, 2026, and June 30, 2025, respectively | 2,695 | 2,596 |
| Class B common stock, $0.0001 par value, 30,000,000 shares authorized; 13,925,640 and 13,937,640 shares issued and outstanding as of March 31, 2026, and June 30, 2025, respectively | 1,393 | 1,394 |
| Additional paid-in capital | 198,414,784 | 190,377,303 |
| Accumulated deficit | (205,415,506) | (195,235,201) |
| Total stockholders’ deficit | (6,996,234) | (4,853,508) |
| Total liabilities and stockholders’ deficit | $1,121,579 | $1,388,516 |

**The accompanying notes are an integral part
of these condensed financial statements**

1

**FREECAST, INC.**

**UNAUDITED CONDENSED STATEMENTS OF OPERATIONS**

| Line item | For the Three Months Ended March 31, 2026 | For the Three Months Ended March 31, 2025 | For the Nine Months Ended March 31, 2026 | For the Nine Months Ended March 31, 2025 |
| --- | --- | --- | --- | --- |
| Net sales |  |  |  |  |
| Sales | $24,846 | $104,964 | $181,749 | $233,432 |
| Sales - related parties | 68,063 | 38,921 | 169,110 | 180,405 |
| Total revenue | 92,909 | 143,885 | 350,859 | 413,837 |
| Cost of revenue: |  |  |  |  |
| Cost of revenue | 34,416 | 93,714 | 126,157 | 269,900 |
| Total cost of revenue | 34,416 | 93,714 | 126,157 | 269,900 |
| Gross profit | 58,493 | 50,171 | 224,702 | 143,937 |
| Operating costs and expenses: |  |  |  |  |
| Compensation and benefits | 2,278,462 | 1,315,681 | 4,776,221 | 4,343,723 |
| Sales and marketing expense | 99,726 | 161,969 | 274,828 | 378,336 |
| General and administrative | 2,102,171 | 1,879,808 | 5,152,954 | 6,127,400 |
| Total operating expenses | 4,480,359 | 3,357,458 | 10,204,003 | 10,849,459 |
| Loss from operations | (4,421,866) | (3,307,287) | (9,979,301) | (10,705,522) |
| Other income (expense): |  |  |  |  |
| Interest income (expense), net | (110,192) | (71,408) | (194,969) | (157,550) |
| Other (expense) income, net | (1,916) | (1,832) | (6,035) | (6,778) |
| Total other (expense) income | (112,108) | (73,240) | (201,004) | (164,328) |
| Net loss before income tax | $(4,533,974) | $(3,380,527) | $(10,180,305) | $(10,869,850) |
| Income tax expense (benefit) | - | - | - | - |
| Net loss | (4,533,974) | (3,380,527) | (10,180,305) | (10,869,850) |
| Net loss per common share - basic and diluted | $(0.11) | $(0.09) | $(0.25) | $(0.28) |
| Weighted average common shares outstanding - basic and diluted | 40,857,460 | 39,552,120 | 40,857,460 | 39,287,209 |

**The accompanying notes are an integral part
of these condensed financial statements**

2

**FREECAST, INC.**

**UNAUDITED CONDENSED STATEMENTS OF STOCKHOLDERS’
DEFICIT**

**FOR THREE AND NINE MONTHS ENDED March 31, 2026,
AND 2025**

| Line item | Redeemable Series A Preferred Stock / Shares | Redeemable Series A Preferred Stock / Amount | Series A Preferred Stock / Shares | Series A Preferred Stock / Amount | Class A Common Stock / Shares | Class A Common Stock / Amount | Class B Common Stock / Shares | Class B Common Stock / Amount | Common Stock / Subscriptions | Additional Paid-In / Capital | Accumulated / Deficit | Total Stockholders’ / Deficit |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Balance as of June 30, 2025 | - | - | 4,000,000 | 400 | 25,947,813 | 2,596 | 13,937,640 | 1,394 | - | 190,377,303 | (195,235,201) | (4,853,508) |
| Stock based compensation | - | - | - | - | - | - | - | - | - | 88,422 | - | 88,422 |
| Common stock issued to settle related party notes payable | - | - | - | - | 509,507 | 51 | - | - | - | 4,076,000 | - | 4,076,051 |
| Common stock issued for cash | - | - | - | - | 337,500 | 34 | - | - | - | 2,699,966 | - | 2,700,000 |
| Common stock issued for services | - | - | - | - | 125,000 | 13 | - | - | - | (13) | - | - |
| Shares converted | - | - | - | - | 12,000 | 1 | (12,000) | (1) | - | - | - | - |
| Net loss | - | - | - | - | - | - | - | - | - | - | (2,862,349) | (2,862,349) |
| Balance as of September 30, 2025 |  |  | 4,000,000 | 400 | 26,931,820 | 2,695 | 13,925,640 | 1,393 | - | 197,241,678 | (198,097,550 | (851,384) |
| Stock based compensation |  |  |  |  |  |  |  |  |  | 87,504 |  | 87,504 |
| Net loss |  |  |  |  |  |  |  |  |  |  | (2,783,982) | (2,783,982) |
| Balance as of December 31, 2025 |  |  | 4,000,000 | 400 | 26,931,820 | 2,695 | 13,925,640 | 1,393 | - | 197,329,182 | (200,881,532) | (3,547,862) |
| Stock based compensation |  |  |  |  |  |  |  |  |  | 85,602 |  | 85,602 |
| Stock-based compensation recognized for prior Common stock issuance |  |  |  |  |  |  |  |  |  | 1,000,000 |  | 1,000,000 |
| Net loss |  |  |  |  |  |  |  |  |  |  | (4,533,974) | (4,533,974) |
| Balance as of March 31, 2026 |  |  | 4,000,000 | 400 | 26,931,820 | 2,695 | 13,925,640 | 1,393 |  | 198,414,784 | (205,415,506 | (6,996,234) |
| Balance as of June 30, 2024 | 4,000,000 | 120,000,000 | - | - | 32,993,283 | 3,299 | 6,154,670 | 616 | - | 63,495,755 | (181,169,253) | (117,669,583) |
| Stock based compensation | - | - | - | - | - | - | - | - | - | 105,172 | - | 105,172 |
| Reclass from Class A common stock to Class B common stock | - | - | - | - | (7,782,970) | (778) | 7,782,970 | 778 | - | - | - | - |
| Warrants issued for services | - | - | - | - | - | - | - | - | - | 144,262 | - | 144,262 |
| Net loss | - | - | - | - | - | - | - | - | - | - | (3,559,805) | (3,559,805) |
| Balance as of September 30, 2024 | 4,000,000 | 120,000,000 | - | - | 25,210,313 | 2,521 | 13,937,640 | 1,394 | - | 63,745,189 | (184,729,058) | (120,979,954) |
| Class A common stock issued for cash |  |  |  |  | 356,250 | 36 |  |  |  | 2,849,964 |  | 2,850,000 |
| Stock based compensation |  |  |  |  |  |  |  |  |  | 135,550 |  | 135,550 |
| Warrants issued for services |  |  |  |  |  |  |  |  |  | 352,814 |  | 352,814 |
| Reclass of Series A preferred stock from mezzanine to permanent equity | (4,000,000) | (120,000,000) | 4,000,000 | 400 |  |  |  |  |  | 119,999,600 |  | 120,000,000 |
| Class A common stock subscription |  |  |  |  |  |  |  |  | 500,000 |  |  | 500,000 |
| Net loss |  |  |  |  |  |  |  |  |  |  | (3,929,518) | (3,929,518) |
| Balance as of December 31, 2024 | - | - | 4,000,000 | 400 | 25,566,563 | 2,557 | 13,937,640 | 1,394 | 500,000 | 187,083,117 | (188,658,576) | (1,071,108) |
| Class A common stock issued for cash |  |  |  |  | 6,250 | 1 |  |  |  | 49,999 |  | 50,000 |
| Shares issued to settle common stock subscriptions |  |  |  |  | 62,500 | 6 |  |  | (500,000) | 499,994 |  | - |
| Class A common stock subscription |  |  |  |  |  |  |  |  | 1,000,000 |  |  | 1,000,000 |
| Stock based compensation |  |  |  |  |  |  |  |  |  | 148,097 |  | 148,097 |
| Net loss |  |  |  |  |  |  |  |  |  |  | (3,380,527) | (3,380,527) |
| Balance as of March 31, 2025 |  |  | 4,000,000 | 400 | 25,635,313 | 2,564 | 13,937,640 | 1,394 | 1,000,000 | 187,781,207 | (192,039,103) | (3,253,538) |

**The accompanying notes are an integral part
of these condensed financial statements**

3

**FREECAST, INC.**

**UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS**

| Line item | For the Nine Months Ended March 31, 2026 | For the Nine Months Ended March 31, 2025 |
| --- | --- | --- |
| Cash flows from operating activities: |  |  |
| Net loss | $(10,180,305) | $(10,869,850) |
| Reconciliation of net loss to net cash used in operating activities |  |  |
| Depreciation and amortization expense | 13,365 | 18,839 |
| Operating lease expense | 69,185 | 61,917 |
| Stock-based compensation | 1,261,528 | 885,895 |
| Gain on settlement of accounts payable | - | - |
| Bad debt expense | 453 | 23,109 |
| Changes in operating assets and liabilities: |  | - |
| Accounts receivable | (6,668) | (279,443) |
| Accounts receivable - related party | 93,941 | 94,687 |
| Prepaid assets | (159,079) | - |
| Other current assets | (14,194) | 6,972 |
| Operating lease liability | (66,842) | (54,930) |
| Accounts payable and accrued expenses | 741,694 | 320,315 |
| Accounts payable and accrued expenses - related party | 261,704 | (102,887) |
| Deferred revenue | (98,708) | (62,788) |
| Net cash used in operating activities | (8,083,926) | (9,958,164) |
| Cash flows from investing activities: |  |  |
| Purchase of property and equipment | (16,064) | (21,622) |
| Net cash used in investing activities | (16,064) | (21,622) |
| Cash flows from financing activities: |  |  |
| Proceeds from issuance of Class A common stock | 2,700,000 | 3,400,000 |
| Proceeds from Class A common stock subscriptions |  | 1,000,000 |
| Payments on finance lease | - | (546) |
| Proceeds from notes payable - related party | 80,991 |  |
| Proceeds from convertible note payable - related party | 4,889,052 | 1,625,000 |
| Repayments on revolving convertible note payable - related party | - | (1,161,445) |
| Net cash provided by financing activities | 7,670,043 | 4,863,009 |
| Net change in cash | (429,947) | (5,116,777) |
| Cash, beginning of period | 549,249 | 5,218,413 |
| Cash, end of period | $119,302 | $101,636 |
| Non-cash investing and financing activities: |  |  |
| D&O insurance policy financing | $143,949 | - |
| Shares issued for conversion of debt | $4,076,051 | - |

**The accompanying notes are an integral part
of these condensed financial statements**

4

**FREECAST, INC.**

### **NOTES TO CONDENSED FINANCIAL STATEMENTS**

**March 31, 2026, and 2025**

**(Unaudited)**

### **Note 1 – Organization and Description of Business**

FreeCast, Inc. (the “Company”) developed
and markets an interactive digital media guide that facilitates access to a virtual library of entertainment media. The Company is based
in Orlando, Florida and was founded in 2011 as a Florida Corporation. The Company’s primary product is SmartGuide. SmartGuide utilizes
the Company-designed proprietary technology that searches, and aggregates internet distributed streaming media into an electronic media
guide. SmartGuide is licensable to brands/manufacturers of devices with large online user bases.

In addition to subscription and product revenues,
the Company generates revenue from its ad platform and agency services. FreeCast is a technology-driven streaming entertainment aggregator
offering a unified, à la carte service for TV entertainment through a comprehensive Platform-as-a-Service (PaaS) model. The Company
also earns revenue from direct client service contracts for marketing and campaign execution, such as the Launch That agreement, which
involves discovery, development, and test media distribution services. These ad-related and agency revenues are recognized as distinct
revenue streams in accordance with Accounting Standards Codification (ASC) Topic 606, *Revenue from Contracts with Customers* (“ASC
606”).

Additionally, we provide Free Ad-Supported Streaming
TV (“FAST”) channel buildouts which include post-production editing, motion graphic channel assembly and content acquisitions.
We have aggregated over 500 FAST channels, which now provide material operations to the Company. We charge the customers based on time
incurred for the services plus a reasonable margin in addition to any additional out of pocket cost incurred that is charged at cost
to us. In addition, we split the advertising revenue. Revenue is recognized when services are performed. We charge a monthly platform
fee for distributing the FAST channel on its platform. Revenue is recognized at the point in time when the content is available on the
digital platform.

***Going Concern***

The Company has incurred recurring losses from
operations since inception, accumulating a deficit of approximately $205.4 million as of March 31, 2026. For the nine months ended March
31, 2026, and 2025, the Company incurred a net loss of approximately $10.2 million and $10.9 million, respectively. The Company may incur
additional losses and negative operating cash flows in the future. Failure to generate sufficient revenues, reduce spending or raise
additional capital could adversely affect the Company’s ability to achieve its intended business objectives. These matters, among
others, raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the issuance
of these financial statements.

Since the inception of the Company in 2011, the
operations of the Company have been funded primarily through sales of Class A common stock to private investors, debt financing and exchange
of Class A common stock for services received by the Company. Management cannot be certain that additional funding will be available
on acceptable terms, or at all. Management plans include raising additional capital through the sale of equity and debt securities, along
with exploring additional avenues to increase revenues. To the extent that the Company raises additional funds by issuing equity securities,
the Company’s shareholders may experience significant dilution. Any debt financing, if available, may involve restrictive covenants
that impact the Company’s ability to conduct business.

The accompanying financial statements for the
nine months ended March 31, 2026, and 2025 have been prepared assuming the Company will continue as a going concern, which contemplates,
among other things, the realization of assets and satisfaction of liabilities in the normal course of business. During the 2026 calendar
year, management intends to raise additional debt and/or equity financing to fund future operations and to provide additional working
capital. Management’s plans to alleviate substantial doubt include pursuing equity and debt financing, expanding strategic partnerships,
and enhancing monetization of its ad platform and FAST channel network. However, these plans are not yet finalized, and there is no assurance
that such financing will be consummated or obtained in sufficient amounts. The financial statements do not include any adjustments that
might be necessary if the Company is unable to continue as a going concern.

5

### **Note 2 – Summary of Significant Accounting Policies**

***Basis of Presentation***

The accompanying unaudited condensed financial
statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with
the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required
by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting
of normal recurring adjustments except those otherwise described herein) considered necessary for a fair presentation have been included,
unless otherwise disclosed. Operating results for the current quarter ended March 31, 2026, are not necessarily indicative of the results
that may be expected for the fiscal year ending June 30, 2026.

The Condensed Balance Sheet at March 31, 2026,
has been derived from the unaudited Financial Statements at that date but does not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements. The financial statements should be read in conjunction
with the annual audited Financial Statements and Notes thereto.

***Accounts receivable***

Accounts receivables are unsecured and are derived
from revenue earned from customers. For accounts receivable, the Company performs ongoing credit evaluations of customers to assess the
probability of accounts receivable collection based on a number of factors, including past transaction experience with the customer,
evaluation of their credit history, and review of the invoicing terms of the contract. Accounts receivables are reported net of an allowance
for doubtful accounts when applicable. The allowance for doubtful accounts reflects management’s best estimate of probable losses
inherent in the accounts receivable balance at each reporting date. Management determines the allowance based on known troubled accounts,
historical experience, and other currently available evidence. The Company recognized bad debt expense for the nine months ended March
31, 2026, and 2025 of $453 and $23,109, respectively. The balance of allowance for doubtful accounts as of March 31, 2026, and June 30,
2025 was $31,785 and $31,332, respectively.

***Property and Equipment***

Maintenance and repairs are charged against expenses
as incurred.

***Concentration of Credit Risk***

Financial instruments that potentially subject
the Company to concentrations of credit risk consist principally of cash and cash equivalents and trade accounts receivable. Cash and
cash equivalents of the Company are exposed to credit risk, subject to federal deposit insurance, in the event of default by the financial
institutions holding their cash and cash equivalents to the extent of amounts recorded on the balance sheet. The cash accounts are insured
by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. As of March 31, 2026, the Company’s cash balance
did not exceed the FDIC insured limit.

As of March 31, 2026, the Company had two customers,
SportX LLC and related party Celebrity Cigars representing 76.9% and 23.3% of the Company’s receivables, respectively. As of March
31, 2025, the Company had two related party customers, Test Drive Live Inc. and Celebrity Cigars, Inc., representing 16.2% and 21.5%,
respectively, and one non related party representing 56.4% of our receivables (See Note 9).

As of March 31, 2026, the Company had three customers,
Launch That., related party customer Celebrity Cigars, Inc., and Ignite, representing 33.9%, 37.8%, and 12.3%, respectively, of the Company’s
revenues. As of March 31, 2025, the Company had two related party customers, Test Drive Live Inc. and Celebrity Cigars, Inc., representing
18.1% and 24.0%, respectively, of our revenues.

6

***Stock-Based Compensation***

Stock-based compensation issued is measured at
the date of grant based on the estimated fair value of the award, net of estimated forfeitures. The grant date fair value of a stock-based
award is recognized as an expense over the requisite service period of the award on a straight-line basis. The Company will recognize
compensation expense, measured as the fair value of the stock-based compensation on grant date, when a performance condition is considered
probable of occurring. For purposes of determining the variables used in the calculation of stock-based compensation issued to employees,
the Company performs an analysis of current market data and historical data to calculate an estimate of implied volatility, the expected
term of the option and the expected forfeiture rate. With the exception of the expected forfeiture rate, which is not an input, the Company
uses these estimates as variables in the Black-Scholes option pricing model. Depending upon the number of warrants granted, any fluctuations
in these calculations could have a material effect on the results presented in the Company’s Statements of Operations. In addition,
any differences between estimated forfeitures and actual forfeitures could also have a material impact on the Company’s financial
statements.

**Earnings (Loss) Per Share**

Basic earnings (loss) per share is computed by
dividing net income (loss) attributable to all classes of common shareholders of the Company by the weighted average number of shares
of all classes of common stock outstanding during the applicable period. Both Class A and Class B common stock are combined for the purposes
of calculating EPS, due to the equal earnings participation rights between the two classes. Diluted earnings (loss) per share is determined
in the same manner as basic earnings (loss) per share, except that the number of shares is increased to include restricted stock still
subject to risk of forfeiture and to assume exercise of potentially dilutive stock options using the treasury stock method, unless the
effect of such increase would be anti-dilutive.

The following table provides the number of Class
A common stock equivalents not included in diluted income per share, because the effects are anti-dilutive, for the nine months ended
March 31, 2026, and 2025, respectively.

| Line item | For the Nine Months Ended March 31, 2026 | For the Nine Months Ended March 31, 2025 |
| --- | --- | --- |
| Convertible debt and liabilities | 626,979 | 320,013 |
| Options | 926,373 | 993,270 |
| Warrants | 687,500 | 8,056,087 |
| Total | 2,240,852 | 9,369,370 |

**Recently Issued Accounting Pronouncements**

The Company has reviewed the recent accounting
pronouncements issued by the Financial Accounting Standards Board (“FASB”), including its Emerging Issues Task Force, the
American Institute of Certified Public Accountants, and the SEC, and determined that these pronouncements do not have a material impact
on the Company’s current or anticipated consolidated financial statement presentation or disclosures.

In December 2023, the FASB issued ASU 2023-09,
Income Taxes (Topic 740) – Improvements to Income Tax Disclosures (ASU 2023-09). ASU 2023-09 requires that an entity, on an annual
basis, disclose additional income tax information, primarily related to the reconciliation rate and income taxes paid. The amendment
in the ASU is intended to enhance the transparency and decision usefulness of income tax disclosures. The ASU’s amendments are
effective for annual periods beginning after December 15, 2024. The Company has adopted the improvements to income tax disclosure requirements
with no significant impact on its disclosures.

7

In September 2016, the FASB issued ASU 2016-13,
Measurement of Credit Losses on Financial Instrument (“ASU 2016-13”). ASU 2016-13 requires entities to use a forward-looking
approach based on current expected credit losses (“CECL”) to estimate credit losses on certain types of financial instruments,
including trade receivables. This may result in the earlier recognition of allowances for losses. ASU 2016-13 was effective for the Company
beginning July 1, 2023. The adoption of ASU 2016-13 did not have a material impact on the Company’s financial position, results
of operations and cash flows.

In November 2023, the FASB issued ASU 2023-07,
Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This ASU enhances reportable segment disclosure requirements,
primarily by requiring additional information about significant segment expenses. The standard is effective for annual reporting periods
beginning after December 15, 2023, and interim periods beginning after December 15, 2024. The Company has adopted this guidance in the
current quarter and has updated its segment disclosures accordingly.

ASU 2024-03: Income Statement (Topic 220): *Disaggregation
of Income Statement Expenses:*The amendments in this ASU require public companies to disclose, in interim and year-end
reporting periods, additional information about certain expenses in the financial statements. These disclosures are effective beginning
with 2027 annual reports, and interim reports beginning with the first quarter of 2028. Early adoption is permitted on either a prospective
or retrospective basis. The Company is currently assessing the potential impact of adoption of these provisions on the consolidated financial
statements.

### **Note 3 – Segment Reporting**

The Company operates as a single operating and
reportable segment. Accordingly, separate segment information is not presented.

### **Note 4 – Property and Equipment**

Property and equipment, net consisted of the
following:

| Line item | March 31, 2026 | June 30, 2025 |
| --- | --- | --- |
| Property and equipment | $191,329 | $175,265 |
| Less: accumulated depreciation | (162,524) | (149,160) |
| Property and equipment, net | $28,805 | $26,105 |

Depreciation expense was $13,365 and $18,293
for the nine months ended March 31, 2026, and 2025, respectively, and is classified in general and administrative expenses in the Statements
of Operation**s.** Depreciation expense was $4,025 and $6,119 for the three months ended March 31, 2026, and 2025, respectively, and
is classified in general and administrative expenses in the Statements of Operation**s.**

### **Note 5 – Debt**

*Convertible Notes Payable – Related
Party*

In June 2016, the Chief Executive Officer of
the Company (“CEO”), loaned the Company $111,000, at an interest rate of 12% per annum. The loan matured on December 31,
2017, and the note was convertible into shares of Class B common stock at a conversion price of $0.50 per share.

The note was converted on March 29, 2024. The
outstanding principal and accrued interest balance on March 29, 2024, of $92,068 was converted into 184,136 shares of Class B common
stock. As of June 30, 2025, the outstanding principal and interest due to William Mobley was $0.

On May 3, 2024, the Company signed a convertible
promissory note with Nextelligence, a related party that is majority owned and controlled by William Mobley, the Company’s CEO,
in the principal amount of $1,000,000. The note accrues interest at 12% per annum and is due and payable no later than May 3, 2025. At
Nextelligence’s option, all or part of the outstanding principal and accrued interest may be converted into shares of our Class
A common stock at a conversion price of $8.00 per share. On July 1, 2024, the Company repaid $1,075,000 on the convertible promissory
note with related party Nextelligence. On December 13, 2024, the Company renewed and modified the original May 3, 2024, note to incorporate
additional borrowings. On July 26, 2025, the Company approved the conversion of all outstanding principal and interest into common shares
at a conversion price of $8 per share. The conversion was accounted for as settlement of a stock subscription with no gain or loss recognized.
The principal of $3,865,555 and accrued interest of $210,496, total of $4,076,051 was converted into 509,507 shares of Class A common
stock.

8

Between October 9, 2025, and November 21, 2025,
Nextelligence, a related party, majority owned by the Company’s CEO, provided aggregate funding to the Company totaling $1,500,000.
Of this amount, $191,023 was remitted by Nextelligence on behalf of Celebrity Cigars, Inc. and Test Drive Live Inc. to fully satisfy their
outstanding accounts receivable balances with the Company. As these entities are under common control, Nextelligence agreed to assume
the obligations of both Celebrity Cigars, Inc. and Test Drive Live Inc. The remaining $1,308,977 was recorded as a revolving convertible
note payable to Nextelligence, for a total of $1,308,977. The Company and Nextelligence entered into an agreement on November 21, 2025,
to place terms on this revolving convertible note payable. The new outstanding revolving convertible note payable has an interest rate
of 12%, a maturity date of June 30, 2026, and is convertible at Nextelligence’s discretion for $8 per share of Class A common stock.
The terms specify a maximum advance amount of $5,000,000. Additionally, the agreement capitalized all unpaid accrued interest as of November
21, 2025, for $6,575, which resulted in an “original principal balance” of $1,315,552. Between the date of the executed agreement
and March 31, 2026, the Company has received an additional $3,573,500. As of March 31, 2026, the total outstanding principal is $4,889,052
and the accrued interest balance is $126,778 for a total outstanding balance of $5,015,830.

*Notes Payable – Related Party*

On March 12, 2026, the Company entered into a
premium finance agreement for a Director’s and Officer’s Insurance policy, which required a downpayment of $80,991. The Company
received a loan from the Company’s CEO for the full $80,991 in order to pay this down payment. There were no official terms to this
loan. The full principal balance was recorded as Notes payable – related party on the condensed balance sheet.

*Notes Payable – D&O Insurance Financing*

On March 12, 2026, the Company entered into an
agreement with Capital Premium Financing to provide financing in an aggregate amount of $143,949 for the insurance premium associated
with a D&O policy. The policy commenced March 12, 2026, and provided coverage for the next 12 months, expiring March 12, 2027. The
loan bears interest at a 13.5% rate per annum. We are required to pay monthly principal and interest of approximately $24,977 paid over
6 months, with the final payment on September 12, 2026.

### **Note 6 – Stockholders’ Deficit and Mezzanine Equity**

***Preferred Stock***

The Preferred Stock is divided into series, with
the first series designated “Series A Preferred Stock” and consisting of 4,000,000 shares (the “Series A Shares”).
Our board of directors may designate the remaining 1,000,000 authorized but unissued shares of Preferred Stock with such rights and privileges
as the board of directors may determine without notice to our shareholders and without shareholder approval.

As of March 31, 2026, and June 30, 2025, there
were 4,000,000 shares of Series A Preferred Stock issued and outstanding, respectively.

A summary of the powers, preferences, rights,
privileges, restrictions, and other matters relating to the Series A Shares are as follows:

Dividends. In any fiscal year Series A
Shares are outstanding where the Company has revenue of more than $50,000,000, the holder of the Series A Shares (the “Series A
Shareholder”) shall be entitled to receive an annual cash dividend equal to ten percent of any revenue above $50,000,000 (the “Annual
Dividend Payment”). Subject to meeting the above criteria for such fiscal year, Annual Dividend Payments shall continue until such
time as the aggregate amount of all Annual Dividend Payments is equal to the lesser of: (i) $160,000,000; or (ii) the product of the
then number of outstanding shares of Series A Preferred Stock and $40 (as may be adjusted for any subdivisions or combinations) (the
“Maximum Dividend Payment”). Notwithstanding the above, such dividends shall be payable only to the extent permitted by law
out of assets legally available therefore. No dividends shall be paid on any Common Stock during any fiscal year of the Company until
the Annual Dividend Payment on the Series A Shares shall have been paid or declared and set apart during that fiscal year.

Liquidation Preference. In the event of
any liquidation, dissolution or winding up of the Company, either voluntary or involuntary, the Series A Shareholder is entitled to receive,
prior and in preference to any distribution of any of the assets of the Company to the holders of Common Stock, or other junior equity
security by reason of their ownership thereof, an amount per Series A Share equal to $30 (as may be adjusted for any subdivisions or
combinations) (the “Liquidation Amount”). If upon the occurrence of such event, the assets and funds to be distributed to
the Series A Shareholder are insufficient to permit the payment to the Series A Holder of the full preferential Liquidation Amount, then
the entire assets and funds of the Company legally available for distribution shall be distributed to the Series A Shareholder. After
the distribution described above has been paid, the remaining assets of the Company available for distribution to shareholders shall
be distributed among the holders of Common Stock pro rata based on the number of shares of Common Stock held by them. Any change in ownership
or fundamental change shall be treated as a liquidation, dissolution or winding up of the Company, and shall entitle the Series A Shareholder
and the holders of Common Stock to receive at the closing cash, securities or other property as specified above. Whenever the distribution
provided for in this section shall be payable in securities or other property other than cash, the value of such distribution shall be
the fair market value of such securities or other property as determined in good faith by the board of directors.

Redemption by the Company. The Company
has the right at any time (the “Call Right”), but not the obligation, to cause the Series A Shareholder to sell some or all
of the Series A Shares to the Company at the purchase price per share of $30 (as may be adjusted for any subdivisions or combinations)
(the “Call Purchase Price”). If the Company desires to purchase the Series A Shares, the Company shall deliver to the Series
A Shareholder a written notice (the “Call Exercise Notice”) exercising the Call Right. The closing of any sale of Series
A Shares shall take place on a date (the “Call Right Closing Date”) no later than ten days following receipt by the Series
A Shareholder of the Call Exercise Notice.

9

As mentioned above, the redemption feature was
removed on September 26, 2024, as part of the amendment to the Company’s articles of incorporation.

Voting Rights. Except as otherwise required
by law, the Series A Shares have no voting rights or powers on any matter presented to the shareholders of the Company for their action
or consideration at any meeting of shareholders of the Company (or by written consent of shareholders in lieu of a meeting).

Conversion Rights. Except as otherwise
required by law, the Series A Shares have no conversion rights or powers to convert into any other capital stock or security of the Company.

Transfers. Except as otherwise required
by law, the Series A Shareholder has no rights or powers to enter into and/or consummate any sale, assignment, transfer, conveyance,
hypothecation or other transfer or disposition of one or more of the Series A Shares or any legal or beneficial interest in the Series
A Shares, whether or not for value and whether voluntary or involuntary, without the prior written consent of the Company, in its sole
discretion.

The Board of Directors may designate the authorized
but unissued shares of the Preferred Stock with such rights and privileges as the board of directors may determine. As such, our board
of directors may issue 5,000,000 preferred shares and designate the conversion, voting and other rights and preferences without notice
to our shareholders and without shareholder approval.

***Common Stock***

As of March 31, 2026, and June 30, 2025, the
Company is authorized to issue 320,000,000 shares of Class A common stock and 30,000,000 shares of Class B common stock at a par value
of $0.0001 per share.

As of March 31, 2026, and June 30, 2025, the
Company had shares of Class A common stock outstanding of 26,931,820 and 25,947,813, respectively. As of March 31, 2026, and June 30,
2025, the Company had shares of Class B common stock outstanding of 13,925,640 and 13,937,640, respectively.

In general, except with regards to voting rights
described below, shares of Class A Common Stock and Class B Common Stock have the same rights and privileges and rank equally, share
ratably and are identical in all respects as to all matters. Without limiting the generality of the foregoing: (a) in the event of a
merger, consolidation or other business combination requiring the approval of the holders of the Company’s capital stock entitled
to vote thereon (whether or not the Company is the surviving entity), the holders of Class A Common Stock shall have the right to receive,
or the right to elect to receive, the same form of consideration, if any, as the holders of Class B Common Stock and the holders of Class
A Common Stock shall have the right to receive, or the right to elect to receive, at least the same amount of consideration, if any,
on a per share basis as the holders of Class B Common Stock; and (b) in the event of (i) any tender or exchange offer to acquire any
shares of Common Stock by any third party pursuant to an agreement to which the Company is a party or (ii) any tender or exchange offer
by the Company to acquire any shares of Common Stock, pursuant to the terms of the applicable tender or exchange offer, the holders of
Class A Common Stock shall have the right to receive, or the right to elect to receive, the same form of consideration as the holders
of Class B Common Stock and the holders of Class A Common Stock shall have the right to receive, or the right to elect to receive, at
least the same amount of consideration on a per share basis as the holders of Class B Common Stock.

With regards to voting rights, the holders of
shares of Class A Common Stock and Class B Common Stock vote together as one class on all matters (including the election of directors)
submitted to a vote or for the consent of the shareholders of the Company. However, each holder of shares of Class A Common Stock shall
be entitled to one (1) vote for each share of Class A Common Stock held as of the applicable date on any matter that is submitted to
a vote or for the consent of the shareholders of the Company, and the holder of shares of Class B Common Stock shall be entitled to fifteen (15) votes for each share of Class B Common Stock held as of the applicable date on any matter that is submitted to a vote or for the
consent of the shareholders of the Company.

Shares of Class B common stock may only be issued
to and held by William A. Mobley, Jr., personally or jointly with his spouse, and certain permitted entities owned or controlled by Mr.
Mobley, or for which he has sole disposition and voting power over shares held by such entities, other than Nextelligence (each, a “Class
B Holder”). Any issuance by us of Class B shares to anyone other than a Class B Holder is immediately null and void, and of no
legal validity, force, or effect. Unless a Class B Holder requests to receive Class A shares, any issuance of common stock by us to a
Class B Holder will be shares of Class B common stock. If a Class B Holder purchases or otherwise acquires or receives any shares of
Class A common stock from a person or entity other than us, upon receipt thereof such shares of Class A common stock shall automatically
be reclassified as and become an equal number of shares of Class B common stock. As of March 31, 2026, and June 30, 2025, William A Mobley,
Jr. the Company CEO and Majority owner has 13,925,640 and 13,937,640 Class B shares outstanding, respectively, which is 100% of the Class
B shares outstanding as of both reporting periods.

In August 2025, the Company CEO and majority
owner converted 12,000 shares of Class B common stock to 12,000 shares of Class A common stock and subsequently transferred the 12,000
shares of Class A common stock to third parties.

10

On December 8, 2025, the Company entered into
an Equity Purchase Agreement (EPA) with Amiens Technology Investments, LLC (the “Investor”), pursuant to which the Company
may, from time to time after the direct listing, at its sole discretion, issue and sell up to $50,000,000 in aggregate gross purchase
price of newly issued shares of the Company’s Class A common stock, par value $0.0001 per share. Advances under the agreement are
conditioned on the Company’s compliance with certain customary conditions, such as timely filing of required reports and maintaining
its listing on a national securities exchange. Shares issued pursuant to an advance under the agreement are priced at 95% of the VWAP
(volume-weighted average price) for the five-trading day period immediately following the advance request. The shares will be issued
in reliance upon Section 4(a)(2) of the Securities Act of 1933, as amended (which provides an exemption from registration for private
offerings), or other applicable exemptions from registration. The Company is required to maintain a registration statement pursuant to
which the Investor may resell the shares purchased. The Agreement limits the Investor’s ownership to 4.99% of the then outstanding
voting power or issued Class A common stock. The Investor may, upon written notice to the Company, increase or decrease the ownership
percentage up to 9.99%. As consideration for the Investor’s commitment to purchase shares of the Company’s Class A common stock
in accordance with the EPA, the Company agreed to pay a commitment fee in shares of the Company’s Class A common stock in an amount
equal to $750,000 divided by the lower of (i) $10.00; and (ii) the lowest daily VWAP (as defined in the EPA) of the Company’s Class A
common stock during the five trading days immediately following to the date the Company gives the Investor notice of the Company’s intent
to sell them Class A common stock under the EPA. As of March 31, 2026, no issuances have taken place under this Equity Purchase Agreement.

***Class A common stock Issuance***

During the nine months ended March 31, 2026,
the Company received deposits from three third party investors in the amount of $2,700,000 for 337,500 Class A common shares to be issued
pursuant to the securities purchase agreement. These common shares were issued in July 2025.

On July 26, 2025, the Company approved the conversion
of all outstanding principal and interest on a related party convertible note payable into common shares at a conversion price of $8 per
share. The principal of $3,865,555 and accrued interest of $210,496, total of $4,076,051 was converted into 509,507 shares of Class A
common stock (See Note 5).

On September 25, 2025, the Company issued 125,000
shares of its Class A common stock at $8 per share for a total value of $1,000,000 to Maxim Partners LLC (“Maxim”) in connection
with its affiliate’s engagement as a financial advisor to assist with certain aspects of the Company’s direct listing process.
The $1,000,000 issuance for services performed was deferred and resulted in a net effect of $0 on the Stockholder’s deficit as of
December 31, 2025. Initially, the Company recorded an increase in common stock for the par value of the shares of $13 and reduced Additional
Paid in Capital for the same amount. The advisory services contracted to be provided by Maxim’s affiliate include strategic guidance
on listing objectives, structural planning, and investor communication strategy, with the penultimate service being the official direct
listing. During the three months ended March 31, 2026, the direct listing happened, which completed Maxim’s duties to perform contracted
services. As a result, the Company recorded the $1,000,000 as stock-based compensation expense and an increase to Additional Paid in Capital
for the same amount.

***Warrants***

The Company from time-to-time issues warrants
in conjunction with equity financing and to employees and non-employees for services.

During the year ended June 30, 2024, the Company
issued warrants to purchase an aggregate of 100,000 shares of Class A common stock of the Company to the Company’s Chief Operating
Officer for services in conjunction with his employment agreement. The warrants vest over a twelve-month term and have an exercise price
of $2.00 per share. As a result, the Company recognized stock-based compensation of $144,262 for the years ended June 30, 2025. Under
the Black-Scholes-Merton option pricing model the fair value of the warrants at time of issuance was approximately $572,343, the Company
will amortize the fair value over 12 months as compensation and benefits expense in the accompanying statement of operations. The significant
inputs were as follows: Class A common stock fair value of $7.32, volatility of 61.67%, term of 3 years and risk-free rate of 4.66%.

During the year ended June 30, 2025, the Company
amended the Chief Operating Officer’s employment agreement on November 15, 2024, to terminate the warrants in consideration for
a cash bonus that is contingent upon a Liquidity Event as defined in Note 7. Per ASC 718-20-35-7, the termination of the warrants was
treated as a cancellation and all previously unrecognized compensation cost of $352,814 was recognized on November 15, 2024, the date
of cancellation.

On May 1, 2023, the Company issued warrants to
the Company’s Chief Marketing Officer, to purchase 12,500 shares of our Class A common stock, exercisable at $6.00 per share, issued
in connection with entering into an employment agreement, effective May 1, 2023. The warrant vests ratably over 12 months and may be
exercised in whole or in part at any time or from time to time from the vesting date up to and including May 1, 2026. Under the Black-Scholes-Merton
option pricing model the fair value of the warrants at time of issuance was approximately $7,666. The Company will amortize the fair
value over 12 months as compensation and benefits expense in the accompanying statement of operations. The significant inputs were as
follows: Class A common stock fair value of $1.80, volatility of 92.1%, term of 3 years and risk-free rate of 3.85%.

11

The following is a summary of outstanding stock
warrants as of the nine months ended March 31, 2026, and June 30, 2025:

| Line item | Number of Shares | Weighted Average Exercise Price | Weighted Average Remaining Life (years) | Intrinsic Value |
| --- | --- | --- | --- | --- |
| Warrants outstanding as of June 30, 2024 | $8,156,087 | $4.72 | 1.7 | $26,716,879 |
| Warrants exercisable as of June 30, 2024 | 8,069,238 | $4.75 | 1.7 | $26,195,785 |
| Issued | - | - | - | - |
| Expired and forfeited | (100,000) | - | - | - |
| Exercised | - | - | - | - |
| Warrants outstanding as of June 30, 2025 | $8,056,087 | $4.76 | 0.7 | $26,116,879 |
| Warrants exercisable as of June 30, 2025 | $8,056,087 | $4.76 | 0.7 | $26,116,879 |
| Issued | - | - | - |  |
| Expired and forfeited | (7,368,587) | - | - |  |
| Exercised | - | - | - |  |
| Warrants outstanding as of March 31, 2026 | $687,500 | $1.29 | 1.6 | $4,615,000 |
| Warrants exercisable as of March 31, 2026 | $687,500 | $1.29 | 1.6 | $4,615,000 |

| Exercise Price ($) | Warrants outstanding as of March 31, 2026 | Warrants outstanding as of June 30, 2025 |
| --- | --- | --- |
| $0.25 | - | 137,017 |
| $0.60 | $675,000 | 675,000 |
| $1.75 | - | 2,458,446 |
| $3.00 | $12,500 | 4,718,125 |
| $4.00 | - | 67,500 |
|  | 687,500 | 8,056,087 |

***Stock Based Compensation - Stock Options***

Effective June 25, 2021, the Board of Directors
of FreeCast Inc. adopted the 2021 Equity Incentive Plan, (the “Incentive Plan”). The plan provides for both incentive stock
options and non-qualified stock options to officers, directors, employees, and consultants of the Company. The plan authorized 3,000,000
awards to be granted under the Incentive Plan of which 2,073,627 remain available to be granted as of March 31, 2026. The Incentive Plan
expires on June 25, 2031.

The Company recognizes stock-based compensation
expense from stock-based payments using the grant date fair-value, including for stock options. The fair value of options awarded to
employees is measured on the grant date using the Black-Scholes Merton option-pricing model and is recognized as an expense over the
requisite service period on a straight-line basis.

All stock options are exercisable into class
A common stock except for the 125,004 options granted to the Company CEO, which are exercisable into class B common stock.

The following is a summary of outstanding stock
options as of March 31, 2026, and June 30, 2025:

| Line item | Number of Shares | Weighted Average Exercise Price | Weighted Average Remaining Life (years) | Intrinsic Value |
| --- | --- | --- | --- | --- |
| Options outstanding as of June 30, 2025 | $953,892 | $4.48 | 6.53 | $3,353,616 |
| Options exercisable as of June 30, 2025 | $860,083 | $4.11 | 6.64 | - |
| Issued | - | - | - | - |
| Canceled | (27,519) | - | - | - |
| Expired | - | - | - | - |
| Options outstanding as of March 31, 2026 | $926,373 | $4.41 | 5.70 | $3,328,272 |
| Options exercisable as of March 31, 2026 | $898,825 | $4.20 | 5.50 | - |

12

The following are the vesting terms associated with those shares:

| Tranche | Shares Granted | Vesting Method | Vesting Terms |
| --- | --- | --- | --- |
| Tranche 1 | 784,236 | Graded Vesting | 1/6th vested on July 1, 2021, remainder vests over the next 18th months using the graded vesting method, until the option is 100% vested. |
| Tranche 2 | 139,377 | Straight-line | 1/24th will vest on a straight-line monthly basis until the option is 100% vested. |
| Tranche 3 | 2,760 | Graded Vesting | 1/6th vests on grant date, remainder vests over the next 30 months using the graded vesting method, until the option is 100% vested. |
| Total | 926,373 |  |  |

During the nine months ended March 31, 2026,
and 2025, the Company recognized stock-based compensation to employees from options of $260,951 and $388,819, respectively. During the
three months ended March 31, 2026, and 2025, the Company recognized stock-based compensation to employees from options of $85,602 and
$148,097, respectively Additionally, no options were exercised during the three months ended March 31, 2026. Accordingly, there were
no cashflow effects related to stock option exercises.

As of March 31, 2026, there was $152,424 in unrecognized
stock-based compensation related to unvested restricted stock agreements, net of estimated forfeitures.

### **Note 7 – Commitments and Contingencies**

In October 2018, the Company entered into a two-year sublease agreement for approximately 3,360 square feet of office space in Orlando, Florida. In August 2020, the Company provided $117,336
in security deposit and entered into a 39-month lease agreement which allowed the Company to expand its office space to 10,080 square
feet. On October 31, 2023, the Company entered into a First Amendment that extended our lease until October 31, 2028 (see Note 8).

On November 15, 2024, the Company’s Chief
Operating Officer employment agreement was amended whereby Mr. Savine is eligible to receive a performance bonus payable in cash only
in an amount equal to the fair market value of: (i) 112,500 shares; and (ii) 100,000 warrants for Class A common stock exercised on a
cashless basis with an exercise price of $2.00 per share. To be eligible for the bonus, Mr. Savine must be continuously employed during
the term of the agreement, and the Company must have successfully completed a liquidity event, which may occur after the employment term.
A Liquidity Event is defined in the Savine Employment Agreement as either: (i) (a) a merger, consolidation, reorganization, or business
combination; or (b) a sale or other disposition of all or substantially all of our assets in any single transaction or series of related
transactions; or (ii) (a) a primary offering of our Class A common stock by us to the general public through an effective registration
statement filed with the SEC; (b) simultaneous listing of our Class A common stock on any established stock exchange if such common stock
was not already listed at the time of such offering; and (c) we receive net proceeds from the offering of not less than $20 million.
If Mr. Savine becomes eligible for the bonus, it will be paid to him no later than five days after the later of: (a) the end of the initial
term and (b) a liquidity event.

As of March 31, 2026, no liability was recorded
within the balance sheets for contingent consideration as the contingency is not probable such that an amount has not been estimated.

### **Note 8 – Leases**

Operating leases are included in other assets,
current operating lease obligations, and operating lease obligations (less current portion) on the Company’s balance sheet. Finance
leases are included in financing lease, right-of-use assets and current and long-term portion of finance lease obligations on the Company’s
balance sheet. Short-term leases with an initial term of 12 months or less are not presented on the balance sheet with expense recognized
as incurred.

The following table presents lease assets
and liabilities and their balance sheet classification:

| Classification | March 31, 2026 | June 30, 2025 |
| --- | --- | --- |
| Operating Leases: |  |  |
| Right-of-use Asset | $293,783 | $362,968 |
| Current portion of operating lease obligation | $104,886 | $91,220 |
| Operating lease obligation, less current portion | $208,328 | $288,836 |

13

The components of lease expense for the three
months ended March 31, 2026, and 2025, are as follows:

| Classification | For the Three Months Ended March 31, 2026 | For the Three Months Ended March 31, 2025 |
| --- | --- | --- |
| Operating lease cost | $33,280 | $33,280 |
| Finance Lease: |  |  |
| Amortization of lease assets | - | - |
| Interest on lease liabilities | - | - |
| Total finance lease cost | - | - |

The components of lease expense for the nine
months ended March 31, 2026, and 2025, are as follows:

| Classification | For the Nine Months Ended March 31, 2026 | For the Nine Months Ended March 31, 2025 |
| --- | --- | --- |
| Operating lease cost | $99,839 | $99,839 |
| Finance Lease: |  |  |
| Amortization of lease assets | - | 546 |
| Interest on lease liabilities | - | (14) |
| Total finance lease cost | - | $532 |

Supplemental disclosures of cash flow information
related to leases for the three months ended March 31, 2026, and 2025 were as follows:

| Line item | For the Three Months Ended March 31, 2026 | For the Three Months Ended March 31, 2025 |
| --- | --- | --- |
| Cash paid for operating lease liabilities | $33,201 | $31,620 |

Supplemental disclosures of cash flow information
related to leases for the nine months ended March 31, 2026, and 2025 were as follows:

| Line item | For the Nine Months Ended March 31, 2026 | For the Nine Months Ended March 31, 2025 |
| --- | --- | --- |
| Cash paid for operating lease liabilities | $97,495 | $92,582 |

The weighted average lease term and discount
rates are as follows:

March 31,     2026

Operating Leases:

Weighted average remaining lease term (years) 2.59

Weighted average discount rate 12%

Future payments due under leases reconciled to
lease liabilities as follows:

| As of March 31, 2026: | Operating / Lease |
| --- | --- |
| 2026 (remaining) | 100,709 |
| 2027 | 140,602 |
| 2028 | 122,010 |
| Total undiscounted lease payments | 363,321 |
| Present value discount, less interest | (50,106) |
| Lease Liabilities | $313,215 |

### **Note 9 – Related Party Transactions**

All related party transactions are reviewed and
approved by the Company’s Board of Directors or Audit Committee to ensure they are conducted in the best interest of shareholders.

14

***License agreement***

On June 30, 2011, we entered into a Technology
License and Development Agreement, with Nextelligence, which is majority owned and controlled by the Company’s CEO. Nextelligence
is the Company’s largest shareholder with more than 40% of outstanding Class A common stock prior to the listing of our Class A
common stock on Nasdaq. In connection with the Technology Agreement, we issued 10,002,000 shares of our Class A common stock to Nextelligence.
The Technology Agreement expires on June 30, 2054, unless it’s terminated earlier based on termination events as defined in the
Technology Agreement.

***Convertible
Notes Payable***

On May 3, 2024, the Company signed a convertible
promissory note with Nextelligence in the principal amount of $1,000,000. The note accrues interest at 12% per annum and is due and payable
no later than May 3, 2025. At Nextelligence’s option, all or part of the outstanding principal and accrued interest may be converted
into shares of our Class A common stock at a conversion price of $8.00 per share. On July 1, 2024, the Company repaid $1,075,000 on the
convertible promissory note with related party Nextelligence. On December 13, 2024, the Company renewed and modified the original May
3, 2024, note to incorporate additional borrowings. On July 26, 2025, the Company approved the conversion of all outstanding principal
and interest into common shares at a conversion price of $8 per share. The principal of $3,865,555 and accrued interest of $210,496,
total of $4,076,051 was converted into 509,507 shares of Class A common stock.

Between October 9, 2025, and November 21, 2025,
Nextelligence, a related party, majority owned by the Company’s CEO, provided aggregate funding to the Company totaling $1,500,000.
Of this amount, $191,023 was remitted by Nextelligence on behalf of Celebrity Cigars, Inc. and Test Drive Live Inc. to fully satisfy their
outstanding accounts receivable balances with the Company. As these entities are under common control, Nextelligence agreed to assume
the obligations of both Celebrity Cigars, Inc. and Test Drive Live Inc. The remaining $1,308,977 was recorded as a revolving convertible
note payable to Nextelligence, for a total of $1,308,977. The Company and Nextelligence entered into an agreement on November 21, 2025,
to place terms on this revolving convertible note payable. The new outstanding revolving convertible note payable has an interest rate
of 12%, a maturity date of June 30, 2026, and is convertible at Nextelligence’s discretion for $8 per share of Class A common stock.
The terms specify a maximum advance amount of $5,000,000. Additionally, the agreement capitalized all unpaid accrued interest as of November
21, 2025, for $6,575, which resulted in an “original principal balance” of $1,315,552. Between the date of the executed agreement
and March 31, 2026, the Company has received an additional $3,573,500. As of March 31, 2026, the total outstanding principal is $4,889,052
and the accrued interest balance is $126,778 for a total outstanding balance of $5,015,830.

***Notes Payable***

On March 12, 2026, the Company entered into a
premium finance agreement for a Director’s and Officer’s Insurance policy, which required a downpayment of $80,991. The Company
received a loan from the Company’s CEO for the full $80,991 in order to pay this down payment. There were no official terms to this
loan. The full principal balance was recorded as Notes payable – related party on the condensed balance sheet.

***Issuance of Class B Common Shares***

On May 16, 2024, in conjunction with the Reverse
Split and Amendment, where defined in these notes to the financial statements, Nextelligence, Inc. agreed to forfeit and cancel 20,000,000
shares of Class A common stock in exchange for the issuance of 4,000,000 shares of Series A preferred stock (see Note 6).

On July 29, 2024, the Company’s largest
shareholder and related party Nextelligence distributed 9,623,543 shares of Class A common stock to shareholders of Nextelligence. The
Company CEO and majority owner beneficially received 7,782,970 of the shares distributed, which upon receipt, in accordance with the
Company’s articles of incorporation, were automatically reclassified as Class B common stock.

***Services Agreement***

The Company entered into a Data Services Agreement
with Nextelligence, which is effective as of July 1, 2025. Under the agreement, the Company has access to and use of a proprietary marketing
database and related analytical services Nextelligence either owns or licenses from Audience Acuity LLC, including customer profiling,
audience targeting, and CRM support. The agreement imposes certain restrictions on our use of the data, including prohibitions on resale,
reverse engineering and use in certain industries and applications. The Company paid a one-time fee of $120,000 and is required to pay
a monthly fee of $10,000 for continued access to the data and services. The fees related to this contract are being recorded as General
and administrative expenses. The agreement has an initial three-year term, automatically renewing for successive one-year periods unless
terminated in writing by either party not less than 30 days before the end of the initial term or subsequent term extension. On the March
31, 2026, condensed balance sheet, $40,000 of the unamortized license fee is classified as prepaid assets- related party within current
assets, while the remaining non-current portion of $50,000 is presented as prepaid assets, net of the current portion – related
party.

***Related Party Revenue***

In June 2023, the Company entered into verbal
arrangements with two related party entities, Test Drive Live Inc. and Celebrity Cigars, Inc., which are under common ownership control.
William A. Mobley, Jr. serves as the President of both companies and is the sole director for Celebrity Cigars. Mr. Mobley’s son,
Sean Mobley, is part of the management team of Celebrity Cigars. The Company provided FAST channel buildout services relating to the development
and buildout of their respective channels. The Company also provides the platform on an ongoing basis for each company to stream their
content. The Company charges each company a monthly fee based on a 15% or 30% markup of the Company’s cost of production, depending
on the level of supervision required to provide the Company’s services, which includes labor, rent, etc. The Company also charges
for any out-of-pocket costs, which vary from month to month. The Company is currently negotiating with each company on a potential advertising
revenue sharing arrangement. Any revenue recognized under these agreements is presented as Sales – related parties on the statement
of operations.

15

The Company recognized related party revenue
of $169,110 ($157,110 for FAST channel buildouts and $12,000 for channel streaming) for the nine months March 31, 2026. The Company has
accounts receivable – related party of $50,962 for the FAST revenue services provided and $1,400 from Nextelligence, Inc. for the
reimbursement of supplies and rent provided during the nine months ended March 31, 2026.

### **Note 10 – Disaggregation of Revenues**

Net sales disaggregated by significant products
and services for the three months ended March 31, 2026, and 2025 were as follows:

| Line item | For the three months ended / March 31, 2026 | For the three months ended / March 31, 2025 |
| --- | --- | --- |
| Membership (1) | $12,430 | $31,817 |
| FAST Revenue – related parties (2) | 68,063 | 38,921 |
| Ad Revenue (3) | 11,016 | 72,565 |
| Other Revenue | 1,400 | 582 |
| Total | $92,909 | $143,885 |

Net sales disaggregated by significant products
and services for the nine months ended March 31, 2026, and 2025 were as follows:

| Line item | For the nine months ended / March 31, 2026 | For the nine months ended / March 31, 2025 |
| --- | --- | --- |
| Membership (1) | $50,237 | $109,008 |
| FAST Revenue – related parties (2) | 169,110 | 180,405 |
| Ad Revenue (3) | 130,052 | 122,697 |
| Other Revenue | 1,460 | 1,727 |
| Total | $350,859 | $413,837 |

(1) Membership sales refer to customers purchasing premium content through our SmartGuide for varying fees and recognized on a gross basis over the service period determined.

(2) We provide end-to-end software solutions for development of FAST (Free Ad-Supported TV) channels to customers such as content creation, production, video studio rental, etc. to aid in the creation of content for their channels and a platform fee for distributing the channel. Revenue is recognized at the point in time the services are performed for the development of FAST channels. We charge a monthly platform fee for distributing the FAST channel on our platform.

(3) During the period from July 1, 2025, through March 31, 2026, we recognized $130,052 of ad revenue from the buying and selling of advertising space on other content platform providers. Of this amount, $125,000 was recognized as Ad Agency Revenue under the Launch That Experimental Media Plan Agreement, representing revenue from the provision of discovery, development, and test media distribution services for a client campaign. The remaining was related to a new customer from the buying and selling of advertising space via the FreeCast Ad Platform.

### **Note 11 – Subsequent Events**

The Company evaluated subsequent events through
the date the financial statements were issued, and determined that except for the following subsequent events, there have been no additional
subsequent events that would require recognition in the financial statements or disclosure in the notes to the financial statements other
than the following:

On April 20, 2026, the Company renewed and modified
the revolving convertible promissory note with Nextelligence to extend the maturity date to June 30, 2027, and modify the terms of the
conversion rights. Prior to the Company’s direct listing, the conversion rights were based on a conversion price of $8 per share,
whereas the updated terms base the conversion price on the closing stock price on the most recent trading day prior to the date of conversion.

On April 20, 2026, Nextelligence elected to convert
$114,052 of principal over and beyond the $5,000,000 limit stated in the terms of the note using a conversion price of $4.00, which resulted
in 28,513 shares being issued. Additionally, on the same date, Nextelligence converted $1,600,000 of principal using a conversion price
of $3.51, which resulted in 455,841 shares being issued.

On April 8, 2026, the Company issued a total of
6,493,588 warrants to various holders that can each be exercised for one share of common stock at an exercise price of $4.25.

16

## Item 2. Management’s Discussion and
Analysis of Financial Condition and Results of Operations.**

*The following discussion
of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes
thereto and other financial information appearing elsewhere in this Report.*

Forward-Looking Statements

Certain statements, other
than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected
operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. These forward-looking statements generally are identified by the words “believes,” “project,”
“expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,”
“may,” “will,” “would,” “will be,” “will continue,” “will likely result,”
and similar expressions. We intend such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements
contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of complying with those
safe-harbor provisions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties
which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual
effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on our operations and
future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes,
availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should
also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. We undertake
no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or
otherwise. Further information concerning our business, including additional factors that could materially affect our financial results,
is included herein and in our other filings with the Securities and Exchange Commission.

**Overview**

We currently operate primarily
in the U.S., but have recently begun to provide services in certain international markets. We continue to explore opportunities for expansion
into other international markets by signing licensing agreements and collaborating with international Consumer Direct Platforms (CDPs).
However, we can only take advantage of these opportunities if we have sufficient capital to do so, are able to recruit the necessary staff,
and are able to expand our current infrastructure. We may also face additional challenges from new competitors that may be able to launch
new businesses at relatively low cost, with consumers easily being able to shift spending from one provider to another. In order to combat
this, we must continue to deliver a product that is more advanced than that of competitors.

Primarily as a result of our
shift to a free registration subscription service, we have been able to increase the number of subscribers during our most recent 12-month
period. Our subscriber numbers have increased from 934,543 on March 31, 2025, to 1,024,592 on March 31, 2026. Our revenue excluding Free
Ad-Supported TV (FAST) Revenue (FAST Revenue was $169,110 and $180,405 for the nine months ended March 31, 2026, and 2025, respectively)
and Ad Revenue (Ad Revenue was $130,052 and $122,697 for the nine months ended March 31, 2026, and 2025, respectively) per subscriber
has decreased from $0.12 for the nine months ending March 31, 2025, compared to $0.05 for the nine months ending March 31, 2026. Our revenue
excluding FAST Revenue (FAST Revenue was $68,063 & $38,921 for the three months ended March 31, 2026, and 2025, respectively) and
Ad Revenue (Ad Revenue was $11,016 & $72,565 for the three months ended March 31, 2026, and 2025, respectively) per subscriber has
decreased from $0.03 for the three months ending March 31, 2025, compared to $0.013 for the three months ending March 31, 2026.

As of March 31, 2026, we
had a cash balance of $119,302 and a working capital deficit of $7,285,937. We plan to raise additional equity financing as well, without
which we will not be able to meet our obligations as they become due for the next 12 months. However, we cannot provide any assurance
that additional equity financing will be available on terms that are acceptable to us, or at all.

17

**Components of our Operating Results**

**Revenue**

*Subscription (Membership) Revenue*

In light of shifting consumer
behaviors and constraints on big-box retail sales (especially during the pandemic), we refined our business model in 2022 to focus on
B2B2C distribution. This approach leverages partnerships with multi-dwelling unit operators, hospitality providers, broadband carriers,
and device manufacturers, each channel granting us immediate, large-scale user access. We believe that aligning with enterprise-level
partners reduces our direct retail marketing costs, stabilizes recurring revenues, and extends the reach of our aggregator platform to
tens of thousands of new users at once.

As a result, we no longer
generate subscription revenue through renewal sales of Rabbit TV and Rabbit TV Plus, or through Select TV and Streaming TV Kits, which
operated as the successor products to Rabbit TV and Rabbit TV Plus. In October 2022, our SelectTV.com paid subscription service and packaged
SelectTV Streaming TV Kits were discontinued. We rebranded to the corporate namesake FreeCast.com and relaunched our SmartGuide as a
free registration subscription service. SmartGuide is our internet distributed streaming media guide that searches and aggregates media
content on the web and facilitates access to our customers through Wi-Fi-enabled devices that support streaming video.

We do, however, sell monthly
subscriptions for premium content purchased through our SmartGuide for varying fees for different content. Revenue from such premium
subscription fees is recognized on a gross basis over the service period as we are deemed to be the principal in the relationship with
the end user. We control the content before transferring it to the end user and have latitude in establishing pricing. We both retransmit
and “ingest” and distribute content.

Subscription revenue is derived
from online sales through search engine optimization, search engine marketing, various marketing advertising services, the utilization
of resellers in the form of publishers that promote upcoming retail promotions and packages, as well as direct sales to subscribers of
our Value Channels subscription service. Value Channels subscription contains 17 cable channels and sells on a monthly subscription or
annual fee. Value Channels is integrated into the initial FreeCast.com free registration and then offered as an upgrade. Both FreeCast.com
(free registration) and Value Channels are available in various streaming Smart TV models (Google TV’s, Amazon Fire TV’s,
LG, Samsung, TCL, Sony, and others), plus Streaming Devices (Amazon Fire, Google ChromeCast, Apple TV), PC’s/Laptops and mobile
apps for Android and iOS devices.

Subscription revenue is recognized
ratably on a straight-line basis over the duration of the subscription period, generally ranging from one month to five years. If the
subscriber renews early, then the expiration date is extended by the renewal period, and the additional subscription fee is deferred
and amortized over the additional months purchased by the subscriber. We no longer offer SelectTV lifetime subscriptions, which were
initially deferred and recognized over a five-year period. All subscription fees are collected at the time of purchase.

*FAST (Free Ad-Supported TV)*

We provide FAST channel buildouts
that include post-production editing, motion graphics, channel assembly and content acquisitions. We charge the customers based on time
incurred for the services plus a reasonable margin in addition to any additional out of pocket cost incurred that is charged at cost
to us. In addition, we split the advertising revenue. Revenue is recognized when services are performed. We charge a monthly platform
fee for distributing the FAST channel on its platform. Revenue is recognized at the point in time when the content is available on the
digital platform.

In June 2023, we entered
into verbal arrangements with two related party entities, Test Drive Live Inc. and Celebrity Cigars, Inc. William A. Mobley, Jr. serves
as the President of both companies and is the sole director for Celebrity Cigars. Mr. Mobley’s son, Sean Mobley, is part of the
management team of Celebrity Cigars. We provided FAST channel buildout services relating to the development and buildout of their respective
channels. We also provide the platform on an ongoing basis for each company to stream their content. We charge each company a monthly
fee based on a 15% or 30% markup of our cost of production, depending on the level of supervision required to provide our services, which
include labor, rent, etc. We also charge for any out-of-pocket costs, which vary from month-to-month. We are currently negotiating with
each company on a potential advertising revenue-sharing arrangement.

18

*Ad Platform Revenue*

We are an agent in transactions
on our Ad Exchange platforms. We act as an intermediary between DSPs and non-owned and operated publishers by providing access to a platform
that allows both parties to transact in the buying and selling of ad inventory. The transaction price is determined by a real-time auction,
and the Company has no pricing discretion or obligation related to the fulfillment of the advertising delivery.

We generally invoice buyers
at the end of each month for the full purchase price of ad impressions monetized in that month. Accounts receivables are recorded at
the amount of gross billings for the amounts we are responsible for collecting, and accounts payable are recorded at the net amount payable
to suppliers. Accordingly, both accounts receivable and accounts payable appear large in relation to revenue reported on a net basis.

*Ad Agency Revenue (Launch That and Similar
Contracts)*

We earn revenue from direct
client service contracts for marketing and campaign execution, such as the Launch That agreement. These contracts typically involve two
distinct phases:

- Phase 1: Discovery and Development Services (data research, audience analysis, creative development). Revenue is recognized over time using an input method based on the proportion of costs incurred relative to total estimated costs for Phase 1.
- Phase 2: Test Media Distribution Services (media placement, outreach, KPI reporting). Revenue is recognized upon delivery of the performance evaluation report specified in the contract.

Revenue from such contracts
is presented separately from “Other Revenue” due to its materiality and distinct nature.

*Deferred Revenue – Ad Agency Revenue
(Launch That and Similar Contracts)*

For the Ad Agency revenue
stream, we provide demand partners with access to the FreeCast Ad Platform, enabling real-time bidding on advertising inventory. Revenue
is recognized at a point in time when a transaction is completed—specifically, when a bid is won and the client’s purchase
occurs through the platform. Amounts invoiced in advance of the completion of these transactions are recorded as deferred revenue and
recognized as revenue when our performance obligation is satisfied.

*Other Revenue*

Other revenue includes product,
licensing, and referral fee revenue. We generate revenue through free registrations of FreeCast.com by signing licensing agreements and
collaborating with CDPs. A FreeCast.com license is freely provided per registered consumer marketed by distributors in exchange for a
negotiated revenue sharing percentage with each distributor on a case-by-case basis. Affiliate commissions are earned and then shared
from third-party advertisement service providers, pay-per-view movie or series distributors, and live events tickets sales for such things
as professional boxing or concerts. These license arrangements have not resulted in significant revenue to date.

Beginning in 2024, in conjunction
with the release of our new product FreeCast Home, we started recognizing contracts with customers from product sales requiring performance
up to delivery, as well as contracts with customers that contain a subscription portion that causes revenue to be allocated or adjusted
over time. Shipping and handling activities are performed before the customer obtains control of the goods and therefore represent a
fulfillment activity rather than a promised service to the customer. Revenue and costs of sales are recognized when control of the products
transfers to our customer, which generally occurs upon shipment from our facilities. For our physical product sales, our performance
obligations are satisfied at that time.

Referral fee revenue is generated
through premium services which are also available on our platform, for an additional fee, to allow single or time-limited use of private,
decrypted viewing of movies, sporting events, concerts or other types of events.

19

*Deferred Revenue*

Deferred revenue consists
principally of both prepaid but unrecognized subscription revenue and advertising fees received or billed in advance of the delivery
or completion of the delivery of services. We may pay sales incentives, in cash or by issuing equity instruments, to distributors of
our subscriptions. Such sales incentives are not recognized as deferred revenue. Rather, sales incentives are recognized in current operations
when issued, regardless of amounts in deferred revenue, which may have resulted from the distributor’s efforts. Deferred revenue
consists primarily of subscriptions for multiple months purchased upfront and recognized ratably over the term of the subscription.

**Cost of Revenue**

Cost of revenue consists
primarily of subscription costs and FAST streaming costs, such as third-party hosting costs, infrastructure costs and salaries and benefits
related to employees for our customer support. We make payments to third-party ad servers in the period in which the advertising impressions
are delivered, or click-through actions occur, and accordingly record this as a cost of revenue in the related period. Hosting costs
consist of content streaming, maintaining our internet service and creating and serving advertisements through third-party ad servers.
Cost of revenue also consists of FAST channel buildout costs such as the salaries and benefits related to employees, facility related
expenses and information technology associated with supporting these buildouts.

**Operating Expenses**

*Compensation and Benefits*

Compensation and benefits
consist primarily of employee-related costs, including salaries and benefits related to employees in finance, accounting, internal information
technology and other administrative personnel and stock-based compensation.

*Sales and Marketing*

Sales and marketing consist
primarily of employee-related costs, including salaries, commissions and benefits related to employees in sales, sales support and marketing
departments. In addition, sales and marketing expenses include external sales and marketing expenses such as third-party marketing, TV
Infomercials, branding, advertising, public relations expenses, commissions, facilities-related expenses, and infrastructure costs.

*General and Administrative*

General and administrative
expenses include professional services costs for outside legal and accounting services, facilities-related expenses, travel costs, third
party customer support, and credit card fees.

**Three and Nine Months Ended March 31, 2026,
Compared to Three and Nine Months Ended March 31, 2025**

**Revenue**

Our primary sources of revenue
are subscription revenue and FAST revenue. Additionally, we have several other revenue streams: product sales revenue, channel streaming,
advertising revenue, and other revenue, which encompasses earnings from licensing and referral fees.

Subscription revenue decreased
by 61%, or $19,387, to $12,430, in the three months ended March 31, 2026, as compared to $31,817 for the three months ended March 31,
2025. Subscription revenue decreased by 54%, or $58,771, to $50,237, in the nine months ended March 31, 2026, as compared to $109,008
for the nine months ended March 31, 2025. The decrease in subscription revenue is primarily attributable to our shift to a free registration
subscription service that is supported with advertising revenue.

20

FAST revenue increased by
75%, or $29,142, to $68,063, in the three months ended March 31, 2026, as compared to $38,921 for the three months ended March 31, 2025.
FAST revenue decreased by 6%, or $11,295, to $169,110, in the nine months ended March 31, 2026, as compared to $180,405 for the nine months
ended March 31, 2025. The decrease was primarily due to lower production activity and reduced related-party channel buildout services
compared to the prior year. While we continued to provide platform distribution services, fewer new channel buildouts were completed in
the six months ended December 31, 2025; however, this slightly increased back to higher production activity during the three months ended
March 31, 2026, which resulted in higher FAST revenue for the three-month period but lower FAST revenue for the nine-month period.

Ad revenue decreased by 85%
or $61,549 to $11,016, in the three months ended March 31, 2026, as compared to $72,565 for the three months ended March 31, 2025. The
decrease was related to minimal demand in the current quarter. Ad revenue increased by 6% or $7,355 to $130,052, in the nine months ended
March 31, 2026, as compared to $122,697 for the nine months ended March 31, 2025. The increase was related to revenue from the “Launch
That” contract.

We are strategically reinvesting
in our proprietary Platform-as-a-Service (PaaS) infrastructure and broader ecosystem to enhance long-term enterprise value and deepen
monetization opportunities for both us and our partners.

Our recent decline in advertising
revenue is transitional rather than structural, driven by the migration from Spring Serve/Magnite to our own proprietary, completed and
recently launched in-house Zer0Gap Ads platform. The shift introduced temporary delivery inefficiencies, demand disruption and onboarding
friction, resulting in short-term monetization gaps. As the platform integration stabilizes, revenue performance is expected to better
reflect the underlying economics of a vertically integrated advertising model with early signs of recovery, as we have secured new commercial
relationships with major media spenders such as Launch That, NHK and Del-Air.

The connected TV (CTV) advertising
ecosystem led by demand-side platforms like The Trade Desk is under scrutiny for its lack of transparency and complex fee structures.
Advertisers struggle to trace how much of their spending actually reaches publishers, with multiple intermediaries taking cuts along
the programmatic supply chain. This opacity, combined with concerns about data quality and measurement consistency, has put pressure
on traditional ad tech platforms to justify their value. As brands demand clearer attribution and more efficient media buying, the perceived
inefficiencies of third-party platforms are becoming a growing point of friction.

At the same time, major streaming
platforms such as Roku, Netflix and Amazon are building and expanding their own first-party advertising ecosystems. By owning both the
content distribution and ad inventory, these companies can offer advertisers more direct access to audiences, better data integration
and improved transparency. This vertical integration reduces reliance on external intermediaries and allows streaming providers to capture
a greater share of ad revenue while delivering more measurable outcomes for brands.

In this shifting landscape,
our ZeroGap Ads strategy positions us to benefit long term by aligning with this broader industry trend. By creating and recently launching
our own internal ad platform, we are able to directly serve advertising across our network of content partners while also enabling co-branded
telecom and MDU partners to monetize their customer bases within the same ecosystem. This dual-sided approach enhances revenue potential,
strengthens partner relationships and provides greater control over data and pricing. As transparency and efficiency become critical differentiators
in CTV advertising, our integrated model could offer a more streamlined and scalable alternative to traditional programmatic platforms.

Other revenue increased by
141% or $818, to $1,400 in the three months ended March 31, 2026, as compared to $582 for the three months ended March 31, 2025. Other
revenue decreased by 15% or $267, to $1,460 in the nine months ended March 31, 2026, as compared to $1,727 for the nine months ended March
31, 2025.

The following table presents
our revenue on a disaggregated basis:

| Line item | For the three months ended / March 31, 2026 | For the three months ended / March 31, 2025 |
| --- | --- | --- |
| Membership (1) | $12,430 | $31,817 |
| FAST Revenue – related parties (2) | 68,063 | 38,921 |
| Ad Revenue (3) | 11,016 | 72,565 |
| Other Revenue | 1,400 | 582 |
| Total | $92,909 | $143,885 |

21

| Line item | For the nine months ended / March 31, 2026 | For the nine months ended / March 31, 2025 |
| --- | --- | --- |
| Membership (1) | $50,237 | $109,008 |
| FAST Revenue – related parties (2) | 169,110 | 180,405 |
| Ad Revenue (3) | 130,052 | 122,697 |
| Other Revenue | 1,460 | 1,727 |
| Total | $350,859 | $413,837 |

(1) Membership sales refer to customers purchasing premium content through our SmartGuide for varying fees and recognized on a gross basis over the service period determined.

(2) We provide end-to-end software solutions for development of FAST (Free Ad-Supported TV) channels to customers such as content creation, production, video studio rental, etc. to aid in the creation of content for their channels and a platform fee for distributing the channel. Revenue is recognized at the point in time the services are performed for the development of FAST channels. We charge a monthly platform fee for distributing the FAST channel on our platform.

(3) During the period from July 1, 2025, through March 31, 2026, we recognized $130,052 of ad revenue from the buying and selling of advertising space on other content platform providers. Of this amount, $125,000 was recognized as Ad Agency Revenue under the Launch That Experimental Media Plan Agreement, representing revenue from the provision of discovery, development, and test media distribution services for a client campaign. The remaining was related to a new customer from the buying and selling of advertising space via the FreeCast Ad Platform.

**Cost of Revenue**

Cost of revenue decreased
by 63%, or $59,298, to $34,416 in the three months ended March 31, 2026, as compared to $93,714 for the three months ended March 31,
2025. Cost of revenue decreased by 53%, or $143,743, to $126,157 in the nine months ended March 31, 2026, as compared to $269,900 for
the nine months ended March 31, 2025. The decrease in cost of revenue is primarily attributed to lower revenue, paired with an inventory
write-off during the prior period related to moving away from product sales.

**Operating Expenses**

Operating expenses increased
by 33%, or $1,122,901 to $4,480,359 in the three months ended March 31, 2026, as compared to $3,357,458 for the three months ended March
31, 2025. The change in operating expenses is attributed to a $222,363 increase in general and administrative expenses and an increase
in compensation and benefits expense of $962,781. The increase in compensation and benefits was primarily the result of an increase to
stock-based compensation. The increase in general and administrative expenses was primarily the result of increased professional fees.
Operating expenses decreased by 6%, or $645,456 to $10,204,003 in the nine months ended March 31, 2026, as compared to $10,849,459 for
the nine months ended March 31, 2025. The change in operating expenses is attributed to a $974,446 decrease in general and administrative
expenses, partially offset by an increase in compensation and benefits expense of $432,498. The increase in compensation and benefits
was primarily the result of Maxim Partners’ stock-based compensation. The decrease in general and administrative expenses was primarily
the result of decreased website development.

**Other (Expense**) **Income**

Other expense was $112,108,
for the three months ended March 31, 2026, as compared to other expense of $73,240 for the three months ended March 31, 2025. Other expense
was $201,004, for the nine months ended March 31, 2026, as compared to other expense of $164,328 for the nine months ended March 31,
2025. The change was principally caused by an increase in interest expense of $38,784 and $37,419 for the three and nine months, respectively.

**Liquidity and Capital Resources**

Since inception, we have
financed our operations from a combination of:

- issuance and sales of our Class A common stock;
- issuance of notes payable with related and non-related parties;
- issuance of convertible notes payable with related and non-related parties;

22

- borrowing under our revolving convertible notes payable with related party;
- cash advances from related parties; and
- cash generated from operations.

We have experienced operating
losses since our inception and had a total accumulated deficit of $205,415,506 as of March 31, 2026. We expect to incur additional costs
and require additional capital as we continue to implement our expansion plan. During the nine months ended March 31, 2026, and 2025,
our cash used in operations was $8,002,935 and $9,958,164, respectively.

Our primary short-term cash
requirements are to fund working capital, lease obligations and short-term debt, including current maturities of long-term debt. Working
capital requirements can vary significantly from period to period, particularly as a result of additional development expenses.

Our ability to fund our cash
needs will depend, in part, on our ability to generate cash in the future, which depends on future financial results. Our future results
are subject to general economic, financial, competitive, legislative and regulatory factors that may be outside of our control. Our future
access to, and the availability of credit on acceptable terms and conditions, is impacted by many factors, including capital market liquidity
and overall economic conditions.

Our financial statements
have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the
normal course of business. We have incurred recurring losses and as of March 31, 2026, had an accumulated deficit of $205,415,506 . For
the three months ended March 31, 2026, and 2025, we sustained a net loss of $4,533,974 and $3,380,527, respectively. For the nine months
ended March 31, 2026, and 2025, we sustained a net loss of $10,180,305 and $10,869,850, respectively. These factors, among others, raise
substantial doubt about our ability to continue as a going concern for the next twelve months from the date these financial statements
were issued. These 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 may be necessary should we be unable to continue as a going concern.
Our continuation as a going concern is contingent upon our ability to obtain additional financing and to generate revenue and cash flow
to meet our obligations on a timely basis. We will continue to seek to raise additional funding through debt or equity financing during
the next twelve months. Management believes that actions presently being taken to obtain additional funding provide the opportunity for
us to continue as a going concern. There is no guarantee we will be successful in achieving these objectives.

We cannot be sure that future
funding will be available to us on acceptable terms, or at all. Due to the often volatile nature of the financial markets, equity and
debt financing may be difficult to obtain.

We may seek to raise any
necessary additional capital through a combination of private or public equity offerings, debt financings, collaborations, strategic
alliances, licensing arrangements and other marketing and distribution arrangements. To the extent that we raise additional capital through
marketing and distribution arrangements or other collaborations, strategic alliances or licensing arrangements with third parties, we
may have to relinquish valuable rights or future revenue streams on terms that may not be favorable to us. If we raise additional capital
through private or public equity offerings, the ownership interest of our existing shareholders will be diluted, and the terms of these
securities may include liquidation or other preferences that adversely affect our shareholders’ rights. If we raise additional
capital through debt financing, we may be subject to covenants limiting or restricting our ability to take specific actions, such as
incurring additional debt, making capital expenditures or declaring dividends.

*Equity Line of Credit*

On December 8, 2025, we entered
into an Equity Purchase Agreement, which was subsequently amended on March 30, 2026, (together, the “EPA”) with Amiens Technology
Investments LLC, a Delaware limited liability company (the “Investor”), pursuant to which the Investor committed to purchase
up to $50 million of shares of our Class A common stock (the “ELOC Shares” and such financing, the “ELOC Financing”),
subject to certain limitations and conditions set forth in the EPA. During the Commitment Period (as defined in the EPA), we may from
time to time, by written notice delivered by us to the Investor (each, an “Advance Notice”), direct the Investor to purchase
a number of shares of our Class A common stock up to the Maximum Advance Amount (as defined in the EPA) as set forth in the Advance Notice,
subject to limitations and adjustments as set forth in the EPA. Shares issued pursuant to an Advance Notice are priced at 95% of the VWAP
(volume-weighted average price) for the five-trading day period immediately following the delivery of the Advance Notice.

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We have filed a registration
statement, which has been declared effective as of May 6, 2026, that registers the resale of up to 5,750,000 shares of our Class A common
stock, based on the assumption that we may deliver Advance Notices to the Investor for an aggregate of $21,735,000 under the EPA at an
assumed purchase price of $3.78 per share. The actual number of shares of our Class A common stock issuable by us in connection with
the ELOC Financing will vary depending on the then-current market price of the shares of our Class A common stock sold to the Investor
pursuant to the EPA and we expect that the number of shares currently registered will not be sufficient to register the full $50 million
facility in the ELOC Financing and the ELOC Commitment Shares (as defined herein). We may be required to file one or more additional
registration statements in order to deliver future Advance Notices to the Investor to access the full $50 million commitment under the
EPA.

As consideration for the Investor’s
commitment to purchase the ELOC Shares in accordance with the EPA, we agreed to pay a commitment fee in an amount equal to $750,000, by
the issuance to the Investor of a number of shares of Class A common stock (the “ELOC Commitment Shares”) as follows: (1)
one-third of the ELOC Commitment Shares are to be issued to the Investor on the occurrence of the first closing under the EPA; (2) one-third
of the ELOC Commitment Shares are to be issued to the Investor on the date the Investor has purchased an aggregate of $15 million of ELOC
Shares; and (3) the remaining one-third of the ELOC Commitment Shares are to be issued to the Investor on the date the Investor has purchased
an aggregate of $30 million of ELOC Shares. The number of ELOC Commitment Shares issued to the Investor on each required date will be
equal to $250,000 divided by the lower of: (i) $10.00; and (ii) the lowest daily VWAP of our Class A common stock during the five trading
days immediately preceding the applicable issuance due date. The issuance of the ELOC Commitment Shares will result in dilution to existing
shareholders, independent of any sales of shares under the EPA.

We will not receive any of
the proceeds from the resale or other disposition of the shares of our Class A common stock by the Investor; however, we may receive
gross proceeds of up to $50 million from the sale of the ELOC Shares from time to time, in our discretion, over a 36-month period. The
36-month period began on March 11, 2026, and ends on April 1, 2029.

We have the right to control
the timing and amount of any sales of shares of our Class A common stock to the Investor under the EPA, subject to certain limitations
described in the EPA. We will bear all fees and expenses incident to our obligation to register the offer and sale of the shares of Class
A common stock. The Investor has no right to require us to sell any shares of our Class A common stock under the EPA and has no obligation
to purchase shares unless and until we deliver a valid Advance Notice in accordance with the EPA, at which time, subject to the terms
and conditions of the EPA, the Investor is contractually obligated to purchase the applicable shares.

Consistent with the applicable
Nasdaq listing rules, the aggregate number of shares of our Class A common stock that we may issue to the Investor under the EPA may
not exceed 19.99% of the shares of Class A common stock issued and outstanding as of the execution date of the EPA (the “Exchange
Cap”), unless we first obtain shareholder approval to issue shares of our Class A common stock in excess of the Exchange Cap in
accordance with applicable Nasdaq listing rules.

Additionally, we may not
direct the Investor to purchase any shares of our Class A common stock under the EPA if such purchase, when aggregated with all other
shares of our Class A common stock then owned by the Investor and its affiliates beneficially, would result in the Investor and its affiliates
beneficially owning (on an aggregated basis) more than 4.99% of the then outstanding voting power or number of shares of our Class A
common stock; provided that, Investor may increase or decrease this ownership limitation, upon notice to us, which notice for any increase
will not be effective until the 61st day following the date such notice is delivered, not to exceed 9.99% of the number of shares of
our Class A common stock outstanding immediately after giving effect to the issuance of shares of our Class A common stock held by the
Investor.

The EPA contains customary
representations, warranties, conditions and indemnification obligations of the parties. We have the right to terminate the EPA at any
time effective five trading days after providing written notice to the Investor, at no cost or penalty, provided that there are no outstanding
Advance Notices, the shares of Class A common stock under which have yet to be issued, and we have paid all amounts owed to the Investor
pursuant to the EPA. We are required to use commercially reasonable efforts to continuously maintain the effectiveness of the registration
statement until all of the Commitment Shares and the shares of our Class A common stock to be issued from time to time under the EPA
pursuant to an Advance Notice have been sold or may be sold without restriction pursuant to Rule 144.

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*Convertible Note Payable – Related Party*

In June 2016, William A.
Mobley, Jr., our founder, Chief Executive Officer and Chairman, loaned us $111,000, at an interest rate of 12% per annum, and due and
payable at June 30, 2024. The note was convertible into shares of our Class B common stock at a conversion price of $0.50 per share.
The note was converted on March 29, 2024. As of March 29, 2024, and June 30, 2023, accrued interest charges related to this loan were
$25,020 and $19,003, respectively. On March 29, 2024, the outstanding principal and accrued interest balance of $92,068 was converted
into 184,136 shares of our Class B common stock.

On May 3, 2024, we signed
a convertible promissory note with Nextelligence in the principal amount of $1,000,000. Outstanding principal accrued interest at 12%
per annum and was due and payable no later than May 3, 2025. In lieu of repayment, at Nextelligence’s option, all or part of the
outstanding principal and accrued interest was convertible into shares of our Class A common stock at a conversion price of $8.00 per
share. Between May 30, 2024, and June 26, 2024, we borrowed an additional $1,075,000 from Nextelligence. On July 1, 2024, we repaid
$1,075,000 on the convertible promissory note with related party Nextelligence. Between October 31, 2024, and December 11, 2024, we borrowed
an additional $1,395,000 from Nextelligence. On December 13, 2024, we renewed and modified the May 3, 2024, note to include the additional
loans. Between December 31, 2024, and June 3, 2025, we borrowed an additional $1,557,000 and made payments of $150,000 to Nextelligence.
On July 26, 2025, Nextelligence converted the outstanding principal and accrued interest balance of $4,076,051 into 509,507 shares of
our Class A common stock.

Between October 9, 2025, and
November 21, 2025, Nextelligence, a related party, majority owned by our CEO, provided aggregate funding to us totaling $1,500,000. Of
this amount, $191,023 was remitted by Nextelligence on behalf of Celebrity Cigars, Inc. and Test Drive Live Inc. to fully satisfy their
outstanding accounts receivable balances with the Company. As these entities are under common control, Nextelligence agreed to assume
the obligations of both Celebrity Cigars, Inc. and Test Drive Live Inc. The remaining $1,308,977 was recorded as a revolving convertible
note payable to Nextelligence, for a total of $1,308,977. The Company and Nextelligence entered into an agreement on November 21, 2025,
to place terms on this revolving convertible note payable. The new outstanding revolving convertible note payable has an interest rate
of 12%, a maturity date of June 30, 2026, and is convertible at Nextelligence’s discretion for $8 per share of Class A common stock.
The terms specify a maximum advance amount of $5,000,000. Additionally, the agreement capitalized all unpaid accrued interest as of November
21, 2025, for $6,575, which resulted in an “original principal balance” of $1,315,552. Between the date of the executed agreement
and March 31, 2026, the Company has received an additional $3,573,500. As of March 31, 2026, the total outstanding principal is $4,889,052
and the accrued interest balance is $126,778 for a total outstanding balance of $5,015,830.

*Notes Payable – Related Party*

On March 12, 2026, we entered into a premium finance
agreement for a Director’s and Officer’s Insurance policy, which required a downpayment of $80,991. We received a loan from
our CEO for the full $80,991 in order to pay this down payment. There were no official terms to this loan. The full principal balance
was recorded as Notes payable – related party on the condensed balance sheet.

*Notes Payable*

On March 12, 2026, we entered
into an agreement with Capital Premium Financing to provide financing in an aggregate amount of $143,949 for the insurance premium associated
with a D&O policy. The policy commenced March 12, 2026, and provided coverage for the next 12 months, expiring March 12, 2027. The
loan bears interest at a 13.5% rate per annum. We are required to pay monthly principal and interest of approximately $24,977 paid over
6 months, with the final payment on September 12, 2026.

**Cash Flows**

The following tables provide
detailed information about our net cash flows for the periods indicated:

| Line item | For the Nine Months Ended March 31, 2026 | For the Nine Months Ended March 31, 2025 |
| --- | --- | --- |
| Net cash used in operating activities | $(8,083,926) | $(9,958,164) |
| Net cash used in investing activities | (16,064) | (21,622) |
| Net cash provided by financing activities | 7,670,043 | 4,863,009 |
| Net (decrease) increase in cash and cash equivalents | $(429,947) | $(5,116,777) |

25

*Operating Activities*

For the nine months ended
March 31, 2026, cash used in operating activities decreased by $1,874,238 or 19% due primarily to our decrease in net loss of $689,545,
which comprised of a non-cash increase in stock-based compensation of $375,633, and a net increase in working capital of $829,922.

*Investing Activities*

For the nine months ended
March 31, 2026, cash used in investing activities decreased by $5,558 or 26%. The change was attributed to a decrease in the cash used
to purchase property and equipment.

*Financing Activities*

For the nine months ended
March 31, 2026, cash provided by financing activities increased by $2,807,034 or 58%. The change was primarily due to an increase in proceeds
from convertible notes payable – related party of $3,264,052 and a decrease to payments on the revolving convertible note payable
– related party of $1,161,445, partially offset by a decrease to proceeds from issuance of Class A common stock of $1,700,000.

**Critical Accounting Policies and Estimates**

Our financial statements
and accompanying notes have been prepared in accordance with GAAP applied on a consistent basis. The preparation of these financial statements
requires us to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent
assets and liabilities at the date of the financial statements, the application of the stock split accounting as of the date these financial
statements are ready to be issued and the reported amounts of revenue and expenses during the periods presented. We evaluate these estimates
and assumptions on an ongoing basis. We base our estimates on the information currently available to us and on various other assumptions
that we believe to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions
or conditions. As of March 31, 2026, our previous estimates had not materially deviated from our results.

An accounting policy is deemed
to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time
the estimate is made; if different estimates reasonably could have been used; or if changes in the estimate that are reasonably likely
to occur periodically could materially impact the financial statements. While our significant accounting policies are described in more
detail in the notes to our financial statements included in this Quarterly Report on Form 10-Q, we believe the following accounting policies
to be critical to the estimates and assumptions used in the preparation of our financial statements.

**Revenue Recognition**

Revenue is recognized upon
transfer of control of promised goods or services to customers in an amount that reflects the consideration we expect to receive in exchange
for those goods or services, in accordance with ASC 606. Our contracts include various products or services or a combination of both,
which are generally capable of being distinct and are accounted for as separate performance obligations. Our contracts may contain multiple
distinct performance obligations.

The transaction price of
a contract is estimated based on the expected value for which a significant reversal of revenue is not expected to occur. Stand-alone
selling prices are generally determined based on prices charged to customers. In arrangements with multiple performance obligations,
the estimated transaction price is allocated to each distinct performance obligation based on relative stand-alone selling price (“SSP”).

**Concentration of Credit Risk**

Financial instruments that potentially subject
us to concentrations of credit risk consist principally of cash and cash equivalents and trade accounts receivable. Our cash and cash
equivalents are exposed to credit risk, subject to federal deposit insurance, in the event of default by the financial institutions holding
its cash and cash equivalents to the extent of amounts recorded on the balance sheet. The cash accounts are insured by the Federal Deposit
Insurance Corporation (“FDIC”) up to $250,000. As of March 31, 2026, the Company’s cash balance did not exceed the
FDIC insured limit.

As of March 31, 2026, the Company had two customers,
SportX LLC and related party Celebrity Cigars representing 76.9% and 23.3% of the Company’s receivables, respectively. As of March
31, 2025, the Company had two related party customers, Test Drive Live Inc. and Celebrity Cigars, Inc., representing 16.2% and 21.5%,
respectively, and one non related party representing 56.4% of our receivables.

26

As of March 31, 2026, the Company had three customers,
Launch That., related party customer Celebrity Cigars, Inc., and Ignite, representing 33.9%, 37.8%, and 12.83%, respectively, of the
Company’s revenues. As of March 31, 2025, the Company had two related party customers, Test Drive Live Inc. and Celebrity Cigars,
Inc., representing 18.1% and 24.0%, respectively, of our revenues.

**Fair Value of Financial Instruments**

We account for financial
instruments under Financial Accounting Standards Board (“FASB”) ASC 820, Fair Value Measurements. This statement defines
fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about
fair value measurements. To increase consistency and comparability in fair value measurements, ASC 820 establishes a fair value hierarchy
that prioritizes the inputs to valuation techniques used to measure fair value into three levels as follows:

Level 1 — quoted prices (unadjusted) in
active markets for identical assets or liabilities;

Level 2 — observable
inputs other than Level 1, quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar
assets and liabilities in markets that are not active, and model-derived prices whose inputs are observable or whose significant value
drivers are observable; and

Level 3 — assets and liabilities whose significant
value drivers are unobservable.

The Company applies fair
value accounting for all assets and liabilities that are recognized or disclosed at fair value in the financial statements. The carrying
amounts reported in the financial statements for cash, accounts receivable, accounts payable and accrued liabilities approximate their
fair value due to their short-term nature.

**Earnings (Loss) Per Share**

Basic earnings (loss) per
share is computed by dividing net income (loss) attributable to all classes of our common stock by the weighted average number of shares
of all classes of our common stock outstanding during the applicable period. Diluted earnings (loss) per share is determined in the same
manner as basic earnings (loss) per share, except that the number of shares is increased to include restricted stock still subject to
risk of forfeiture and to assume exercise of potentially dilutive stock options using the treasury stock method, unless the effect of
such increase would be anti-dilutive.

The following table provides
the number of Class A common stock equivalents not included in diluted income per share, because the effects are anti-dilutive, for the
nine months ended March 31, 2026, and 2025, respectively.

| Line item | For the Nine Months Ended March 31, 2026 | For the Nine Months Ended March 31, 2025 |
| --- | --- | --- |
| Convertible debt and liabilities | 626,979 | 320,013 |
| Options | 926,373 | 993,270 |
| Warrants | 687,500 | 8,056,087 |
| Total | 2,240,852 | 9,369,370 |

**Stock Based Compensation**

Stock-based compensation
issued is measured at the date of grant based on the estimated fair value of the award, net of estimated forfeitures. The grant date
fair value of a stock-based award is recognized as an expense over the requisite service period of the award on a straight-line basis.
The Company will recognize compensation expense measured as the fair value of the stock-based compensation on grant date, when a performance
condition is considered probable to occur. For purposes of determining the variables used in the calculation of stock-based compensation
issued to employees, the Company performs an analysis of current market data and historical data to calculate an estimate of implied
volatility, the expected term of the option and the expected forfeiture rate. With the exception of the expected forfeiture rate, which
is not an input, the Company uses these estimates as variables in the Black-Scholes option pricing model. Depending upon the number of
warrants granted, any fluctuations in these calculations could have a material effect on the results presented in the Company’s
Statements of Operations. In addition, any differences between estimated forfeitures and actual forfeitures could also have a material
impact on the Company’s financial statements.

In accounting for modifications
of equity-classified warrants held by employees, it is the Company’s policy to determine the impact by analogy to the share-based
compensation guidance of ASC 718, Compensation - Stock Compensation (“ASC 718”). The model for a modified share-based payment
award that is classified as equity and remains classified in equity after the modification is addressed in ASC 718-20-35-3. Pursuant
to that guidance, the incremental fair value from the modification is recognized as stock-based compensation expense in the statements
of operations to the extent the modified instrument has a higher fair value. The Company modified certain equity-classified warrants
held by employees in the year 2023.

27

**Loss Contingencies**

Certain conditions may exist
as of the date the financial statements are issued, which may result in a loss to us, but which will only be resolved when one or more
future events occur or fail to occur. Our management and legal counsel assess such contingent liabilities, and such assessment inherently
involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against us or unasserted
claims that may result in such proceedings, our legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims
as well as the perceived merits of the amount of relief sought or expected to be sought therein.

If the assessment of a contingency
indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated
liability would be accrued in our financial statements. If the assessment indicates that a potentially material loss contingency is not
probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with
an estimate of the range of possible loss if determinable and material, would be disclosed.

Loss contingencies considered
remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed.

**Modifications to Equity-classified Instruments**

A change in the terms or
conditions of a warrant is accounted for as a modification. For a warrant modification accounted for under ASC 815, the effect of a modification
shall be measured as the difference between the fair value of the modified warrant and the fair value of the original warrant immediately
before its terms are modified, with each measured on the modification date. The accounting for incremental fair value of the modified
warrants over the original warrants is based on the specific facts and circumstances related to the modification. When a modification
is directly attributable to an equity offering, the incremental change in fair value of the warrants is accounted for as an equity issuance
cost. When a modification is directly attributable to a debt offering, the incremental change in fair value of the warrants is accounted
for as a debt discount or debt issuance cost. For all other modifications accounted for under ASC 815, the incremental change in fair
value is recognized as a deemed dividend.

**Redeemable Series A Preferred Stock**

We apply the guidance enumerated
in ASC 480, when determining the classification and measurement of preferred stock. Preferred stock subject to mandatory redemption,
if any, is classified as a liability and is measured at fair value. We classify conditionally redeemable preferred stock, which includes
preferred stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence
of uncertain events not solely within the Company’s control, as mezzanine equity. At all other times, we classify its preferred
stock in stockholders’ equity. We subsequently measure mezzanine equity to redemption value when the instrument is currently redeemable
or when it is probable the instrument will become redeemable. Initially, the redemption rights were not solely within our control because
our Chief Executive Officer (CEO), William Mobley, was able to force us to redeem the shares for cash. Therefore, we classified the Series
A Preferred Stock as mezzanine equity pursuant to ASC 480-10-S99. We had adjusted the value of the Series A Preferred shares to its maximum
redemption amount as the instrument was redeemable.

28

On December 26, 2024, we
amended the terms and conditions of the Series A Preferred Stock to replace the deemed liquidation triggered by a change in control with
an ordinary liquidation. In conjunction with this amendment, we reclassified the Series A Preferred Stock from mezzanine equity to permanent
equity because the features giving rise to mezzanine equity classification, the redemption right and the deemed liquidation, have been
removed as part of the amendment.

**Recently Issued Accounting Pronouncements**

From time to time, new accounting
pronouncements are issued by the FASB or other standard setting bodies that we adopt as of the specified effective date. We do not believe
that the impact of recently issued standards that are not yet effective will have a material impact on our financial position or results
of operations upon adoption.

## Item 3. Quantitative and Qualitative Disclosures
About Market Risk**

As a smaller reporting company, we are not required
to provide the information required by this Item.

## Item 4. Controls and Procedures.

**Disclosure Controls and Procedures**

Disclosure controls and procedures
are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted
under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and
forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required
to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including
our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

We do not expect that our disclosure
controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived
and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met.
Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits
must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation
of disclosure controls and procedures can provide absolute assurance that we have identified all of the information required to be disclosed,
and that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures
also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will
succeed in achieving its stated goals under all potential future conditions.

**Evaluation of Effectiveness of Disclosure
Controls and Procedures**

As required by Rules
13a-15 and 15d-15 under the Exchange Act, we carried out an evaluation of the effectiveness of the design and operation of our
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of March 31, 2026. This evaluation
was carried out under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer.
Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of March 31, 2026, our
disclosure controls and procedures were effective.

**Changes in Internal Control over Financial Reporting**

During the fiscal quarter ended March 31, 2026, there were no changes
in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that have
materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

29

**PART II – OTHER INFORMATION**

## Item 1. Legal Proceedings

None.

## Item 1A. Risk Factors

As a smaller reporting company,
we are not required to provide the information required by this Item.

## Item 2. Unregistered Sales of Equity Securities
and Use of Proceeds**

*Unregistered Sales of
Equity Securities*

None.

*Use of Proceeds*

Not applicable.

*Repurchases*

None.

## Item 3. Defaults Upon Senior Securities

None.

## Item 4. Mine Safety Disclosures

Not applicable.

## Item 5. Other Information

None.

30

## Item 6. Exhibits

The following documents are
filed as exhibits to this Report.

| Exhibit / Number | Exhibit Description | Incorporated By Reference / Form | Incorporated By Reference / As Exhibit | Incorporated By Reference / Filing Date |
| --- | --- | --- | --- | --- |
| 3.1(a) | Second Amended and Restated Articles of Incorporation of the Registrant | S-1 | 3.1 | 07/24/2024 |
| 3.1(b) | Amendment to Second Amended and Restated Articles of Incorporation of the Registrant, effective September 26, 2024 | S-1 | 3.1(b) | 11/01/2024 |
| 3.1(c) | Amendment to Second Amended and Restated Articles of Incorporation of the Registrant, effective December 26, 2024 | S-1 | 3.1(c) | 01/14/2025 |
| 3.2 | Second Amended and Restated Bylaws of the Registrant | S-1 | 3.2 | 11/01/2024 |
| 4.1 | Revolving Convertible Promissory Note made by FreeCast, Inc. in favor of Nextelligence, Inc., dated November 21, 2025 | S-1 | 4.15 | 12/09/2025 |
| 10.1 | Amendment to Equity Purchase Agreement between FreeCast, Inc. and Amiens Technology Investments, LLC, dated March 30, 2026 | 8-K | 10.1 | 04/03/2026 |
| 10.2 | Equity Purchase Agreement between FreeCast, Inc. and Amiens Technology Investments, LLC, dated December 8, 2025 | S-1 | 10.30 | 12/09/2025 |
| 31.1* | Certification of Principal Executive Officer filed pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |  |  |  |
| 31.2* | Certification of Principal Financial Officer filed pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |  |  |  |
| 32.1** | Certification of Chief Executive Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |  |  |  |
| 32.2** | Certification of Chief Financial Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |  |  |  |
| 101.INS | Inline XBRL Instance Document |  |  |  |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document |  |  |  |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document |  |  |  |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document |  |  |  |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document |  |  |  |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document |  |  |  |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |  |  |  |

\* Filed herewith.

\*\* Furnished herewith.

31

**SIGNATURES**

Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.

**FREECAST, INC.**

(Registrant)

Date: May 15, 2026 By: */s/ William A. Mobley, Jr.*

**William A. Mobley, Jr.**

*Chief Executive Officer*

*(Principal Executive Officer)*

32