# EDGAR Filing Document

**Accession Number:** 0001903595
**File Stem:** 0001213900-26-046293
**Filing Date:** 2026-4
**Character Count:** 213522
**Document Hash:** de8c8552bca1e4eae13bf1ac2ac9dba8
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001213900-26-046293.hdr.sgml**: 20260422

**ACCESSION NUMBER**: 0001213900-26-046293

**CONFORMED SUBMISSION TYPE**: 10-K/A

**PUBLIC DOCUMENT COUNT**: 71

**CONFORMED PERIOD OF REPORT**: 20251231

**FILED AS OF DATE**: 20260422

**DATE AS OF CHANGE**: 20260421

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Brag House Holdings, Inc.
- **CENTRAL INDEX KEY:** 0001903595
- **STANDARD INDUSTRIAL CLASSIFICATION:** FINANCE SERVICES [6199]
- **ORGANIZATION NAME:** 09 Crypto Assets
- **EIN:** 000000000
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-K/A
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-42525
- **FILM NUMBER:** 26880782

**BUSINESS ADDRESS:**
- **STREET 1:** 45 PARK STREET
- **CITY:** MONTCLAIR
- **STATE:** NJ
- **ZIP:** 07042
- **BUSINESS PHONE:** 413-398-2845

**MAIL ADDRESS:**
- **STREET 1:** 45 PARK STREET
- **CITY:** MONTCLAIR
- **STATE:** NJ
- **ZIP:** 07042

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-K/A**

**(Amendment No. 1)** 

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

For the fiscal year ended: December 31, 2025

or

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

For the transition period from _________ to ________

Commission File Number: **001-42525**

**<u>Brag House Holdings, Inc.</u>**

(Exact name of registrant as specified in its charter)

---

| | |
|:---|:---|
| **Delaware** | **87-4032622** |
| (State or other jurisdiction<br> of incorporation) | (I.R.S. Employer<br> Identification Number) |

---

---

| | |
|:---|:---|
| **45 Park Street**<br> **Montclair, NJ 07042** | **(413) 398-2845** |
| (Address of principal executive offices and zip code) | (Registrant's telephone number, including area code) |

---

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

---

| | | |
|:---|:---|:---|
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| Common Stock, $0.0001 par value per share | TBH | The Nasdaq Stock Market LLC |

---

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

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 every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, "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 ☐ <br> Non-accelerated filer ☒ Smaller reporting company ☒ <br> 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 has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant was approximately $7,161,164 based upon the price of $0.7615 at which the common stock was last sold as of June 30, 2025, the last business day of the registrant's most recently completed second fiscal year, multiplied by the approximate number of shares of common stock held by persons other than executive officers, directors and five percent stockholders of the registrant without conceding that any such person is an "affiliate" of the registrant for purposes of the federal securities laws.

The registrant had 23,496,125 shares of its common stock, par value $0.0001, issued and outstanding as of March 26, 2026.

**EXPLANATORY NOTE**

Brag House Holdings, Inc. (the "Company") is filing this Amendment No. 1 on Form 10-K/A (this "Amendment") to amend its Annual Report on Form 10-K for the year ended on December 31, 2025, previously filed with the Securities and Exchange Commission (the "SEC") on March 31, 2026 (the "Original Filing"), for the sole purpose of correcting the date of the Report of Independent Registered Public Accounting Firm of Marcum LLP, which was inadvertently dated incorrectly in the Original Filing and has been updated to reflect the original date of the audit opinion to May 7, 2025. No other changes have been made to the financial statements or Form 10-K content compared to the Form 10-K filed on March 31, 2026.

In addition, pursuant to the rules of the SEC, the exhibit list included herewith reflects currently-dated auditor consents and certifications from the Company's Chief Executive Officer and Chief Financial Officer, which are filed as exhibits to this Amendment No. 1.

Except for the foregoing information, this Amendment No. 1 does not amend or update any other information contained in the Original Filing, or reflect any events that have occurred after the filing of the Original Filing. Accordingly, this Amendment No. 1 should be read in conjunction with the Original Filing.

**ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA**

See Index to Financial Statements and Financial Statement Schedules from page F-1 of this Amendment No. 1 to the Annual Report on Form 10-K/A, which are incorporated herein by reference.

**PART IV**

**ITEM 15. EXHIBIT AND FINANCIAL STATEMENT SCHEDULES**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The following documents are filed
 as part of this Amendment No. 1:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Financial
 Statements

The financial statements and Report of Independent Registered Public Accounting Firm are listed in the "Index to Financial Statements and Schedules" on page F-1 and included from F-2 onwards.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Financial Statement Schedules

All schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission (the "Commission") are either not required under the related instructions, are not applicable (and therefore have been omitted), or the required disclosures are contained in the financial statements included herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Exhibits (including those incorporated by reference).

The following exhibits are filed as part of this Amendment No. 1:

&nbsp;&nbsp;&nbsp;&nbsp;(b) Exhibits

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | | **Incorporated by Reference** | **Incorporated by Reference** | **Incorporated by Reference** | |
| <br>**Exhibit<br> Number** | <br>**Exhibit<br> Description** | **Form** | **Exhibit** | **Filing Date** | **Filed or**<br>**Furnished**<br> **Herewith** |
| 23.1 |  | [Consent of CBIZ CPAs P.C., independent registered public accounting firm](ea028700101ex23-1.htm) |  |  | X |
| 23.2 |  | [Consent of Marcum LLP, independent registered public accounting firm](ea028700101ex23-2.htm) |  |  | X |
| 31.1 |  | [Certification of Chief Executive Officer Required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](ea028700101ex31-1.htm) |  |  | X |
| 31.2 |  | [Certification of the Acting Chief Financial Officer Required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](ea028700101ex31-2.htm) |  |  | X |
| 32.1# |  | [Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](ea028700101ex32-1.htm) |  |  | X |
| 32.2# |  | [Certification of Acting Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](ea028700101ex32-2.htm) |  |  | X |
| 101.INS+ |  | XBRL Instance Document |  |  | X |
| 101.SCH+ |  | XBRL Taxonomy Extension Schema Document |  |  | X |
| 101.CAL+ |  | XBRL Taxonomy Extension Calculation Linkbase Document |  |  | X |
| 101.DEF+ |  | XBRL Taxonomy Extension Definition Linkbase Document |  |  | X |
| 101.LAB+ |  | XBRL Taxonomy Extension Label Linkbase Document |  |  | X |
| 101.PRE+ |  | XBRL Taxonomy Extension Presentation Linkbase Document |  |  | X |
| 104 |  | Cover Page Interactive Data File - The cover page iXBRL tags are embedded within the inline XBRL document. |  |  | X |

---

**#** This certification is being furnished and shall not be deemed "filed" with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.

**BRAG HOUSE HOLDINGS, INC.**

**INDEX TO CONSOLIDATED FINANCIAL STATEMENTS**

---

| | |
|:---|:---|
|  | **Page** |
| [Report of Independent Registered Public Accounting Firm (PCAOB Firm ID Number 199)](#f_001) | F-2 |
| [Report of Independent Registered Public Accounting Firm (PCAOB Firm ID Number 688)](#s_001) | F-3 |
| [Consolidated Balance Sheets at December 31, 2025 and 2024](#f_002) | F-4 |
| [Consolidated Statements of Operations and Comprehensive Loss For the Years Ended December 31, 2025 and 2024](#f_003) | F-6 |
| [Consolidated Statements of Changes in Stockholders' Equity (Deficit) For the Years Ended December 31, 2025 and 2024](#f_004) | F-7 |
| [Consolidated Statements of Cash Flows For the Years Ended December 31, 2025 and 2024](#f_005) | F-12 |
| [Notes to Consolidated Financial Statements](#f_006) | F-14 |

---

**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

To the Shareholders and Board of Directors of **Brag House Holdings, Inc.**

**Opinion on the Financial Statements**

We have audited the accompanying consolidated balance sheet of Brag House Holdings, Inc. (the "Company") as of December 31, 2025, the related consolidated statements of operations and comprehensive loss, changes in stockholders' equity (deficit), and cash flows for the year ended December 31, 2025, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and the results of its operations and its cash flows for the year ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

**Explanatory Paragraph - Going Concern**

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 1, the Company has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

**Basis for Opinion**

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

/s/ CBIZ CPAs P.C.

CBIZ CPAs P.C.

We have served as the Company's auditor since 2021 (such date takes into account the acquisition of the attest business of Marcum LLP by CBIZ CPAs P.C. effective November 1, 2024).

Boston, MA

March 30, 2026

**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

To the Shareholders and Board of Directors of **Brag House Holdings, Inc.**

**Opinion on the Financial Statements**

We have audited the accompanying consolidated balance sheet of Brag House Holdings, Inc. (the "Company") as of December 31, 2024, the related consolidated statements of operations and comprehensive loss, changes in stockholders' equity (deficit), and cash flows for the year ended December 31, 2024, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for the year ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

**Explanatory Paragraph - Going Concern**

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 1, the Company has a significant working capital deficiency, has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

**Basis for Opinion**

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

/s/ Marcum LLP

Marcum LLP

We have served as the Company's auditor from 2021 to 2025.

New Haven, CT

May 7, 2025

**BRAG HOUSE HOLDINGS, INC.**

**CONSOLIDATED BALANCE SHEETS**

---

| | | |
|:---|:---|:---|
|  | **December 31, <br> 2025** | **December 31, <br> 2024** |
| **Assets** | | |
| **Current Assets:** | | |
| &nbsp;&nbsp;&nbsp;Cash and Cash Equivalents | $222572 | $29228 |
| &nbsp;&nbsp;&nbsp;Other Receivable | - | 34667 |
| &nbsp;&nbsp;&nbsp;Prepaid Expenses | 203389 | - |
| &nbsp;&nbsp;&nbsp;Notes Receivable - Related Party | 8779000 | - |
| &nbsp;&nbsp;&nbsp;Accrued Interest Receivable - Related Party | 92838 | - |
| &nbsp;&nbsp;&nbsp;Advances to Related Party | 3365000 | - |
| &nbsp;&nbsp;&nbsp;Other Current Assets | 25500 | 18332 |
| **Total Current Assets** | **12688299** | **82227** |
| **Other Assets:** |  |  |
| &nbsp;&nbsp;&nbsp;Deferred Offering Costs | 1000000 | 1219176 |
| &nbsp;&nbsp;&nbsp;Prepaid Expenses - Long-Term | - | 125 |
| &nbsp;&nbsp;&nbsp;Investment in Equity Securities | 1100000 | - |
| **Total Other Assets** | **2100000** | **1219301** |
| **Total Assets** | $**14788299** | $**1301528** |
| **Liabilities and Stockholders' Equity (Deficit)** |  |  |
| **Liabilities** |  |  |
| **Current Liabilities:** |  |  |
| &nbsp;&nbsp;&nbsp;Accounts Payable | $1320617 | $1929469 |
| &nbsp;&nbsp;&nbsp;Due to Officer - Related Party | - | 24303 |
| &nbsp;&nbsp;&nbsp;Accrued Interest | - | 1189345 |
| &nbsp;&nbsp;&nbsp;Accrued Payroll | 44249 | 251043 |
| &nbsp;&nbsp;&nbsp;Accrued Liabilities | 1130208 | 193785 |
| &nbsp;&nbsp;&nbsp;Share Payable | 1234 | 32500 |
| &nbsp;&nbsp;&nbsp;Other Current Liabilities | 98238 | 95238 |
| &nbsp;&nbsp;&nbsp;Notes Payable | - | 297900 |
| &nbsp;&nbsp;&nbsp;Convertible Debt - December 2024, net of discount | - | 21719 |
| &nbsp;&nbsp;&nbsp;Convertible Debt, net of discount and issuance costs | - | 5722511 |
| &nbsp;&nbsp;&nbsp;Convertible Debt - Yorkville | 3771845 | - |
| &nbsp;&nbsp;&nbsp;Commitment Fee Payable | 1000000 | - |
| **Total Current Liabilities** | **7366391** | **9757813** |
| **Long-Term Liabilities:** |  |  |
| &nbsp;&nbsp;&nbsp;Warrant Liability | 3987046 | - |
| **Total Long-Term Liabilities** | **3987046** | **-**  |
| **Total Liabilities** | **11353437** | **9757813** |
| **Commitments and Contingencies (Note 4)** |  |  |
| **Stockholders' Equity (Deficit)** |  |  |
| &nbsp;&nbsp;&nbsp;Series C Preferred Stock, $0.0001 Par Value - 65 Shares Authorized, no shares Issued and Outstanding as of December 31, 2025 and 2024 | - | - |
| &nbsp;&nbsp;&nbsp;Series B Preferred Stock, $0.0001 Par Value - 15,000 Shares Authorized, 8,098 and 0 Issued and Outstanding as of December 31, 2025 and 2024, respectively | 1 | - |
| &nbsp;&nbsp;&nbsp;Series A Preferred Stock, $0.0001 Par Value - 200,000 Shares Authorized, no shares Issued and Outstanding as of December 31, 2025 and 2024 | - | - |

---

The accompanying notes are an integral part of these consolidated financial statements.

**BRAG HOUSE HOLDINGS, INC.**

**CONSOLIDATED BALANCE SHEETS (CONTINUED)**

---

| | | |
|:---|:---|:---|
|  | **December 31, <br> 2025** | **December 31, <br> 2024** |
| &nbsp;&nbsp;&nbsp;Preferred Stock, $0.0001 Par Value - 24,784,935 Shares Authorized, 0 and 82,096 Issued and Outstanding as of December 31, 2025 and 2024, respectively | - | 420 |
| &nbsp;&nbsp;&nbsp;Common Stock, $0.0001 Par Value - 250,000,000 Shares Authorized, 20,951,363 and 7,033,330 Issued and Outstanding as of December 31, 2025 and 2024, respectively | 2095 | 14554 |
| &nbsp;&nbsp;&nbsp;Stock Subscription Receivable | - | (3700) |
| &nbsp;&nbsp;&nbsp;Additional Paid In Capital | 33986156 | 6195322 |
| &nbsp;&nbsp;&nbsp;Accumulated Deficit | (30538211) | (14647702) |
| &nbsp;&nbsp;&nbsp;Accumulated Other Comprehensive Loss | (15179) | (15179) |
| **Total Stockholders' Equity (Deficit)** | **3434862** | **(8456285)** |
| **Total Liabilities and Stockholders' Equity (Deficit)** | $**14788299** | $**1301528** |

---

The accompanying notes are an integral part of these consolidated financial statements.

**BRAG HOUSE HOLDINGS, INC.**

**CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS**

---

| | | |
|:---|:---|:---|
|  | **For the Years Ended** | **For the Years Ended** |
|  | **December 31, <br> 2025** | **December 31, <br> 2024** |
| **Revenues:** | | |
| &nbsp;&nbsp;&nbsp;Tournament Revenues | $- | $- |
| &nbsp;&nbsp;&nbsp;Live-streaming Services | - | 105 |
| **Total Revenues** | **-**  | **105** |
| **Cost of Sales** |  |  |
| &nbsp;&nbsp;&nbsp;Cost of Sales | - | 464 |
| **Total Cost of Sales** | **-**  | **464** |
| **Gross Profit (Loss)** | **-**  | **(359)** |
| **Operating Expenses:** |  |  |
| &nbsp;&nbsp;&nbsp;Advertising and Marketing | 641919 | 172989 |
| &nbsp;&nbsp;&nbsp;Legal and Professional | 2123440 | 490528 |
| &nbsp;&nbsp;&nbsp;Selling, General and Administrative | 3327087 | 608904 |
| &nbsp;&nbsp;&nbsp;Software Expense | 639334 | 18089 |
| &nbsp;&nbsp;&nbsp;Software Development | 23591 | 21034 |
| &nbsp;&nbsp;&nbsp;Stock-Based Compensation | 963534 | 179766 |
| **Total Operating Expenses** | **7718905** | **1491310** |
| **Other (Income) Expense:** |  |  |
| &nbsp;&nbsp;&nbsp;Interest Expense and Amortization of Debt Discount | 1458971 | 2179122 |
| &nbsp;&nbsp;&nbsp;Other Income | (210726) | (384047) |
| &nbsp;&nbsp;&nbsp;Interest Income | (92838) | - |
| &nbsp;&nbsp;&nbsp;Other Expenses | 74416 | - |
| &nbsp;&nbsp;&nbsp;Other Expense - Stock-Based Compensation Liability | 133331 | - |
| &nbsp;&nbsp;&nbsp;Foreign Currency (Gain) Loss | (441) | 1775 |
| &nbsp;&nbsp;&nbsp;Net Unrealized Loss on Equity Securities | 2900000 | - |
| &nbsp;&nbsp;&nbsp;Change in Fair Value of Warrants and Convertible Debt | 3908891 | - |
| **Total Other (Income) Expense, Net** | **8171604** | **1796850** |
| **Loss Before Income Taxes** | **(15890509)** | **(3288519)** |
| Provision for Income Taxes | - | - |
| **Net Loss** | **(15890509)** | **(3288519)** |
| **Total Comprehensive Loss** | $**(15890509)** | $**(3288519)** |
| **Net Loss per Common Share - Basic and Diluted** | $**(1.31)** | $**(0.58)** |
| **Weighted Average Shares Outstanding - Basic and Diluted** | 12169674 | 5697212 |

---

The accompanying notes are an integral part of these consolidated financial statements.

**BRAG HOUSE HOLDINGS, INC.**

**CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)**

**FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Series C<br> Preferred Stock** | **Series C<br> Preferred Stock** | **Series B<br> Preferred Stock** | **Series B<br> Preferred Stock** |
|  | **Shares** | **Amount** | **Shares** | **Amount** |
| **Balance on December 31, 2023** |  | $**-**  | **-**  | $**-**  |
| **Issuance of Shares Payable** |  | &nbsp;&nbsp;&nbsp;&nbsp;- |  | &nbsp;&nbsp;&nbsp;&nbsp; - |
| **Sale of Common Stock** |  | - |  | - |
| **Retirement of Shares** |  | - |  | - |
| **Issuance of Common Stock for Services** |  |  |  |  |
| **Stock-Based Compensation** |  |  |  |  |
| **Interest Payment in Shares** |  | - |  | - |
| **Net Loss** |  | - | - | - |
| **Balance on December 31, 2024** |  | $**-**  | **-**  | $**-**  |
| **Issuance of Common Stock** |  | - |  | - |
| **Offering Costs** |  | - |  | - |
| **Conversion of Preferred Stock to Common Stock** |  | - |  | - |
| **Conversion of Convertible Debt and Accrued Interest** |  | - |  | - |
| **Issuance of Common Stock in Connection with IPO and Over-allotment, Net of $1,176,800 of Offering Costs** |  | - |  | - |
| **Issuance of Underwriter Warrants** |  |  |  |  |
| **Issuance of Common Stock for Services** |  |  |  |  |
| **Stock-Based Compensation** |  |  |  |  |
| **Issuance of Shares Payable - Subscription** |  | - |  | - |
| **Issuance of Common Stock for Services in Connection with the PIPE Offering** |  | - |  | - |
| **Issuance of Series B Convertible Preferred Stock with Warrants - PIPE Offering, Net of $1,964,705 of Offering Costs** |  | - | 15000 | 1 |
| **Settlement of Subscription Receivable** |  | - |  | - |
| **Adjustment of Par Value of Common Stock** |  | - |  | - |
| **Conversion of Series B Convertible Preferred Stock to Common Stock** |  | - | (6902) | - |
| **Exercise of Warrants** |  | - |  | - |
| **Net Loss** |  | - | - | - |
| **Balance on December 31, 2025** |  | $**-**  | **8098** | $**1** |

---

The accompanying notes are an integral part of these consolidated financial statements.

**BRAG HOUSE HOLDINGS, INC.**

**CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) (CONTINUED)**

**FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Series A Preferred Stock** | **Series A Preferred Stock** | **Preferred Stock** | **Preferred Stock** |
|  | **Shares** | **Amount** | **Shares** | **Amount** |
| **Balance on December 31, 2023** |  | $**-**  | **82096** | $**420** |
| **Issuance of Shares Payable** |  | &nbsp;&nbsp;&nbsp;&nbsp;- |  | - |
| **Sale of Common Stock** |  | - |  | - |
| **Retirement of Shares** |  | - |  | - |
| **Issuance of Common Stock for Services** |  |  |  |  |
| **Stock-Based Compensation** |  |  |  |  |
| **Interest Payment in Shares** |  | - |  | - |
| **Net Loss** |  | - | - | - |
| **Balance on December 31, 2024** |  | $**-**  | **82096** | $**420** |
| **Issuance of Common Stock** |  | - |  | - |
| **Offering Costs** |  | - |  | - |
| **Conversion of Preferred Stock to Common Stock** |  | - | (82096) | (420) |
| **Conversion of Convertible Debt and Accrued Interest** |  | - |  | - |
| **Issuance of Common Stock in Connection with IPO and Over-allotment, Net of $1,176,800 of Offering Costs** |  | - |  | - |
| **Issuance of Underwriter Warrants** |  |  |  |  |
| **Issuance of Common Stock for Services** |  |  |  |  |
| **Stock-Based Compensation** |  |  |  |  |
| **Issuance of Shares Payable - Subscription** |  | - |  | - |
| **Issuance of Common Stock for Services in Connection with the PIPE Offering** |  | - |  | - |
| **Issuance of Series B Convertible Preferred Stock with Warrants - PIPE Offering, Net of $1,964,705 of Offering Costs** |  | - |  | - |
| **Settlement of Subscription Receivable** |  | - |  | - |
| **Adjustment of Par Value of Common Stock** |  | - |  | - |
| **Conversion of Series B Convertible Preferred Stock to Common Stock** |  | - |  | - |
| **Exercise of Warrants** |  | - |  | - |
| **Net Loss** |  | - | - | - |
| **Balance on December 31, 2025** |  | $**-**  | **-**  | $**-**  |

---

The accompanying notes are an integral part of these consolidated financial statements.

**BRAG HOUSE HOLDINGS, INC.**

**CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) (CONTINUED)**

**FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024**

---

| | | | |
|:---|:---|:---|:---|
|  | **Common Stock** | **Common Stock** | |
|  | **Shares** | **Amount** | **Subscription**<br> **Receivable** |
| **Balance on December 31, 2023** | **5744929** | $**14794** | $**(4276)** |
| **Issuance of Shares Payable** | 135856 | 33 | - |
| **Sale of Common Stock** | 29093 | 7 | - |
| **Retirement of Shares** | (208010) | (425) | 576 |
| **Issuance of Common Stock for Services** | 1250000 | 125 | - |
| **Stock-Based Compensation** |  | - | - |
| **Interest Payment in Shares** | 81462 | 20 | - |
| **Net Loss** | - | - | - |
| **Balance on December 31, 2024** | **7033330** | $**14554** | $**(3700)** |
| **Issuance of Common Stock** | 56 | - | - |
| **Offering Costs** |  | - | - |
| **Conversion of Preferred Stock to Common Stock** | 82096 | 420 | - |
| **Conversion of Convertible Debt and Accrued Interest** | 1954606 | 195 | - |
| **Issuance of Common Stock in Connection with IPO and Over-allotment, Net of $1,176,800 of Offering Costs** | 1696250 | 169 | - |
| **Issuance of Underwriter Warrants** |  | - | - |
| **Issuance of Common Stock for Services** | 302273 | 30 | - |
| **Stock-Based Compensation** |  | - | - |
| **Issuance of Shares Payable - Subscription** | 6250 | 1 | - |
| **Issuance of Common Stock for Services in Connection with the PIPE Offering** | 450000 | 45 | - |
| **Issuance of Series B Convertible Preferred Stock with Warrants - PIPE Offering, Net of $1,964,705 of Offering Costs** |  | - | - |
| **Settlement of Subscription Receivable** |  | - | 3700 |
| **Adjustment of Par Value of Common Stock** |  | (14262) | - |
| **Conversion of Series B Convertible Preferred Stock to Common Stock** | 7327245 | 733 | - |
| **Exercise of Warrants** | 2099257 | 210 | - |
| **Net Loss** | - | - | - |
| **Balance on December 31, 2025** | **20951363** | $**2095** | $**-**  |

---

The accompanying notes are an integral part of these consolidated financial statements.

**BRAG HOUSE HOLDINGS, INC.**

**CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) (CONTINUED)**

**FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024**

---

| | | | |
|:---|:---|:---|:---|
|  | **Additional <br> Paid-in <br> Capital - Net of <br> Offering Costs** | **Accumulated <br> Deficit** | **Accumulated <br> Other <br> Comprehensive <br> Loss** |
| **Balance on December 31, 2023** | $**5284362** | $**(11359183)** | $**(15179)** |
| **Issuance of Shares Payable** | 351372 | - | - |
| **Sale of Common Stock** | 99993 | - | - |
| **Retirement of Shares** | (151) | - | - |
| **Issuance of Common Stock for Services** | - | - | - |
| **Stock-Based Compensation** | 179766 | - | - |
| **Interest Payment in Shares** | 279980 | - | - |
| **Net Loss** | - | (3288519) | - |
| **Balance on December 31, 2024** | $**6195322** | $**(14647702)** | $**(15179)** |
| **Issuance of Common Stock** | - | - | - |
| **Offering Costs** | (1427078) | - | - |
| **Conversion of Preferred Stock to Common Stock** | - | - | - |
| **Conversion of Convertible Debt and Accrued Interest** | 6765577 | - | - |
| **Issuance of Common Stock in Connection with IPO and Over-allotment, Net of $1,176,800 of Offering Costs** | 5608031 | - | - |
| **Issuance of Underwriter Warrants** | 130980 | - | - |
| **Issuance of Common Stock for Services** | 964118 | - | - |
| **Stock-Based Compensation** | 963534 | - | - |
| **Issuance of Shares Payable - Subscription** | 24999 | - | - |
| **Issuance of Common Stock for Services in Connection with the PIPE Offering** | (45) | - | - |
| **Issuance of Series B Convertible Preferred Stock with Warrants - PIPE Offering, Net of $1,964,705 of Offering Costs** | 13035294 | - | - |
| **Settlement of Subscription Receivable** | (2987) | - | - |
| **Adjustment of Par Value of Common Stock** | 14262 | - | - |
| **Conversion of Series B Convertible Preferred Stock to Common Stock** | (733) | - | - |
| **Exercise of Warrants** | 1714882 | - | - |
| **Net Loss** | - | (15890509) | - |
| **Balance on December 31, 2025** | $**33986156** | $**(30538211)** | $**(15179)** |

---

The accompanying notes are an integral part of these consolidated financial statements.

**BRAG HOUSE HOLDINGS, INC.**

**CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) (CONTINUED)**

**FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024**

---

| | |
|:---|:---|
|  | **Total <br> Stockholders' <br> Equity <br> (Deficit)** |
| **Balance on December 31, 2023** | $**(6079062)** |
| **Issuance of Shares Payable** | 351405 |
| **Sale of Common Stock** | 100000 |
| **Retirement of Shares** | - |
| **Issuance of Common Stock for Services** | 125 |
| **Stock-Based Compensation** | 179766 |
| **Interest Payment in Shares** | 280000 |
| **Net Loss** | (3288519) |
| **Balance on December 31, 2024** | $**(8456285)** |
| **Issuance of Common Stock** | - |
| **Offering Costs** | (1427078) |
| **Conversion of Preferred Stock to Common Stock** | - |
| **Conversion of Convertible Debt and Accrued Interest** | 6765772 |
| **Issuance of Common Stock in Connection with IPO and Over-allotment, Net of $1,176,800 of Offering Costs** | 5608200 |
| **Issuance of Underwriter Warrants** | 130980 |
| **Issuance of Common Stock for Services** | 964148 |
| **Stock-Based Compensation** | 963534 |
| **Issuance of Shares Payable - Subscription** | 25000 |
| **Issuance of Common Stock for Services in Connection with the PIPE Offering** | - |
| **Issuance of Series B Convertible Preferred Stock with Warrants - PIPE Offering, Net of $1,964,705 of Offering Costs** | 13035295 |
| **Settlement of Subscription Receivable** | 713 |
| **Adjustment of Par Value of Common Stock** | - |
| **Conversion of Series B Convertible Preferred Stock to Common Stock** | - |
| **Exercise of Warrants** | 1715092 |
| **Net Loss** | (15890509) |
| **Balance on December 31, 2025** | $**3434862** |

---

The accompanying notes are an integral part of these consolidated financial statements.

**BRAG HOUSE HOLDINGS, INC.**

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

---

| | | |
|:---|:---|:---|
|  | **For the Years Ended** | **For the Years Ended** |
|  | **December 31, <br> 2025** | **December 31, <br> 2024** |
| **OPERATING ACTIVITIES** | | |
| &nbsp;&nbsp;&nbsp;Net Loss | $(15890509) | $(3288519) |
| **Adjustments to reconcile net loss to net cash used in operating activities:** |  |  |
| &nbsp;&nbsp;&nbsp;Accrued Interest | - | 826225 |
| &nbsp;&nbsp;&nbsp;Share Payable | - | 132849 |
| &nbsp;&nbsp;&nbsp;Stock-Based Compensation | 963534 | 179766 |
| &nbsp;&nbsp;&nbsp;Amortization of Debt Discount | 100781 | 50629 |
| &nbsp;&nbsp;&nbsp;Loan Extension Fees | - | 997253 |
| &nbsp;&nbsp;&nbsp;Deferred Offering Costs | - | (6647) |
| &nbsp;&nbsp;&nbsp;Interest Payment in Shares | - | 280000 |
| &nbsp;&nbsp;&nbsp;Change in Fair Value of Stock-Based Compensation Liability - Software Expense | 39998 | - |
| &nbsp;&nbsp;&nbsp;Other Expense - Stock-Based Compensation Liability | 133331 | - |
| &nbsp;&nbsp;&nbsp;Issuance of Common Stock for Services - Marketing Expenses | 282682 | - |
| &nbsp;&nbsp;&nbsp;Issuance of Common Stock for Services - Software Expenses | 159091 | - |
| &nbsp;&nbsp;&nbsp;Issuance of Common Stock for Services - Selling, General and Administrative | 70000 | - |
| &nbsp;&nbsp;&nbsp;Foreign Currency (Gain) Loss | (441) | 1775 |
| &nbsp;&nbsp;&nbsp;Net Unrealized Loss on Equity Securities | 2900000 | - |
| &nbsp;&nbsp;&nbsp;Change in Fair Value of Warrants and Convertible Debt | 3908891 | - |
| &nbsp;&nbsp;&nbsp;Bad Debt Expense | 17408 | - |
| &nbsp;&nbsp;&nbsp;Impairment of Capitalized Implementation Costs - Software Expenses | 389171 | - |
| &nbsp;&nbsp;&nbsp;Interest Expense - Original Issue Discount | 385000 | - |
| &nbsp;&nbsp;&nbsp;**Changes in operating assets and liabilities:** |  |  |
| &nbsp;&nbsp;&nbsp;Prepaid Expenses and Other Current Assets | (63138) | - |
| &nbsp;&nbsp;&nbsp;Other Receivable | 35480 | - |
| &nbsp;&nbsp;&nbsp;Interest Receivable - Related Party | (92838) | - |
| &nbsp;&nbsp;&nbsp;Other Current Assets | (25500) | 12228 |
| &nbsp;&nbsp;&nbsp;Other Assets | - | 8639 |
| &nbsp;&nbsp;&nbsp;Accounts Payable | (608975) | 489446 |
| &nbsp;&nbsp;&nbsp;Related Party Payable | (24303) | 14692 |
| &nbsp;&nbsp;&nbsp;Accrued Payroll | (206794) | 203733 |
| &nbsp;&nbsp;&nbsp;Accrued Liabilities | 1051423 | (567106) |
| &nbsp;&nbsp;&nbsp;Accrued Interest | (146084) | - |
| &nbsp;&nbsp;&nbsp;Share Payable | (6266) | - |
| &nbsp;&nbsp;&nbsp;Other Current Liabilities | 3000 | 95000 |
| **Net Cash Flows Used In Operating Activities** | $**(6625058)** | $**(570037)** |
| **INVESTING ACTIVITIES** |  |  |
| &nbsp;&nbsp;&nbsp;Investment in Equity Securities | $(4000000) | $- |
| &nbsp;&nbsp;&nbsp;Advance of Notes Receivable - Related Party | (8779000) | - |
| &nbsp;&nbsp;&nbsp;Advances to Related Party | (3365000) | - |
| **Net Cash Flows Used in Investing Activities** | $**(16144000)** | $**-**  |
| **FINANCING ACTIVITIES** |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from Notes Payable | $101650 | $321408 |
| &nbsp;&nbsp;&nbsp;Repayment of Notes Payable | (399126) | (25000) |
| &nbsp;&nbsp;&nbsp;Cash paid for the settlement of the Stock-Based Compensation Liability | (250000) | - |

---

The accompanying notes are an integral part of these consolidated financial statements.

**BRAG HOUSE HOLDINGS, INC.**

**CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)**

---

| | | |
|:---|:---|:---|
|  | **For the Years Ended** | **For the Years Ended** |
|  | **December 31,<br> 2025** | **December 31, <br> 2024** |
| &nbsp;&nbsp;&nbsp;Proceeds from OID Convertible Loans, net | - | 168968 |
| &nbsp;&nbsp;&nbsp;Repayment of Convertible Debt - December 2024, net | (227500) | - |
| &nbsp;&nbsp;&nbsp;Proceeds from Convertible Debt - December 2024, net | 105000 | - |
| &nbsp;&nbsp;&nbsp;Proceeds from the sale of Common Stock in IPO | 6785000 | - |
| &nbsp;&nbsp;&nbsp;Proceeds from the sale of Common Stock | - | 100000 |
| &nbsp;&nbsp;&nbsp;Offering Costs Paid and Netted with IPO Proceeds | (1250800) | - |
| &nbsp;&nbsp;&nbsp;Offering Costs Paid | (761422) | - |
| &nbsp;&nbsp;&nbsp;Offering Costs Paid and Netted with PIPE Proceeds | (1321205) | - |
| &nbsp;&nbsp;&nbsp;Proceeds from the sale of Series B Convertible Preferred Stock and Warrants | 15000000 | - |
| &nbsp;&nbsp;&nbsp;Proceeds from the Collection of Subscription Receivable | 713 | - |
| &nbsp;&nbsp;&nbsp;Proceeds from the Exercise of Warrants | 1715092 | - |
| &nbsp;&nbsp;&nbsp;Proceeds from Convertible Debt - Yorkville Facility | 3465000 | - |
| **Net Cash Flows from Financing Activities** | $**22962402** | $**565376** |
| **Net change in cash** | $**193344** | $**(4661)** |
| Cash and Cash Equivalents at the beginning of the year | 29228 | 33889 |
| **Cash and Cash Equivalents at the end of the year** | $**222572** | $**29228** |
| **SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION** |  |  |
| Cash paid for Interest | $532943 | $25000 |
| **NONCASH INVESTING AND FINANCING ACTIVITIES** |  |  |
| Conversion of Convertible Debt and Accrued Interest | $6765772 | $- |
| Deferred Offering Costs | - | 608341 |
| Issuance of Shares Payable | - | 351405 |
| Other Assets Paid for with Shares | - | 125 |
| Issuance of Underwriter Warrants included as Offering Costs | 130980 | - |
| Change in Stock-Based Compensation Liability Capitalized to Implementation Costs | 76671 | - |
| Prepaid Expenses Reclassified to Issuance of Common Stock for Services - Software Expense | 62 | - |
| Prepaid Expenses Reclassified to Capitalized Implementation Costs | 63 | - |
| Issuance of Common Stock for Capitalized Implementation Costs | 312437 | - |
| Deferred Offering Costs at December 31, 2024 Reclassified to Offering Costs | 1219176 | - |
| Other Current Assets Reclassified to Other Receivables | 18081 | - |
| Other Current Assets Reclassified to Prepaid Expenses | 250 | - |
| Write Off of Deferred Offering Costs Accrued at December 31, 2024 | 115000 | - |
| Conversion of Series A Preferred Stock to Common Stock | 420 | - |
| Prepaid Expenses Recognized by Issuance of Common Stock | 140000 | - |
| Issuance of Shares Payable - Subscription | 25000 | - |
| Issuance of Placement Agent and Settlement Warrants included as Offering Costs | 1106389 | - |
| Issuance of Common Stock for Services Included in Offering Costs - PIPE | 478200 | - |
| Deferred Commitment Fee Payable | 1000000 | - |

---

The accompanying notes are an integral part of these consolidated financial statements.

**BRAG HOUSE HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 1 - NATURE OF THE ORGANIZATION AND BUSINESS**

 

*Corporate History*

Brag House Holdings, Inc. ("Brag House" or "BHHI" or the "Company") was formed as a Delaware corporation on December 3, 2021. The Company's principal executive offices are located at 45 Park Street, Montclair, NJ 07042.

Brag House, Inc. ("BHI"), the Company's wholly owned indirect subsidiary, was formed as a Delaware corporation in February 2018. Their principal offices are located at 45 Park Street, Montclair, NJ 07042.

On June 11, 2021, Brag House, Ltd. ("BHL") was registered in the United Kingdom. Their principal offices are located at 7 - 9 Swallow Street, London W1B 4DE, United Kingdom.

On August 16, 2021, BHL acquired all of the 10,000,000 issued and outstanding BHI shares held by BHI shareholders on a one for 14.07 basis (rounded to the nearest whole number) in exchange for 140,700,000 ordinary shares of £0.0001 in BHL, making BHI a wholly owned subsidiary of BHL ("UK Reorganization").

Following the UK Reorganization, the board of directors of BHL determined that it was in the best interests of BHL and its shareholders that an initial public offering ("IPO") in the United States and concurrent listing on Nasdaq be pursued. To effect that proposed initial public offering and listing on Nasdaq, in December 2021, the Company was formed. In connection with this offering, prior to the effectiveness of the registration statement, on February 8, 2022, the Company approved a reorganization, in which the shareholders of BHL would exchange their ordinary shares and preference shares of BHL for a proportionate number of common and preferred shares in the Company on a 21 to 1 basis ("U.S. Reorganization"). Immediately following the U.S. Reorganization, BHL became the wholly-owned subsidiary of the Company, and BHI became the indirect wholly-owned subsidiary of the Company. Management anticipates that BHL will be wound down and dissolved as soon as reasonably practicable.

 

On February 14, 2025, the Company received its notice of effectiveness from the U.S. Securities Exchange Commission ("SEC") and became a public company. On March 5, 2025, the Company entered into a material definitive agreement in the form of an underwriting agreement with Kingswood Capital Partners, LLC ("Kingswood") as representative of the underwriters named therein, for the offer and sale of 1,475,000 shares of the Company's common stock at a public offering price of $4.00 per share for gross proceeds of $5.9 million, before deducting underwriting discounts and other related expenses totaling $1.1 million.

On March 6, 2025 the Company's shares began trading on Nasdaq under the symbol "TBH" and on March 7, 2025, the Company filed its prospectus with the SEC and completed its IPO.

**BRAG HOUSE HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 1 - NATURE OF THE ORGANIZATION AND BUSINESS** (cont.)

Pursuant to the underwriting agreement, as partial compensation for their services, the Company issued to the underwriters on the closing date of the IPO (the "Closing Date"), warrants (the "Underwriter Warrants") to purchase an aggregate of 44,250 shares of the Company's Common Stock, representing 3% of the shares issued on the Closing Date. The Underwriter Warrants will be exercisable, in whole or in part, commencing on September 3, 2025 and expiring on September 9, 2029, at an initial exercise price per share of common stock of $4.00, which is equal to 100% of the offering price. The terms of the Underwriter Warrants are substantially the same as the terms set forth in the form of such warrant which is filed as Exhibit 4.1 to the report on Form 8-K filed by the Company on March 11, 2025.

On March 10, 2025, Kingswood, as representative of the underwriters, exercised in full its option to purchase an additional 221,250 shares of the Company's common stock to cover over-allotments at a public offering price of $4.00 per share for gross proceeds from the over-allotment exercise of $885,000, before deducting underwriting discounts and other related expenses totaling $95,800. The over-allotment exercise closed on March 11, 2025 and, on that same date, the Company issued a press release announcing the closing of the over-allotment exercise.

Brag House Merger Sub, Inc. ("Merger Sub" or "BHMS"), a wholly owned subsidiary of the Company, was formed as a Delaware corporation on October 9, 2025. The Company's principal executive offices are located at 45 Park Street, Montclair, NJ 07042. Please refer to Note 12.

The Company entered into a Merger Agreement dated as of October 12, 2025 (the "Merger Agreement"), by and among the Company, House of Doge Inc., a Texas Corporation ("House of Doge"), and the Merger Sub. The Merger Agreement and the transactions contemplated thereby were unanimously approved by the respective boards of directors of both Brag House and House of Doge. Pursuant to the Merger Agreement, upon the terms and subject to the conditions set forth therein, among other things, House of Doge will merge (the "Merger") with and into Merger Sub, with the House of Doge continuing as the surviving entity and a wholly owned subsidiary of the Company.

The proposed merger is subject to customary closing conditions, including regulatory approvals, filing of required registration statements, shareholder consent, and completion of due diligence. As of the date these financial statements were issued, the Merger had not yet closed. The Company expects the transaction to be finalized during the second quarter of 2026, pending satisfaction of all closing conditions. Please refer to Note 12. 

 

*Nature of the Business*

Brag House is a vertically integrated social network for college gamers. The Company's mission is to create a community which empowers gamers, streamers, and fans to interact with one another. The Company's platform, which focuses on building a centralized gaming experience for non-professional college gamers and their fans, achieves this by allowing college students to compete against one another, support their favorite gamers and teams, and win prizes.

 

*Liquidity and Going Concern*

The accompanying consolidated financial statements have been prepared on the basis that the Company will continue as a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business. As of December 31, 2025, the Company had an accumulated deficit of $30,538,211. For the year ended December 31, 2025, the Company had a net loss of $15,890,509 and negative cash flows from operations of $6,625,058. The Company's investing activities consume the majority of its cash resources. The Company will continue to promote its services to existing and potential customers, but it anticipates that it will continue to incur operating losses as it executes its development plans through 2026, in addition to pursuing other potential strategic and business development initiatives including the contemplated Merger Agreement. In addition, the Company has had, and expects to have, negative cash flows from operations, at least into the near future. The Company previously funded these losses primarily through the sale of equity and infusions of cash from advances by its Chief Executive Officer, and plans to continue funding operations through the sale of equity or issuance of debt instruments. The accompanying consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern for the next twelve months from the issuance of these consolidated financial statements.

**BRAG HOUSE HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 1 - NATURE OF THE ORGANIZATION AND BUSINESS** (cont.)

The Company also secured a strategic partnership for tournament and promotional events in 2025 with Learfield Communications, LLC, formerly Learfield IMG College, a billion dollar media company that holds the media rights to hundreds of colleges in the US, including collegiate properties as the NCAA and its 89 championships and NCAA Football. In May 2025, the Company launched the first activation under its strategic partnership with Learfield. This activation was for students and alumni at the University of Florida, one of Learfield's media rights properties. In July 2025, the Company executed the second activation under its strategic partnership with Learfield, expanding on the success of the initial May 2025 event. This activation was conducted virtually and designed to engage students and alumni through a digital tournament centered around EA College Football 26, following the game's national release. The event incorporated university-branded content and featured participation from student-athletes, further aligning with the Company's Name, Image, and Likeness ("NIL") engagement strategy. The Company believes these activations demonstrated its ability to scale digital experiences across collegiate communities and reinforced its commercial model for integrating sponsorship, branded content and messaging, and fan engagement at the intersection of gaming and college sports. The Company believes this partnership positions itself to leverage Learfield's college network to generate sponsorship revenue and brand engagement opportunities while giving the Company access to extensive datasets from diverse college campuses as the Company evolves into a scalable data insight revenue model, where the Company aims to enable brands to gain data insights to create enhanced, personalized and effective marketing campaigns. The Company further believes this partnership will contribute directly to its model through shared sponsorship earnings, while validating its marketing and data strategy for reaching college-aged Gen Z gamers. Through this, the Company plans to scale across Learfield's properties, expanding brand partnerships in the gaming and esports spaces.

Management believes this is a strong indicator of continued growth in the coming years for tournament revenue. Until revenue from such tournaments provides sufficient and steady cash flow, management intends to raise funds through equity and debt offerings, and believes that the actions presently being taken to further implement its business plan will enable the Company to continue as a going concern. While the Company believes in its viability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company's ability to further implement its business plan and raise additional funds as described.

Although no assurances can be given as to the Company's ability to deliver on its revenue plans or that unforeseen expenses will not arise, management believes that the revenue to be generated from operations, together with equity and debt financing, will provide the necessary funding for the Company to continue as a going concern. However, the Company has earned minimal revenue from its inception through the year ended December 31, 2025, and management cannot guarantee that any potential debt or equity financing will be available, or if available, on favorable terms. As such, these matters raise substantial doubt about the Company's ability to continue as a going concern for the next twelve months from the issuance of the accompanying consolidated financial statements. If adequate funds are not available on acceptable terms, or at all, the Company will need to curtail operations or cease operations completely.

On July 24, 2025, the Company entered into an agreement to sell an aggregate of 15,000 shares of its Series B Convertible Preferred Stock in a private placement offering for total gross proceeds of $15,000,000 (the "PIPE Offering"). Please refer to Note 5.

Additionally, on September 2, 2025, the Company invested $4,000,000 in Pre-Funded Common Stock Purchase Warrants (the "Pre-Funded Warrants") of CleanCore Solutions, Inc., with a purchase price of $1 per warrant share. The exercise price of the warrants is $0.0001 per share and each warrant is for one share of Class B Common Stock of CleanCore Solutions, Inc., a publicly traded company The Pre-Funded Warrants were exercised in full as of December 31, 2025 and are investments in equity securities which are measured at fair value at each reporting period. Please refer to Notes 10 and 11.

On December 4, 2025, the Company, House of Doge and Yorkville entered into the Yorkville Purchase Agreement, whereby the Company has the right, but not the obligation, to sell to Yorkville, and Yorkville is obligated to purchase from the Company, up to $100,000,000 in the Company's Common Stock. Concurrently with the Yorkville Purchase Agreement, the Company and House of Doge, jointly and severally, authorized the issuance of the Yorkville Convertible Note to Yorkville, in the aggregate original principal amount of up to $11.0 million. Also, in connection with the aforementioned, the Company issued to Yorkville a warrant (the "*Yorkville Warrant*") to purchase up to 10,173,881 shares of the Company's Common Stock with an exercise price equal to the lower of (i) $1.50 per share, or (ii) 130% of the average closing price of the Company's Common Stock as reported by Nasdaq for the five trading days ending on the 10th trading day following the closing of the Merger. The Yorkville Warrant was exercisable immediately upon issuance and expires three years from the date of issuance. Please refer to Notes 7 and 10.

*Emerging Growth Company*

The Company is an "emerging growth company," as defined in Section 2(a)(19) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 ("JOBS Act"), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company's consolidated financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

**BRAG HOUSE HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

 

*Basis of Presentation*

The accompanying audited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") and include the balances and results of operations of the Company and our consolidated subsidiaries. The summary of significant accounting policies presented below are designed to assist in understanding the Company's consolidated financial statements. Such consolidated financial statements and accompanying notes are the representations of the Company's management, who is responsible for their integrity and objectivity. The Company and its subsidiaries operate as a single operating segment.

*Reclassification of Expenses*

Certain prior-period amounts have been reclassified to conform to the current-year presentation. Specifically, amounts previously reported within Selling, General and Administrative expenses have been reclassified to Software Expenses to better reflect the nature of these costs. These reclassifications had no impact on previously reported total operating expenses, net loss, or cash flows.

*Principles of Consolidation*

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

 

*Segment Reporting*

 

The Company follows the guidance in ASC Topic 280, "*Segment Reporting"*, for the identification and disclosure of reportable segments. Operating segments are defined as components of an enterprise for which separate financial information is available and evaluated regularly by the Company's chief operating decision maker ("CODM") in deciding how to allocate resources and in assessing performance.

The Company's CODM, who is its Chief Executive Officer, reviews financial information presented on a consolidated basis for purposes of making operating decisions and assessing performance. The Company manages its operations and evaluates financial performance as a single operating segment. Accordingly, the Company has determined that it operates in one reportable segment.

The Company's operations are currently located in the United States, and substantially all revenues are derived from U.S. customers. Management will continue to evaluate the Company's operations to determine if, in the future, changes in organizational structure or business activities require the identification of additional reportable segments.

*Use of Estimates*

The preparation of financial statements in conformity with GAAP requires the Company's management to make estimates and assumptions that affect the reported amounts of assets, liabilities, equity-based transactions and disclosure of contingent assets and liabilities at the date of the financial statement and the reported amounts of revenues and expenses during the reporting period.

The Company bases its estimates and assumptions on an ongoing basis using historical experience and other factors, known or expected trends and various other assumptions that it believes to be reasonable. As future events and their effects cannot be determined with precision, actual results could differ from these estimates, which may cause the Company's future results to be affected.

**BRAG HOUSE HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** (cont.)

 

*Cash and Cash Equivalents*

The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents. The Company had cash equivalents totaling $215,000 and $0 as of December 31, 2025 and 2024, respectively.

 

*Allowance for Credit Losses*

Trade accounts receivable are stated net of an allowance for credit losses. The Company estimates the credit losses using historical information, current economic conditions and reasonable and supportable forecast information for a reasonable period of time. The Company starts by determining expected credit losses by using historical loss information based on the aging of receivables. An analysis of the current economic conditions along with forecast information is then used to determine any adjustment to the historical loss rates to determine the appropriate rates for future losses and the Company's current expected credit losses for trade receivables.

As of December 31, 2025, the Company had receivables due from House of Doge Inc. ("House of Doge"), a related party, totaling approximately $12,236,838, which are included within Notes Receivable - Related Party, Accrued Interest Receivable - Related Party, and Advances to Related Party in the accompanying consolidated balance sheets. House of Doge is a party to the Merger Agreement entered into on October 12, 2025, pursuant to which a subsidiary of the Company will merge with and into House of Doge, with House of Doge surviving as a wholly owned subsidiary of the Company upon completion of the transaction.

The receivables arose primarily from a promissory note and advances provided to House of Doge in connection with activities related to the pending merger and related operational matters. The balance for the note receivable is subject to repayment terms and interest, while the advances are not.

The Company evaluates the collectability of financial assets measured at amortized cost in accordance with ASC 326, Financial Instruments-Credit Losses, which requires the recognition of an allowance for expected credit losses over the contractual life of the financial asset.

Due to the limited number of counterparties and the specific nature of the related-party arrangement, the Company estimates expected credit losses on the House of Doge receivable using a specific identification approach. In developing its estimate of expected credit losses, management considered:

● the financial condition and liquidity of House of Doge;

● historical payment experience between the parties, if any;

● the expected consummation of the merger transaction;

● current economic conditions; and

● other relevant qualitative and forward-looking information available as of the balance sheet date.

Based on its evaluation as of December 31, 2025, the Company determined that no allowance for expected credit losses was required related to these receivables. The Company will continue to monitor the collectability of the receivables and adjust the allowance for credit losses as necessary in future reporting periods.

*Offering Costs*

Offering costs represent specific incremental costs directly attributable to a proposed or actual offering of securities which may be deferred and charged against the gross proceeds of the offering. The Company incurred legal, accounting and other direct costs related to the IPO, which closed on March 7, 2025. Prior to the close of the IPO, these costs were recognized as deferred offering costs. These offering costs were reclassified to additional paid-in capital from deferred offering costs. These amounts are shown, along with underwriters' fees paid, in the amount of $1,351,098. Please refer to Note 5 for details.

Further, during the year ended December 31, 2025, additional offering costs of $1,252,780 were incurred simultaneously with the closing of the IPO. Of this amount, $190,980 is recorded as offering costs and the remaining $1,061,800 is displayed as a net amount against the IPO and over-allotment option proceeds on the consolidated statements of changes in stockholders' equity (deficit).

Also, the Company incurred an additional $3,549,294 in offering costs in connection with the PIPE Offering during the year ended December 31, 2025. Please refer to Note 5 for details.

 

**BRAG HOUSE HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** 

**NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** (cont.)

 

*Subscription Receivable*

The Company records share issuances at the effective date. If the subscription is not funded upon issuance, the Company records a subscription receivable as an asset on its balance sheet. When subscription receivables are not received prior to the issuance of financial statements at a reporting date in satisfaction of the requirements under Financial Accounting Standards Board (the "FASB") Accounting Standards Codification ("ASC") 505-10-45-2, "Equity" - Other Presentation Matters, the subscription receivable is reclassified as a contra account to stockholders' equity (deficit) on the consolidated balance sheets.

During the year ended December 31, 2025, the Company received $713 in cash from outstanding subscriptions receivable and wrote off the remaining balance of $2,987.

 

*Employee Retention Tax Credit*

 

The Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") provided an employee retention credit which was a refundable tax credit against certain employment taxes. The Consolidated Appropriations Act (the "Appropriations Act") extended and expanded the availability of the employee retention credit through December 31, 2021. The Appropriations Act amended the employee retention credit to be equal to 70% of qualified wages paid to employees during the 2021 fiscal year. The Company qualified for the employee retention credit beginning in October 2021 for qualified wages through December 2021 and filed a cash refund claim during the year ended December 31, 2023.

The Company had a tax credit receivable of $34,667 included as an other receivable in the current assets section of the Company's consolidated balance sheets as of December 31, 2024. During the year ended December 31, 2025, the Company collected $17,259 of the receivable and wrote off the remaining $17,408 as an uncollectible amount to bad debt expense.

 

*Accounts Payable*

 

Accounts payable consist of amounts due to vendors and service providers for goods and services received in the ordinary course of business. Accounts payable are recognized when the obligation to pay arises, typically upon receipt of goods or services and are recorded at their nominal amounts, which approximate fair value due to their short-term nature.

The Company' standard payment terms with vendors generally range from net 15 to net 60 days. Discounts received from vendors for early payment are recognized when earned. Vendor discounts are recorded as a reduction of the related expense in the accompanying consolidated statements of operations. If such discounts are not clearly associated with a specific expense category, they are recorded as a reduction to cost of goods sold or, if immaterial, may be recognized as other income.

The Company reviews accounts payable regularly to ensure timely payment and to assess the need for accruals for goods or services received but not yet invoiced. At each reporting period, any unbilled amounts are accrued and reflected in accrued liabilities, and estimates are based on historical trends, vendor communication, and other relevant factors.

**BRAG HOUSE HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** 

 

**NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** (cont.)

The Company does not maintain a formal policy for interest on past due payables and generally does not incur material penalties or interest expenses in the normal course of settling vendor obligations.

During the years ended December 31, 2025 and 2024, the Company recognized other income due to discounts granted by vendors in the amount of $73,450 and $0, respectively.

*Concentration of Credit Risk*

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents in financial institutions, which, at times, may exceed the Federal Depository Insurance Coverage of $250,000. As of December 31, 2025 and 2024, the Company was not exposed to any risks due to having a cash balance in each account which did not exceed the coverage limits. The Company has not experienced any losses in such accounts.

 

*Advertising and Marketing*

The Company expenses advertising and marketing costs as they are incurred. Advertising and marketing expenses were $641,919 and $172,989 for the years ended December 31, 2025 and 2024, respectively.

*Fair Value Measurements*

As defined in ASC 820, "*Fair Value Measurements and Disclosures*", fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). This fair value measurement framework applies at both initial and subsequent measurement.

---

| | |
|:---|:---|
| Level 1: | Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. |
| Level 2: | Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reported date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. |
| Level 3: | Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management's best estimate of fair value. The significant unobservable inputs used in the fair value measurement for nonrecurring fair value measurements of long-lived assets include pricing models, discounted cash flow methodologies and similar techniques. |

---

**BRAG HOUSE HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** (cont.)

The carrying value of the Company's financial instruments: cash, other receivables, notes receivable, accrued interest receivable, advances, accounts payable, and accrued liabilities, approximate their fair values because of the short-term nature of these financial instruments.

 

*Derivatives*

The Company evaluates its convertible instruments to determine if those contracts or embedded components of those contracts qualify as derivative financial instruments, in accordance with ASC 815, "*Derivatives and Hedging*". The standard requires that the Company record embedded conversion options ("ECOs") and any related freestanding instruments at their fair values as of the inception date of the agreement and at fair value as of each subsequent balance sheet date. Any change in fair value is recorded as non-operating, non-cash income or expense for each reporting period at each balance sheet date. Conversion options are recorded as a discount to the host instrument and are amortized as amortization of debt discount on the financial statements over the life of the underlying instrument. The Company reassesses the classification of its derivative instruments at each balance sheet date. If the classification changes as a result of events during the period, the contract is reclassified as of the date of the event that caused the reclassification.

 

*Equity Awards with a Guaranteed Minimum-Value Cash Settlement - Technology Purchase Agreements*

 

The Company evaluates its stock-based compensation arrangements within the scope of ASC 718, "*Compensation - Stock Compensation*". The Company has issued an equity award with a guaranteed minimum-value cash settlement in accordance with the terms that were agreed upon by the Company in the Master Services Agreement ("MSA") with Artemis Ave LLC ("Artemis") and the Software as a Service Agreement (the "SaaS" Agreement) with EVEMeta, LLC ("EVEMeta"). Subsection ASC 718-10-20 defines these equity awards as combination awards. Under this classification, the share grant is accounted for as an equity-classified award measured at grant-date fair value, and the cash-settled written put option is liability classified and marked to fair value at each reporting period. Compensation costs for the share grant are measured and fixed on the date of grant and recognized over the vesting period, which is consistent with the delivery of goods and services. Compensation costs associated with the cash-settled written put option should be recognized over the vesting period based on the remeasured fair value at each reporting period, which is consistent with the delivery of goods and services from the vendor, until settlement. To value the cash-settled written put option, the Company remeasures the fair market value of the written put option via an appropriate option pricing model in accordance with ASC 718, and records the appropriate liability as of each reporting period with a corresponding adjustment to software expense. The Company determines the fair value of the liability using a Monte Carlo simulation model at each reporting period. On May 12, 2025, the Company amended the Artemis MSA and EVEMeta SaaS agreements and removed the guaranteed minimum-value cash settlement in exchange for cash payments totaling $250,000 in contemplation of Artemis delivering to the Company the Services and Deliverable to be provided pursuant to the MSA and EVEMeta delivering to the Company the Compression Services to be provided pursuant to the SaaS. This amendment effectively settled the stock-based compensation liability. A valuation was completed as of May 12, 2025, and the fair value measurement of the cash-settled written put option for services provided thus far resulted in an additional stock-based compensation liability of $72,277, for a total balance of $116,669. The settlement of the stock-based compensation liability in exchange for a cash payment of $250,000 resulted in the derecognition of the total liability balance of $116,669 and an other expense of $133,331 for the difference. As of May 12, 2025, a stock-based compensation liability no longer exists.

Please refer to Notes 4 and 5 for a detailed explanation of the terms of the technology purchase agreements.

**BRAG HOUSE HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** (cont.)

*Cloud Computing Arrangements - Technology Purchase Agreements*

The Company applies the guidance under ASC 350-40, "*Intangibles - Goodwill and Other-Internal-Use Software*", when evaluating the applicable accounting treatment for the purchase of technological products and services. The Company has determined that the MSA with Artemis and the SaaS agreement with EVEMeta constitute a cloud computing arrangement ("CCA"). The terms of the agreements provide for software development, which include CCA implementation costs, support and maintenance services, and the use of the EVEMeta compression software. The Company accounts for the CCA implementation costs in a different manner than the support and maintenance services from the Artemis agreement and the terms of the SaaS agreement with EVEMeta.

The Company capitalizes implementation costs associated with its CCA consistent with costs capitalized for internal-use software. The stock-based payments provided in advance for implementation costs are recorded as capitalized implementation costs as the services are rendered. Capitalized implementation costs related to the CCA are included on the consolidated balance sheets. The CCA implementation costs are amortized over the term of the related hosting agreement, including renewal periods that are reasonably certain to be exercised. Amortization will begin only when the software is placed into use and the amortization expense will be recorded as an operating expense. As of December 31, 2024, $63 was recognized as a non-current prepaid expense asset related to the development services to be provided by Artemis. During the years ended December 31, 2025 and 2024, $389,171 and $0 was recognized, respectively, as capitalized implementation costs related to the Company's cloud computing arrangements and no amortization expense was recognized in either year as the software was not placed into service. The amount of $389,171 was a recognition of $312,500 for services provided, which included the reclassification of the $63 recorded as a non-current prepaid expense asset as of December 31, 2024, and a portion of the change in fair value of the stock-based compensation liability which equaled $76,671 during the year ended December 31, 2025.

The costs associated with the support and maintenance services and the use of the EVEMeta compression software are recorded as software expenses over the service period defined in the respective agreements. As of December 31, 2024, $62 was recognized as a non-current prepaid expense asset related to the services by Artemis and EVEMeta for support and maintenance. During the year ended December 31, 2025, the Company recorded software expenses of $159,091 in connection with the EVEMeta compression software, which included the expensing of the $62 recorded as a non-current prepaid expense asset as of December 31, 2024. The Company sent notices of material breach to both Artemis and EVEMeta regarding the MSA and SaaS Agreements during the year ended December 31, 2025, and all services from Artemis and EVEMeta have remained halted and the project is no longer expected to be completed. As a result, the Company has determined that the previously capitalized implementation costs no longer have probable future economic benefit and have recorded an impairment loss on the total carrying value of $389,171, which is recorded in software expenses for the year ending December 31, 2025.

**BRAG HOUSE HOLDINGS, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** (cont.)

*Convertible Debt*

The Company accounts for convertible debt instruments in accordance with the provisions of ASC 470-20, "*Debt with Conversion and Other Options*". Under this guidance, convertible debt instruments that do not meet the criteria for separation of embedded conversion features from the host contract are accounted for as a single liability. If a convertible debt instrument contains embedded features (e.g., conversion options, redemption rights) that require separate accounting under ASC 815, "*Derivatives and Hedging*", the Company evaluates such features and bifurcates them as derivative liabilities when applicable. Issuance costs related to convertible debt are presented as a direct deduction from the carrying amount of the liability and are amortized to interest expense over the term of the debt using the effective interest method.

The Company accounts for certain convertible debt instruments under the fair value option ("FVO") in accordance with ASC 825, "*Financial Instruments*". The Company may elect the FVO on an instrument-by-instrument basis at initial recognition. The election of the FVO is irrevocable. Convertible debt for which the fair value option has been elected is recorded at fair value on the issuance date and remeasured at fair value at each subsequent reporting date. Changes in fair value are recognized in earnings in the period in which they occur, except for changes attributable to instrument-specific credit risk, which are recognized in other comprehensive income. When the FVO is elected, the Company does not separately account for embedded conversion features, and no portion of the instrument is classified in equity. Further, issuance costs related to the convertible debt under the FVO are immediately expensed.

The Company determined that the convertible debt instruments where the FVO was elected do not have readily determinable market values and therefore estimates fair value using valuation techniques consistent with the market and income approaches in accordance with ASC 820. The fair value measurements are classified within Level 3 of the fair value hierarchy because they utilize significant unobservable inputs.

Given the complex capital structure and the potential for multiple settlement outcomes, the Company estimates the fair value of the convertible debt instruments using the Probability-Weighted Expected Return Method ("PWERM"). Under the PWERM, the Company models multiple potential future scenarios, which may include conversion into equity in connection with a qualified financing, repayment at maturity, strategic transaction, or other liquidity events. For each scenario, the Company estimates the value of the convertible debt instruments based on the contractual terms, including conversion features, repayment provisions, interest accrual, and any embedded preferences.

The estimated value under each scenario is probability-weighted based on management's assessment of the likelihood of each outcome and discounted to present value using a rate that reflects the risks associated with the instrument and the expected timing of the settlement event.

Significant unobservable inputs used in the valuation may include:

● Probabilities assigned to various settlement or liquidity scenarios

● Expected timing of financing or liquidity events

● Estimated enterprise values under equity conversion scenarios

● Discount rates

● Volatility assumptions

● Projected financial performance

Because the valuation incorporates significant management judgment and unobservable inputs, changes in these assumptions could result in material changes in fair value in future periods. The Company reassesses these assumptions at each reporting date. Please refer to Notes 7 and 10 for more detail.

**BRAG HOUSE HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** (cont.)

*Shares Payable*

The Company has incurred obligations that are payable in shares of the Company's equity. If shares are not issued to satisfy those obligations, a short-term liability is recognized as a share payable. The Company has a share payable balance of $1,234 and $32,500 as of December 31, 2025 and 2024, respectively. Please refer to Note 7 for more detail.

*Revenue Recognition*

The Company recognizes revenue from the sale of products and services in accordance with ASC 606, "*Revenue Recognition*" following the five steps procedure:

Step 1: Identify the contract(s) with customers

Step 2: Identify the performance obligations in the contract

Step 3: Determine the transaction price

Step 4: Allocate the transaction price to performance obligations

Step 5: Recognize revenue when or as performance obligations are satisfied

The Company generates revenues mainly from advertising, sponsorship and league tournaments. An insignificant amount of revenue is generated through the operation of its live streaming platform using a revenue model whereby gamers and creators can get free access to certain live streaming of amateur tournaments, and gamers and creators pay fees or subscriptions to compete in league competitions. Streaming revenue amounts are recognized as live-streaming services on the consolidated statements of operations and comprehensive loss.

 

*Foreign Currency Translation*

For the Company's non-U.S. operations where the functional currency is the local currency, the Company translates assets and liabilities at exchange rates in effect at the balance sheet date and record translation adjustments in stockholders' equity (deficit). The Company translates statement of operations amounts at average rates for the period. Transaction gains and losses are recorded in other (income) expense, net in the Consolidated Statements of Operations and Comprehensive Loss.

The Company recognized a gain or loss on foreign currency from the settlement and fluctuation of foreign currency of notes payable for a gain of $424 and a loss of $1,492, convertible debt for $0 and a loss of $152 and receivables and payables due in foreign currency totaling a gain of $17 and a loss of $131, for the years ending December 31, 2025 and 2024, respectively, for a total foreign currency gain of $441 and a loss of $1,775, respectively. Please refer to Note 7.

**BRAG HOUSE HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** (cont.)

*Comprehensive Loss*

The Company reports comprehensive loss and its components in its consolidated financial statements. Comprehensive loss consists of net loss and foreign currency translation adjustments, affecting stockholders' equity (deficit) that, under U.S. GAAP, is excluded from net loss.

 

*Net Loss per Common Share*

The computation of earnings per share ("EPS") includes basic and diluted EPS in accordance with ASC 260, "*Earnings per Share*". Basic EPS is measured as the income (loss) available to common stockholders divided by the weighted average common shares outstanding for the period. Diluted income (loss) per share reflects the potential dilution, using the if-converted and treasury stock methods, that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the income (loss) of the Company as if they had been converted at the beginning of the periods presented, or issuance date, if later. In computing diluted income (loss) per share, the treasury stock method assumes that outstanding options and warrants have been exercised, and the proceeds have been used to purchase common stock at the average market price during the period. Options and warrants may have a dilutive effect under the treasury stock method only when the average market price of the common stock during the period exceeds the exercise price of the options and warrants. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. All outstanding convertible promissory notes and convertible preferred stock are considered common stock at the beginning of the period or at the time of issuance, if later, pursuant to the if-converted method. Since the effect of common stock equivalents is anti-dilutive with respect to losses, the shares issuable upon conversion have been excluded from the Company's computation of net loss per common share.

The following table summarizes the securities that are excluded from the diluted per share calculation because the effect of including these potential shares is anti-dilutive due to the Company's net loss:

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| | | |
|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** |
|  | **2025** | **2024** |
| Convertible Debt | 734584 | 1903675 |
| Unvested Restricted Stock | - | 69783 |
| Shares Payable | 355 | 8125 |
| Convertible Preferred Stock | 5165071 | 82096 |
| Stock Options | 417678 | - |
| Warrants | 2807797 | - |
| Total | 9125485 | 2063679 |

---

As of December 31, 2025, no dividends have been declared in any year since inception and all classes of BHHI's stock do not have cumulative dividend features. As such, the Company did not include any adjustment to the net loss for dividends.

**BRAG HOUSE HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** (cont.)

The table below represents the calculation for both basic and diluted net loss per share:

---

| | | |
|:---|:---|:---|
|  | **Years Ended <br> December 31,** | **Years Ended <br> December 31,** |
|  | **2025** | **2024** |
| Net Loss | $(15890509) | $(3288519) |
| Weighted-average Shares Outstanding - Basic and Diluted | 12169674 | 5697212 |
| Loss per share - Basic and Diluted | $(1.31) | $(0.58) |

---

 

*Income Taxes*

The Company follows the asset and liability method of accounting for income taxes under ASC 740, *Income Taxes*. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company's temporary differences result primarily from capitalization of certain qualifying research and development expenses, stock-based compensation, and net operating loss carryovers. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded for deferred tax assets if it is more likely than not that some portion or all of the deferred tax assets will not be realized.

The Company recognizes the effect of income tax positions only if those positions are more likely than not to be sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% of likely being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs.

The Company records interest related to unrecognized tax benefits in interest expense and penalties in selling, general and administrative expenses.

**BRAG HOUSE HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** (cont.)

*Stock-Based Compensation*

The Company evaluates its stock-based compensation arrangements within the scope of ASC 718, "*Compensation - Stock Compensation*". The Company measures and records the expense related to stock-based payment awards based on the fair value of those awards as determined on the date of grant. The Company recognizes stock-based compensation expense over the requisite service period of the grant, generally equal to the vesting period, and uses the straight-line method to recognize stock-based compensation. For stock options with performance conditions, the Company records compensation expense when it is deemed probable that the performance condition will be met. The Company measures the fair value of stock options and warrants granted to employees, directors, and non-employees using option pricing models, including the Black-Scholes-Merton ("Black-Scholes") option-pricing model and Binomial Lattice models. The determination of the fair value of these instruments requires management to make certain estimates and assumptions that have a material impact on the amount of stock-based compensation expense recognized.

Key assumptions used in these models include expected volatility, expected term, risk-free interest rate, and expected dividend yield. Because the Company has a limited operating history and insufficient historical trading data to estimate expected volatility, the Company bases its volatility assumption on the historical volatilities of a group of comparable publicly traded companies within its industry. The risk-free interest rate is based on the yield of U.S. Treasury securities with maturities consistent with the expected term of the related option or warrant. The expected dividend yield is assumed to be zero, as the Company has not historically declared or paid dividends and does not anticipate doing so in the foreseeable future.

The Company uses the "simplified method" to estimate the expected term for stock options that have exercise prices issued at the money and are considered plain vanilla options, consistent with SEC Staff Accounting Bulletin Topic 14. For stock options with exercise prices that are out of the money, the Company uses a Binomial Lattice model, which incorporates assumptions about future exercise behavior and potential changes in stock price over the life of the award.

 

The Company issued stock options exercisable into 1,950,000 shares of its Common Stock during the year ended December 31, 2025. The Company has issued warrants convertible into 44,250 shares of its Common Stock to the underwriter in connection with its IPO, warrants convertible into 17,517,203 shares of its Common Stock in connection with the PIPE Offering, and warrants convertible into an additional 10,173,881 shares of its Common Stock in connection with the Yorkville Purchase Agreement and Yorkville Convertible Note as of December 31, 2025. Please refer to Notes 1, 5, 7 and 10 for more information. Stock-based payment awards, such as stock options or restricted stock awards, are valued based on the fair value on the date of grant and amortized ratably over the estimated life of the award. Stock-based payment awards may vest based on the passage of time, or upon occurrence of a specific event or achievement of goals as defined in the grant agreements. In such cases, the Company records compensation expenses related to grants of stock-based payment awards on management's estimates of the probable dates of the vesting events. The Company recognizes forfeitures of stock-based payment awards as they occur.

 

*Investment in Equity Securities*

 

Investments in equity securities are accounted for under ASC 321 and reported at their readily determinable fair values as quoted by market exchanges, with changes in fair value recorded in other (income) expense in the consolidated statements of operations and comprehensive income (loss). All changes in an equity security's fair value are reported in earnings as they occur. As such, the sale of an equity security does not necessarily give rise to a significant gain or loss. Unrealized gains (losses) due to fluctuations in fair value are recorded in the consolidated statements of operations and comprehensive loss.

 

**BRAG HOUSE HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** 

 

**NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** (cont.)

*Newly Adopted Accounting Pronouncements*

 

On December 14, 2023, the FASB issued Income Taxes (Topic 740) ("ASU 2023-09"). This ASU requires the use of consistent categories and greater disaggregation in tax rate reconciliations and income taxes paid disclosures. These amendments are effective for fiscal years beginning after December 15, 2024. During 2025, the Company adopted the provisions of this updated accounting pronouncement prospectively.

 

*Recently Issued but not yet Adopted Accounting Pronouncements*

In November 2024, the FASB issued ASU 2024-03, "Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses." The standard requires that public business entities disclose additional information about specific expense categories in the notes to financial statements for interim and annual reporting periods. The standard will become effective for the Company for its fiscal year 2027 annual financial statements and interim financial statements thereafter and may be applied prospectively to periods after the adoption date or retrospectively for all prior periods presented in the financial statements, with early adoption permitted. The Company plans to adopt the standard beginning with the fiscal year 2027 annual financial statements, and management is currently evaluating the impact this guidance will have on the disclosures included in the Notes to the Consolidated Financial Statements.

In July 2025, the FASB issued Accounting Standards Update (ASU) 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. This ASU introduces a practical expedient, applicable to all entities, permitting the assumption that current conditions as of the balance sheet date remain unchanged over the remaining life of current accounts receivable and current contract assets arising from transactions under ASC 606. These amendments will become effective for the Company for its annual reporting periods beginning with the Company's fiscal year 2026, including interim periods within those fiscal years, with early adoption permitted. The guidance is to be applied prospectively. The Company is currently evaluating the impact of ASU 2025-05 on its accounting estimates and allowance methodology. At this time, the Company has not yet determined the effect, if any, that adoption of this ASU will have on its consolidated financial position, results of operations, disclosures, or processes.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270) Narrow-Scope Improvements, which is intended to improve the navigability of the guidance in ASC 270 - Interim Reporting and clarify when it applies. Under the amendments, an entity is subject to ASC 270 if it provides interim financial statements and notes in accordance with GAAP. ASU 2025-11 also addresses the form and content of such financial statements, interim disclosure requirements, and establishes a principle under which an entity must disclose events since the end of the last annual reporting period that have a material impact on the entity. The new guidance will be effective for the Company for interim reporting periods within annual reporting periods beginning with the Company's fiscal year 2029. Early adoption is permitted. The Company is currently evaluating the impact this standard will have on the financial statement presentation and disclosures.

**BRAG HOUSE HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 3 - RELATED PARTY TRANSACTIONS**

The Company follows ASC 850, "*Related Party Disclosures,*" for the identification of related parties and disclosure of related party transactions.

As of December 31, 2025 and 2024, the Company had payables to the Company's co-founder and Chief Executive Officer and the Company's co-founder and Chief Operating Officer for reimbursable expenses totaling $0 and $24,303, respectively.

*Notes Receivable and Accrued Interest - Related Party*

 

Pursuant to the Merger Agreement, on October 14, 2025, the Company loaned to House of Doge $8.0 million (the "Loan"), which was evidenced by a secured promissory note (the "Note") that House of Doge issued in favor of the Company. On December 4, 2025, the Company and House of Doge entered into an amendment to the Note to (i) increase the principal amount of the Note to $10.0 million, (ii) permit the issuance of the Yorkville Convertible Note, as defined below, and (iii) provide for the subordination of the Company's lien over House of Doge securing House of Doge's obligations under the Note to YA II PN, LTD.'s, a Cayman Islands exempted limited partnership ("Yorkville"), with the lien in connection with the Yorkville Agreements discussed below. The Loan accrues interest at an annual rate of 5% and matures upon the earlier of (i) April 14, 2026 and (ii) the occurrence of an event of default, as defined in the Note (in most cases, with notice from the Company to House of Doge).

In connection with the Loan, on October 14, 2025, House of Doge and each of its wholly-owned subsidiaries as guarantors entered into a Security and Pledge Agreement in favor of the Company, pursuant to which, among other things, the guarantors granted the Company a first priority lien and security interest in the collateral listed therein. In addition, House of Doge entered into a separate Intellectual Property Security Agreement, dated as of October 14, 2025, in favor of the Company, pursuant to which House of Doge granted to the Company a security interest in certain intellectual property of House of Doge as set forth therein. Further, each of the guarantors executed a Guarantee, dated as of October 14, 2025, in favor of the Company pursuant to which each guarantor guaranteed the full and punctual payment when due and performance of all of House of Doge's and the other guarantors' debts, liabilities and obligations pursuant to the Note and any other documents relating thereto.

As of December 31, 2025, the Company was owed a principal balance of $8,779,000 and accrued interest of $92,838.

*Advances to Related Party*

 

In connection with the Yorkville Convertible Note, as described in Note 7, the Company received an advance of funds totaling $3,465,000. After paying transaction costs totaling $100,000, the Company advanced to House of Doge a total of $3,365,000 on December 4, 2025, the closing date of the Yorkville Convertible Note. This advance is non-interest bearing and does not have a maturity date. The balance of $3,365,000 remained outstanding and collectible as of December 31, 2025.

**BRAG HOUSE HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 4 - COMMITMENTS AND CONTINGENCIES**

The Company evaluates its business transactions and agreements during the course of business to identify whether any contingencies or commitments exist which would give rise to the recognition of a loss or liability. The Company is currently not involved with or know of any pending or threatening litigation against the Company or any of its officers. Further, the Company is currently complying with all relevant laws and regulations and does not have any long-term commitments or guarantees.

 

*Marketing Agreement*

In March of 2024, the Company entered into a marketing agreement with Outside the Box Capital, Inc. ("OTB Capital") for marketing services to be provided for the six-month period from May 1, 2024 to October 31, 2024. Compensation for the services consisted of $100,000 in cash and shares of BHHI Common Stock, priced at the IPO, totaling $200,000 which equaled 50,000 shares. These shares became due 10 days after the successful completion of the Company's IPO on March 6, 2025, deemed the listing date ("Listing Date"), and were issued in April of 2025. The balance of $200,000 increased stockholders' equity for the issuance of Common Stock for services for the year ended December 31, 2025. Lastly, if within the term of the Company's agreement with OTB Capital, the Company's shares achieve a 7-day moving average (calculated using daily VWAP) share price of $9 or more, the Company would issue an additional 50,000 shares to OTB Capital. This share price threshold was not achieved during the term of the agreement and additional compensation was not due. Services under this contract were not provided during the expected service period of May through October of 2024. A modification of the agreement was negotiated and finalized in November of 2024. Services were amended to begin on December 15, 2024 through June 15, 2025. Services had not yet commenced as of December 31, 2024 and through March 5, 2025. As a result, another modification of the agreement was executed on March 28, 2025. This new agreement revised the dates of service to begin on March 6, 2025 through September 6, 2025. It also revised the terms of compensation and, as a result, the base compensation of $100,000 became payable in two tranches, the first payment for $50,000 within 10 business days following the Company's Listing Date as a publicly traded company and the second and final payment for the remaining amount was due three months from the Listing Date. The first payment of $50,000 was made in April of 2025 and the final payment was made on June 5, 2025. No accrual for a liability was required or recorded as of December 31, 2024. A total of $300,000 in advertising and marketing expenses was recognized for the year ended December 31, 2025 in connection with this agreement.

 

*Broncos Sponsorship Agreement*

During 2023, the Company entered into a sponsorship agreement with Stadium Management Company and the Denver Broncos. This resulted in marketing expenses totaling $305,000 accrued during the year ended December 31, 2023. In September of 2024, the parties terminated the sponsorship agreement and this resulted in a reduction of the payable amount from $305,000 to $61,000. The reduction of $244,000 was recorded as other income during the year ended December 31, 2024. The balance of $61,000 remains outstanding as of December 31, 2025 and 2024, and is recorded as accounts payable on the consolidated balance sheets.

*Cloud Computing Arrangements - Technology Purchase Agreements* 

On November 13, 2024 (the "Artemis Effective Date"), the Company entered into a MSA with Artemis, a skilled technology company, whereby Artemis agreed to develop a proprietary machine learning solution for the Company's platform (the "Software") and provide certain services. In exchange, the Company agreed to issue 937,500 shares of its Common Stock to Artemis (the "Artemis Stock Consideration") in December 2024. The Artemis Stock Consideration is subject to a lock-up provision, with shares of the Artemis Stock Consideration to be released in three (3) equal tranches of 312,500 shares each according to the terms outlined in the MSA and the respective Statements of Work ("SOWs") attached thereto. In connection with the execution of the MSA, on November 13, 2024 (the "EVEMeta Effective Date"), the Company entered into a SaaS Agreement with EVEMeta, an innovative technology company, whereby EVEMeta agreed to license its solution to the Company. In exchange, the Company agreed to issue 312,500 shares of its Common Stock to EVEMeta (the "EVEMeta Stock Consideration" and, collectively, with the Artemis Stock Consideration, the "Stock Consideration"). The 1,250,000 shares granted to Artemis and EVEMeta in exchange for services had a fair market value of $4.00 per share at the date of grant for a total cost of $5,000,000. Further, once released from lock up, the Company will provide each vendor with a guarantee of a minimum value for the released shares for 18 months from the date of release. In the event that either vendor is not able to resell the shares at the IPO price of $4.00 per share, the Company will make additional payments under its minimum value guarantee to the vendor in cash to ensure a total compensation of $3,750,000 to Artemis and $1,250,000 to EVEMeta. Those payments will be made in cash and not in additional shares of Common Stock.

The issuances of the Stock Consideration are accounted for as a combination award in accordance with the accounting provisions under ASC 718, "*Compensation - Stock Compensation"* and ASC 350-40, "*Intangibles - Goodwill and Other-Internal-Use Software*" as noted in Note 2, regarding the technology purchase agreements.

**BRAG HOUSE HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 4 - COMMITMENTS AND CONTINGENCIES** (cont.)

The Stock Consideration is classified as a combination of equity awards (referred to herein as Issuance of Common Stock for Services) or liability awards (referred to herein as Stock-Based Compensation Liability) in accordance with GAAP. The fair value of an equity-classified award is determined at the grant date and is either recognized as an expense to software expense, an operating expense, on a straight-line basis over the service period, or is capitalized as an implementation cost and amortized to software expense over the useful life of the cloud computing arrangement once the software is placed in use. Whether the amount is expensed or capitalized is based on the respective statement of work in each agreement, the value attributed to each and the realization of those services. The fair value of a liability-classified award is determined on a quarterly basis beginning at the grant date until final vesting. Changes in the fair value of liability-classified awards are either recorded to software expense, an operating expense, on a straight-line basis over the service period, or capitalized as an implementation cost and amortized to software expense over the useful life of the cloud computing arrangement once the software is placed in use. Changes in the fair value of liability-classified awards do not result in an impact to the Company's stockholders' equity (deficit) balance.

As of December 31, 2024, the Company only recognized the par value of the shares that were issued and has recorded $125 as a non-current prepaid expense in other assets. The services in accordance with the agreements commenced on the Company's IPO date, March 7, 2025, and services performed under the agreements and compensation costs for the services rendered have been recognized as a software expense or capitalized to capitalized implementation costs, based on the respective agreements.

The Company recognized $588,260 and $0 in total non-employee stock-based compensation costs in relation to the Stock Consideration issued for the technology purchase agreements for the years ended December 31, 2025 and 2024, respectively.

**Equity-Classified Awards**

The Company recognized $471,591 and $0 in non-employee equity-classified stock-based compensation costs for the years ended December 31, 2025 and 2024, respectively.

As of December 31, 2025, there was no longer a remaining unrecognized compensation cost related to the Company's equity-classified awards due to Artemis and EVEMeta breaching its contracts with the Company, as referenced above in Note 2 of this filing. During the year ended December 31, 2025, the Company recorded software expenses of $159,091 in connection with the services rendered with the support and maintenance services with Artemis and the use of the EVEMeta compression software, which included the expensing of the $62 previously recorded as a debit to non-current prepaid expense asset and a credit to Common Stock as of December 31, 2024, for a total increase to stockholders' equity of $159,029 during the year ended December 31, 2025. Further, during the same period, the Company recorded an increase to software expenses of $312,500 in connection with the impairment of capitalized implementation costs in connection with development services rendered, which included the expensing of the $63 previously recorded as a debit to non-current prepaid expense asset and a credit to Common Stock as of December 31, 2024, for a total increase to stockholders' equity of $312,437 during the year ended December 31, 2025. As a result, the total increase to stockholders' equity for the issuance of Common Stock for services was $471,466 for the year ended December 31, 2025, which is the sum of the aforementioned $312,437 and $159,029 amounts.

**Liability-Classified Awards**

The Company recognized $116,669 and $0 in non-employee liability-classified stock-based compensation costs for the years ended December 31, 2025 and 2024, respectively.

On May 12, 2025, the Company executed an amendment to the MSA with Artemis. The amendment eliminated the minimum share price guarantee, therefore no longer requiring the Company to guarantee a minimum return of $4 on the sale of each share received in compensation for the MSA. The amendment triggered a cash payment of $225,000 by the Company to Artemis. Further, the Company agreed to remove the lock-up provision and gradual release obligations relating only to the stock consideration included in Exhibit A of the amended agreement, which releases 234,375 shares of Common Stock as of the amendment date. The cash payment, elimination of the $4 guarantee, and removal of the lock-up provision and gradual release obligations were made in contemplation of Artemis delivering to the Company the Services and Deliverable to be provided pursuant to the MSA.

On the same day, the Company executed an amendment to the SaaS Agreement with EVEMeta. The amendment eliminated the minimum share price guarantee, therefore no longer requiring the Company to guarantee a minimum return of $4 on the sale of each share received in compensation for the SaaS Agreement. The amendment triggered a cash payment of $25,000 by the Company to EVEMeta. No shares were released from lock-up provisions for EVEMeta. The cash payment and elimination of the $4 guarantee were made in contemplation of EVEMeta delivering to the Company the Compression Services to be provided pursuant to the SaaS.

On May 12, 2025, the Company completed a fair value measurement valuation for the cash settlement provision, the liability classified award, using a Monte Carlo simulation model and determined a total fair value of $2,942,136. The Company recognized a stock-based compensation liability from the total fair value only to the extent in which services were provided to the Company through the amendment date, which resulted in partial recognition and was an estimate by the Company as of the amendment date. The Company recognized a stock-based compensation liability and an addition to software expenses of $116,669. The stock-based compensation liability was extinguished as a result of the amendment on May 12, 2025.

**BRAG HOUSE HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 5 - STOCKHOLDERS' DEFICIT**

 

*Capital Structure*

On December 3, 2021, BHHI was incorporated and the Company authorized 50,000,000 shares of Common Stock with a par value of $0.0001 per share and 5,000,000 shares of preferred stock with a par value of $0.0001 per share. On February 22, 2022, the certificate of incorporation was amended and the Company authorized 250,000,000 shares of Common Stock with a par value of $0.0001 per share and 25,000,000 shares of preferred stock with a par value of $0.0001 per share. Further, the Company designated 200,000 shares of preferred stock as Series A Preferred Stock with a par value of $0.0001 per share. Shares of Convertible Series A Preferred Stock and Common Stock (the "Junior Securities") are entitled to one vote for each share. In order of liquidation rights, distributions will be made to the Series A Preferred holders then to the holders of the other remaining Junior Securities, which are currently Common Stock. The Series A Preferred Stock has a liquidation preference of $0.50 per share in the event of a liquidation and distribution. Further, each share of Convertible Series A Preferred Stock shall automatically convert into one share of Common Stock upon consummation of an underwritten public offering of Common Stock. The Company completed an initial public offering during March of 2025. Please refer to Note 1 and the following section for the details of the IPO. There were no shares of Series A Preferred Stock issued and outstanding during any period since inception, and 0 shares and 82,096 shares of Preferred Stock issued and outstanding as of December 31, 2025 and 2024, respectively. Further, a total of 20,951,363 and 7,033,330 shares of Common Stock were issued and outstanding as of December 31, 2025 and 2024, respectively.

In July of 2025, the Company filed a certificate of designation and a subsequent amendment to the certificate of designation with the Secretary of State of the State of Delaware to designate 15,000 shares of the available 24,800,000 shares of Preferred Stock as Series B Convertible Preferred Stock ("Series B Preferred Stock"). Each share is convertible at the option of the holder into shares of Common Stock at a conversion price of $0.942. The Series B Preferred Stock is not redeemable into cash or other assets and is classified as permanent equity. On July 30, 2025, an amendment was filed to establish that each share of Series B Preferred Stock is non-voting. Please refer to the *Private Investment into Public Entity (PIPE)* section below.

On December 11, 2025, the Company filed a certificate of designation of Series C Convertible Preferred Stock, effective as of December 11, 2025, with the Secretary of State of Delaware. The certificate of designation was filed pursuant to Section 7.22 of the Merger Agreement.

The certificate of designation designates 65 shares of the Company's preferred stock, par value $0.0001 per share, as Series C Convertible Preferred Stock. Each share of Series C Convertible Preferred Stock is convertible into 5,000,000 shares of the Company's Common Stock, par value $0.0001 per share, subject to certain beneficial ownership limitations.

The Series C Convertible Preferred Stock votes together with the Common Stock on an as-converted basis, subject to the limitations described above, including a 4.99% voting cap on an as-converted basis. Holders of the Series C Convertible Preferred Stock are entitled to receive dividends on an as-converted basis when, as and if dividends are paid on the Common Stock. Upon a liquidation of the Company, the Series C Convertible Preferred Stock ranks senior to the Common Stock, pari passu with the Company's existing series of preferred stock, and junior only to securities that are expressly designated as senior securities.

The certificate of designation also contains customary anti-dilution adjustment provisions for stock splits, stock dividends, recapitalizations, and similar corporate transactions. The Series C Convertible Preferred Stock may not be issued other than in accordance with the Merger Agreement or in connection with subsequent rights offerings in which holders of Series C Preferred Stock would be entitled to participate on an as-converted basis.

 

**BRAG HOUSE HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 5 - STOCKHOLDERS' DEFICIT** (cont.)

 

*Initial Public Offering*

On February 14, 2025, the Company received its notice of effectiveness from the SEC and became a public company. On March 5, 2025, the Company entered into a material definitive agreement in the form of an underwriting agreement with Kingswood as representative of the underwriters named therein, for the offer and sale of 1,475,000 shares of the Company's Common Stock at a public offering price of $4.00 per share for gross proceeds, before deducting underwriting discounts and other related expenses, of $5.9 million. Underwriting discounts and other related expenses totaled $1.1 million and were recorded as offering costs during the year ended December 31, 2025, for total net proceeds of $4.8 million. Payment of those offering costs was made directly from the proceeds of the offering.

On March 6, 2025, the Company's shares began trading on Nasdaq under the symbol "TBH" and on March 7, 2025, the Company filed its prospectus with the SEC and completed its IPO.

On March 10, 2025, Kingswood, as representative of the underwriters, exercised in full its option to purchase an additional 221,250 shares of the Company's Common Stock to cover over-allotments at a public offering price of $4.00 per share for gross proceeds from the over-allotment exercise of $885,000. Underwriting discounts and other related expenses totaled $95,800, and are recorded as offering costs during the year ended December 31, 2025 for total net proceeds of $789,200. Payment of those offering costs was made directly from the proceeds of the offering. Please refer to Note 1 for further detail.

Offering costs represent legal, accounting and other direct costs related to the IPO, which closed on March 7, 2025. Prior to the close of the IPO, these costs were recognized as deferred offering costs. These direct offering costs were reclassified to additional paid-in capital from deferred offering costs. The Company recorded $0 and $1,219,176 of deferred offering costs in the accompanying consolidated balance sheets as of December 31, 2025 and December 31, 2024, respectively. As of December 31, 2025, a total of $1,351,098 was reclassified from deferred offering costs to offering costs. Of this amount, $1,236,098 is recorded as offering costs and the remaining $115,000 was paid directly from the IPO proceeds and included in the offering costs which are netted against the IPO proceeds on the consolidated statements of changes in stockholders' equity (deficit).

 

*Incentive Award Plan* 

 

On June 11, 2024, the Company's Board of Directors adopted the 2024 Omnibus Incentive Plan (the "Original Stock Incentive Plan"), which was approved by its stockholders on June 13, 2024. On December 31, 2024 the Company's Board of Directors adopted the amended 2024 Omnibus Incentive Plan (the "Stock Incentive Plan"), which was approved by the Company's stockholders on January 30, 2025. The Stock Incentive Plan became effective on February 13, 2025. The Stock Incentive Plan will provide for the grant of incentive stock options, within the meaning of Section 422 of the Internal Revenue Code ("Code") to the Company's employees, and for the grant of stock options (including incentive stock options ("ISOs") and non-qualified stock options ("NSOs"), SARs, restricted stock, restricted stock units ("RSUs"), and other stock-based and cash-based incentive awards, and other stock-based performance awards to the Company's employees, directors, and consultants (collectively, "Awards").

A total of 2,250,000 shares of common stock will be reserved for issuance pursuant to the Stock Incentive Plan ("Plan Share Reserve"). The Plan Share Reserve shall be increased on the first day of each fiscal year beginning with the 2025 fiscal year, in an amount equal to the lesser of (i) ten percent (10.0%) of the outstanding shares of common stock on the last day of the immediately preceding fiscal year, which was determined to be 2,095,136 for the year ended December 31, 2025, and (ii) an amount determined by the Board of Directors. On January 1, 2026, the plan automatically increased to a total of 4,345,136 shares of Common Stock.

Shares with respect to which options or SARs are not exercised prior to termination of the option or SAR, shares that are subject to restricted stock units which expire without converting to Common Stock, and shares of restricted stock which are forfeited before the restrictions lapse, shall be available for grants of new Awards under the Stock Incentive Plan. Notwithstanding the foregoing, neither (i) shares accepted by the Company in payment of the exercise price of any option, if permitted under the terms of such option, nor (ii) any shares withheld from a participant, or delivered to the Company in satisfaction of required withholding taxes arising from Awards, nor (iii) the difference between the total number of shares with respect to SAR, shall be available for reissuance under the Stock Incentive Plan.

**BRAG HOUSE HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 5 - STOCKHOLDERS' DEFICIT** (cont.)

Awards granted under the Stock Incentive Plan upon the assumption of, or in substitution for, awards authorized or outstanding under a qualifying equity plan maintained by an entity directly or indirectly acquired by the Company will not reduce the shares available for grant under the Stock Incentive Plan. However, any such shares issued in connection with the assumption of, or in substitution for, outstanding options intended to qualify as incentive stock options shall be counted against the aggregate number of shares of Common Stock available for Awards of incentive stock options under the Plan. Subject to applicable stock exchange requirements, available shares under a stockholder-approved plan of an entity directly or indirectly acquired by the Company may be used for Awards under the Stock Incentive Plan and shall not reduce the number of shares of Common Stock available for issuance under the Stock Incentive Plan.

The Compensation Committee of the Company's Board of Directors will administer the Stock Incentive Plan (the "Administrator"). Each Award will be set forth in a separate agreement and will indicate the type and terms and conditions of the Award. Compensation for grants of awards will be determined in accordance with the Company's stock-based compensation policy.

As of December 31, 2025, the Company has issued stock options to Executives, an employee, Directors and a contractor of the Company with options reserved in the Stock Incentive Plan to purchase a total of 1,950,000 shares of Common Stock. Please refer to the Stock Options section below.

*Underwriter Warrants*

 

Pursuant to the underwriting agreement, the Company issued to the underwriters on the closing date of the IPO (the "Closing Date"), warrants (the "Underwriter Warrants") to purchase an aggregate of 44,250 shares of the Company's Common Stock, representing 3% of the shares issued on the Closing Date. The Underwriter Warrants will be exercisable, in whole or in part, commencing on September 3, 2025, and expiring on September 9, 2029, at an initial exercise price per share of Common Stock of $4.00, which is equal to 100% of the offering price. No Underwriter Warrants have been exercised as of December 31, 2025.

The Underwriter Warrants are classified as equity instruments in accordance with ASC 815-40, "*Derivatives and Hedging - Contracts in Entity's Own Equity"*. The warrants are considered indexed to the Company's own stock and meet the equity classification criteria under GAAP.

The fair value of the underwriter warrants was estimated using the Black-Scholes option pricing model, a Level 3 measurement, with the following assumptions:

&nbsp;&nbsp;&nbsp;&nbsp;● Stock Price: $4.30

● Risk-free interest rate: 4.00%

● Expected term: 4.5 years

● Expected volatility: 87.00%

● Dividend yield: 0%

The estimated fair value of the Underwriter Warrants on the grant date was approximately $2.96 per share for a total value of $130,980 which was accounted for as a cost of issuing equity, in offering costs. Accordingly, it has been recorded as a reduction to the additional paid-in capital in the statement of stockholders' equity (deficit), in accordance with SEC Staff Accounting Bulletin Topic 5.A.

 

**BRAG HOUSE HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 5 - STOCKHOLDERS' DEFICIT** (cont.) 

 

*Stock Options*

 

During the year ended December 31, 2025, the Company issued stock options ("Options") to Executives, an employee, Directors and a contractor of the Company to purchase a total of 1,950,000 shares of Common Stock. Vesting terms extend from three to four years, with some of the Options vesting immediately. As of December 31, 2025, 1,875,000 Options had vested. The Options carry strike prices ranging from $0.576 to $1.00. Stock options issued to purchase 1,052,888 shares of Common Stock were issued with a strike price that was at the money ("at-the-money options") and the remaining stock options to purchase 897,112 shares of Common Stock were issued with a strike price that was out of the money ("out-of-the-money options"). The Company uses the "simplified method" to estimate the expected term for stock options that have exercise prices issued at-the-money, consistent with SEC Staff Accounting Bulletin Topic 14, and uses the Black-Scholes option pricing model to determine the fair value of these stock options. For stock options with exercise prices at issuance that are out-of-the-money, the Company uses a Binomial Lattice model, which incorporates assumptions about future exercise behavior and potential changes in stock price over the life of the award.

 

The Options are classified as equity instruments and accounted for in accordance with ASC 718, "*Compensation - Stock Compensation*".

The fair value of the at-the-money options was estimated using the Black-Scholes option pricing model, a Level 3 measurement, with the following assumptions:

&nbsp;&nbsp;&nbsp;&nbsp;● Stock Price: $0.57 - $0.84

● Risk-free interest rate: 3.84% - 4%

● Expected term: 5.13 - 5.75 years

● Expected volatility: 83.6% - 84.5%

● Dividend yield: 0%

The fair value of the out-of-the-money options was estimated using the Binomial Lattice option pricing model, a Level 3 measurement, with the following assumptions:

&nbsp;&nbsp;&nbsp;&nbsp;● Stock Price: $0.73

● Risk-free interest rate: 4.39%

● Expected term: 10 years

● Expected volatility: 82.4%

● Dividend yield: 0%

&nbsp;&nbsp;&nbsp;&nbsp;● Exercise Multiple to Strike Price: 2.2x

&nbsp;&nbsp;&nbsp;&nbsp;● Derived Service Period: 7.35 years

The estimated fair values of the Options on the grant dates were within a range of $0.38 and $0.60 per share for a total value of $830,477.

**BRAG HOUSE HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 5 - STOCKHOLDERS' DEFICIT** (cont.)

On October 28, 2025, the Compensation Committee of the Board of Directors adopted a resolution by written unanimous consent to accelerate the vesting of the Company's Executives' stock options with the Company. This triggered the immediate vesting of 518,707 stock options to purchase shares of Common Stock and was treated as a Type 1 modification in accordance with ASC 718*,* as the awards are expected to vest under the original terms. Incremental compensation expense was measured as the excess, if any, of the fair value of the modified award over the fair value of the original award immediately before its terms were modified. The fair value of the modified stock options was measured using the fair value stock price immediately before and immediately after the modification date which resulted in no incremental compensation expense. The fair value of stock options was measured using the Black-Scholes option pricing method using the appropriate valuation assumptions immediately before and immediately after the modification date. The Company concluded that the modification of these awards did not result in any incremental value which required recognition.

The Company recognized stock-based compensation of $642,577 for the vested Options for employees, which was classified as stock-based compensation for the year ended December 31, 2025. The Company recognized stock-based compensation of $150,957 for the vested Options for non-employees in connection with legal and professional expenses for the year ended December 31, 2025. A total of $37,665 remains as unamortized stock-based compensation expense as of December 31, 2025.

 

The following is an analysis of BHHI stock options issued as compensation:

---

| | | |
|:---|:---|:---|
|  | **Nonvested <br> Shares** | **Weighted <br> Average <br> Exercise <br> Price** |
| Nonvested shares, December 31, 2024 | - | $- |
| Granted | 1950000 | $0.81 |
| Vested | (1875000) | $0.81 |
| Forfeited | - | $- |
| Nonvested shares, December 31, 2025 | 75000 | $0.84 |
| Exercisable at December 31, 2025 | 1875000 | $0.81 |

---

 

*Stock Issuances*

In March of 2024, the Company sold 29,094 shares of BHHI Common Stock for total proceeds of $100,000. These were issued during May of 2024 and, therefore, issued and outstanding as of December 31, 2024.

During the year ended December 31, 2024, the Company issued shares payable to vendors and contractors and shares in connection with the issuance of convertible debt securities, which were designated as equity kicker shares, and made up the balance of shares payable in prior periods. A total of 135,856 shares of Common Stock were issued and outstanding with a total value of $351,405. Further, the Company received and retired 208,010 shares of Common Stock from previous shareholders with a total value of $576. Lastly, the Company incurred an additional $5,000 in costs connected with the offering of equity securities.

During the year ended December 31, 2024, the Company also issued 81,462 shares of Common Stock in full payment of the $280,000 amount that was payable in shares of the Company in connection with the issuance of bridge loans. Please refer to Note 7. All 81,462 shares of Common Stock were issued during the year ended December 31, 2024.

On November 13, 2024, the Company entered into a MSA with Artemis to develop software for the Company and provide certain services. Please refer to Note 4. As of December 31, 2025, 312,500 of the shares have been released from the lock-up provisions. The Company has recognized the par value of the shares, equaling $125, as an increase to Common Stock and other assets as of December 31, 2024. On March 7, 2025, the services per the SaaS Agreement and MSA began and the Company began recognizing compensation expenses as services were provided.

During the year ended December 31, 2025, $312,500 was initially recognized as capitalized implementation costs and later impaired and recorded to software expense, in connection with the software development services in the MSA with Artemis. A total of $159,091 was also recognized as software expense, in connection with the services and maintenance services in the MSA with Artemis and the SaaS with EVEMeta. Please refer to Notes 2 and 4 for further detail on these technology purchase agreements.

**BRAG HOUSE HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 5 - STOCKHOLDERS' DEFICIT** (cont.)

In December of 2024, the Company sold 6,250 shares of Common Stock for total cash proceeds of $25,000 to the Company's former CFO, Chetan Jindal. The shares of Common Stock were to be issued immediately after the consummation of the IPO, in accordance with the subscription agreement. These shares were issued in April of 2025.

In March of 2025, the Company's Board of Directors issued their unanimous consent to issue shares in connection with several transactions and the Company issued those shares. The Company authorized and issued 56 shares of Common Stock owed in January of 2025. The issuance of these shares did not have an impact on the balance in equity.

In March of 2025, the Company authorized and issued 82,096 shares of Common Stock due to the conversion of each share of preferred stock to one share of Common Stock as a result of the IPO.

In accordance with the Marketing agreement detailed in Note 4, $200,000 worth of the Company's Common Stock, priced at the Company's IPO price of $4.00 per share became due within ten business days of the Listing Date. The Company issued the shares, totaling 50,000 shares, in April of 2025, subsequent to the due date of March 20, 2025.

In April of 2025, the Company also issued 1,875 shares of Common Stock in repayment of accrued interest of $7,500, subsequent to the maturity date of February 15, 2025.

In October of 2025, the Company issued 175,000 shares of Common Stock in connection with services valued at $210,000. The consideration paid is for services to be provided from November 2025 through April 2026. As such, only $70,000 has been recognized as an expense for the year ended December 31, 2025 and the remaining amount of $140,000 is included as a prepaid expense on the consolidated balance sheets as of December 31, 2025.

In November of 2025, the Company issued 77,273 shares of Common Stock in connection with marketing services valued at $82,682.

 

*Restricted Stock Agreements*

BHI, and therefore the Company, entered into Restricted Stock Purchase Agreements ("RSPA") with various employees and advisors. The share exchanges that occurred during 2021 and 2022 have an effect on the number of restricted shares that are vested and unvested as of the end of each respective reporting period.

During the year ended December 31, 2020, BHI also entered into various RSPAs with an employee and two advisers, pursuant to which BHI sold 225,000 shares of restricted Common Stock in BHI at par value of $0.0001 per share for cash proceeds of $22. The restricted stock vests at varying rates. During the year ended December 31, 2025, the Company wrote off the $22 recorded as contra equity on the December 31, 2024 consolidated balance sheets as this amount was deemed uncollectable. During the year ended December 31, 2024, after the effect of the share exchanges, 61,880 shares of Common Stock were considered vested and the Company recognized stock-based compensation expense of $9,766 for the restricted shares that vested during 2024. All shares were fully vested as of December 31, 2024, and no unamortized stock compensation remained.

**BRAG HOUSE HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 5 - STOCKHOLDERS' DEFICIT** (cont.)

On February 10, 2022, the Company issued a Restricted Stock Award to its outside legal counsel for 279,129 shares of Common Stock. The restricted stock vests 25% immediately and 25% over the next three years at each anniversary. As of December 31, 2025 and 2024, 279,129 and 209,347 shares of Common Stock were considered vested, and the Company recognized stock-based compensation expense of $170,000 per year for the restricted shares that vested during 2025 and 2024. At December 31, 2025 and 2024, unamortized stock compensation of $0 and $170,001 remained.

The following is an analysis of BHI and BHHI shares of Common Stock issued as compensation subsequent to the US Reorganization and presented entirely as BHHI Common Stock:

---

| | | |
|:---|:---|:---|
|  | **Nonvested <br> Shares** | **Weighted <br> Average <br> Fair <br> Value** |
| Nonvested shares, December 31, 2023 | 150308 | $2.34 |
| Granted | - | $- |
| Vested | (80525) | $1.50 |
| Forfeited | - | $- |
| Nonvested shares, December 31, 2024 | 69783 | $2.44 |
| Granted | - | $- |
| Vested | (69783) | $2.44 |
| Forfeited | - | $- |
| Nonvested shares, December 31, 2025 | - | $- |

---

*Private Investment into Public Entity (PIPE)*

On July 24, 2025, the Company entered into a Securities Purchase Agreement (the "Securities Purchase Agreement") with twelve accredited investors (the "Investors") for a private investment in public equity (the "PIPE Offering") of 15,000 shares of its Series B Preferred Stock, par value $0.0001 per share convertible into 15,923,567 shares of Common Stock, par value $0.0001 per share, at a conversion price of $0.942 per share of Series B Preferred Stock, and an aggregate of 15,923,567 warrants (the "PIPE Warrants") to acquire up to 15,923,567 shares of Common Stock. The purchase price of the securities was $1,000 per share of Series B Preferred Stock and accompanying 1,061.5711 PIPE Warrants to acquire up to 1,061.5711 shares of Common Stock, subject to beneficial ownership limitations. The PIPE Warrants issued in the PIPE Offering are exercisable immediately upon issuance at an exercise price of $0.817 per share and will expire five years from the date of issuance.

**BRAG HOUSE HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 5 - STOCKHOLDERS' DEFICIT** (cont.)

The PIPE Offering closed on July 30, 2025, with aggregate gross proceeds totaling $15 million, before placement agent fees, as noted below, and other legal expenses of $150,000 which were directly deducted from the proceeds totaling $1,321,205. In addition to the fees directly deducted from the proceeds, the Company incurred an additional fee of $635,000, discussed further below, and other fees totaling $8,500 for total offering costs of $1,964,705. The Company intends to use the proceeds from the PIPE Offering for general corporate and working capital purposes.

The exercise price and number of shares of Common Stock issuable upon exercise of the PIPE Warrants is subject to appropriate adjustment in the event of stock dividends, stock splits, reorganizations or similar events affecting the Common Stock and the exercise price. Subject to limited exceptions, the Investors may not exercise any portion of the PIPE Warrants to the extent that the Investors would beneficially own more than 4.99% (or, at the election of the holder prior to the date of issuance, 9.99%) of the outstanding Common Stock after exercise. In the event of certain fundamental transactions, the holder of the PIPE Warrants will have the right to receive the Black Scholes Value (as defined in the PIPE Warrants) of its PIPE Warrants calculated pursuant to a formula set forth in the PIPE Warrants, payable in cash. There is no trading market available for the PIPE Warrants on any securities exchange or nationally recognized trading system. The Company does not intend to list the PIPE Warrants on any securities exchange or nationally recognized trading system.

Revere Securities, LLC acted as placement agent (the "Placement Agent") in connection with the PIPE Offering, pursuant to that certain Placement Agent Agreement, dated as of July 24, 2025, between the Company and the Placement Agent, pursuant to which the Company paid the Placement Agent a total of $1,171,205 in fees, which were recognized as offering costs and included in the above $1,964,705 amount. Additionally, a total of 1,057,543 warrants were issued to the Placement Agent (the "Placement Agent Warrants") to acquire up to 1,057,543 shares of Common Stock at an exercise price of $0.942 per share and will expire five years from the date of issuance. These warrants were valued using a Black-Scholes model calculation and were determined to have a fair value of $791,194, all of which were recognized as offering costs. No Placement Agent Warrants were exercised as of December 31, 2025.

In connection with the PIPE Offering and as a pre-condition to effecting the PIPE Offering through Revere Securities, LLC, the Company entered into an agreement to terminate its exclusive engagement with H.C. Wainwright & Co., LLC for professional services allowing the Company to proceed with the PIPE Offering. As consideration for the termination, the Company issued 536,093 warrants (the "H.C. Wainwright Warrants") to acquire up to 536,093 shares of Common Stock at an exercise price of $1.884 per share, which will expire five years from the date of issuance. These warrants were valued using a Black-Scholes model calculation and were determined to have a fair value of $315,195, which was recognized as offering costs. Additionally, a cash payment of $635,000 was made, which was recognized as offering costs and included in the above $1,964,705 amount. No H.C. Wainwright Warrants were exercised as of December 31, 2025.

The fair value of the PIPE Warrants, Placement Agent Warrants and H.C. Wainwright Warrants was estimated using the Black-Scholes option pricing model, a Level 3 measurement, with the following assumptions:

&nbsp;&nbsp;&nbsp;&nbsp;● Stock Price: $1.130

&nbsp;&nbsp;&nbsp;&nbsp;● Risk-free interest rate: 3.92%

● Expected term: 5 years

● Expected volatility: 73.2%

● Dividend yield: 0%

**BRAG HOUSE HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 5 - STOCKHOLDERS' DEFICIT** (cont.)

The estimated fair values of the warrants on the grant dates were within a range of $0.59 and $0.78 per share for a total value of $13,498,967. The Company recognized the fair value of the Placement Agent Warrants and the H.C. Wainwright Warrants as offering costs in connection with the PIPE Offering, totaling $1,106,389 for the year ended December 31, 2025. The fair values attributed to the PIPE Warrants of $12,392,578 and the Series B Preferred Stock of $19,108,280 were used to bifurcate the PIPE Offering proceeds using the relative fair value method and resulted in an allocation of the proceeds of the PIPE Offering as $9,098,933 and $5,901,067 to the Series B Preferred Stock and PIPE Warrants, respectively, before deducting offering costs.

During the year ended December 31, 2025, holders of the Series B Preferred Stock converted a total of 6,902 shares into 7,327,245 shares of Common Stock. Further, during this period, a total of 2,099,257 PIPE Warrants were exercised at $0.817 per warrant for total proceeds of $1,715,092.

*Common Stock Awards - PIPE*

During the year ended December 31, 2025, the Company made two grants for 300,000 and 150,000 totaling 450,000 issued shares of fully vested Common Stock awards in exchange for legal and professional services, which are incremental costs in connection with the PIPE Offering and recognized as offering costs. The fair value of these shares at the date of grant was $0.73 and $1.72, respectively, and this resulted in fair values of $220,200 and $258,000, respectively, for a total cost of $478,200.

*Par Value Adjustment - Common Stock*

During the year ended December 31, 2025, the Company recorded a reclassification within stockholders' equity (deficit) to correct the allocation between Common Stock and Additional Paid-In Capital. This adjustment ensured that the Common Stock account reflects the number of shares issued and outstanding multiplied by the par value.

**NOTE 6 - INCOME TAXES**

The Company, with stockholder's consent, elected to be taxed as an "S Corporation" during the years prior to 2021 under the provisions of the Internal Revenue Code under Section 1362(a) and comparable state income tax law. As an S Corporation, the Company is generally not subject to corporate income taxes and the Company's net income or loss is reported on the individual tax return of the stockholders of the Company. As a result of the UK Reorganization, the Company was no longer eligible to elect an S Corporation status for tax purposes and was subject to tax filings as a C-Corporation for the years ending 2021 through 2023. The Company filed all necessary Federal and State tax returns as a C-Corporation for the years ending 2021 through 2024, and has accrued $95,000 for any potential non-compliance penalties.

The Company identified its federal and New York state tax returns as its "major" tax jurisdictions. The periods for income tax returns that are subject to examination for the federal and New York tax jurisdictions are 2024, 2023 and 2022.The Company believes its income tax filing positions and deductions will be sustained on audit, and management does not anticipate any adjustments that would result in a material change to its financial position. Therefore, no liabilities for uncertain tax positions have been recorded.

**BRAG HOUSE HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 6 - INCOME TAXES** (cont.)

As a result of being in a tax-loss position, the Company has not recorded a tax provision for the years ending on December 31, 2025 or 2024. The net deferred income tax assets/liabilities in the December 31, 2025 and 2024 consolidated balance sheets include the following components:

---

| | | |
|:---|:---|:---|
|  | **12/31/2025** | **12/31/2024** |
| **Deferred tax assets:** | | |
| Stock Compensation Expense | - | 646033 |
| Capitalized R&D Sec 174 | - | 100251 |
| Accrued Liabilities | 267238 | - |
| Investment in Warrants | 1779504 | - |
| Charitable Contribution Carryforward | 263 | - |
| R&D Credit Carry Overs | 28664 | - |
| Federal NOL (Loss Carryovers) | 3869794 | 2032146 |
| State NOL (Loss Carryovers) | 946257 | 736934 |
| Valuation Allowance | (6891719) | (3515364) |
| Total deferred tax Assets | - | - |

---

Upon adoption of ASU 2023-09, Improvements to Income Tax Disclosures, as described in Note 2, Summary of Significant Accounting Policies, the provision for income taxes for the year ended December 31, 2025, differs from the amount of income tax determined by applying the applicable United States statutory federal income tax rate to pre-tax loss from operations as a result of the following differences:

---

| | | |
|:---|:---|:---|
|  | **12/31/2025** | |
| U.S. Federal Statutory Tax Rate | (3337007) | 21.00% |
| Tax Credits | 1130 | -0.01% |
| Equity Based Compensation | 403440 | -2.53% |
| Nontaxable or nondeductible items - Other | 26822 | -0.17% |
| State and local income taxes&nbsp;&nbsp;&nbsp;&nbsp; , net of federal income tax effect (1) | (470740) | 2.96% |
| Changes in Valuation Allowance | 3376355 | -21.25% |
| **Income Tax (Benefit) Expense** | - | 0.00% |

---

(1) The states that contribute to the majority (greater than
50%) of the tax effect in this category include New York for 2021 - 2024.

The provision for income taxes for the year ended December 31, 2024, differs from the amount of income tax determined by applying the applicable United States statutory federal income tax rate to pre-tax loss from operations as a result of the following differences presented in accordance with the guidance prior to the adoption of ASU 2023-09 was as follows:

---

| | |
|:---|:---|
|  | **12/31/2024** |
| Expected Income Tax Benefit | 21.00% |
| State statutory income tax rate, net of federal benefit | 5.00% |
| Change in Valuation Allowance | -26.00% |
| **Income Tax (Benefit) Expense** | 0.00% |

---

Brag House Holdings, Inc. has U.S. Federal net operating loss (NOL) carryovers of $18,427,591 as of December 31, 2025. Under the Tax Cuts and Jobs Act ("TCJA") Federal NOL's incurred in taxable years beginning in 2018 and later have an indefinite carryforward period, but the use of the NOL carryover is limited to 80% of taxable income in the subsequent year. Federal NOL carryovers incurred prior to 2018 expire after 20 years. Brag House Holdings, Inc. has $0 of Federal NOL carryovers incurred prior to 2018. Brag House Holdings, Inc. has State NOL carryovers in New York of $18,427,591 which begin expiring in 2041. NOL carryovers are a benefit to Brag House Holdings, Inc. in the form of future tax savings and such carryovers are recorded as deferred tax assets, subject to a valuation allowance. Brag House Holdings, Inc. has provided a valuation allowance of 100% of its net deferred tax assets due to the uncertainty of generating future profits that would allow for the realization of such deferred tax assets.

**BRAG HOUSE HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 7 - DEBT**

 

*Convertible Debt*

The Company issued convertible debt during 2022 through May of 2024 under its initial round of convertible debt. The balance of convertible debt as of December 31, 2024 was $5,722,511 in outstanding principal and no remaining unamortized debt issuance costs and debt discount. As of December 31, 2024, accrued interest for the notes totaled $888,894.

During 2024, the Company issued convertible debt in the form of original issue discount convertible promissory notes. These notes provide investors with a 20% discount on their investment amount. To determine the principal amount of the notes, the investment amount is divided by 0.80, reflecting that 20% original issue discount. Concurrent with the issue and sale of the notes, each holder was entitled to receive a number of shares of the Company's Common Stock, par value $0.0001 per share equal to: (i) in the case of a holder that is a Lead Investor, the quotient resulting when 20% of the Holder's purchase price is divided by a price per share equal to the Valuation Cap divided by the Company Capitalization, (ii) In the case of all other holders, the quotient resulting when 5% of the Holder's purchase price is divided by a price per share equal to the Valuation Cap divided by the Company Capitalization. The purchase price means the product of the principal amount of the note multiplied by 0.80. The Valuation Cap is set at $20,000,000 and the Company Capitalization means the sum of all equity securities (on an as-converted basis) issued and outstanding, assuming exercise or conversion of all outstanding vested and unvested options, warrants and other convertible securities, but excluding the notes and all equity securities reserved and available for future grant under any equity incentive or similar plan of the Company.

During the year ended December 31, 2024, the Company extended the maturity date of the debt and incurred an additional $997,253 in principal due to extension fees. During the same period, the Company also raised a total of $158,424 in additional operating capital through the issuance of additional original issue discount convertible promissory notes, all of which carry the same terms as all other issued convertible debt. The issuance of these notes resulted in an additional debt discount totaling $39,606 for a total principal amount of $198,030. In addition, note holders were entitled to 2,302 shares of Common Stock and with a share fair market value between $2.42 and $3.46 for a total additional debt discount and share payable of $6,819 during the year ended December 31, 2024. The Company recorded $46,410 in amortization of debt discount to interest expense on the consolidated statements of operations and comprehensive loss for the year ended December 31, 2024. The Company also incurred an additional $525,774 in accrued interest during the year ended December 31, 2024.

In connection with the completion of the IPO on March 7, 2025, which was deemed a qualifying financing event, the Company converted the total balance due to all holders of the original issue discount convertible promissory notes. The actual date of conversion of the notes was completed on March 6, 2025. The total amount that was converted was $6,611,405, which was the total principal of $5,722,511 and accrued interest of $888,894 as of December 31, 2024. These were converted into a total of 1,912,176 shares of the Company's Common Stock. An additional accrual of interest through the date of the IPO, March 7, 2025, was recorded as of March 7, 2025 for $103,101 and this balance is included as a share payable since it was convertible to shares of Common Stock totaling 29,660 as of the date of IPO. In April of 2025, 29,305 of these shares were issued, representing an increase of $101,867 for an updated total converted amount of $6,713,272 for the year ended December 31, 2025. The remaining 355 shares are pending to be issued and the balance of the accrued interest for the shares that were not yet issued, $1,234, is recorded as a share payable balance until issued.

**BRAG HOUSE HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 7 - DEBT** (cont.)

 

*Notes Payable*

In June of 2024, the Company received a loan in the amount of $12,198 which was payable in the foreign currency of Great British Pounds. This loan had no maturity date or interest rate assigned to the loan. It was also unsecured and there were no assets pledged on the loan. This loan was revalued at December 31, 2024 and had a principal balance of $12,900. During the year ended December 31, 2025, a gain on foreign currency exchange was recognized for $424 on the revaluation of the loan. This loan was repaid in March of 2025 as part of a confidential release and final agreement, detailed below.

During August and September of 2024, the Company raised $280,000 in short-term loans that are expected to be repaid within a year, although a maturity date is not specified. These loans have a 100% interest fee that is due at the date of repayment and an additional 100% fee in shares of the Company's Common Stock issued at the current fair market value, which was $1.41 at the dates of the loans. In September of 2024, the Company issued 198,454 shares of Common Stock in full payment of the $280,000 amount that was payable in shares of the Company. In the same period, the Company repaid $25,000 of the short-term loans along with the corresponding $25,000 interest fee. These loans resulted in a total interest expense of $560,000 that was recognized during the year ended December 31, 2024. A total principal balance of $255,000 and accrued interest of $255,000 remained outstanding as of December 31, 2024. The Company repaid $175,000 of the principal amount along with $175,000 of the accrued interest amount as part of a confidential release and final agreement, detailed below. The remaining $80,000 in principal and $80,000 in interest, was repaid in April of 2025, as detailed below, in connection with a loan repayment agreement that was entered into with a shareholder of the Company on April 2, 2025.

In November of 2024, the Company raised $30,000 from a short-term loan which carried a 100% interest fee. In addition, the Company requested from the underwriter that they unlock 24,500 shares of common stock currently owned by the lender to be available as freely floating, publicly tradable shares. A total principal balance of $30,000 and accrued interest of $30,000 remained outstanding as of December 31, 2024. The noteholder agreed to be repaid a total of $29,223 for the principal amount and $29,223 for the accrued interest on the loan. This resulted in a gain on debt extinguishment of $1,554. The final payment was made on April 1, 2025.

The Company entered into a loan agreement with one of its shareholders on February 5, 2025 for an amount totaling $9,314 and agreed to pay an interest fee of 200% of the principal loan and an additional 100% in common stock once the Company became a public company. In addition, this shareholder made an additional loan of $6,186 to the Company on February 10, 2025. The additional loan was not subject to a loan agreement and did not carry any written terms. The Company became a public company on March 6, 2025. On April 2, 2025, the shareholder and the Company agreed on repayment terms for those two loans and a pre-existing loan from August of 2024 (see above) that was owed to this shareholder together with all accrued interest. The total repayment was $206,617 and it included $95,500 in principal and $111,117 in interest. The total principal amount includes the $15,500 loans from February 2025 and the remaining $80,000 in principal and $80,000 in interest from a loan which was made to the Company during August of 2024. The final payment was made in April of 2025.

 

**BRAG HOUSE HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

 

**NOTE 7 - DEBT** (cont.)

*Confidential Release and Final Agreement*

From January through March of 2025, the Company borrowed money from shareholders of the Company to pay for expenses in connection with the IPO. Total proceeds of $86,150 were received by the Company and these borrowed funds did not have a loan agreement or loan terms. These shareholders also had notes payable made to the Company during 2024, which are part of the notes payable disclosed in Note 6 totaling $187,900 in principal as of December 31, 2024.

In March of 2025, the Company entered into a confidential release and final agreement to settle all loan amounts and interest payable to these shareholders with a total payment of $650,000. The agreement also supersedes all prior loan agreements and settles any future claims for any reason and no longer requires the payment of any shares of equity. The total loans that were paid had a principal amount of $273,626 and accrued interest of $175,000. The Company recognized an additional $201,374 in interest expense. Payment of the settlement amount was made on March 31, 2025.

 

*Convertible Debt - December 2024*

In December of 2024, the Company raised $25,000 from a short-term convertible promissory note which is unrelated to the previously issued convertible debt through May of 2024 and carries different terms. This note has a 30% original issue discount that constitutes the interest due on the loan and was added to the principal balance, a payment in equity kicker shares of the Company's common stock having a combined value equaling 30% of the principal amount and a maturity date of February 15, 2025. The number of the shares subject to the equity kicker were calculated based on the Company's anticipated price per share at the IPO, which was at $4. The original issue discount and the equity kicker shares had values of $7,500 each for a total discount on debt of $15,000. During 2024, the Company recognized $4,219 in amortization of debt discount on the consolidated statements of operations and comprehensive loss. The issuance of this loan resulted in an additional 1,875 shares of common stock becoming due and were not issued as of December 31, 2024. As such, it resulted in an increase of $7,500 to the shares payable balance during the year ended December 31, 2024. A total principal balance of $32,500 and unamortized debt discount of $10,781 was outstanding as of December 31, 2024. The Company amortized the remaining debt discount amount of $10,781 to interest expense during the year ended December 31, 2025.

Loan repayment options included the proceeds of the Company's IPO, which occurred on March 6, 2025 and was the earliest of all other options. The lender had the option to convert the debt into shares of the Company's common stock but, instead, the repayment of the loan principal of $25,000 and accrued interest of $7,500 was completed in March of 2025. The 1,875 shares were issued in April of 2025, subsequent to the maturity date of February 15, 2025, and were no longer included as a shares payable as of December 31, 2025.

In March of 2025, the Company raised an additional $150,000 from two short-term promissory notes which have a 30% original issue discount that constitutes the interest due on the loan and was added to the principal balance, a payment in equity kicker shares of the Company's common stock having a combined value equaling 30% of the principal amount and a maturity date of April 10, 2025. The number of the shares subject to the equity kicker were calculated based on the Company's anticipated price per share at the IPO, which was at $4. The original issue discount and the equity kicker shares had values of $45,000 each for a total discount on debt of $90,000. The issuance of this loan resulted in an additional 11,250 shares of common stock becoming due. As such, it resulted in an increase of $45,000 to the shares payable balance during 2025. The Company repaid the total loan principal of $150,000 and accrued interest of $45,000 in March of 2025. The shares in connection with the share payable amount of $45,000 were issued in April of 2025 and were no longer included as a shares payable as of December 31, 2025. The Company amortized the $90,000 debt discount amount to interest expense during the year ended December 31, 2025.

**BRAG HOUSE HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 7 - DEBT** (cont.)

***Yorkville Facility***

*Yorkville Purchase Agreement*

On December 4, 2025, the Company, House of Doge and Yorkville entered into the Yorkville Purchase Agreement, whereby the Company has the right, but not the obligation, to sell to Yorkville, and Yorkville is obligated to purchase from the Company, up to $100,000,000 in the Company's Common Stock, or the lesser of (x) $100,000,000 in aggregate gross purchase price of newly issued shares of Common Stock ("Equity Line Securities") and (y) 3,957,838 shares of Common Stock ("Yorkville Exchange Cap"), provided that the Yorkville Exchange Cap shall not apply to any shares sold to Yorkville at or above the Base Price. Sales of shares of the Company's Common Stock to Yorkville under the Yorkville Purchase Agreement, and the timing of any such sales, will be determined by the Company from time to time in its sole discretion and will depend on a variety of factors, including, among other things, market conditions, the trading price of the Company's Common Stock, and determinations by the Company about the use of proceeds of such Common Stock sales. The net proceeds from any such sales under the Yorkville Purchase Agreement will depend on the frequency with, and the price at which the shares of the Company's Common Stock are sold to Yorkville.

Upon the initial satisfaction of the conditions to Yorkville's obligation to purchase shares of the Company's Common Stock set forth under the Yorkville Purchase Agreement (the "Commencement"), including that a registration statement registering the resale by Yorkville of the shares of the Company's Common Stock under the Securities Act, purchased pursuant to the Yorkville Purchase Agreement (the "Resale Registration Statement") is declared effective by the SEC and a final prospectus relating thereto is filed with the SEC, the Company will have the right, but not the obligation, from time to time, at its sole discretion and on the terms and subject to the limitations contained in the Yorkville Purchase Agreement, until no later than the first day of the month following the 36-month anniversary of the Commencement Date (as defined in the Purchase Agreement), to direct Yorkville to purchase up to a specified maximum amount of the Company's Common Stock as set forth in the Yorkville Purchase Agreement by delivering written notice to Yorkville prior to the commencement of trading on any trading day. The purchase price of the Company's Common Stock that the Company elects to sell to Yorkville pursuant to the Yorkville Purchase Agreement will be 97% of the volume weighted average price (the "VWAP") of the Company's Common Stock during the applicable purchase date on which the Company has timely delivered a written notice to Yorkville, directing it to purchase its Common Stock under the Yorkville Purchase Agreement.

A commitment fee of $1,000,000 was earned by Yorkville upon the closing of the Yorkville Purchase Agreement and is payable in cash with 10% of each purchase price paid by Yorkville of Common Stock being withheld as repayment for the fee. In the event that the Yorkville Purchase Agreement is terminated prior to full repayment of the commitment fee, the unpaid balance of the commitment fee will immediately become payable. The Company has recognized a deferred offering cost and commitment fee payable of $1,000,000 in the consolidated balance sheets as of December 31, 2025 and this balance will be reclassified from a deferred offering cost and recognized as an offering cost as Yorkville purchases the Company's Common Stock and repayment of the commitment fee is made.

The Resale Registration Statement was declared effective by the SEC on January 16, 2026.

The Yorkville Purchase Agreement was determined to be a freestanding financial instrument which did not meet the criteria to be accounted for as a derivative instrument and meets the criteria under ASC 815-40, "*Derivatives and Hedging -Contracts In Entity's Own Equity*" ("ASC 815-40") to be recognized within equity upon the sale of the Company's Common Stock in accordance with the terms of the agreement. As of December 31, 2025, the conditions to Yorkville's obligation to purchase shares of the Company's Common Stock have not been met and no shares have been sold under the Yorkville Purchase Agreement.

*Yorkville Convertible Note*

Concurrently with the Yorkville Purchase Agreement, the Company and House of Doge, jointly and severally, authorized the issuance of the Yorkville Convertible Note to Yorkville, in the aggregate original principal amount of up to $11.0 million, pursuant to which Yorkville agreed to advance the aggregate principal amount to the Company in two advances (each an "*Advance*"). In respect of each Advance, Yorkville will pay a purchase price equal to 90% of the principal amount of such Advance. The first Advance under the Yorkville Convertible Note in the original principal amount of $3,850,000 was issued on December 4, 2025, and the second Advance in the original principal amount of $7,150,000 will be issued upon the satisfaction of the conditions set forth in the Yorkville Convertible Note.

The Yorkville Convertible Note is convertible into shares of the Company's Common Stock in certain circumstances in accordance with the terms of the Yorkville Convertible Note at a conversion price equal to 95% of the lowest daily VWAP of the Company's Common Stock during the five consecutive trading days immediately preceding the relevant conversion date, subject to adjustment pursuant to the terms of the Yorkville Convertible Note. The Company received net proceeds of $3,365,000, after the deduction of transaction related expenses, from the closing of the first Advance pursuant to the Yorkville Convertible Note, with the resulting net proceeds being delivered to House of Doge at the direction of the Company and House of Doge. This amount is classified as advances to a related party on the Company's consolidated balance sheet as of December 31, 2025.

Consistent with certain applicable Nasdaq rules, the Company may not issue to Yorkville more than 3,957,838 Equity Line Securities under the Yorkville Purchase Agreement or the Yorkville Convertible Note, which number of shares is equal to 19.99% of the shares of the Company's Common Stock issued and outstanding immediately prior to the execution of the Yorkville Purchase Agreement, unless the Company obtains stockholder approval to issue shares of its Equity Line Securities in excess of such limit in accordance with applicable rules of Nasdaq.

**BRAG HOUSE HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 7 - DEBT** (cont.)

Moreover, the Company may not issue or sell any Equity Line Securities to Yorkville that, when aggregated with all other shares of the Company's Common Stock then beneficially owned by Yorkville and its affiliates (as calculated pursuant to Section 13(d) of the Exchange Act and Rule 13d-3 promulgated thereunder), would result in Yorkville beneficially owning more than 4.99% of the issued and outstanding shares of the Company's Common Stock.

The Company has elected to account for this convertible debt instrument with the FVO in accordance with ASC 825, "*Financial Instruments*". The Company elected the FVO for the Yorkville Convertible Note due to the complexity of its embedded features, including conversion options and other terms that could otherwise require bifurcation and separate accounting under ASC 815, Derivatives and Hedging. By electing the FVO, the Company accounts for the instrument in its entirety at fair value, which simplifies the accounting and provides more transparent and relevant financial reporting by reflecting the economic characteristics of the instrument as a whole. As such, the Yorkville Convertible Note is required to be measured at fair value at the date of issuance, December 4, 2025, and at subsequent reporting periods.

The fair value of the Yorkville Convertible Note as of December 4, 2025 and December 31, 2025 was $3,727,014 and $3,771,845, respectively. During the year ended December 31, 2025, the Company recorded a loss of $44,831 related to the change in fair value of the Yorkville Convertible Note liability. For each valuation, the Company used the probability-weighted expected return model ("PWERM"). Please refer to Note 10.

*Yorkville Warrant*

Concurrently with the execution of the Yorkville Purchase Agreement and the issuance of the Yorkville Convertible Note, on December 4, 2025, the Company issued to Yorkville a warrant (the "*Yorkville Warrant*") to purchase up to 10,173,881 shares of the Company's Common Stock with an exercise price equal to the lower of (i) $1.50 per share, or (ii) 130% of the average closing price of the Company's Common Stock as reported by Nasdaq for the five trading days ending on the 10th trading day following the closing of the Merger. The Yorkville Warrant was exercisable immediately upon issuance and expires three years from the date of issuance.

The exercise price and number of shares of the Company's Common Stock issuable upon exercise of the Yorkville Warrant is subject to appropriate adjustment in the event of stock dividends, stock splits, reorganizations or similar events affecting the Company's Common Stock and the exercise price. Subject to limited exceptions, Yorkville may not exercise any portion of the Yorkville Warrant to the extent that Yorkville would beneficially own more than 4.99% (or, at the election of the holder prior to the date of issuance, 9.99%) of the outstanding shares of the Company's Common Stock after exercise. In the event of certain fundamental transactions, the holder of the Yorkville Warrant will have the right to receive the Black Scholes Value (as defined in the Yorkville Warrant) of the Yorkville Warrant calculated pursuant to a formula set forth in the Yorkville Warrant, payable in cash. None of the Yorkville Warrants have been exercised as of December 31, 2025.

The Yorkville Warrant is required to be measured at fair value pursuant to ASC 815, "*Derivatives and Hedging"* at the date of issuance, December 4, 2025, and at subsequent reporting periods. The fair value of the Yorkville Warrant as of December 4, 2025 and December 31, 2025 was $5,341,589 and $3,987,046, respectively. The Company used a Monte Carlo simulation model to determine the Yorkville Warrant's fair value at issuance and the end of the reporting period, December 31, 2025. During the year ended December 31, 2025, the Company recorded a gain of $1,354,543 related to the change in fair value of the Yorkville Warrant. Please refer to Note 10.

At issuance, the aggregate fair value of the Yorkville Convertible Note and the Yorkville Warrant was $9,068,603, which exceeded the proceeds received from the first Advance under the Yorkville Convertible Note by $5,218,603. In accordance with ASC 825, ASC 815 and ASC 820, the Company recorded the Yorkville Convertible Note and Yorkville Warrant at their respective fair values at the issuance date. Because the aggregate fair value of these financial instruments exceeded the proceeds received and no other separately identifiable assets or economic benefits were identified that would be recognized under U.S. GAAP, the Company recognized the excess of the fair value of the instruments over the proceeds received as a loss in earnings at issuance.

The estimated fair values of the Yorkville Convertible Note and Yorkville Warrant reflect the prices that would be received to transfer the instruments in an orderly transaction between market participants at the measurement date and incorporate significant assumptions regarding expected volatility of the Company's common stock, the probability and timing of conversion or exercise, and other market-based inputs. These assumptions resulted in an aggregate estimated fair value of the instruments that exceeded the proceeds received from the initial Advance.

The Company entered into the Yorkville financing to obtain access to capital and additional liquidity to support its operations and strategic initiatives. Management believes that this financing structure provided the Company with access to capital that may not otherwise have been available on acceptable terms given the Company's stage of development, capital requirements and market conditions. The Yorkville financing also provides the Company with potential future access to additional capital through the Yorkville Purchase Agreement equity facility.

**BRAG HOUSE HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 7 - DEBT** (cont.)

The Company believes the transaction was negotiated with an unrelated third-party investor and was conducted on an arm's-length basis. Management evaluated whether any additional rights, services or other economic benefits were obtained in connection with the transaction that would qualify for recognition as separate assets under U.S. GAAP and determined that none met the criteria for separate recognition. As a result, the excess of the fair value of the financial instruments over the proceeds received was recognized as a loss at issuance.

During the year ended December 31, 2025, the Company recognized (i) a loss of $5,218,603 related to the initial recognition of the excess of the fair value of the instruments over the proceeds received, (ii) a loss of $44,831 related to the change in fair value of the Yorkville Convertible Note and (iii) a gain of $1,354,543 related to the change in fair value of the Yorkville Warrant, resulting in a net loss of $3,908,891 related to the Yorkville financing instruments during the year ended December 31, 2025.

Subsequent to initial recognition, these liability-classified instruments are remeasured at fair value at each reporting date, with changes in fair value recognized in earnings.

**NOTE 8 - REVENUE RECOGNITION**

The Company recognizes revenue from the sale of products and services in accordance with ASC 606, "*Revenue from contracts with Customers*".

The Company generates revenues from advertising, sponsorship and league tournaments, and through the operation of its live streaming platform using a revenue model whereby gamers and creators can get free access to certain live streaming of amateur tournaments, and gamers and creators pay fees or subscriptions to compete in league competitions. The Company enters into contracts which may include combinations of products, support and professional services, which may be accounted for as separate performance obligations with differing revenue recognition patterns.

At the end of December 31, 2025 and 2024, the Company did not have any contract assets or liabilities arising from contracts with customers. This was due to the fact that all service agreements for tournaments were entered into and completed in the same period.

 

*Performance Obligations*

The Company earns the majority of its revenue from hosting video gaming tournaments. The main performance obligation has been organizing and executing these tournaments. There are many different deliverables that are noted or implied in these contracts with customers including but not limited to, planning the event, identifying vendors and locations, completing administrative tasks, managing the event staff, coordinating the tournaments, and executing sponsorship advertisement. Contracts vary in length and extent of deliverables. Some tournaments are single events, while others require the Company to have qualifiers leading up to a championship event. In the case of contracts for longer tournament deliverables, the Company has identified each qualifier and each championship event as performance obligations. For single event contracts, the performance obligation is the execution of the event. These performance obligations are met once the tournaments are hosted and completed.

In the case of revenue earned from the Twitch Affiliate Program, the Company's performance obligations is to create content and maintain a channel to which (i) customers can subscribe, (ii) ads can be played to viewers by Twitch to generate revenue and (iii) customers can use bits. These performance obligations are monitored by Twitch and the Company receives the revenue from those obligations. On a monthly basis, the Company receives from Twitch its respective portion of the revenue generated by its content. This source of revenue is insignificant and not a main source of income for the Company.

 

*Judgments and Estimates*

The Company's contracts include commitments to transfer tournament hosting and a gaming community platform service that customers can subscribe to. Judgment is required to allocate the transaction price to each performance obligation. The Company has carefully evaluated the timing of when the completion of performance obligations occurs for tournament hosting revenue and has determined that it occurs at the point in time in which the event has been completed. For single event tournaments, the Company determines the transaction price to be the contracted amount and allocates that price to the single performance obligation. In the case of tournaments with multiple events and performance obligations, the Company evaluates the magnitude of the performance obligations to make an estimate of the allocation of the transaction price (total contract amount) to the multiple performance obligations. It is the Company's judgment that the transaction price for multiple event tournaments is allocated evenly throughout each of the total qualifier and championship match events. The reasoning is because at each event, there is no distinguishable difference in the amount of advertising and/or other obligations that are performed and thus, service that is provided for the customer.

**BRAG HOUSE HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 8 - REVENUE RECOGNITION** (cont.)

In the case of subscription revenue, which is recognized over time, the Company has determined that the revenue is earned ratably over the period of the subscription. Revenue is recognized evenly over the subscription period because there is no discernable difference in the amount of service that is provided in each of the days within the subscription period.

 

*Costs to Obtain or Fulfill a Contract*

The new revenue recognition standard requires the capitalization of certain incremental costs of obtaining a contract. These typically are represented by commission expenses. Prior to the Company's adoption of the new revenue standard, commission expenses would be recognized in the period incurred. Under the new revenue recognition standard, the Company is required to recognize these expenses over the period of benefit associated with these costs. This results in a deferral of certain commission expenses each period. There were no deferred commissions related to contracts that were or were not completed prior to December 31, 2025 and 2024. The Company recognizes an asset for the incremental costs of obtaining a contract with a customer if the benefit of those costs is expected to be longer than one year.

**NOTE 9 - SEGMENT REPORTING**

The Company and its subsidiaries manage its business activities on a consolidated basis and operate as a single operating segment (the "Gaming" segment). The Company is a vertically integrated social network for college gaming and its mission is to create a community which empowers gamers, streamers, and fans to interact with one another. The Company's platform, which focuses on building a centralized gaming experience for non-professional college gamers and their fans, achieves this by allowing college students to compete against one another, support their favorite gamers and teams, and win prizes. The accounting policies of the Gaming segment are the same as those described in Note 2.

The Company's CODM is our Chief Executive Officer, Lavell Juan Malloy, II. The CODM uses net loss, as reported on our consolidated statements of operations and comprehensive loss, in evaluating performance of the Gaming segment and determining how to allocate resources of the Company as a whole. The CODM does not review assets in evaluating the results of the Gaming segment, and therefore, such information is not presented.

The following table provides the operating financial results of our Gaming segment:

---

| | | |
|:---|:---|:---|
|  | **Years Ended December 31,** | **Years Ended December 31,** |
|  | **2025** | **2024** |
| **Total Revenue** | $**-**  | $**105** |
| Less: Significant and Other Segment Expenses |  |  |
| &nbsp;&nbsp;&nbsp;Cost of Sales | - | 464 |
| &nbsp;&nbsp;&nbsp;Advertising and Marketing | 641919 | 172989 |
| &nbsp;&nbsp;&nbsp;Legal and Professional | 2123440 | 490528 |
| &nbsp;&nbsp;&nbsp;Selling, General and Administrative | 3327087 | 608904 |
| &nbsp;&nbsp;&nbsp;Software Expense | 639334 | 18089 |
| &nbsp;&nbsp;&nbsp;Software Development | 23591 | 21034 |
| &nbsp;&nbsp;&nbsp;Stock-Based Compensation | 963534 | 179766 |
| &nbsp;&nbsp;&nbsp;Interest Expense and Amortization of Debt Discount | 1458971 | 2179122 |
| &nbsp;&nbsp;&nbsp;Other Income | (210726) | (384047) |
| &nbsp;&nbsp;&nbsp;Interest Income | (92838) | - |
| &nbsp;&nbsp;&nbsp;Other Expenses | 74416 | - |
| &nbsp;&nbsp;&nbsp;Other Expense - Stock-Based Compensation Liability | 133331 | - |
| &nbsp;&nbsp;&nbsp;Foreign Currency (Gain) Loss | (441) | 1775 |
| &nbsp;&nbsp;&nbsp;Net Unrealized Loss on Equity Securities | 2900000 | - |
| &nbsp;&nbsp;&nbsp;Change in Fair Value of Warrants and Convertible Debt | 3908891 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Segment Net Loss** | $(15890509) | $(3288519) |

---

**BRAG HOUSE HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 10 - FAIR VALUE MEASUREMENTS**

*Cloud Computing Arrangements - Technology Purchase Agreements*

 

In accordance with ASC 820, "Fair Value Measurements and Disclosures", the Company uses various inputs to measure the fair value of its stock-based compensation liability resulting from the cash-settled written put options related to the MSA with Artemis and the SaaS with EVEMeta on a recurring basis to determine the fair value of these liabilities. The Company determines the fair value of the stock-based compensation liability using a Monte Carlo simulation.

Further, as of May 12, 2025, the Company completed a fair value measurement for the cash settlement provision of its agreements with Artemis and EVEMeta, the liability classified award, using a Monte Carlo simulation model as a result of the amendment of the agreements and determined a total fair value measurement of $2,942,136. The Company recognized a stock-based compensation liability from the total fair value only to the extent in which services were provided to the Company through the amendment date, which resulted in partial recognition and was an estimate by the Company as of period end. This resulted in the recognition of a stock-based compensation liability of $116,669 as of May 12, 2025, of which $72,277 was recognized as an increase during the period April 1, 2025 to May 12, 2025 to the existing stock-based compensation liability of $44,392 as of March 31, 2025. Of the total of $72,277, $41,331 was capitalized to capitalized implementation costs and $30,946 was expensed as a software expense. These amounts did not have an impact on the balance of the Company's stockholders' equity. Lastly, as a result of the amendment, the stock-based compensation liability was settled and no longer exists as of May 12, 2025. Please refer to Note 2 for further details on the modification and settlement of the stock-based compensation liability.

The following table presents the changes in the Level 3 measurement of the stock-based compensation liability at fair value for the year ended December 31, 2025. Both observable and unobservable inputs were used to determine the fair value of positions that the Company has classified within the Level 3 category.

---

| | |
|:---|:---|
|  | **Stock-Based<br> Compensation<br> Liability** |
| **Balance as of December 31, 2024** | $**-**  |
| **Change in fair value - Capitalized Implementation Costs** | 76671 |
| **Change in fair value - Software Expense** | 39998 |
| **Settlement of Stock-Based Compensation Liability** | (116669) |
| **Balance as of December 31, 2025** | $**-**  |

---

The key inputs for the Monte Carlo simulation for the stock-based compensation liability as of May 12, 2025 were as follows:

---

| | |
|:---|:---|
| **Stock-Based Compensation Liability: Key Valuation Inputs\*** | |
| **Valuation Date Stock Price** | $0.59 |
| **Volatility** | 102% |
| **Risk-Free Rate** | 4.08% |
| **Credit Risk Adjusted Rate** | 13.90% |
| **Time period (years)** | - |

---

\* The valuation was based on a Monte Carlo simulation analysis of 100,000 iterations.

**BRAG HOUSE HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 10 - FAIR VALUE MEASUREMENTS** (cont.)

*Private Investment into Public Entity (PIPE)*

On July 24, 2025, the Company entered into a Securities Purchase Agreement with investors for the PIPE Offering of 15,000 shares of its Series B Preferred Stock and an aggregate of 15,923,567 PIPE Warrants to acquire up to 15,923,567 shares of Common Stock. The PIPE Offering closed on July 30, 2025. Additionally, the Company issued a total of 1,057,543 Placement Agent Warrants to acquire up to 1,057,543 shares of Common Stock at an exercise price of $0.942 per share, and 536,093 H.C. Wainwright Warrants to acquire up to 536,093 shares of Common Stock at an exercise price of $1.884 per share.

The fair value of the PIPE Warrants, Placement Agent Warrants and H.C. Wainwright Warrants was estimated using the Black-Scholes option pricing model. This valuation approach represents a Level 3 measurement within the fair value hierarchy as it incorporates significant unobservable inputs. Please refer to the PIPE section in Note 5.

*Pre-Funded Warrants*

 

On September 2, 2025, the Company invested $4,000,000 in Pre-Funded Warrants of CleanCore Solutions, Inc. with a purchase price of $1 per warrant. The exercise price of the warrants is $0.0001 per share and each warrant is for one share of Class B Common Stock of CleanCore Solutions, Inc., a publicly traded company. The investment is accounted for as an equity security under ASC 321, Investments - Equity Securities, and is measured at the fair value of the consideration that was transferred, which was $4,000,000 in cash, with changes in fair value recognized in earnings. In November 2025, the Company exercised the pre-funded warrants and received 4,000,000 shares of CleanCore Solutions, Inc Class B Common Stock. As of December 31, 2025, the investment had a carrying value of $1,100,000 which was determined using the quoted market price of CleanCore's Class B Common Stock on the NYSE American Exchange, representing a Level 1 measurement within the fair value hierarchy. Please refer to Notes 1 and 11.

*Yorkville Convertible Note*

On December 4, 2025, concurrently with the Yorkville Purchase Agreement, the Company and House of Doge, jointly and severally, authorized the issuance of the Yorkville Convertible Note to Yorkville. The Company has elected to account for this convertible debt instrument with the FVO in accordance with ASC 825, "*Financial Instruments*". Please refer to Note 7 for further details on the Yorkville Convertible Note.

The following table presents changes in the Level 3 measurement of the convertible debt at fair value for the year ended December 31, 2025. Both observable and unobservable inputs were used to determine the fair value of positions that the Company has classified within the Level 3 category.

---

| | |
|:---|:---|
|  | **Convertible <br> Debt** |
| **Balance as of December 4, 2025** | $**3727014** |
| **Change in Fair Value** | 44831 |
| **Balance as of December 31, 2025** | $**3771845** |

---

**BRAG HOUSE HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 10 - FAIR VALUE MEASUREMENTS** (cont.)

The key inputs for the PWERM for the Yorkville Convertible Note as of December 31, 2025 were as follows:

---

| | |
|:---|:---|
| **Convertible Debt: Key Valuation Inputs** | |
| **Variable Weighted Average Price for Conversion** | $0.4041 |
| **Expected Stock Price at Conversion** | 0.4044 |
| **Volatility** | 87.55% |
| **Risk-Free Rate** | 3.48% |
| **Credit Risk Adjusted Rate** | 14.52% |
| **Discount Rate** | 18% |
| **Probability Merger occurs by March 31, 2026** | 90% |
| **Probability Merger does not occur by March 31, 2026** | 10% |

---

*Yorkville Warrant*

 

On December 4, 2025, concurrently with the execution of the Yorkville Purchase Agreement and the issuance of the Yorkville Convertible Note, on December 4, 2025, the Company issued the Yorkville Warrant. The Yorkville Warrant is required to be measured at fair value pursuant to ASC 815, "*Derivatives and Hedging"* ("ASC 815") at the date of issuance, December 4, 2025, and in subsequent reporting periods.

The following table presents changes in the Level 3 measurement of the warrant liability at fair value for the year ended December 31, 2025. Both observable and unobservable inputs were used to determine the fair value of positions that the Company has classified within the Level 3 category.

---

| | |
|:---|:---|
|  | **Warrant <br> Liability** |
| **Balance as of December 4, 2025** | $**5341589** |
| **Change in Fair Value** | (1354543) |
| **Balance as of December 31, 2025** | $**3987046** |

---

The key inputs for the Monte Carlo simulation for the Yorkville Warrant as of December 31, 2025 were as follows:

---

| | |
|:---|:---|
| **Warrant Liability: Key Valuation Inputs\*** | |
| **Valuation Date Stock Price** | $0.40 |
| **Volatility** | 87.55% |
| **Risk-Free Rate** | 3.55% |
| **Time period (years)** | 2.93 |

---

\* The valuation was based on a Monte Carlo simulation analysis of 100,000 iterations.

**BRAG HOUSE HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 10 - FAIR VALUE MEASUREMENTS** (cont.)

The following table classifies the Company's assets and liabilities measured at fair value on a recurring basis into the fair value hierarchy as of December 31, 2025:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** |
| <br>**Assets** | **Fair Value** | **Level 1** | **Level 2** | **Level 3** |
| Investment in Equity Securities | $1100000 | $1100000 | $- | $- |
| **Total Assets** | $1100000 | $1100000 | $- | $- |
|  | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** |
| **Liabilities** | **Fair Value** | **Level 1** | **Level 2** | **Level 3** |
| Yorkville Convertible Note | $3771845 | $- | $- | $3771845 |
| Yorkville Warrant | $3987046 | $- | $- | $3987046 |
| **Total Liabilities** | $7758891 | $- | $- | $7758891 |

---

The Company did not have any assets or liabilities measured at fair value on a recurring basis as of December 31, 2024.

**NOTE 11 - INVESTMENTS**

In September 2025, the Company entered into a Securities Purchase Agreement with CleanCore Solutions, Inc. ("CleanCore"), a Nevada corporation, to invest in Pre-Funded Warrants representing the right to acquire shares of CleanCore's Class B Common Stock at a nominal exercise price of $0.0001 per share. The Company purchased 4,000,000 warrant shares at a price of $1.00 for a total investment of $4,000,000 in cash.

The Pre-Funded Warrants were fully funded upon issuance and exercised on November 10, 2025 at a nominal exercise price for CleanCore's Class B Common Stock, following the completion of all required corporate approvals, including an amendment to CleanCore's articles of incorporation authorizing additional shares. The Warrants are non-redeemable and economically equivalent to shares of common stock, with a beneficial ownership limitation of 4.99% (or 9.99% upon election).

The investment is accounted for as an equity security under ASC 321, Investments - Equity Securities, and is measured at the fair value of the consideration that was transferred, with changes in fair value recognized in earnings. As of December 31, 2025, the investment had a carrying value of $1,100,000, based on the quoted market price of CleanCore's Class B Common Stock on the NYSE American Exchange. A net unrealized loss on equity securities was recognized for $2,900,000 during the year ended December 31, 2025.

**BRAG HOUSE HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 12 - BUSINESS COMBINATION**

*The Merger Agreement*

The Company entered into a Merger Agreement dated as of October 12, 2025, by and among the Company, House of Doge, and the Merger Sub. The Merger Agreement and the transactions contemplated thereby were unanimously approved by the respective boards of directors of both Brag House and House of Doge. Pursuant to the Merger Agreement, upon the terms and subject to the conditions set forth therein, among other things, House of Doge will merge (the "Merger") with and into Merger Sub, with House of Doge continuing as the surviving entity and a wholly owned subsidiary of the Company.

In exchange for the outstanding shares of the House of Doge's common stock and outstanding restricted stock units ("RSUs"), Brag House will issue shares of its Common Stock and a new class of preferred stock (that will be convertible into shares of common stock) and RSUs constituting an aggregate of approximately 663,250,176 shares of its common stock, on a fully diluted basis, to House of Doge's shareholders and RSU holders, provided that any shares of its common stock that House of Doge issues to non-affiliates in arms-length commercial business transactions it negotiates in good faith in the ordinary course of business prior to the effective time of the Merger (the "Effective Time") will also be exchanged in the Merger and, therefore, cause the number of shares of common stock that Brag House issues in the Merger to proportionately increase. House of Doge will also issue 9,000,000 shares of its common stock to Lavell Juan Malloy, II, Brag House's CEO, and certain other individuals or representatives of Brag House to be identified by Brag House (the "Purchaser Representatives") prior to the closing (the "Closing") of the transactions contemplated by the Merger Agreement (the "Transactions"). Upon consummation of the Merger, House of Doge will become the majority shareholder of Brag House. Following the Merger, Brag House's Common Stock shall continue to be listed on The Nasdaq and Brag House will be renamed "House of Doge Inc."

On November 26, 2025, the Company entered into amendment No. 1 to the Merger Agreement. On February 2, 2026 the Company entered into amendment No. 2 to the Merger Agreement and on March 26, 2026 entered into amendment No. 3 to modify certain provisions of the Merger Agreement, including the extension of the termination date of the agreement to May 29, 2026.

As of December 31, 2025, the pre-requisite conditions to close the Merger have not been achieved and the Merger has not been consummated. The Merger is subject to approval by the Company's shareholders and other customary closing conditions as set forth in the Merger Agreement. The closing date is estimated to occur during April of 2026; however, there is no guarantee that the Merger will take place by this date or at all.

On February 5, 2026, the Company's registration statement for the Merger was declared effective by the SEC.

**NOTE 13 - SUBSEQUENT EVENTS**

The Company has evaluated events and transactions subsequent to December 31, 2025 through the date these consolidated financial statements were included on Form 10-K and filed with the SEC. Other than the matters described below, there are no additional subsequent events identified that would require disclosure in the consolidated financial statements.

*Resignation of Chief Financial Officer*

Effective February 5, 2026, Chetan Jindal resigned from his position as Chief Financial Officer of Brag House Holdings, Inc. in order to pursue other opportunities. Effective February 5, 2026, the Board of Directors of the Company appointed Rene Rodriguez as the Company's Acting Chief Financial Officer.

 

*Stock Options*

In January of 2026, the Company issued stock options to Directors of the Company with options to purchase a total of 250,000 shares of Common Stock. The options immediately vested and carry strike prices that range from $0.45 to $0.55.

*Conversion of Series B Preferred Stock*

From January through March of 2026, shareholders of Series B Preferred Stock converted 1,743 shares of Series B Preferred Stock into 1,850,318 shares of the Common Stock.

*Restricted Stock Units*

 

On March 18, 2026, the Company's Board of Directors approved the cancellation of all stock options granted to the Company's CEO and COO and the grant of one RSU in exchange for each such stock option. In connection therewith, the Company granted an aggregate of 1,141,556 RSUs, of which 694,444 RSUs had been issued as of March 26, 2026, with the remainder expected to be issued thereafter.

**SIGNATURES**

Pursuant to the requirements of Section 13 or 15(d) 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.

---

| | | |
|:---|:---|:---|
|  | **BRAG HOUSE HOLDINGS, INC.** | **BRAG HOUSE HOLDINGS, INC.** |
| Dated: April 21, 2026 | By: | */s/ Lavell Juan Malloy, II* |
|  |  | Lavell Juan Malloy, II |
|  |  | Chief Executive Officer |
| Dated: April 21, 2026 | By: | */s/ Rene Rodriguez* |
|  |  | Rene Rodriguez |
|  |  | Acting Chief Financial Officer |

---

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

---

| | | |
|:---|:---|:---|
| **Signature** | **Title** | **Date** |
| */s/ Lavell Juan Malloy, II* | Chief Executive Officer and Director | April 21, 2026 |
| Lavell Juan Malloy, II | (Principal Executive Officer) |  |
| */s/ Rene Rodriguez* | Acting Chief Financial Officer (Principal | April 21, 2026 |
| Rene Rodriguez | Financial Officer and Principal Accounting Officer) |  |
| */s/ Daniel Leibovich* | Director | April 21, 2026 |
| Daniel Leibovich |  |  |
| */s/ Kevin Foster* | Director | April 21, 2026 |
| Kevin Foster |  |  |
| */s/ DeLu Jackson* | Director | April 21, 2026 |
| DeLu Jackson |  |  |
| */s/ Scott Woller* | Director | April 21, 2026 |
| Scott Woller |  |  |

---

## Exhibit 23.1

**Exhibit 23.1**

---

| | |
|:---|:---|
| ![](ea028700101_ex23-1img1.jpg) | *CBIZ CPAs P.C.*<br>53 State Street<br> 17th Floor<br> Boston, MA 02109<br> P: 617.807.5000 |

---

**<u>CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</u>**

We consent to the incorporation by reference in the Registration Statements on Forms S-1 (File Nos. 333-289505 and 333-292429) and Form S-8 (File No. 333-288786) of our report dated March 30, 2026, with respect to the consolidated financial statements of Brag House Holdings, Inc. included in this Annual Report on Form 10-K/A for the year ended December 31, 2025.

![](ea028700101_ex23-1img2.jpg)

Boston, MA

April 21, 2026

## Exhibit 23.2

**Exhibit 23.2**

![](ea028700101_ex23-2img1.jpg)

**<u>INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM'S CONSENT</u>**

We consent to the incorporation by reference in the Registration Statements on Forms S-1 (File Nos. 333-289505 and 333-292429) and Form S-8 (File No. 333-288786) of our report dated May 7, 2025, with respect to the consolidated financial statements of Brag House Holdings, Inc. included in this Annual Report on Form 10-K/A for the year ended December 31, 2025.

![](ea028700101_ex23-2img2.jpg)

Boston, Massachusetts

April 21, 2026

![](ea028700101_ex23-2img3.jpg)

## Exhibit 31.1

**Exhibit 31.1**

**CERTIFICATION**

I, Lavell Juan Malloy II, certify that:

1. I have reviewed this Amendment No. 1 to the Annual Report
on Form 10-K/A of Brag House Holdings, Inc.;

2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other
financial information included in this report, fairly present in all material respects the financial condition, results of operations
and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are
responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))
and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;a. Designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which
this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;b. Designed such internal control over financial reporting,
or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;c. Evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures,
as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;d. Disclosed in this report any change in the registrant's
internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's
fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have
disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the
audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;a. All significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's
ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;b. Any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Date: April 21, 2026 | By: | */s/ Lavell Juan Malloy II* |
|  |  | **Lavell Juan Malloy II** |
|  |  | ***Chief Executive Officer*** |
|  |  | ***(Principal Executive Officer)*** |

---

## Exhibit 31.2

**Exhibit 31.2**

**CERTIFICATION**

I, Rene Rodriguez, certify that:

1. I have reviewed this Amendment No. 1 to the Annual Report
on Form 10-K/A of Brag House Holdings, Inc.;

2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other
financial information included in this report, fairly present in all material respects the financial condition, results of operations
and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are
responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))
and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;a. Designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which
this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;b. Designed such internal control over financial reporting,
or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;c. Evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures,
as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;d. Disclosed in this report any change in the registrant's
internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's
fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have
disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the
audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;a. All significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's
ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;b. Any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Date: April 21, 2026 | By: | */s/ Rene Rodriguez* |
|  |  | **Rene Rodriguez** |
|  |  | ***Acting Chief Financial Officer*** |
|  |  | ***(Principal Financial and Accounting Officer)*** |

---

## Exhibit 32.1

**Exhibit 32.1**

**CERTIFICATION**

Pursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. Section 1350), Lavell Juan Malloy II, Chief Executive Officer of Brag House Holdings, Inc. (the "Company"), hereby certify that, to the best of his knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;1. The Company's Amendment No. 1 to the Annual Report
on Form 10-K/A for the year ended December 31, 2025, to which this Certification is attached as Exhibit 32.1 (the "Periodic Report"),
fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, and

&nbsp;&nbsp;&nbsp;&nbsp;2. The information contained in the Periodic Report fairly presents,
in all material respects, the financial condition and results of operations of the Company.

---

| | | |
|:---|:---|:---|
| Date: April 21, 2026 | By: | */s/ Lavell Juan Malloy II* |
|  |  | **Lavell Juan Malloy II** |
|  |  | **Chief Executive Officer** |
|  |  | *(Principal Executive Officer)* |

---

## Exhibit 32.2

**Exhibit 32.2**

**CERTIFICATION**

Pursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. Section 1350), Rene Rodriguez, Acting Chief Financial Officer of Brag House Holdings, Inc. (the "Company"), hereby certify that, to the best of his knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;1. The Company's Amendment No. 1 to the Annual Report
on Form 10-K/A for the year ended December 31, 2025, to which this Certification is attached as Exhibit 32.2 (the "Periodic Report"),
fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, and

&nbsp;&nbsp;&nbsp;&nbsp;2. The information contained in the Periodic Report fairly presents,
in all material respects, the financial condition and results of operations of the Company.

---

| | | |
|:---|:---|:---|
| Date: April 21, 2026 | By: | */s/ Rene Rodriguez* |
|  |  | **Rene Rodriguez** |
|  |  | **Acting Chief Financial Officer** |
|  |  | *(Principal Financial and Accounting Officer)* |

---