FreeCast, Inc. — FY2026 Form 10-K
Reporting period: Fiscal year ended June 30, 2026; filed September 28, 2026. FreeCast provides white-label streaming and media-platform technology to enterprise partners, alongside advertising, FAST channel services and premium subscriptions. Its PaaS, BEST and D2D models are growth strategies, but the filing says several potential monetization streams are not yet material.
Financial results and liquidity
| Metric | FY2026 | FY2025 | Change |
|---|---|---|---|
| Revenue | $710,882 | $628,149 | +13.2% |
| Gross profit | $583,326 | $281,568 | +107.2% |
| Gross margin | 82.1% | 44.8% | +37.3 percentage points |
| Operating expenses | $13,261,776 | $14,037,006 | -5.5% |
| Operating loss | $(12,678,450) | $(13,755,438) | Loss narrowed |
| Net loss | $(13,044,799) | $(14,065,948) | Loss narrowed |
| Net loss attributable to common shareholders | $(24,456,297) | $(14,065,948) | Includes $11.4 million deemed dividend |
| Basic and diluted loss per share | $(0.62) | $(0.36) | Worsened, primarily reflecting deemed dividend |
| Cash used in operating activities | $(10,029,873) | $(12,332,291) | Use declined 18.7% |
Revenue comprised advertising of $385,602 (up 41.7%), related-party FAST revenue of $267,509 (up 20.6%), subscriptions of $56,311 (down 57.6%) and other revenue of $1,460. Lower cost of revenue—$127,556 versus $346,581—lifted gross margin. Compensation and benefits rose by $657,988, partly reflecting stock-based compensation; general and administrative costs fell by $1,238,050.
At June 30, 2026, cash was $8,919,833, working capital was positive by $1,964,398, total assets were $9,891,300, total liabilities were $7,639,292 and stockholders’ equity was $2,252,008. Current liabilities included $3,679,451 of related-party convertible-note principal; accrued interest of $256,111 was included in related-party payables. Cash used in investing was $23,199 and financing provided $18,423,657. Cash included approximately $8.0 million in subscriptions for a financing that closed after year-end.
On July 2, 2026, the Company closed a private placement that generated approximately $23.7 million gross and $22.3 million net proceeds. Management said available resources, including this financing, should fund operations and working capital for at least 12 months. The company also has a conditional equity purchase facility of up to $50 million; proceeds and dilution depend on market price, trading liquidity and other conditions. No specific revenue or earnings guidance is provided.
Business developments, commentary and material risks
- Registered accounts increased to 1,194,219 from 975,501, but include inactive accounts; paid accounts declined to 14,275 from 17,062. Management reported revenue excluding advertising and FAST per reported subscriber fell from $0.14 to $0.05.
- Zer0Gap Ads development was completed in March 2026 and rollout began in the fourth quarter. Management views the in-house ad platform as a potential way to improve targeting and control, but revenue depends on inventory, audience activity and advertiser demand.
- Revenue concentration remains significant: LaunchThat, related-party customer Celebrity Cigars and Del Air accounted for 31.7%, 30.2% and 19.4% of FY2026 revenue, respectively. Two related-party customers together represented more than 36% of revenue in FY2026, according to the risk disclosures. Customer and receivables concentration create exposure to payment delays or lost business.
- The Company has recurring losses, a $219.7 million accumulated deficit and $10.0 million of operating cash use in FY2026. The auditor issued an unmodified opinion and no going-concern explanatory paragraph; management attributes its assessment of adequate 12-month liquidity to the post-year-end financing.
- Management concluded disclosure controls were ineffective at year-end due to a material weakness in review and approval controls for complex equity transactions. Remediation measures have begun but are not yet demonstrated to be effective. The auditor did not express an opinion on internal-control effectiveness.
- Warrant reissuance and modification generated an $11,411,498 deemed dividend, reducing income available to common shareholders but not representing operating cash expense. The filing reports unusually high warrant valuation volatility assumptions.
- Nextelligence, majority-owned and controlled by the CEO, licenses core SmartGuide technology and is also a lender and service provider. Interruption of the technology license, related-party conflicts, and related-party financing are material risks.
- Multiple Saracco lawsuits allege contract, investment and other claims; the Company denies them and says loss is remote. The financial-statement notes also describe separate litigation involving George Davison and related parties, assessed by management as remote. No liability was recorded; outcomes remain uncertain.
- Additional risks include dependence on third-party infrastructure and content partners, privacy and cybersecurity exposure, uncertain adoption of new enterprise models, potential dilution, volatile and recently established Nasdaq trading, and dual-class voting control. The CEO holds 88.48% of voting power; cybersecurity disclosures report no known threat or incident that materially affected, or is reasonably likely to materially affect, the Company.
Key facts for investors to verify
- Whether the post-year-end $22.3 million net financing and other liquidity sources are sufficient relative to the continuing operating cash burn.
- How much reported subscriber growth translates into active users, paid subscriptions, advertising impressions and revenue per active user.
- The sustainability and collection of advertising and FAST revenue, including major-customer concentration and related-party channel arrangements.
- Whether Zer0Gap Ads and enterprise partnerships convert into recurring, material platform revenue rather than one-time campaign or channel-buildout fees.
- The remaining related-party note balance, conversion terms, accrued interest and potential dilution, as well as the availability and share-price impact of the Amiens equity facility.
- Progress and evidence of remediation of the material weakness in controls over complex equity transactions.
- Developments in the Saracco and Davison litigation, and the terms and ongoing dependence associated with the Nextelligence technology license.