SCHEDULE: FreeCast CEO Mobley Boosts Stake to 93.1%

FreeCast CEO William A. Mobley, Jr. and Nextelligence, Inc. report a combined beneficial ownership of 93.1% of FreeCast's Class A Common Stock, signaling control.

Summary

• William A. Mobley, Jr. and Nextelligence, Inc. (the "Reporting Persons") have filed a Schedule 13D regarding their beneficial ownership in FreeCast, Inc.
• Mr. Mobley beneficially owns 25,077,524 shares of Class A Common Stock, representing 93.1% of the Issuer's outstanding Class A Common Stock.
• Nextelligence, Inc. beneficially owns 11,026,880 shares of Class A Common Stock, representing 40.9% of the Issuer's outstanding Class A Common Stock.
• The ownership includes Class A and Class B Common Stock, stock options, and shares underlying a convertible promissory note.
• Each share of Class B Common Stock is entitled to 15 votes and is convertible into one share of Class A Common Stock.
• The Reporting Persons acquired the shares for investment purposes and with the explicit purpose of exercising control over FreeCast, Inc.
• A revolving convertible promissory note with Nextelligence, Inc. for up to $5 million, bearing 12% interest per annum, has an outstanding principal and interest of $3,261,042 as of February 13, 2026, and is convertible at $8.00 per Class A share.

Sentiment

Score: 6

Explanation: StockSavvy.ai views this as moderately positive due to strong insider commitment and financing, but the high concentration of control and high cost of debt introduce potential governance and financial risks that warrant careful consideration.

Positives

• Strong alignment of interests between the CEO and the company due to significant ownership, potentially leading to stable long-term strategic direction.
• The CEO and related entities are providing financing to the company through a convertible promissory note, indicating continued support and investment.

Negatives

• Highly concentrated ownership (93.1%) by Mr. Mobley could significantly limit the influence and voice of minority shareholders.
• The convertible promissory note carries a high interest rate of 12% per annum, with an 18% default rate, which could indicate a higher cost of capital for the company or potential financial strain.

Risks

• Potential for significant dilution from the conversion of Class B shares and the convertible promissory note into Class A Common Stock.
• The high interest rate on the convertible note (12% per annum, 18% default) could pose a financial burden if not managed effectively, impacting profitability and cash flow.
• Concentrated ownership by Mr. Mobley could lead to corporate decisions that primarily benefit the controlling shareholder rather than all shareholders, potentially impacting corporate governance and minority shareholder rights.

Future Outlook

The filing primarily details current beneficial ownership and past transactions, rather than providing explicit forward-looking statements or guidance on future company performance. It does indicate the maturity of a revolving convertible promissory note on June 30, 2026, which will require repayment or conversion.

Management Comments

• "The Reporting Persons acquired the shares of Common Stock for investment purposes and with the purpose of exercising control."

Industry Context

StockSavvy.ai notes that such a high concentration of ownership (93.1%) by a single individual who is also the CEO is highly unusual for a publicly traded company. This structure suggests a tightly controlled entity, which can offer stability and a clear strategic vision but may also raise concerns about corporate governance, minority shareholder rights, and market liquidity. The use of related-party financing at a 12% interest rate also points to a specific financing strategy, potentially reflecting challenges in securing traditional debt or a preference for insider funding.

Comparison to Industry Standards

• A 93.1% beneficial ownership by a single individual (CEO) is significantly higher than typical CEO ownership percentages in publicly traded companies, which commonly range from 1-10% and rarely exceed 20-30% in established firms, indicating an almost complete control scenario.
• The 12% interest rate on the convertible promissory note is substantially higher than typical corporate borrowing rates for companies with access to conventional financing, which often fall in the 4-7% range for investment-grade debt or 7-10% for high-yield bonds. This suggests either a higher perceived risk profile for FreeCast or a strategic choice for related-party financing over external market options, potentially at a premium.
• The dual-class share structure with Class B shares carrying 15 votes per share is a common mechanism used by companies like Google (Alphabet) or Meta (Facebook) to maintain founder control, but FreeCast's structure results in an even more extreme concentration of voting power.

Corporate Governance

Related Party Transactions

• Nextelligence, Inc., where Mr. Mobley is the CEO, sole director, and majority shareholder, holds a revolving convertible promissory note with FreeCast, Inc. for up to $5 million.
• Public Wire, LLC, of which Mr. Mobley is the manager and sole member, converted outstanding debt into Class B Common Stock of FreeCast, Inc.
• Mr. Mobley holds 7,782,970 shares of Class B Common Stock jointly with his spouse, Michele Mobley.
• Mr. Mobley acts as trustee for 2,000 shares of Class B Common Stock held of record by Telebrands pursuant to a Voting Trust Agreement.

Stakeholder Impact

• **Shareholders (Minority):** Reduced influence on corporate decisions due to highly concentrated ownership and disproportionate voting rights of Class B shares. Potential for decisions to prioritize controlling shareholder interests over broader shareholder value.
• **Shareholders (Controlling):** Enhanced control over strategic direction and operations, strong alignment of personal and company interests, and significant voting power.
• **Creditors:** The 12% interest rate on the convertible note suggests a higher risk profile or a preference for related-party financing, which could be viewed differently by external creditors when assessing the company's creditworthiness.

Next Steps

• Maturity of the revolving convertible promissory note on June 30, 2026, which will require repayment or conversion.
• Potential future conversion of Class B Common Stock and the convertible promissory note into Class A Common Stock, which could impact the share structure and outstanding share count.

Key Dates

Recommendation

The filing reveals a highly concentrated ownership structure with the CEO holding over 93% of the voting power, indicating strong insider commitment and control. While this provides stability and clear leadership, it also significantly limits minority shareholder influence and could impact liquidity. The company is also utilizing related-party financing at a high interest rate, which could be a concern. Given the established control and lack of new operational or financial performance data, a 'hold' recommendation is appropriate for existing investors, while new investors should carefully consider the implications of such concentrated ownership.

Keywords

FreeCast, William Mobley, Nextelligence, Schedule 13D, beneficial ownership, corporate control, convertible note, Class A Common Stock, Class B Common Stock, SEC filing