S-1/A: FreeCast Files S-1/A for Nasdaq Direct Listing

FreeCast, Inc. filed an Amendment No. 11 to its S-1 registration statement for the direct listing of up to 19,782,084 shares of its Class A common stock on the Nasdaq Global Market, with no proceeds going to the company from these sales.

Summary

• FreeCast, Inc. is pursuing a direct listing of up to 19,782,084 shares of its Class A common stock on the Nasdaq Global Market under the symbol CAST.
• The company will not receive any proceeds from the sale of shares by the Registered Shareholders in this direct listing.
• FreeCast operates as a technology-driven streaming entertainment aggregator, offering a Platform-as-a-Service (PaaS) model through its proprietary SmartGuide digital interactive technology.
• The business model focuses on licensing its technology to Commercial Direct Platforms (CDPs) rather than acquiring individual subscribers, aiming for B2B2C partnerships.
• As of September 30, 2025, total subscribers reached 988,158, comprising 974,222 ad-supported and 13,936 paid subscribers.
• The company has incurred recurring losses from inception, with an accumulated deficit of $198,097,550 as of September 30, 2025.
• For the three months ended September 30, 2025, the net loss was $2,862,349, an improvement from $3,559,805 in the same period of 2024.
• Total revenue for the three months ended September 30, 2025, was $195,860, an increase from $118,407 in the prior year period.
• Ad revenue significantly increased by 92,980% to $119,014 for the three months ended September 30, 2025, compared to $128 in the prior year period.
• Subscription revenue decreased by 42% to $22,120 for the three months ended September 30, 2025, primarily due to a shift to a free registration subscription service.
• The company is classified as a 'controlled company' under Nasdaq corporate governance standards because William A. Mobley, Jr., the CEO and Chairman, will hold approximately 75.55% of the voting power.
• An Equity Purchase Agreement (EPA) was entered into on December 8, 2025, with Amiens Technology Investments, LLC, for up to $50 million in Class A common stock purchases over 36 months, contingent on the direct listing.
• Independent auditors included an explanatory paragraph regarding substantial doubt about the company's ability to continue as a going concern.
• Material weaknesses in internal control over financial reporting have been identified, including a lack of written documentation, insufficient segregation of duties, inadequate staff, and insufficient financial reporting processes.

Sentiment

Score: 3

Explanation: While revenue growth and reduced net loss are positive, the company's significant accumulated deficit, going concern warning, working capital deficit, and reliance on related-party transactions and future capital raises indicate substantial financial instability and high risk for investors. The direct listing itself carries inherent volatility risks.

Positives

• Net loss decreased by $697,456 (19.6%) for the three months ended September 30, 2025, compared to the same period in 2024.
• Total revenue increased by $77,453 (65.4%) for the three months ended September 30, 2025, compared to the same period in 2024.
• Ad revenue saw a substantial increase of 92,980% ($118,886) for the three months ended September 30, 2025, indicating successful monetization of the ad platform.
• Total subscribers increased from 879,489 on September 30, 2024, to 988,158 on September 30, 2025.
• Operating expenses decreased by 17% ($581,817) for the three months ended September 30, 2025, primarily due to reduced general and administrative expenses and executive compensation.
• Secured an Equity Purchase Agreement (EPA) for up to $50 million, providing a flexible source of potential liquidity post-listing.
• Successful conversion of $4,076,051 in related-party convertible notes into 509,507 shares of Class A common stock on July 26, 2025, reducing debt.
• A civil action with shareholder Michael Saracco was mutually dismissed with prejudice on December 17, 2025, resolving a legal proceeding.

Negatives

• The company has incurred recurring losses from operations since inception, with an accumulated deficit of $198,097,550 as of September 30, 2025.
• Independent auditors included an explanatory paragraph regarding substantial doubt about the company's ability to continue as a going concern.
• A working capital deficit of $1,151,752 as of September 30, 2025, indicates short-term liquidity challenges.
• Cash balance of $345,723 as of September 30, 2025, is below the FDIC insured limit by $95,723 and may be insufficient to meet obligations for the next 12 months without additional financing.
• Subscription revenue decreased by 42% ($16,008) for the three months ended September 30, 2025, due to a strategic shift to a free ad-supported model.
• FAST revenue decreased by 31% ($24,473) for the three months ended September 30, 2025, due to lower production activity and reduced related-party channel buildout services.
• Reliance on a limited number of customers, with two related-party customers (Launch That and Celebrity Cigars, Inc.) representing 63.82% and 20.87% of total revenues, respectively, for the three months ended September 30, 2025.
• The dual-class stock structure concentrates voting control with CEO William A. Mobley, Jr. (75.55% voting power), limiting other shareholders' ability to influence corporate matters.
• Operating as a 'controlled company' under Nasdaq rules means the company will elect not to comply with certain corporate governance standards, such as majority independent directors and independent compensation/nominating committees, reducing shareholder protections.
• Material weaknesses in internal control over financial reporting have been identified, including a lack of written documentation, insufficient segregation of duties, inadequate staff, and insufficient financial reporting processes.
• The direct listing process, unlike a firm-commitment underwritten IPO, may result in higher price volatility and an uncertain trading volume for Class A common stock.
• Historical sales prices in private transactions may have little or no relation to broader market demand for Class A common stock.
• The CEO and CFO also serve as executive officers of other companies, potentially creating conflicts of interest in allocating their full attention to FreeCast's business.

Risks

• Inability to continue as a going concern without additional financing, potentially leading to cessation of operations.
• Reliance on a limited number of customers, where the loss of one or more could adversely affect the business.
• Failure to build strong brand identity and improve subscriber satisfaction and loyalty, impacting subscriber attraction and retention.
• Inability to continue using current marketing channels, adversely affecting new subscriber acquisition.
• Potential liability for negligence, copyright, patent, or trademark infringement claims based on content accessed through the service.
• Significant disruption in computer systems or those of third parties utilized in operations, leading to service loss or degradation.
• Reliance on third parties to host certain aspects of the service, with disruptions impacting operations.
• Heavy reliance on proprietary technology, and the failure of this technology to operate effectively.
• Privacy concerns limiting the ability to leverage subscriber data, or unauthorized access to subscriber data harming business and reputation.
• Intellectual property claims against the company, which could be costly and result in loss of significant rights.
• Inability to protect intellectual property rights, including trademarks, patents, copyrights, and trade secrets.
• Inability to protect domain names, adversely affecting reputation and brand.
• Dependence on key management and experienced personnel, with failure to attract, motivate, and retain staff hindering business growth.
• Conflicts of interest arising from the CEO and CFO serving as executive officers of other companies.
• Inability to obtain or retain third-party contractors for specific services or development needs.
• Harm to brand name and business from aggressive marketing and communications strategies of competitors.
• Changes in consumer viewing habits, including more widespread usage of on-demand entertainment, could adversely affect the business.
• Dependence on continued and unimpeded access to the Internet at non-discriminatory prices, with potential for blocking, limiting, degrading, or charging for access by Internet providers.
• Changes in how network operators handle and charge for access to data, potentially increasing operating expenses or negatively impacting subscriber acquisition.
• The direct listing differs significantly from an initial public offering, potentially leading to greater volatility and uncertain trading volume.
• Limitations on investors' ability to trace their shares to the registration statement, potentially precluding claims under Sections 11 and 12 of the Securities Act.
• No prior public market for Class A common stock, and an active, liquid trading market may not develop or be sustained.
• Potential for extreme volatility in the stock price, seemingly unrelated to underlying company performance, making valuation difficult.
• The dual-class structure concentrates voting control with the founder, limiting other shareholders' ability to influence corporate matters.
• Controlled company status under Nasdaq rules allows reliance on exemptions from certain corporate governance requirements, reducing shareholder protections.
• If securities or industry analysts do not publish research, change recommendations adversely, or if earnings estimates are missed, the market price and trading volume could decline.
• Inability to meet Nasdaq's continued listing requirements, leading to potential delisting.
• Business depends on adequate funding and access to capital; inability to obtain additional capital on acceptable terms.
• Unpredictable actual number of shares sold under the Equity Purchase Agreement (EPA) or gross proceeds resulting from those sales.
• Substantial dilution to existing shareholders from the sale and issuance of Class A common stock under the EPA, and potential decrease in stock price from resales.
• Management's broad discretion over the use of net proceeds from EPA sales, which may not be invested successfully.
• Emerging growth company status allows reduced reporting requirements, potentially making Class A common stock less attractive to some investors.
• Failure to maintain an effective system of internal control over financial reporting, potentially leading to inaccurate financial reports or fraud.
• Past material weaknesses in internal control over financial reporting that have not been fully remediated.
• Substantial future sales or perceived potential sales of Class A common stock in the public market could cause the price to decline significantly.
• Anti-takeover provisions contained in articles of incorporation and bylaws could impair a takeover attempt.
• The COVID-19 pandemic has had, and may in the future continue to have, a material adverse impact on the business.
• Significantly increased costs and substantial management time required for operating as a public company.

Future Outlook

FreeCast plans to expand domestically and globally by securing licensing agreements with Consumer Direct Platforms (CDPs) that have substantial user bases. The company aims to continually enhance customer experience by expanding its content catalog, refining its user interface, and extending its service to more Internet-connected devices. Future growth is also anticipated from new technologies like FreeCast Home and Commercial Gateway devices, the Collaborative ATSC Service Tech (CAST), aggregated sports data, and an AI-powered personalized channel guide. The company expects to increase advertising revenue and content breadth through its DAI and FAST Channel Builder, launched in early 2023, with partner channel launches beginning January 2024. The fully integrated virtual wallet system, MediaPay, launched in October 2023, is expected to reduce subscriber churn and increase revenue.

Management Comments

• "We believe that aligning with enterprise-level partners reduces our direct retail marketing costs, stabilizes recurring revenues, and extends the reach of our aggregator platform to tens of thousands of new users at once."
• "We believe that this is a complementary relationship in which we directly supply free traffic to content suppliers, much like the print-based model employed by TV Guide in past decades."
• "Management believes that actions presently being taken to obtain additional funding provide the opportunity for us to continue as a going concern."
• "We expect to incur additional cost and require additional capital as we continue to implement our expansion plan."
• "We believe that we are uniquely positioned to take advantage of this market with our products."
• "We expect the trends toward digital streaming video consumption to continue."
• "We believe this integrated ad tech stack generates incremental revenue, capitalizing on the high engagement levels of streaming audiences."

Industry Context

The U.S. video streaming market is projected to grow from $18.8 billion in 2023 to $66.4 billion by 2030, with North America representing 31.9% of the global market. Traditional pay TV viewership is declining, with 60.5 million households in 2023, expected to drop to 50 million by 2027. Conversely, OTT video consumption is rapidly increasing, with 75% of the U.S. population expected to watch OTT video in 2024. Consumers are experiencing 'streaming fatigue' due to fragmentation and rising costs, with 38% wishing all shows were on one platform. FreeCast's aggregator model, which consolidates content and operates as a non-competitive, agnostic omnichannel platform, positions it to address this market need by offering convenience and value through B2B2C partnerships, aiming for higher margins and lower churn compared to traditional direct-to-consumer streaming services.

Comparison to Industry Standards

• Unlike traditional streaming platforms that rely on a direct-to-consumer (B2C) approach, FreeCast operates under a B2B2C sales and marketing strategy, partnering with Commercial Dedicated Partners (CDPs) to scale efficiently and reduce customer acquisition costs and churn rates.
• Most competitors' products, such as Netflix or Amazon Prime, are limited in content library and do not direct subscribers to content available on competing services. FreeCast's SmartGuide, by cataloging but not distributing content, directs subscribers to any available source (free or fee-based).
• Many competitors provide services tied to a single home-based device (e.g., Roku, TiVo, Amazon's FireTV, Apple TV), acting as app managers. FreeCast's SmartGuide is device-agnostic and offers a unified media interface across all Internet-connected devices.
• Traditional streaming services struggle with high customer acquisition costs (CAC) of $50+ per user and 3-5% margins. FreeCast aims for 50%+ margins with minimal CAC through its partnership-focused distribution model, also resulting in lower churn rates.
• FreeCast's model of supplying free traffic to content suppliers is compared to the print-based model employed by TV Guide in past decades.

Management Changes

Corporate Governance

Legal Proceedings

• A civil action in the Circuit Court of the Ninth Judicial Circuit, Orange County, Florida, Case 2025-CA-010793-O, involving shareholder Michael Saracco, was mutually dismissed with prejudice on December 17, 2025.
• The company was sued by CEBV, LLC in August 2022, alleging receipt of proceeds from a purported loan fraud scheme; the case was dismissed without prejudice on August 2, 2023.
• U.S. Premium Finance sued the company and its CEO in December 2022 for nonpayment of a settlement agreement; the company paid $662,893.75 plus $44,595 for post-judgment interest and attorney fees on January 16, 2024, concluding the litigation.

Related Party Transactions

• William A. Mobley, Jr. (CEO and Chairman) holds 75.55% of the voting power through Class B common stock and controls Nextelligence, Inc.
• Nextelligence, Inc. (majority owned and controlled by Mr. Mobley) is the largest shareholder with over 40% of outstanding Class A common stock prior to listing.
• A Technology License and Development Agreement with Nextelligence, Inc. (expires June 30, 2054) grants an exclusive license to core technology, with Nextelligence providing development and maintenance services.
• Nextelligence converted $4,076,051 in outstanding principal and accrued interest from a convertible promissory note into 509,507 shares of Class A common stock on July 26, 2025.
• Nextelligence converted $14,747,425 in outstanding principal and accrued interest from a revolving convertible promissory note into 29,494,851 shares of Class A common stock on March 29, 2024.
• William A. Mobley, Jr. converted $92,068 in outstanding principal and accrued interest from a convertible promissory note into 184,136 shares of Class B common stock on March 29, 2024.
• Public Wire, LLC (an entity owned by Mr. Mobley) converted $118,714 in outstanding principal and accrued interest from a promissory note into 29,679 shares of Class B common stock on March 29, 2024.
• Nextelligence, Inc. forfeited and cancelled 20,000,000 shares of Class A common stock in exchange for 4,000,000 shares of Series A preferred stock on May 16, 2024.
• Nextelligence distributed 9,623,543 shares of Class A common stock to its shareholders on July 29, 2024, with Mr. Mobley beneficially receiving 7,782,970 shares reclassified as Class B.
• A Data Services Agreement with Nextelligence, effective July 1, 2025, provides access to a proprietary marketing database for a one-time fee of $120,000 and a monthly fee of $10,000.
• Verbal arrangements with Test Drive Live Inc. and Celebrity Cigars, Inc. (Mr. Mobley serves as President of both) for FAST channel buildout and platform distribution services generated $54,666 in related party revenue for the three months ended September 30, 2025.
• Nextelligence provided $1,500,000 in aggregate funding between October 9, 2025, and November 21, 2025, with $1,308,977 recorded as a revolving convertible note payable.
• William A. Mobley, Jr. received an automobile allowance of $30,000 for the three months ended September 30, 2025.
• Jonathan Morris (CFO) advises two special purpose acquisition companies (SPACs), ESH Acquisition Corp. and Global Blockchain Acquisition Corp., on a limited basis.

Stakeholder Impact

• **Shareholders (Class A):** Will experience dilution from future equity issuances (e.g., EPA, incentive plans). Voting power is significantly concentrated with the CEO due to the dual-class structure, limiting their influence on corporate matters. The direct listing process may lead to higher price volatility and an uncertain trading market. Limitations on tracing shares to the registration statement may reduce legal remedies under the Securities Act.
• **Shareholders (Class B):** William A. Mobley, Jr. (and permitted entities) maintains substantial control over the company's voting power (75.55%), ensuring his ability to influence strategic decisions and corporate governance.
• **Employees:** Equity incentive awards (options, warrants) are part of compensation, providing potential upside. However, the company's going concern warning and need for additional capital could impact job security or future compensation.
• **Customers (CDPs):** Benefit from FreeCast's technology licensing model, which enhances their service offerings and creates new revenue opportunities through advertising and commissions, without significant infrastructure investment.
• **Subscribers:** Benefit from a unified, 'a la carte' streaming experience through SmartGuide, consolidating content from multiple services. The shift to a free ad-supported model increases accessibility, with options for premium content bundles.
• **Creditors:** The company's recurring losses and going concern warning indicate elevated risk. Recent debt conversions to equity have reduced liabilities, but the need for additional financing remains critical.
• **Management:** Key management, including the CEO and CFO, have significant equity stakes and compensation. However, their involvement in other companies raises potential conflicts of interest. The direct listing and public company requirements will increase workload and compliance costs.

Next Steps

• Complete the direct listing of Class A common stock on the Nasdaq Global Market under the symbol CAST.
• Begin trading on Nasdaq on or about _____, 2026 (date to be determined).
• File a registration statement for the resale of shares under the Equity Purchase Agreement within 15 days following the direct listing date.
• Use commercially reasonable efforts to have the resale registration statement effective within 90 days of the direct listing date.
• Continuously maintain the effectiveness of the resale registration statement until all commitment shares and EPA shares are sold or freely tradeable.
• Enter into a new employment agreement with William A. Mobley, Jr. soon after listing on Nasdaq.
• Appoint two independent directors to the board within 90 days of the prospectus date to comply with Nasdaq audit committee requirements.
• Establish a compensation package for non-executive directors after the Nasdaq listing.
• Commercial launch of the new Commercial Gateway device targeted for fiscal year ending June 30, 2026.
• Launch two new versions of the Out-of-Home (OOH) FreeCast app for CDPs in hospitality and commercial business.
• License Collaborative ATSC Service Tech (CAST) to device manufacturers.
• Integrate aggregated sports data onto the platform.
• Develop an Automated User-Personalized Dynamic Channel Guide powered by AI.
• Implement Multi-channel View feature for Web and TV applications.
• Expand licensing platform to CDPs with substantial user bases domestically and globally.
• Continue to enhance customer experience by expanding content catalog, refining user interface, and extending service to more Internet-connected devices.
• Pursue distribution through membership-based or affinity organizations.
• Seek to patent certain intellectual property in the future.

Key Dates

Recommendation

FreeCast, Inc. presents an extremely high-risk investment profile. The company has a history of recurring losses, a substantial accumulated deficit of over $198 million, and a current working capital deficit. The independent auditors have issued a going concern warning, indicating significant doubt about the company's ability to continue operations without substantial additional financing. While revenue increased and net loss decreased in the most recent quarter, these improvements are insufficient to offset the underlying financial instability. The direct listing itself is a novel and potentially volatile process, lacking traditional underwriting support, which could lead to significant price fluctuations. The dual-class stock structure concentrates voting power with the CEO, limiting minority shareholder influence, and the company's 'controlled company' status allows it to bypass certain Nasdaq corporate governance standards, reducing investor protections. Furthermore, identified material weaknesses in internal controls and heavy reliance on related-party transactions add to operational and governance risks. Despite a potential $50 million equity line of credit, the company's fundamental financial health and the inherent risks of its business model and listing process make it an an unfavorable investment.

Keywords

Streaming Entertainment, PaaS, SmartGuide, Direct Listing, Nasdaq, Ad-Supported TV, FAST Channels, Media Aggregation, B2B2C, FreeCast, Technology Licensing, Equity Purchase Agreement, Going Concern, Dual-Class Stock, Corporate Governance, SEC Filing