{"url_path":"/sec/fabc/10-q/2026/item-5","section_key":"item-5","section_title":"Item 5 OTHER INFORMATION**","topic":"sec","document":{"doc_type":"10-Q","doc_date":"2026-05-15","source_url":"https://www.sec.gov/Archives/edgar/data/1086745/0001493152-26-023860-index.html","accession_number":"0001493152-26-023860","cik":"0001086745","ticker":"FABC","issuer_name":"Fabric.AI, Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1086745/0001493152-26-023860-index.html","primary_entity_key":"0001086745","primary_entity_name":"Fabric.AI, Inc."},"word_count":879,"has_tables":true,"body_markdown":"**ITEM\n5. OTHER INFORMATION**\n\n \n\n*Rule 10b-5 Trading Arrangements*\n\n \n\nNone of the Company’s officers or directors\nadopted, modified or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the Company’s\nfiscal quarter ended March 31, 2026, as such terms are defined under Item 408(a) of Regulation S-K.\n\n \n\n*Pro Forma Condensed Consolidated Financial Statements*\n\n \n\nThe pro forma adjustments reflected herein are limited to transaction accounting\nadjustments directly attributable to the cash proceeds received from the Series K Private Placement financing, after deducting related\noffering expenses (the “Transaction Accounting Adjustments”), as well as the issuance of the Waiver Warrants. The pro forma adjustments are based upon available information and certain\nassumptions that we believe are reasonable. The unaudited pro forma condensed consolidated financial information\nis presented for illustrative purposes only and does not purport to represent what the Company’s financial position or results of\noperations would have been had the Series K Private Placement occurred on the date assumed, nor does it purport to project the Company’s\nfuture financial position or results of operations.\n\n \n\nAfter\ngiving effect to the Series K Private Placement financing and related Transaction Accounting Adjustments, the Company’s pro forma\ncash and cash equivalents would have increased by approximately $19.5 million, and stockholders’ equity would have increased by\napproximately $15.8 million as of March 31, 2026, after the effect of estimated transaction expenses.\n\n \n\nThe unaudited pro forma condensed consolidated financial information should\nbe read in conjunction with the Company’s unaudited condensed consolidated financial statements and related notes included elsewhere\nin this Quarterly Report on Form 10-Q, including Note 14. Subsequent Events.\n\n \n\n29\n\n \n\n \n\n*The following pro forma financial information gives effect to the Series\nK Private Placement as if it had occurred on March 31, 2026.*\n\n \n\n**FABRIC.AI, INC. AND SUBSIDIARIES**\n\n**UNAUDITED PRO FORMA CONSOLIDATED BALANCE\nSHEET**\n\n**MARCH 31, 2026**\n\n \n\n  \nAs Reported  \nAdjustments  \nPro Forma \n\nASSETS \n    \n    \n   \n\nCurrent assets: \n    \n    \n   \n\nCash and cash equivalents \n$3,263,540  \n$19,470,000(a) \n$22,733,540 \n\nRestricted cash \n 110,562  \n —  \n 110,562 \n\nMarketable securities \n 3,416,475  \n —  \n 3,416,475 \n\nPrepaid expenses and other current assets \n 1,176,058  \n —  \n 1,176,058 \n\nTotal current assets \n 7,966,635  \n 19,470,000  \n 27,436,635 \n\n  \n    \n    \n   \n\nOperating lease – right-of-use asset \n 172,853  \n —  \n 172,853 \n\nDigital assets \n 1,335,336  \n —  \n 1,335,336 \n\nDeposits and other assets \n 16,149  \n —  \n 16,149 \n\nTotal assets \n$9,490,973  \n$19,470,000  \n$28,960,973 \n\n  \n    \n    \n   \n\nLIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY \n    \n    \n   \n\nCurrent liabilities: \n    \n    \n   \n\nAccounts payable \n$818,789  \n$—  \n$818,789 \n\nAccrued expenses and other current liabilities \n 535,559  \n —  \n 535,559 \n\nCurrent portion lease obligation – operating lease \n 224,424  \n —  \n 224,424 \n\nTotal current liabilities \n 1,578,772  \n —  \n 1,578,772 \n\n  \n    \n    \n   \n\nDerivative liability \n 25,000  \n —  \n 25,000 \n\nLease obligation - operating lease, net of current portion \n —  \n —  \n — \n\nTotal liabilities \n 1,603,772  \n —  \n 1,603,772 \n\n  \n    \n    \n   \n\nMezzanine equity: \n    \n    \n   \n\nRedeemable Series H-7 Convertible Preferred Stock, ($0.0001 par value per share and $1,000 face value per share; authorized - 22,000 shares; issued and outstanding – 1,180 shares, at March 31, 2026).\nLiquidation preference of $1,327,697 as of March 31, 2026. \n 1,375,892  \n —  \n 1,375,892 \n\nRedeemable Series I Convertible Preferred Stock, ($0.0001 par value per share and $1,000 face value per share; authorized - 7,000 shares; issued and outstanding – 7,000 shares at March 31, 2026).\nLiquidation preference of $7,079,450 as of March 31, 2026. \n 5,330,996  \n —  \n 5,330,996 \n\nContingently redeemable Series K Convertible Preferred Stock, ($0.0001 par value per share and $1,000 face value per share) - authorized - 21,500 shares; issued and outstanding - 21,500 shares at March 31, 2026).\nLiquidation preference of $23,005,000 as of March 31, 2026. \n —  \n 3,678,930(a) \n 3,678,930 \n\n  \n    \n    \n   \n\nStockholders’ equity: \n    \n    \n   \n\nPreferred Stock, (authorized – 20,000,000 shares) \n —  \n —  \n — \n\nSeries H Convertible Preferred Stock, ($0.0001 par value per share; authorized – 8,500 shares; issued and outstanding – 8 shares as of March 31, 2026)\nLiquidation preference of $0 as of March 31, 2026. \n —  \n —  \n — \n\nConvertible Preferred Stock Series H-3, ($0.0001 par value; authorized – 8,461 shares; issued and outstanding – 1,234 shares as of March 31, 2026 and December 31, 2025, respectively)\nLiquidation preference of $15 as of March 31, 2026. \n —  \n —  \n — \n\nSeries H-6 Convertible Preferred Stock, ($0.0001 par value per share; authorized – 50,000 shares; issued and outstanding – 50 shares as of March 31, 2026 and December 31, 2025, respectively)\nLiquidation preference of $72 as of March 31, 2026. \n —  \n —  \n — \n\nCommon Stock, ($0.0001 par value; authorized – 1,200,000,000 and 200,000,000 shares as of March 31, 2026, and December 31, 2025, respectively; issued and outstanding – 1,455,975 shares as of March 31, 2026) \n 146  \n —  \n 146 \n\nAdditional paid-in capital \n 141,769,305  \n 15,791,070(a) \n 157,560,375 \n\nAccumulated deficit \n (140,589,138) \n —  \n (140,589,138)\n\nTotal stockholders’ equity \n 1,180,313  \n 15,791,070  \n 16,971,383 \n\nTotal liabilities, mezzanine equity and stockholders’ equity \n$9,490,973  \n$19,470,000  \n$28,960,973 \n\n \n\n(a)\nAdjustment reflects the Series K Private Closing. The Company incurred an\nestimated $2,030,000 in cash transaction costs directly attributable to the Series K Private Placement, resulting in total net proceeds\nof $19,470,000. The Series K Warrants and Placement Agent Warrants were determined to meet the criteria to be classified in equity pursuant\nto Accounting Standards Codification (‘ASC”) Topic 815 – Derivatives and Hedging and ASC Topic 480 – Distinguishing\nLiabilities from Equity (“ASC 480”). The Series K Preferred Stock was classified in mezzanine equity due to certain contingent\nredemption features pursuant to ASC 480. The Waiver Warrants were determined to meet the criteria to be classified in equity pursuant to ASC 815 and ASC 480,\nand thus their issuance has no impact on stockholders’ equity.\n\n \n\n30"}