Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

References to the "Company," "Mitesco, Inc.," "our," "us" or "we" refer to Mitesco, Inc. The following discussion and analysis of the Company's financial condition and results of operations should be read in conjunction with the unaudited interim financial statements and the notes thereto contained elsewhere in this report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act. We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may," "should," "could," "would," "expect," "plan," "anticipate," "believe," "estimate," "continue," or the negative of such terms or other similar expressions. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other SEC filings.

Company Overview

Mitesco, Inc. (the "Company," "we," "us," or "our") was formed in the state of Delaware on January 18, 2012. On December 9, 2015, we restructured our operations and acquired Newco4pharmacy, LLC, a development stage company which sought to acquire compounding pharmacy businesses. As a part of the restructuring, we shut down our former business line. On April 24, 2020, we changed our name to Mitesco, Inc. In October 2023, the Company changed its domicile from Delaware to Nevada in order to effect reduced costs.

Current Business Operations

We are a holding company seeking to provide products, services and technology.

In June 2024 we announced the formation of two (2) new wholly owned business units, Centcore, LLC ("Centcore") that is providing data center services including cloud computing and application hosting, and Vero Technology Ventures, LLC ("VTV"), whose aim is to seek investment and acquisition opportunities, generally in the areas of cloud computing and data center related applications.

Centcore has two (2) areas of focus. The first, generic data center services, is aimed at hosting applications for a specific user, sometimes referred to as "managed services offerings" or MSO, where the client moves the software licensed from various vendors, or internally developed, into our data center where we maintain the computing, communications and backup environment. We currently offer services through a "co-location" agreement with a data center based in Melbourne, Florida, which has relationships with eight (8) other data centers worldwide. Using this approach, we have an ability to rapidly expand the size of our computing resources quickly, at minimal expense. Over time we expect to create similar situations with other data centers worldwide based on our clients' specific needs. We are also evaluating the development of a network of smaller format (5,000 to 10,000 square foot) data centers inside of existing facilities. We believe that this approach may allow us to expand capacity with a minimal capital expenditure. The existing facilities we are targeting generally have sufficient power, often with a substation nearby. These types of buildings usually have backup generators, HVAC, water and security in a form that would support a data center environment.

We have retained experienced professionals in the data center, cyber security and infrastructure services areas to support our needs on a per hour basis, which we believe will allow us to control our costs relative to business activity, without significant staffing internally.

The Vero Technology Ventures (VTV) subsidiary is actively reviewing potential early-stage cloud computing solution vendors and is developing its own artificial intelligence (A.I.) based application set. VTV is currently involved with the formation of a new software development project aimed at applying artificial intelligence (A.I.) to the sales process for various businesses including residential real estate using cloud computing based software. This initial effort dubbed "Robo Agent", is expected to be available for initial users in Q4 of FY2025. Later versions may include similar functionality focused on other markets, generally in a "business to consumer" (B2C) selling situation.

In August 2025 we retained a highly qualified executive to begin development of our Robo Agent product set on a consulting basis at a rate of $10,000 per month. We have also recruited three (3) additional contract programmers to accelerate the overall process. In September 2025 we received a contract for development of a new application intended to effect the listing and sale of properties and products specifically related to sports, and the pickleball arena initially. We expect this project to be executed using both internal and external resources and to be completed in late FY2024.

There are several other projects in evaluation, generally aimed at software that would operate on a cloud computing platform such as that which the Company has in its Centcore Data Center.

FY2024 Debt Restructuring

From FY2021 until late FY2022 the Company invested in an operating subsidiary, The Good Clinic, which was developing a series of primary care healthcare facilities. In late FY2022, as a result of a lack of adequate revenues and limited funding, it ceased operations. As of June 30, 2024, the Company had over $30 million in senior securities, notes and accounts payable related to that discontinued operation. In order to clear those obligations management began a restructuring which involved negotiations to reduce the overall debt, converting certain accredited institutional investors into a newly created Series A Amortizing Preferred stock ("Series A Preferred"), and all others into restricted common stock using a price per share of $4.00.

As of the date of this filing it has converted over $25 million of its obligations, representing over $20 million of its senior securities, and over $2 million of notes and accounts payable, into 2,478,179 of restricted Common Stock, and 566,085 shares of Series A Preferred stock. The Series A Preferred stock is held by six (6) accredited institutional investors, while over 40 holders of obligations of the Company elected to receive common stock using the $4 per share valuation.

Included in the above totals, effective December 31, 2024, the Company has entered into Obligation Exchange Agreements pursuant to which it has converted $580,132, including $32,132 of principal and interest, of its 2024 Bridge Notes into Series A Preferred shares, which resulted in the issuance of 23,206 shares of Series A Preferred shares to three (3) of its institutional investor. This extinguishes $580,132 of its short-term debt. As of the date of this filing all FY2024 bridge notes have been extinguished. Further, during January 2025 the Company issued 4,000 shares of its Series A Preferred shares in consideration of an investment of $100,000 by three (3) of its institutional investors.

As part of the restructuring, the Company agreed to register shares of Common Stock issued and to be issued to Series A Preferred Stockholders.

Comparison of the Three Months Ended September 30, 2025, and 2024.

Revenues

We had revenues of $3,000 for the three months ended September 30, 2025, compared to $23,500 in the comparable period. The revenues were related to our newly formed subsidiary Centcore, LLC. We shifted much of our limited resources to our new software projects during Q3 and as a result we saw a reduction in data center revenue.

Operating Expenses

Our total operating expenses for the three months ended September 30, 2025, were $1,014,422. For the comparable period in 2024, the operating expenses were $239,742. The increase is the result of the Company's focus on establishing the operations of its newly formed subsidiaries as well as development of a software platform in addition to stock-based compensation expense of $812,149 for the three months ended September 30, 2025 compared to $106,250 for the comparable period.

Other Income and Expenses

Interest expense was $386,699 for the three months ended September 30, 2025, compared to $50,979 for the comparable period in 2024. The increase was a result of the Series A preferred shares accretion and interest on the outstanding legal settlements.

Interest expense - related parties was $0 for the three months ended September 30, 2025, compared to $10,587 in the prior period. The decrease was a result of reduced debt balances in the current period.

During the three months ended September 30, 2024, we recorded a gain on settlement of operating lease liabilities of $636,485. There were no comparable transactions in the current period.

During the three months ended September 30, 2025, we recorded a loss on settlement of legal settlement of $500,000. There were no comparable transactions in the prior period.

During the three months ended September 30, 2024, we recorded a gain on settlement of notes payable of $693,768. There were no comparable transactions in the current period.

During the three months ended September 30, 2024, we recorded a gain on settlement of accounts payable of $1,024,583. There were no comparable transactions in the current period.

During the three months ended September 30, 2025, we recorded a loss on revaluation of derivative liabilities of $917,212. There were no comparable transactions in the prior period.

During the three months ended September 30, 2025, we recorded a loss on revaluation of Series A preferred shares of $387,638. There were no comparable transactions in the prior period.

Comparison of the Nine Months Ended September 30, 2025, and 2024.

Revenues

We had revenues of $38,700 for the nine months ended September 30, 2025, compared to $29,500 in the comparable period. The revenues were related to our newly formed subsidiary Centcore, LLC.

Operating Expenses

Our total operating expenses for the nine months ended September 30, 2025, were $1,668,862. For the comparable period in 2024, the operating expenses were $721,095. The increase is the result of the Company's focus on establishing the operations of its newly formed subsidiaries as well as development of a software platform, in addition to stock-based compensation expense of $824,649 for the nine months ended September 30, 2025 compared to $388,250 for the comparable period.

Other Income and Expenses

Interest expense was $1,137,355 for the nine months ended September 30, 2025, compared to $159,206 for the comparable period in 2024. The increase was a result of the Series A preferred shares accretion and interest on the outstand legal settlements.

Interest expense - related parties was $2,297 for the nine months ended September 30, 2025, compared to $26,133 in the prior period. The decrease was a result of reduced debt balances in the current period.

During the nine months ended September 30, 2025, we recorded a gain on settlement of liabilities of $562,793. During the nine months ended September 30, 2024, we recorded a gain on settlement of accounts payable of $1,024,583.

During the nine months ended September 30, 2025, we recorded a loss on legal settlement of $500,000. There were no comparable transactions in the prior period.

During the nine months ended September 30, 2025, we recorded a gain on revaluation of derivative liabilities of $3,513,655. There were no comparable transactions in the prior period.

During the nine months ended September 30, 2025, we recorded a loss on revaluation of Series A preferred shares of $646,653. There were no comparable transactions in the prior period.

Liquidity and Capital Resources

To date, we have not generated sufficient revenue from operations to support our operations. We have financed our operations through the sale of equity securities and short-term borrowings. As of November 13, 2025, we had cash of approximately $55,000 compared to cash of approximately $300 as of September 30, 2025. This was as a result of our latest financing using the 2025 Bridge Notes (see subsequent events). Our Company's recurring losses from operations and negative cash flows from operations and our need to raise additional funding to finance our operations raise substantial doubt about our ability to continue as a going concern.

Net cash used in operating activities was $308,963 for the nine months ended September 30, 2025. This is the result of establishing the operations of the Company's newly formed subsidiaries. Cash used in operations for the nine months ended September 30, 2024, was $399,775.

The Company had no investing activities for the nine months ended September 30, 2025 and 2024.

Net cash provided by financing activities for the nine months ended September 30, 2025, was $305,882, compared to $428,759 for the nine months ended September 30, 2024. Cash provided by financing activities was the result of cash proceeds from sales of Series A preferred shares of $125,000 and cash proceeds from notes payable of $200,000, offset by the repayment of principal on the SBA loan in the amount of $19,118.

On October 31, 2025 the Company entered into a Senior Secured 10% Original Issue Discount Convertible Promissory Note (the "2025 Bridge Note") financing agreement with one of our historical institutional investors, C/M Capital Master Fund, L.P. for a potential total funding of $1 million, with an initial funding with net proceeds of $250,000. Under the terms of the 18 month note the Company is obligated to repay a total of $275,000 as the note includes a 10% original issue discount. The note bears no interest unless in default and may be converted into common stock of the Company at $0.15 per share, subject to certain adjustments. The 2025 Bridge Notes may be prepaid at 110% of the outstanding principal amount owed at the time of repayment. The obligations under the 2025 Bridge Note are guaranteed by the subsidiaries of the Company and included a pledge of the securities the Company's subsidiaries and first priority senior security interest in all the Company's assets.

At September 30, 2025, we had the following current liabilities which are payable in cash: Accounts payable and accrued liabilities of approximately $4.3 million; notes payable of approximately $0.6 million; SBA Loan Payable of approximately $0.4 million; legal settlements of approximately $3.3 million; accrued interest payable of approximately $0.4 million; and other current liabilities of approximately $0.2 million and royalty payable of approximately $0.2 million. We also have the following liabilities which are payable in stock: derivative liabilities of approximately $1.2 million and Series A Preferred Stock liability of approximately $7 million.

The Series A Preferred Stock are accounted for as a liability as a result of the mandatory redemption features requiring the Company to repay the Series A in either cash or shares of Common Stock of the Company, under ASC 480, the Company is required to record the full redemption value of the Series A preferred shares as a liability. The Company has recorded the redemption value based on the 10% premium required if the Company were to repay in shares of Common Stock due to the current expected cash flows of the Company.

The Company has relationships with a number of consultants who are assisting in the creation of the new business units. It is anticipated that this approach will continue indefinitely as it does not desire to create the overhead associated with a large employment force.

The following table summarizes the status of our property-related settlements as noted above and the total settlement amounts as of the date of the filing:

LOCATION		PROPERTY NAME		ORIGINAL OBLIGATION				SETTLEMENT AMOUNT				DATE OF AWARD		INTEREST RATE				INTEREST ACCRUED ON SETTLEMENT(1)				TOTAL SETTLEMENT OBLIGATION				TYPE OF SETTLEMENT
WAYZETTA, MN		WAZETTA BAY		$	407,000			$	25,000			NA			-				-			$	25,000			CASH PAYMENT OBLIGATION
EAGAN, MN		VIKINGS		$	767,000			$	488,491			12/7/2023			10	%		$	88,731			$	577,222			DEFAULT JUDGEMENT
ST. LOUIS PARK, MN		EXCELSIOR		$	673,000			$	425,350			5/22/2024			10	%		$	57,801			$	483,151			DEFAULT JUDGEMENT
ST. PAUL, MN		CONTINENTAL 560		$	1,153,000			$	415,606			1/22/2024			10	%		$	70,254			$	485,860			DEFAULT JUDGEMENT
MAPLE GROVE, MN		BUTTNICK		$	1,153,127			$	219,000			10/3/2022			10	%		$	65,580			$	284,580			SETTLEMENT AGREEMENT
DENVER, CO		RADIANT		$	782,000			$	530,557						-				-			$	530,557			DISMISSED
DENVER, CO		QUINCY		$	1,079,000			$	848,764			11/14/2023			12	%			87,699			$	936,463			DEFAULT JUDGEMENT
		TOTAL		$	6,014,127			$	2,952,768									$	370,066			$	3,322,834

Note (1): accrued interest has been calculated through September 30, 2025.

Critical Accounting Estimates

Management uses various estimates and assumptions in preparing our financial statements in accordance with generally accepted accounting principles. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Accounting estimates that are the most important to the presentation of our results of operations and financial condition, and which require the greatest use of judgment by management, are designated as our critical accounting estimates. We have the following critical accounting estimates:

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Estimates and assumptions used in the valuation of derivative liabilities: Management utilizes a lattice model to estimate the fair value of derivative liabilities. The model includes subjective assumptions that can materially affect the fair value estimates.