Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

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

You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K. This discussion and other parts of this Annual Report on Form 10-K contain forward-looking statements, such as those relating to our plans, objectives, expectations, intentions, and beliefs, which involve risks and uncertainties. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in the sections titled "Cautionary Note Regarding Forward-Looking Statements" and "Risk Factors" included elsewhere in this Annual Report on Form 10-K. Our historical results are not necessarily indicative of the results that may be expected for any period in the future.

Overview

Unicoin Inc. (hereinafter the "Company", "Unicoin", "we", "us", or "our") was incorporated in the state of Delaware on June 22, 2015. In 2008, our SaaS platform was developed by KMGi, the precursor to Unicoin, as an internal tool for monitoring and managing computer-based work for the purpose of improving efficiency of both remote and on-site employees and eliminating overbilling by contractors. The SaaS platform has been in use since 2009, initially under the name TransparentBilling, serving KMGi's internal operations. With clients of all sizes in multiple countries around the world, and over 30,000 registered individual users of our remote talent platform, Unicoin Inc. brings together an end-to-end solution to manage distributed teams in a transparent and efficient way.

Unicoin Inc. is an operating and holding company. As an operating company, Unicoin Inc. manages its SaaS (Software-as-a-Service) software business which provides for simple and seamless monitoring and management of remote or work-from-home employees. Unicoin Inc. has also launched a token project in early 2022, as a complementary business to its Unicorns, Inc. (hereinafter "Unicorns" or "Unicorn Hunters") subsidiary. As a holding company, Unicoin Inc. wholly owns SheWorks!, a Talent-as-a-Service ("TaaS") operating company and platform. As a holding company, from November 2020 through December 2025, Unicoin Inc. was the majority owner of a traditional staffing agency, ITSQuest, with a regional presence in the U.S. Southwest. Finally, as a holding company, Unicoin Inc. also became the majority owner in 2021 of Unicorns Inc., a media production company producing Unicorn Hunters, a business and investing reality show.

Key Factors and Measures We Use to Evaluate Our Business

Sources of Revenue

The Company primarily derives its revenues from three revenue streams:

1.

Subscription Revenue (Software-as-a-Service or "SaaS") - which is comprised of fees from customers accessing the Company's all-in-one cloud-based solution to manage remote workers ("software platform").

2.

Staffing Revenue (Talent-as-a-Service or "TaaS") - whereby enterprise customers are connected to individuals who are able to assist them in projects.

3.

Unicorns Revenue - which generally represents the fair value of private company stock options or warrants, committed to be granted to the Company, as consideration for the right to present and promote those private companies on the Unicorn Hunters show.

SaaS Revenue. For SaaS contracts, the typical subscription term is one year or less and the Company generally invoices its customers at the start of the subscription period when access to the software platform is provided. Amounts that have been invoiced are recorded in accounts receivable and deferred revenue and revenue is recognized over the subscription period.

TaaS Revenue. For TaaS contracts, the Company's staffing contracts are typically for a duration of less than a year and are either on a fixed hourly rate basis or on a fixed cost basis billed upon satisfaction of respective milestones. The Company typically invoices its customers at the end of each month in cases where the contracts involve billing based on fixed hourly rates and/or once a milestone is reached. An over-time method is used to measure progress because the Company's obligation is to provide continuous service over the contractual period when fixed hourly rate billing is involved. For time-and-materials contracts, revenue from contracts with customers is recognized in the amount to which the Company has a right to invoice, when the services are rendered by the Company's remote workers in such cases. For milestone-based contracts, revenue is recognized over time using an output method based upon milestones achieved. Revenue is recognized once a milestone is reached for an amount of the transaction price that is proportionate to the total milestones in the contract. Milestones reached represent work performed and thereby best depicts the transfer of control to the customer.

Unicorns Revenue. For Unicorns contracts, customers are billed when an episode is distributed for broadcast or streaming. The promise to the customer is fulfilled and revenue is recognized for the entire transaction price when an episode is distributed on the Unicorn Hunters website.

Gross Profit

We define gross profit as the difference between total revenue and cost of revenue.

For the SaaS and TaaS segments, cost of revenue includes salaries, and personnel compensation costs, associated with the Company's website hosting and other costs including providing technical support, materials, and supplies. For Unicorns, cost of revenue includes salaries and personnel compensation costs as noted for SaaS and TaaS but also includes third party costs for production team, celebrity hosts and travel. The Company evaluates if Unicorn Hunters show production costs are expected to be recovered. Costs are capitalized if expected to be recovered and otherwise are expensed as incurred. Any capitalized costs are expensed when the related show is distributed on the Unicorn Hunters website.

Operating Expenses

Research and development costs are related to maintaining and improving the Company's software platform and primarily consist of personnel-related costs, including salaries and bonuses, benefits and stock-based compensation expense. Research and development costs related to internal use software are not material and are expensed as they are incurred.

Sales and marketing costs principally consist of third-party marketing, advertising, and branding in addition to compensation and benefits of the Company's own marketing personnel. Sales, marketing and advertising costs are expensed as incurred.

General and administrative costs primarily consist of compensation, employee benefits, and stock-based compensation related to executive management, finance, administration and human resources, facility costs, professional service fees, and other general overhead costs.

Economic and Labor Trends

Demand for our talent pool, consultants and growth of placement services are dependent upon general economic and labor trends. We believe that the Company is well positioned in the current macroeconomic environment, particularly as economies continue to reopen and demand for services increase. We expect greater geographical work flexibility and the legacy of the coronavirus pandemic to continue and help drive business growth as travel restrictions may be slow to be lifted.

Evolving Technology

The ability to respond in time to technology trends and new developments is a key determinant of our business and operational performance.

Dynamic and Evolving Technology

The ability to respond in time to technology trends and new developments is a key determinant of our business and operational performance. We have a clearly focused technology roadmap, combined with the forward-looking outlook of the Unicorn Hunters show, that introduces new functionality and features from our audience, thereby ensuring a dynamic and evolving experience. We believe this will widen our platform's appeal to new customers, while expanding our potential opportunities for investment, resulting in greater revenue growth.

ITSQuest Divestiture & Financial Recast

Effective December 31, 2025, Unicoin Inc. elected not to further extend the divestiture agreement with the original sellers of ITSQuest, a regional staffing agency in which the Company had held a 51% majority interest since November 2020. Under the terms of the original Share Exchange Agreement, the Company's failure to achieve specific milestones by the expiration date triggered the formal transfer of the equity interest back to the original sellers. Management determined that a further negotiation for extension was not in the Company's strategic interest. This conclusion was based on an internal assessment that the traditional staffing model of ITSQuest constitutes a non-core asset that lacks sufficient synergy with the Company's proprietary technology and brand equity. By allowing the divestiture to proceed, Unicoin Inc. intends to reallocate its capital and management resources exclusively toward high-growth digital assets and media-driven opportunities across its primary markets.

Consequently, management has retrospectively recasted Unicoin's historical financial statements for the 2024 and 2025 fiscal years, reclassifying all financial results associated with ITSQuest into discontinued operations.

Significant Related Party Transactions

As of December 31, 2025 and 2024, the total fair value of unicoin rights issued to related parties amounted to $4,815 thousand and $4,337 thousand, respectively.

Results of Operations

The following table summarizes key components of our results of operations for the periods indicated, both in dollars and as a percentage of our sales.

We derived the consolidated statements of operations for fiscal 2025 and fiscal 2024 from our consolidated financial statements, respectively. Furthermore, our consolidated statements of operations include the post-acquisition period activity for Unicorns. Our historical results are not necessarily indicative of the results that may be expected in the future.

		Years Ended December 31,
		2025				% of Total Revenue				2024				% of Total Revenue
Revenues:
Staffing revenues		$	2,390,840				99	%		$	2,481,067				99	%
Subscription revenues			26,404				1	%			32,549				1	%
Unicorns revenues			38				0	%			2,676				0	%
Total Revenues			2,417,282				100	%			2,516,292				100	%
Cost of Revenues:
Staffing cost of revenues			1,993,420				82	%			1,954,448				78	%
Subscription cost of revenues			-				-				-				-
Unicorns cost of revenues			30,300				1	%			128,415				5	%
Total Cost of Revenues			2,023,720				84	%			2,082,863				83	%
GROSS PROFIT			393,562				16	%			433,429				17	%
OPERATING COSTS AND EXPENSES
General and administrative			7,856,135				325	%			19,788,291				786	%
Sales and marketing			741,873				31	%			13,703,994				545	%
Research and development			174,376				7	%			12,511				0	%
Cost of contract amendment			-				-				790,000				31	%
TOTAL OPERATING COSTS AND EXPENSES			8,772,384				363	%			34,294,796				1363	%
LOSS FROM OPERATIONS			(8,378,822	)			(347	)%			(33,861,367	)			(1346	)%
Interest income (expense), net			(208,247	)			(9	)%			(196,533	)			(8	)%
Other income (expense), net			(366,174	)			(15	)%			(1,988,506	)			(79	)%
LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES			(8,953,243	)			(370	)%			(36,046,406	)			(1433	)%
Income tax expense			(1,127	)			0	%			(69,373	)			(3	)%
NET LOSS FROM CONTINUING OPERATIONS			(8,954,370	)			(370	)%			(36,115,779	)			(1435	)%
Net Income from Discontinued Operations			184,040				8	%			543,938				22	%
Loss from Divestiture of Discontinued Operations			(4,891,712	)			(202	)%			-				0	%
NET LOSS			(13,662,042	)			(565	)%			(35,571,841	)			(1414	)%
Less: net loss attributable to the noncontrolling interest			(268,654	)			(11	)%			(617,190	)			(25	)%
NET LOSS ATTRIBUTABLE TO UNICOIN INC.		$	(13,393,388	)			(554	)%		$	(34,954,651	)			(1389	)%

Revenues

The following table presents our revenue for the periods indicated.

		Year ended December 31,
		2025				2024				Change ($)				Change (%)
TAAS revenues		$	2,390,840			$	2,481,067			$	(90,227	)			(4	)%
SAAS revenues			26,404				32,549				(6,145	)			(19	)%
Unicorns revenues			38				2,676				(2,638	)			(99	)%
Total Revenues		$	2,417,282			$	2,516,292			$	(99,010	)			(4	)%

Total revenues decreased by $99 thousand, or 4%, to $2,417 thousand in 2025.

TaaS. TAAS revenues decreased by $90 thousand, or (4)%, to $2,391 thousand in 2025 and comprised 99% of our total revenues.

SaaS. Our SaaS business is currently being phased out of our operations through customer attrition, and are no longer the focus of our efforts.

Unicorns. Unicorn did not release any episodes of Unicorns in 2025.

Cost of Revenues

The following table presents our cost of revenues for the periods indicated.

		Year ended December 31,
		2025				2024				Change ($)				Change (%)
TAAS cost of revenues		$	1,993,420				1,954,448				38,972				2	%
SAAS cost of revenues			-				-				-				0	%
Unicorns cost of revenues			30,300				128,415				(98,115	)			(76	)%
Total Cost of Revenues		$	2,023,720			$	2,082,863			$	(59,143	)			(3	)%

Total cost of revenues decreased by $59 thousand, or 3%, to $2,024 thousand in 2025.

TaaS. TAAS cost of revenues increased by $39 thousand, or 2%, to $1,993 thousand.

Unicorns. Unicorns cost of revenues for the year ended December 31, 2025 was $30 thousand, compared to $128 thousand for the year ended December 31, 2024. No revenue generating Unicorn Hunters episode released in the year ended December 31, 2025. The Company did not capitalize any costs of revenues for the years ended December 31, 2025 and 2024, in relation to any undistributed episodes, based on the uncertainty as to whether the costs of such episodes was recoverable during the Company's start-up phase.

General and administrative

General and administrative expenses decreased by $12,722 thousand, or 62%, to $7,856 thousand for the twelve months ended December 31, 2025, compared to $20,578 thousand for the year ended December 31, 2024. This decrease was primarily attributable to the decrease of $6,956 thousand in transaction losses recorded in the prior year related to the reacquisition of Unicoin Rights from investors under the five-year deferred payment plan, which utilized previously acquired Unicoin Rights as consideration. The year-over-year decrease was further driven by reductions of $1,227 thousand in accounting, tax, and professional fees, $1,182 thousand in expenses paid with Unicoin Rights, and $1,177 thousand in legal fees.

Sales and marketing

Sales and marketing expenses decreased by $12,962 thousand, or 95%, to $742 thousand for the year ended December 31, 2025. This decrease was primarily driven by a $10,083 thousand reduction in sales and marketing expenses paid using Unicoin Rights as consideration, as well as a $2,593 thousand decrease in recurring marketing expenses.

Research and development

Research and development expenses increased by $163 thousand, or 1294%, to $174 thousand. Research and development mainly consist of personnel related costs such as salaries and benefits. Internally developed software costs for internal use are not material and are expensed as they are incurred.

Cost of contract amendment

Cost of contract amendment was $0 thousand, for the year ended December 31, 2025, compared to $790 thousand, for the year ended December 31, 2024. This cost reflects the fair value of the consideration given to the former owners of ITSQuest, during the year ended December 31, 2024, in exchange for extending the contingent divestiture provision, as discussed in Note 7 - Unicoin rights financing obligation of "Notes to Consolidated Financial Statements," included in Item 8 of this Annual Report on Form 10-K.

Interest income (expense), net

Net interest expense increased by $12 thousand, or 6%, to $208 thousand for the year ended December 31, 2025, compared to $197 thousand for the year ended December 31, 2024. This increase was primarily attributable to the issuance of unsecured notes during the fourth quarter of the year ended December 31, 2025.

Other income (expense), net

Other net expenses decreased by $1,622 thousand to $366 thousand for the year ended December 31, 2025. During the year ended December 31, 2025, the Company recorded impairment charges of $624 thousand related to its investment in land and $580 thousand related to its mining rights assets.

Provision for Income Taxes

		Year Ended December 31,
		2025				2024				Change ($)				Change (%)
Income tax benefit (expense)		$	(1,127	)		$	(69,373	)		$	68,246				(98	)%
Effective tax rate			(0.01	)%			(0.19	)%

The Company's effective tax rate was (0.01)% and (0.19)% for the years ended December 31, 2025 and 2024, respectively. The Company records a full valuation allowance against its deferred income tax assets, as it continues to conclude that it is more likely than not that such assets will not be realized. The Company's deferred tax assets primarily relate to net operating loss carryforwards.

Net income (losses) attributable to the noncontrolling interest

Net losses attributable to noncontrolling interests decreased by $349 thousand, or (56)%, to $(269) thousand for the year ended December 31, 2025. Noncontrolling interest partners in ITSQuest were allocated income of $90 thousand and $267 thousand for the years ended December 31, 2025 and 2024, respectively, while noncontrolling interest partners in Unicorns were allocated losses of $(255) thousand and $(884) thousand for the years ended December 31, 2025 and 2024, respectively. Noncontrolling interest partners in Unicoin International were allocated losses of $(104) thousand and $0 thousand for the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025, noncontrolling interests in ITSQuest (immediately prior to its divestiture on December 31, 2025), Unicorns, and Unicoin International represented ownership interests of 49%, 28.12%, and 100%, respectively, compared to ownership interests of 49% and 28.12% in ITSQuest and Unicorns, respectively, as of December 31, 2024.

Net income (losses) attributable to the noncontrolling interest

Net income from discontinued operations was $184 thousand for the year ended December 31, 2025, compared to $544 thousand for the year ended December 31, 2024, and reflects the operating results of ITSQuest through the date of divestiture. In connection with the automatic divestiture of ITSQuest on December 31, 2025, the Company recognized a loss on divestiture of $4,892 thousand, which primarily reflects the derecognition of ITSQuest's net assets, including goodwill, with no consideration received. As a result, discontinued operations had a significant unfavorable impact on net loss for the year ended December 31, 2025.

Liquidity and Capital Resources

Our primary future uses of cash will be to fund working capital requirements and expenditures of Unicorns.

We had cash and cash equivalents of $1,238 thousand available as of December 31, 2025. Based on currently available capital resources (cash and cash equivalents on hand as of December 31, 2025), we estimate that at our current cash "burn rate", the Company will not be able to operate for more than two months. For the company to maintain operations for at least twelve months, we would need to receive further equity or debt financing of approximately $7,421 thousand. For the period from January 1, 2026 through the date of this Annual Report on Form 10-K, we have received cash and cryptocurrency funding of $5,335 thousand, $25 thousand private placement unsecured notes and $5,310 thousand non-security utility issuance. However, given the impact of the economic downturn on the U.S. and global financial markets, the Company may be unable to access further equity or debt financing when needed. In addition, the Company has recorded a significant financing obligation that we believe the Company would be required to pay in the event the unicoins have not been made tradeable on crypto exchanges and there remains significant uncertainty as to if, and when, it may be made tradeable on crypto exchanges may occur. There can be no assurance that the Company will be able to obtain additional liquidity when needed or under acceptable terms, if at all. Our auditors have included an explanatory paragraph in their audit opinion, included as part of our Annual Report on Form 10-K for the year ended December 31, 2025, that our current liquidity position raises substantial doubt about our ability to continue as a going concern for the next twelve months unless we obtain additional capital. The Company anticipates that such conditions will continue to exist until either significant financing has been obtained and/or the uncertainty surrounding the launch of the unicoin has been resolved.

From January 1, 2025 through December 31, 2025, the Company issued unicoin rights to investors and service providers in exchange of consideration consisting of cash $2,508 thousand and incurred operating expenses paid with unicoin rights with a fair value of $336 thousand, together amounting to approximately $2,844 thousand.

Through December 31, 2025, the Company has recorded a financing obligation of $112.9 million associated with unicoin rights issued to date which represents the Company's estimate of what it would be obligated to pay in the event the unicoin is never launched. Although it is the Company's intention to ultimately launch the unicoin and settle unicoin rights obligations by issuing unicoins to rights holders, there are aspects of the launch process, including certain regulatory approvals of the Unicoin, that may be outside of the Company's control. If the Company fails to launch the unicoin, its intent would be to pay for the unicoin rights financing obligations using cash flows from its existing operations and/or through future debt or equity financing. In order to be able to pay the financing obligation using cash from operations or to achieve financing at terms acceptable to the Company, the Company will have to achieve substantial additional revenue growth and positive cash flows from operations or achieve substantial growth in its existing private company investment values and experience one or more exits or other liquidity transactions associated with its private company investments. There can be no assurance that the Company will achieve these successes prior to events or circumstances that lead to a future conclusion that the unicoin will not be able to be launched. If one or more of these factors leading to positive growth in the Company's liquid resources do not occur prior to a conclusion that the Company will fail to launch the Unicoin, the financing obligation to holders of unicoin rights may need to be settled for a fraction of the recorded obligation, or in the worst case, there may be no funds available to settle the obligation.

As part of the agreement in which the Company received 50,000,001 shares of Unicorns stock, the Company extended an initial line of credit to Unicorns in the amount of $10,000 thousand to fund production of the Unicorn Hunters show and related expenses. Further additional ongoing funding has been provided by Unicoin Inc. to Unicorns, since the initial line of credit, to fund the production-related expenses of Unicorn Hunters show. This intercompany loan, which is eliminated in consolidation, net amounted to $28,758 thousand and $27,113 thousand as of December 31, 2025 and 2024, respectively. Beyond the initial $10,000 thousand line of credit, the Company does not have any contractual commitments to fund the operations of Unicorns. However, it is the Company's intention to continue funding the operations of Unicorns, until Unicorns begins generating sufficient cash flows to sustain its own business operations without using additional funding from the Company.

Summary of Cash Flows

Year Ended December 31, 2025 compared with Year Ended December 31, 2024

The following table sets forth our cash flows for the periods indicated:

		Year Ended December 31,
(In thousands)		2025				2024
Cash flows used in continuing operations:
Net cash used in operating activities		$	(6,551	)		$	(8,970	)
Net cash used in investing activities			(3,020	)			(333	)
Net cash provided by financing activities			6,897				4,721
Net increase (decrease) in cash and cash equivalents from continuing operations			(2,674	)			(4,582	)
Cash flows from discontinued operations			1,314				718
Net increase (decrease) in cash and cash equivalents		$	(1,360	)		$	(3,864	)

Cash Used in Operating Activities

Cash flows used in operating activities increased by $2,419 thousand to $(6,551) thousand for the year ended December 31, 2025, compared to $(8,970) thousand for the year ended December 31, 2024. Net cash used in operating activities for the year ended December 31, 2025, was due to our net loss from continuing operations of $(8,954) thousand, offset by non-cash items of $1,336 thousand and an increase in operating assets net of liabilities of $1,067 thousand. Net cash used in operating activities for the year ended December 31, 2024, was due to our net loss from continuing operations of $(36,116) thousand, offset by non-cash items of $21,872 thousand and an increase in operating assets net of liabilities of $5,274 thousand.

Cash Used in Investing Activities

Net cash flows used in investing activities increased by $2,687 thousand to $3,020 thousand for the year ended December 31, 2025. The increase in net cash used in investing activities was primarily due to $3,020 thousand transferred to ITSQuest in connection with the divestiture, partially offset by a $330 thousand decrease in net purchases of digital assets.

Cash Provided by Financing Activities

Net cash flows provided by financing activities increased by $2,176 thousand to $6,897 thousand for the year ended December 31, 2025, compared to $4,721 thousand for the year ended December 31, 2024. This increase was primarily driven by a $1,085 thousand increase in net proceeds from the sales and repurchases of Unicoin Rights and $2,301 thousand in proceeds from the issuance of short-term debt, partially offset by a $1,394 thousand decrease in proceeds from the issuance of common stock.

Cash and Cash Equivalents

We maintain cash with several high credit quality financial institutions. Temporary cash investments with original maturities of 90 days or less are considered cash equivalents. Temporary cash investments are stated at cost, which approximates fair value. These investments are not subject to significant market risk. We maintain our cash and cash equivalents in bank accounts which, at times, exceed the federally insured limits. We have not experienced any losses in such accounts.

Critical Accounting Policies and Estimates

Our consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP"). The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosures. We evaluate our estimates and assumptions on an ongoing basis. Actual results may differ from these estimates. To the extent that there are material differences between these estimates and our actual results, our future financial statements will be affected.

Going Concern

These consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) assuming the Company will continue as a going concern. The going concern assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

The Company incurred net losses from continuing operations of $(8,954) thousand and $(36,116) thousand for the years ended December 31, 2025 and 2024, respectively. Total income (loss) from discontinued operations, including the divestiture of discontinued operations, amounted to $(4,708) thousand and $544 thousand for the years ended December 31, 2025 and 2024, respectively. The Company had net cash used in operating activities of $(6,551) thousand and $(8,970) thousand for the years ended December 31, 2025 and 2024, respectively. The Company had an accumulated deficit of $(179,724) thousand and $(166,330) thousand as of December 31, 2025 and 2024, respectively, and expects to incur additional significant losses in the future.

These conditions raise substantial doubt about the Company's ability to continue as a going concern. The Company's long-term success is dependent upon its ability to successfully raise additional capital, market its existing services, increase revenues, and, ultimately, to achieve profitable operations.

The Company is evaluating strategies to obtain the required additional funding for future operations. These strategies may include, but are not limited to, issuing unicoin rights, obtaining equity financing, issuing debt, or entering other financing arrangements, and restructuring of operations to grow revenues and decrease expenses. However, in view of uncertainties in U.S. and global financial markets, the Company may be unable to access further equity or debt financing when needed. As such, there can be no assurance that the Company will be able to obtain additional liquidity when needed or under acceptable terms, if at all.

The consolidated financial statements do not include any adjustments to the carrying amounts and classification of assets, liabilities, and reported expenses that may be necessary if the Company were unable to continue as a going concern.

Variable Interest Entity

The Company's policy is to consolidate all subsidiaries or other entities in which it has a controlling financial interest. The consolidation guidance under ASC 810 "Consolidation" ("ASC 810") requires an analysis to determine if an entity should be evaluated for consolidation under the voting interest entity ("VOE") model or the variable interest model ("VIE"). Under the VOE model, controlling financial interest is generally defined as majority ownership of voting interests. The consolidated financial statements include the accounts of all subsidiaries or other entities in which the Company has a direct or indirect controlling financial interest.

The Company assesses all entities in which it has a significant economic, ownership or other financial interest for consolidation on a case-by-case basis depending on the specific facts and circumstances surrounding each entity. Pursuant to ASC 810, the Company first evaluates whether it holds a variable interest in an entity. The Company considers all economic interests, including proportionate interests through related parties, to determine if such interests are considered a variable interest.

For any entity where the Company has determined that it does hold a variable interest, the Company performs an assessment to determine whether it qualifies as a variable interest entity ("VIE"). The Company consolidates a VIE if it is the primary beneficiary having the power to direct the activities that most significantly affect the economic performance of the VIE as well as the obligation to absorb losses and the right to receive benefits that could be significant to the VIE.

Management evaluated whether Unicorns meets the criteria for classification as a VIE or as VOE and concluded that Unicorns meets the criteria of a VIE. Management further concluded that the Company is the primary beneficiary of Unicorns because the Company has the power to direct the activities that most affect its economic performance and further has the obligation to absorb losses and the right to receive benefits that could be significant to the VIE. Accordingly, the Company is required to consolidate Unicorns as a VIE.

Management evaluated whether UII meets the criteria for classification as a VIE or as VOE and concluded that UII meets the criteria of a VIE. Management further concluded that the Company is the primary beneficiary of UII because the Company has the power to direct the activities that most affect its economic performance and further has the obligation to absorb losses and the right to receive benefits that could be significant to the VIE. Accordingly, the Company is required to consolidate UII as a VIE.

As of December 31, 2025 and 2024, UII did not hold any assets. As of December 31, 2025 and 2024, UII had liabilities of $109 thousand and $6 thousand, respectively, related to operating payments made by Unicoin on behalf of UII. These intercompany balances were eliminated in consolidation. The total expenses incurred by UII for the years ended December 31, 2025 and 2024 amounted to approximately $103 thousand and $6 thousand.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions in the consolidated financial statements and accompanying notes. Significant estimates and assumptions made by us include: the valuation of unicoin rights and the related embedded feature, the valuation of non-cash consideration received from Unicorns customers and the associated revenue recognition; valuation of investments in private companies; assessments of the recoverability of accounts receivable and determination of the fair value of certain stock awards issued. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable, the result of which forms the basis for making judgements about the carrying values of assets and liabilities. Actual results could differ materially from those estimates.

Accounts Receivable

Accounts receivable consist of receivables from sale or renewal of SaaS subscriptions to its software platform or TaaS staffing arrangements. The Company records a receivable for its SaaS segment when customer access to the software platform is provided. For the TaaS segment, receivables are recorded when the Company has a right to invoice and are typically invoiced on a monthly basis. Typical cash payment terms provide that customers pay within 30 days of invoicing.

As more fully discussed in the Revenue Recognition section below, accounts receivable for Unicorns generally consists of commitments from companies, that have appeared on the Unicorn Hunters show, to issue stock options or warrants to the Company. These options or warrants typically have a term of five to ten years and are recorded at their estimated fair values. Unicorns invoices customers when an episode is distributed for broadcast or streaming. Receipt of the option or warrant certificates is handled on a case-by-case basis in accordance with each customer agreement. Unicorns receivables are classified as current because the underlying option or warrant certificates are generally received within one year of invoicing.

Subsequent to receipt of these option or warrant certificates, the related receivables are reclassified to investments in privately-held companies, a long-term asset account. The Company does not charge interest for past due accounts and does not require any collateral for its receivables. As more fully discussed in the Revenue Recognition section below, Unicorns non-cash consideration is recorded at fair value as determined at, or near the date of contract inception. As permitted by a practical expedient provision in ASC 606 "Revenue Recognition," the Company does not adjust Unicorns contract consideration for the effects of a significant financing component if, at contract inception, management expects the period between time of service and payment to be less than one year.

Allowance for Doubtful Accounts

The Company evaluates the collectability of its accounts receivable based on a combination of factors. Where the Company is aware of circumstances that may impair a specific customer's ability to meet its financial obligations, the Company records a specific allowance against amounts due. The Company writes off a receivable and charges it against its recorded allowance when all collection efforts are exhausted without success. Amounts are included as a component of general and administrative expenses on the accompanying consolidated statements of operations. For Unicorns, revenue and receivables are generally in the form of commitments from companies, that have appeared on the Unicorn Hunters show, to issue stock options or warrants to the Company.

Accounts receivable are recorded at the invoiced amount, net of allowance for expected credit losses. The Company's primary allowance for credit losses is the allowance for doubtful accounts. The allowance for doubtful accounts reduces the accounts receivable balance to the estimated net realizable value. The Company regularly reviews the adequacy of the allowance for credit losses based on a combination of factors. In establishing any required allowance, management considers historical losses adjusted for current market conditions, the Company's customers' financial condition, the amount of any receivables in dispute, the current receivables aging, current payment terms and expectations of forward-looking loss estimates.

The allowance for doubtful accounts related to Unicorns non-cash receivables is subject to uncertainty because the fair value of the underlying private company options, warrants or shares could change subsequent to the initial determination of fair value and before receipt of the related option, warrant or share certificates. In addition, unforeseen circumstances could arise after contract inception which could impact the customer's intent or ability to pay. Because the value of any one of the receivables associated with Unicorn's contracts may be material, changes such as these could have a material effect on the Company's future financial condition, results of operations and cash flows.

As discussed in the Investments in Privately-Held Companies section below, the fair value of options or warrants of private companies, held upon settlement of such receivables, may fluctuate subsequent to receipt resulting in charges or gains to the Company's consolidated statements of operations in future periods.

Investments in Privately-Held Companies

In accordance with ASC 321 "Investments-Equity Securities" ("ASC 321"), equity securities for which the Company has no significant influence (generally less than a 20% ownership interest), and which do not have readily determinable fair values, are accounted for using the measurement alternative which is at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or a similar investments of the same issuer. Gains and losses on investments in equity securities are recognized in the consolidated statements of operations.

The Company regularly reviews such equity securities for impairment based on a qualitative assessment which includes, but is not limited to (i) significant deterioration in the earnings performance, credit rating, asset quality or business prospects of the investee, (ii) significant adverse changes in the regulatory, economic or technological environment of the investee and (iii) significant adverse changes in the general market condition of either the geographical area or the industry in which the investee operates, (iv) a bona fide offer to purchase, an offer by the investee to sell, or a completed auction process for the same or similar investment for an amount less than the carrying amount of that investment, (v) factors that raise significant concerns about the investee's ability to continue as a going concern such as negative cash flows from operations, working capital deficiencies, or non-compliance with statutory capital requirements or debt covenants. If an equity security is impaired, an impairment loss is recognized in the consolidated statements of operations (as other income (expense), net) equal to the difference between the fair value of the investment and its carrying amount. If such impairment is determined prior to receiving options or warrants to be received as consideration for Unicorns customer contracts, the related loss on impairment is reflected as bad debt expense.

Digital Assets

The Company has accepted digital assets including Ether (ETH), USD Coin (USDC), and Tether (USDT) as consideration from certain investors in exchange for equity, debt or unicoin rights issued by the Company.

The Company records the initial cost basis at their original purchase prices or the then-current quoted market prices (e.g., if received in an exchange rather than purchase transaction) and presents all digital assets held as a result of these transactions as indefinite-lived intangible assets in accordance with ASC 350, Intangibles-Goodwill and Other, except USD Coin. Fair value of the Company's digital assets is determined in accordance with ASC 820, "Fair Value Measurement" ("ASC 820"), based on quoted prices on the active exchange(s) that we have determined is the principal market for such assets (Level 1 inputs). The Company has ownership and control of its digital assets and utilizes INX and/or Coinbase, third-party custodians, to secure its holdings and facilitate transactions.

The Company's accounting policies for intangible assets and financial assets provide that USD Coin ("USDC") meets the definition of a financial asset and, accordingly, is measured at fair value. USDC is classified within prepaid expenses and other current assets based on its nature and liquidity.

In addition, the Company's impairment assessment methodology for digital assets reflects that impairment is recognized when the carrying value exceeds fair value, consistent with ASC 350-30-35-19. Under this methodology, impairment losses are measured based on the lowest quoted market price of one unit of a digital asset on an active exchange since acquisition, and once recognized, the adjusted carrying amount becomes the asset's new accounting basis. Management evaluated the potential impact of applying this methodology to prior periods and determined that any differences would have been immaterial.

The Company performs an analysis each quarter to identify whether events or changes in circumstances, principally decreases in the quoted prices on active exchanges, indicate that it is more likely than not that our digital assets are impaired. In determining if an impairment has occurred, we consider the quoted price of the digital asset. If the then-current carrying value of a digital asset exceeds the fair value so determined, an impairment loss has occurred with respect to those digital assets in the amount equal to the difference between their carrying values and the price determined.

Impairment losses are recognized within loss from operations in the consolidated statements of operations in the period in which the impairment is identified. The impaired digital assets are written down to their fair values at the time of impairment and this new cost basis is not adjusted upward for any subsequent increase in fair value. Gains are not recorded until realized upon sale, at which point they are recorded within loss from operations in the consolidated statements of operations. In determining the gain to be recognized upon sale, we calculate the difference between the sales price and carrying value of the digital assets sold immediately prior to sale.

The Company uses digital assets as payment to vendors for goods or services from time to time. The Company computes resulting gains or losses by subtracting the then-current carrying value from the realized proceeds or the fair value of cryptocurrencies on the goods or services transaction date, or the fair value of the goods or services received in exchange for cryptocurrencies, if more readily determinable. Such transactions are processed by the Company's digital assets custodian. The transfer of control and transaction date are based on the transaction date as indicated in reports from the custodian. Gains and losses are determined separately for each digital asset purchase in accordance with the first in first out (FIFO) method of accounting.

Operating Segments

Our reportable segments consist of SaaS, TaaS and Unicorn Hunters. We determine our operating segments based on how the chief operating decision maker ("CODM") manages the business, allocate resources, make operating decisions and evaluate operating performance. The Company's CODM is the Chief Executive Officer. Our CODM reviews financial information presented on a consolidated basis accompanied by information about revenue and cost of revenue by services type along with gross profit for purposes of allocating resources and evaluating financial performance, as such we have disclosed segment information up to gross profit for each operating segment. Furthermore, our revenues are derived from the United States and foreign countries which includes the South American and Europeans regions ("Foreign countries").

Unicoin Rights Financing Obligation

The Company accounts for unicoin rights by recording a liability representing the amount management believes the Company would be obligated to pay or refund (i.e., the amount holders have a right to claim and would likely be awarded in settlement) for fair value exchanged (i.e., in the form of cash or services) for rights to receive unicoins in the future in the event the unicoin is never launched. As of December 31, 2025, any amounts received for unicoin rights are not considered equity or revenue, management determined that 100% of the obligation is a liability to be settled by through the issuance of unicoins, or through other means if unicoins are never issued. The obligation to settle this liability through the exchange of a fixed number of unicoins, when and if all contingencies are resolved and unicoins are launched, represents an embedded feature that may result in additional charges to the Company's consolidated statement of operations upon settlement.

Revenue Recognition

The Company recognizes revenue in accordance with ASC 606 which requires revenue to be recorded in a manner which depicts the transfer of goods or services to customers at amounts that reflect the consideration the Company expects to receive in exchange for those goods or services. Under ASC 606, revenue is recognized when obligations under the terms of a contract with a customer are satisfied; this occurs with the transfer of control of the Company's goods or services.

The Company primarily derives its revenues from three revenue streams:

	1.	Subscription Revenue (Software-as-a-Service or "SaaS") - which is comprised of fees from customers accessing the Company's all-in-one cloud-based solution to manage remote workers ("software platform").
	2.	Staffing Revenue (Talent-as-a-Service or "TaaS") - whereby enterprise customers are connected to individuals who are able to assist them in projects.
	3.	Unicorns Revenue - which generally represents the fair value of private company stock options or warrants, committed to be granted to the Company, as consideration for the right to present and promote those private companies on the Unicorn Hunters show.

The Company accounts for revenue contracts with customers through the following five steps: (i) identification of the contract, or contracts, with a customer, (ii) identification of the performance obligations in the contract, (iii) determination of the transaction price, (iv) allocation of the transaction price to the performance obligation in the contract, and (v) recognition of revenue when, or as, the Company satisfies a performance obligation. The Company's subscription service arrangements and Unicorns agreements are non-cancellable and do not contain refund-type provisions. Certain service agreements include cancelation clauses and there is a right of refund provided to the customer. The Company estimates and maintains a reserve for expected customer refunds. These estimates involve inherent uncertainties and management judgment. As of December 31, 2025 and 2024 no such reserves were recorded.

The Company's customers include government institutions, a Fortune 500 Company, and small businesses. At contract inception, the Company assesses the product offerings in its contracts to identify performance obligation(s) that are distinct. A performance obligation is distinct when the customer can benefit from it on its own or together with other resources that are readily available and when it is separately identifiable from other items in the contract. Historically, costs to obtain a contract have not been significant.

To identify its performance obligation(s), the Company considers all the promises in the contract for SaaS, TaaS or Unicorns Services. The Company has concluded there to be a single performance obligation in each of these services. For SaaS arrangements, the primary obligation is the license issuance to the customer to access the Company's workforce platform. For TaaS arrangements, the primary performance obligation is services provided to the customer by the professional resulting in hours accrued or milestones reached. For Unicorns arrangements, the primary performance obligation is to provide customers with publicity and exposure through appearance on the Unicorn Hunters show which occurs when an episode is distributed for broadcast or streaming.

The transaction price is the total amount of consideration the Company expects to be entitled to in exchange for the service offerings in a contract. At the inception of the contract, the transaction price is known for all the services in the contracts. For SaaS contracts the transaction price is based on the number of licenses sold. TaaS contracts are based on the contracted service hours. Some contracts have a form of variable consideration, for example discounts on licenses sold that exceed certain volumes, or TaaS remote talent projects with a 10% discount for long term engagements that could impact the base transaction price of our services in contracts with the customers. The Company estimates variable consideration and adjusts the transaction price at the time of contract signing.

Revenue and accounts receivable for Unicorns generally consists of the fair value of stock options, warrants or shares of common stock committed from companies that have appeared on the Unicorn Hunters show. Contract consideration is fixed at contract inception and has historically been received in one of two forms; 1) either a pre-determined number of stock options, warrants or shares or 2) options or warrants or shares representing a specific percentage of the customer's common stock outstanding as of a particular point in time. Other key terms specified in customer contracts include the exercise price and the duration or term of the options or warrants. The options or warrants underlying the commitments typically have a term of five to ten years and accounts receivable are recorded at the estimated fair value of such options or warrants as determined at contract inception. The estimated fair value of stock options and warrants, expected to be received as consideration, is dependent on the fair value of the underlying equity of each privately held presenting company.

The fair value of such underlying private company equity is determined based on (i) the valuation indicated in a recent round of financing (ii) a recent pre-existing third-party valuation report or (iii) a new third-party valuation report as of or near the date of contract inception. Third-party valuation reports consider factors such as recent financing rounds, third-party financing transactions, discounted cash flow analyses and market-based information, including comparable transactions, trading multiples and other factors based on facts and circumstances specific to each privately held presenting company. For non-cash consideration in the form of stock options or warrants of the presenting company, the Company, with assistance from third-party valuation advisors, determines the fair value of such consideration using the Black-Scholes option pricing model which, in addition to the fair value of underlying stock, considers the term of the stock options or warrants, exercise price, volatility, interest rate and dividend yield. These are Level 3 estimates under the fair value hierarchy because they involve significant unobservable inputs. The valuation of stock options or warrants committed by Unicorns customers requires management judgment due to the absence of an observable market price for those options or warrants.

Under ASC 606, the total transaction price is allocated to each performance obligation in the contract. As noted above, each contract in each segment contains only one performance obligation. Accordingly, the total transaction price for all Company contracts relates a to the single performance obligation and no allocation is required.

Revenue is recognized upon transfer of control of promised services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those services. If the consideration promised in a contract includes a variable amount, for example, a discount for the subscription to access the software platform or for long term staffing engagements, the Company includes an estimate of the amount it expects to receive for the total transaction price if it is probable that a significant reversal of cumulative revenue recognized will not occur.

For SaaS contracts, the typical subscription term is one year or less and the Company generally invoices its customers at the start of the subscription period when access to the software platform is provided. Amounts that have been invoiced are recorded in accounts receivable and deferred revenue and related revenue is recognized over the subscription period. For TaaS contracts, the Company's staffing contracts are typically for a duration of less than a year and are either on a fixed hourly rate basis or on a fixed cost basis billed upon satisfaction of respective milestones. For Unicorns contracts, customers are billed when an episode is distributed for broadcast or streaming.

The Company typically invoices its customers at the end of each month in cases where the contracts involve billing based on fixed hourly rates and/or once a milestone is reached. An over-time method is used to measure progress because the Company's obligation is to provide continuous service over the contractual period when fixed hourly rate billing is involved. For time-and-materials contracts, revenue from contracts with customers is recognized in the amount to which the Company has a right to invoice, when the services are rendered by the Company's remote workers in such cases. For milestone-based contracts, revenue is recognized over time using an output method based upon milestones achieved. Revenue is recognized once a milestone is reached for an amount of the transaction price that is proportionate to the total milestones in the contract. Milestones reached represent work performed and thereby best depicts the transfer of control to the customer. For Unicorns contracts, the promise to the customer is fulfilled and revenue is recognized for the entire transaction price when an episode is distributed on the Unicorn Hunters website.

Revenue from TaaS arrangements is recorded on a gross basis, as principal, rather than on a net basis, as agent. The Company concluded that it is the principal in these arrangements because the Company contracts separately with customers and service providers, is responsible for directing service providers to meet the agreed upon customer specifications, has discretion to establish pricing for services provided to end customers and bears the primary risks related to billing, collection and customer satisfaction.

Deferred Revenue

Deferred revenue represents amounts that have been prepaid in advance of revenue recognition. Deferred revenue is recognized as revenue when transfer of control to customers has occurred or as services are being provided. The Company generally invoices customers in monthly installments for the TaaS business and for SaaS, business customers are invoiced at the start of the contract period therefore timing differences and deferred revenue can occur in the SaaS and TaaS segments. As noted above, Unicorns invoicing and revenue recognition both occur at the time an episode is distributed on the Unicorn Hunters website therefore there is no deferred revenue recorded for the Unicorn Hunters segment.

The Company had deferred revenue of $1 thousand and $4 thousand as of December 31, 2025 and December 2024, respectively. The amount of revenue recognized in fiscal 2025 and 2024 that was included in deferred revenue at the beginning of the periods was $4 thousand and $5 thousand, respectively.

Remaining Performance Obligation

In accordance with ASC 606, the Company is required to include disclosures on its remaining performance obligations as of the end of the current reporting period. Due to the nature of the contracts in the Company's businesses, these reporting requirements are not applicable. Most of the Company's remaining contracts meet certain exceptions as defined in ASC 606. For the Company's contracts that pertain to these exceptions: (i) the remaining performance obligations primarily relates to the provision of access to the software platform for its subscribers; and (ii) the estimated duration of these performance obligations is less than one year or ranges from the remaining of the current calendar year to the next calendar year.

Income Taxes

Income taxes are accounted for under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the consolidated statements of operations in the period in which the change was enacted. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets if management has determined that it is more likely than not that such assets will not be realized. The calculation of tax liabilities involves significant judgment in estimating the impact of uncertainties in the application of complex tax laws. The Company is subject to examinations by federal and state authorities for the income tax periods that remain open. In the event that a taxing jurisdiction levies an assessment in the future, it is possible the assessment could have a material adverse effect on the consolidated financial condition or results of operations.

The consolidated financial statement recognition of the benefit for a tax position is dependent upon the benefit being more likely than not to be sustainable upon audit by the applicable tax authority. If this threshold is met, the tax benefit is then measured and recognized at the largest amount that is greater than 50% likely of being realized upon ultimate settlement. In the event that the Internal Revenue Service ("IRS") or another taxing jurisdiction levies an assessment in the future, it is possible the assessment could have a material adverse effect on the consolidated financial condition or results of operations. The provision for income taxes includes the effects of any resulting tax reserves, or unrecognized tax benefits, that are considered appropriate as well as the related net interest and penalties. The Company recognizes interest and penalties related to income tax matters in income tax expense.

Off-Balance Sheet Arrangements

As of December 31, 2025 and 2024, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K promulgated under the Securities Act of 1934.

Recently Issued and Adopted Accounting Standards

Refer to Note 2 of "Notes to Consolidated Financial Statements," included in Item 8 of this Annual Report on Form 10-K for details.