Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)

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

Forward Looking Statements

This "Management's Discussion and Analysis of Financial Condition and Results of Operations" (MD&A) is intended to provide an understanding of our financial condition, changes in financial condition, cash flows, liquidity and results of operations. The following MD&A discussion should be read in conjunction with the unaudited financial statements and notes thereto that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect the Company's plans, estimates and beliefs. The Company's actual results could differ materially from those discussed or referred to in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed under the caption "Forward-Looking Information and Factors That May Affect Future Results" and under Part II, Item 1A, "Risk Factors," if applicable.

GENERAL

Overview

Certiplex Corporation is a full-service multi-media company with a multi-operational approach focused on providing business-ready solutions. Our services include business module development, website and mobile app integration and design, SEO (Search Engine Optimization), social media integration, and online video and photography content creation and distribution. In addition, the Company owns licensing rights to the Pro Sun Lighting system for residential and commercial use, which it markets through distribution channels.

Our revenues are derived primarily from multimedia design and development services. Management continues to pursue growth in web and mobile integration services, SEO and marketing services, and potential licensing opportunities.

The Company has been capitalized primarily through operations and prior financing activities. However, we have not yet established a recurring revenue base sufficient to cover operating costs. Management continues to evaluate options for additional capital through equity or debt financing.

Significant Accounting Policies and Estimates

Management's Discussion and Analysis of Financial Condition and Results of Operations discusses the Company's unaudited interim financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America and applicable SEC rules for interim financial reporting. The preparation of these financial statements requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as reported amounts of revenues and expenses during the reporting period.

Management bases its estimates on historical experience and on various other assumptions believed to be reasonable under the circumstances. Actual results could differ from those estimates.

Revenue Recognition

Revenue consists primarily of fees earned from multimedia services, including website design, SEO services, and business module development. Revenue is recognized when control of the promised goods or services is transferred to the customer, typically upon delivery of services.

The Company also holds licensing rights and continues to evaluate opportunities to generate revenue from those rights.

Results of Operations

Three and Six Months Ended June 30, 2026 vs. Three and Six Months Ended June 30, 2025

Revenue

Revenue for the three months ended June 30, 2026 was $25,837, compared to $39,761 for the three months ended June 30, 2025. The decrease of $13,924 was primarily attributable to lower multimedia and website design service sales during the 2026 period. Revenue for the six months ended June 30, 2026 was $41,611, compared to $69,116 for the six months ended June 30, 2025, a decrease of $27,505.

Cost of Sales and Gross Profit

Cost of sales decreased to $5,495 for the three months ended June 30, 2026 from $6,643 for the three months ended June 30, 2025, a decrease of $1,148. For the six months ended June 30, 2026, cost of sales was $9,737, compared to $11,825 for the six months ended June 30, 2025, a decrease of $2,088. The decreases were generally consistent with the decline in revenue.

Gross profit decreased to $20,343 for the three months ended June 30, 2026 from $33,118 for the three months ended June 30, 2025, a decrease of $12,775. Gross profit for the six months ended June 30, 2026 was $31,874, compared to $57,291 for the six months ended June 30, 2025, a decrease of $25,417. The decreases were primarily due to lower revenue.

Operating Expenses

Total operating expenses decreased to $38,768 for the three months ended June 30, 2026 compared to $44,416 for the three months ended June 30, 2025, a decrease of $5,648. For the six months ended June 30, 2026, total operating expenses were $57,809, compared to $79,362 for the six months ended June 30, 2025, a decrease of $21,553.

Key changes include:

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General and administrative expenses decreased to $1,930 from $10,447 for the three-month period and to $8,313 from $21,265 for the six-month period;

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Consulting expenses decreased to $8,940 from $12,400 for the three-month period and to $17,508 from $20,800 for the six-month period;

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Advertising and marketing expenses decreased to $1,538 from $2,359 for the three-month period and to $3,768 from $4,837 for the six-month period;

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Professional fees increased to $26,000 from $18,850 for the three-month period and decreased to $27,420 from $31,740 for the six-month period; and

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Depreciation and amortization remained consistent at $360 for each three-month period and $720 for each six-month period.

The decrease in operating expenses for the six-month period was primarily driven by lower professional fees, consulting expenses, general and administrative expenses, and advertising and marketing expenses.

Operating Loss

Operating loss increased to $(18,425) for the three months ended June 30, 2026 compared to $(11,298) for the three months ended June 30, 2025. For the six months ended June 30, 2026, operating loss was $(25,935), compared to $(22,071) for the six months ended June 30, 2025. The increased losses were primarily attributable to lower gross profit, partially offset by lower operating expenses.

Other Expense

Interest expense was $1,108 for the three months ended June 30, 2026, compared to $798 for the three months ended June 30, 2025. Interest expense was $2,110 for the six months ended June 30, 2026, compared to $1,527 for the six months ended June 30, 2025. The Company also recognized other income of $49 during the three- and six-month periods ended June 30, 2026. Interest expense was primarily related to the Company's SBA loan and credit card balances..

Net Loss

Net loss for the three months ended June 30, 2026 was $(19,484), compared to $(12,096) for the three months ended June 30, 2025. Net loss for the six months ended June 30, 2026 was $(27,997), compared to $(23,598) for the six months ended June 30, 2025. The increased net losses primarily reflect lower revenue and gross profit and higher interest expense, partially offset by lower operating expenses.

Liquidity and Capital Resources

Six Months Ended June 30, 2026 Compared to December 31, 2025 and Six Months Ended June 30, 2025

As of June 30, 2026, the Company had cash and cash equivalents of $1,621, compared to $4,666 at December 31, 2025. The statement of cash flows reports a net change in cash of $(3,044), attributable to net cash used in operating activities.

Net cash used in operating activities for the six months ended June 30, 2026 was $(3,044), compared to net cash used in operating activities of $(1,400) for the six months ended June 30, 2025. The 2026 amount reflects the net loss, depreciation and amortization, the noncash loan receivable write-off, and changes in accrued compensation and accounts payable and accrued liabilities.

There was no cash provided by or used in investing activities during the six months ended June 30, 2026 or 2025. The $1,064 loan receivable balance at December 31, 2025 was written off as a noncash adjustment during the six months ended June 30, 2026.

There were no financing cash flows reported for the six months ended June 30, 2026 or 2025.

Total assets decreased to $123,906 at June 30, 2026 from $128,735 at December 31, 2025, primarily due to decreases in cash, the loan receivable, and the net carrying amount of vehicles.

Total liabilities increased to $243,934 at June 30, 2026 from $220,766 at December 31, 2025, primarily due to an increase in accrued compensation, partially offset by a decrease in accounts payable and accrued liabilities. The Company's SBA loan balance remained $49,700, all of which was classified as long-term at June 30, 2026.

The Company continues to operate with a stockholders' deficit of $(120,028) as of June 30, 2026, compared to a stockholders' deficit of $(92,032) as of December 31, 2025. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management plans to address this through revenue growth and potential financing.

The Company has no current off-balance sheet arrangements and does not anticipate entering into any such arrangements.

Plan of Operation

The Company plans to continue expanding its core business operations, including website design, multimedia services, SEO services, and business module development. The Company will also continue to pursue monetization opportunities related to its licensing rights.

Management may seek additional financing through equity or debt offerings. At present, the Company has no committed financing arrangements.

The Company is also evaluating potential acquisitions that align with its business model, although no agreements have been executed.

Marketing and Sales Efforts

The Company's marketing efforts will focus on expanding its digital presence through SEO optimization and online marketing initiatives. Sales are expected to be driven primarily through the Company's website and digital channels.

The Company may also explore additional marketing channels, including partnerships and outbound sales strategies, to expand its customer base.

Successful execution of the Company's strategy depends on several factors, including:

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The ability to anticipate and respond to customer demand;

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The ability to effectively market and deliver services;

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The ability to secure additional financing; and

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The ability to compete effectively within the industry.

Adverse changes in these factors could materially impact the Company's business, financial condition, and results of operations.