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

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

Statements in the following discussion and throughout this Form 10-Q that are not historical in nature are "forward-looking statements." You can identify forward-looking statements by the use of words such as "expect," "anticipate," "estimate," "may," "will," "should," "intend," "believe," and similar expressions. Although we believe the expectations reflected in these forward-looking statements are reasonable, such statements are inherently subject to risk and we can give no assurances that our expectations will prove to be correct. Actual results could differ from those described in this Form 10-Q because of numerous factors, many of which are beyond our control. We undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date of this Form 10-Q or to reflect actual outcomes.

Overview

We are a holding company with limited operations and reported net income (losses) of approximately $(141,000) and $2,547,000 for the six months ended June 30, 2026 and 2025, respectively, and $(86,000) and $2,754,000, for the three months ended June 30, 2026 and 2025. We had current assets of approximately $65,000 and current liabilities of $2,097,000 as of June 30, 2026. As of December 31, 2025, our current assets and current liabilities were approximately $16,000 and $2,157,000, respectively. The increase in current assets is due to the sale of equity securities during the six months ended June 30, 2026. The decrease in current liabilities is primarily due to the reduction of accounts payable and the repayment of $50,000 on short-term borrowings as offset by interest accrued on debt and advances on short-term borrowings to fund operating expenses.

We have prepared our financial statements for the six months ended June 30, 2026, assuming that we will continue as a going concern. Our continuation as a going concern is dependent upon improving our profitability and the continuing financial support from our shareholders as well as Yissum's ability to successfully commercialize the License. Our sources of capital in the past have included the sale of equity securities, which include common stock sold in private transactions, and related party debt as well as debt from unrelated parties. During 2025 we entered into a bridge loan agreement with our Executive Chairman to obtain funding for current operating expenses and in March 2026 we issued common stock in exchange for $250,000 in a private transaction.

RESULTS OF OPERATIONS

The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes thereto and other financial information appearing elsewhere in this Form 10-Q. In the discussion below, general and administrative expenses are referred to as "G&A expenses".

		Six Months Ended June 30,												Three Months Ended June 30,
		2026				2025				Change				2026				2025				Change
Operating expenses:
General and administrative expenses			39,888				158,537				(118,649	)			34,935				63,964				(29,029	)
Total operating expenses			39,888				158,537				(118,649	)			34,935				63,964				(29,029	)
Loss from operations			(39,888	)			(158,537	)			118,649				(34,935	)			(63,964	)			29,029
Other (income) expenses:
Gain on disposal of equity method investment			-				(1,171,760	)			1,171,760				-				(1,171,760	)			1,171,760
Relief of indebtedness income			-				(1,697,024	)			1,697,024				-				(1,697,024	)			1,697,024
Interest expense			100,928				163,962				(63,034	)			50,860				51,319				(459	)
Total other (income) expenses			100,928				(2,704,822	)			2,805,750				50,860				(2,817,465	)			2,868,325
Income (loss) before income taxes			(140,816	)			2,546,285				(2,687,101	)			(85,795	)			2,753,501				(2,839,296	)
Provision for income tax			-				-				-				-				-				-
Income (loss) before equity in net income (loss) of equity method investees			(140,816	)			2,546,285				(2,687,101	)			(85,795	)			2,753,501				(2,839,296	)
Equity in net income (loss) of equity method investees			-				340				(340	)			-				340				(340	)
Net income (loss)			(140,816	)			2,546,625				(2,687,441	)		$	(85,795	)		$	2,753,841			$	(2,839,636	)

We are a holding company whose primary asset currently is our right to the monetization of the former NewStem license now held by Yissum. We currently conduct no other business and as a result, we have no operating revenue or cost of revenue.

The Company incurs general and administrative ("G&A") expenses primarily related to professional fees, insurance and stock-based compensation. We incurred G&A expenses of approximately $40,000 and $159,000 for the six months ended June 30, 2026 and 2025, respectively. Specifically, professional fees decreased by approximately $95,000 in the six months ended June 30, 2026 as compared to the six months ended June 30, 2025, primarily due to a decrease in accounting and audit fees of approximately $27,500 and the write off of approximately $67,500 in prior years legal fees due to the settlement of outstanding fees at a discount. We incurred a bad debt expense during the six months ended June 30, 2025 of approximately $9,500 for the write off of uncollectible administrative fees. We had reductions in stock compensation of approximately $8,800 as no options were issued during 2025 and previously issued stock options were fully expensed during 2025. Other miscellaneous G&A expenses decreased by approximately $5,700.

The Company incurs G&A expenses primarily related to professional fees, insurance and stock-based compensation. We incurred G&A expenses of approximately $35,000 and $64,000 for the three months ended June 30, 2026 and 2025, respectively. Specifically, professional fees decreased by approximately $26,000 in the three months ended June 30, 2026 as compared to the three months ended June 30, 2025, primarily due to a decrease in legal fees and audit fees for NewStem. We also had reductions in stock compensation and investor costs of approximately $3,000.

Interest expense decreased by approximately $63,000 in the six months ended June 30, 2026 as compared to the six months ended June 30, 2025 primarily due to the settlement of the litigation funding agreement on May 9, 2025.

The Company has recorded no income tax expense as we have incurred operating losses and all deferred tax assets are fully offset by an income tax valuation allowance.

Liquidity and Capital Resources

We have not paid dividends on our common stock since our name change and business focus shift in 2018. Our present policy is to apply cash to debt service, acquisitions or expansion; consequently, we do not expect to pay dividends on common stock in the foreseeable future.

The Company will need to obtain additional funds to continue its operations. Management's plans with regard to these matters include fundraising until our interest in NewStem's technology via monetization of the License is profitable. Although management continues to pursue these plans, there is no assurance that the Company will be successful in obtaining sufficient cash from financing on terms acceptable to the Company, or that NewStem's technology will be monetized and become profitable.

The Company has in place note agreements entered into during 2022 with Jan Loeb, our Executive Chairman and Jerry Wolasky, a member of the Board, to borrow up to an aggregate of $750,000 for working capital needs. The agreements provide for interest at a rate of 10% per annum and mature March 30, 2027. As of the date of this Quarterly Report, the full amount of $750,000 has been funded pursuant to these agreements.

During the year ended December 31, 2023, the Company entered into a note agreement with a shareholder to borrow $300,000 for continued working capital. This note bore interest at zero percent (0%) and matured on May 5, 2025. The note included a guarantee which was identified as an embedded derivative. This note was amended in May 2025 to provide for fixed interest from inception of $36,000 to be added to the principal balance, remove the guarantee and extend the maturity date to September 30, 2025. This note was amended for a second time in October 2025 to extend the maturity date to December 31, 2026.

In December 2023, the Company entered into two notes payable with unrelated parties for a total of $250,000 in borrowings utilized for the funding of NewStem. The notes bear interest at 12% per annum prior to an event of default and mature March 30, 2027, at which time all principal and accrued interest are due and payable. The notes provide that principal and accrued interest become due and payable upon the earlier of the stated maturity date or the closing of a capital raise, and that in the event of a capital raise each holder is entitled to participate in that transaction and to tender its note, valued at 133% of the amounts owed on the closing date, as payment for securities issued to that holder. Subsequent to June 30, 2026, the Company entered into waiver and confirmation agreements with both holders with respect to financing transactions completed on or prior to the date of those agreements, including the March 13, 2026 issuance of common stock.

In April 2024, the Company borrowed $100,000 from unrelated parties pursuant to convertible debt agreements accounted for as debt. The notes bear interest at 10% per annum and mature March 30, 2027.

In February 2025, the Company entered into a bridge loan agreement with the Executive Chairman to fund working capital until such time as additional funding can be obtained. Advances from this note were approximately $28,000 and $106,000 during the six months ended June 30, 2026 and 2025, respectively. The Company repaid $50,000 on this note during the six months ended June 30, 2026. The note bears interest at 10% per annum and matures March 30, 2027.

On May 9, 2025 the Company sold its interest in NetCo to its JV partner for $1,300,000 which was paid directly to Omni Bridgeway in full settlement of all liabilities related to the litigation funding agreement totaling $2,959,625 including all accrued and unpaid interest.

On March 13, 2026, the Company received $250,000 in exchange for 2,450,980 shares of common stock from an unrelated party.

Net Cash Used In Operating Activities.

For the six months ended June 30, 2026, net cash used in operating activities was approximately $172,000, which consisted primarily of a net loss of approximately $141,000 and the noncash settlement of accounts payable of $67,500, offset by interest added to notes payable of approximately $100,000. Additionally, cash was used in operations related to a decrease in accounts payable of approximately $71,000, offset by a decrease in prepaid expenses of approximately $7,000.

For the six months ended June 30, 2025, net cash used in operating activities was approximately $110,000, which consisted primarily of net income of approximately $2,547,000, offset by noncash disposal of equity method investment of approximately $1,172,000, relief of indebtedness income of approximately $1,697,000, stock-based compensation of approximately $9,000 and interest added to notes payable of approximately $103,000 and accretion of interest on notes payable of approximately $60,000. Additionally, cash was used in operations related to decrease in current assets of approximately $12,000 and a net increase in total accrued liabilities and accounts payable of approximately $28,000.

Net Cash Used In Investing Activities.

No net cash was used in investing activities during the six months ended June 30, 2026 and 2025.

Net Cash Provided By Financing Activities.

For the six months ended June 30, 2026, net cash provided by financing activities was $228,000, consisting of short-term borrowings from the Executive Chairman of approximately $28,000, proceeds from the issuance of common stock of $250,000 offset by repayment of $50,000 in short-term borrowings from the Executive Chairman.

For the six months ended June 30, 2025, net cash provided by financing activities was $105,500, consisting of short-term borrowings from the Executive Chairman.