Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations.

Forward-Looking Statements

Statements in the following discussion and throughout this report 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 not all forward-looking statements contain these identifying words. Although we believe the expectations reflected in these forward-looking statements are reasonable, such statements are inherently subject to significant risks and uncertainties and we can give no assurances that our expectations will prove to be correct. Actual results could differ materially from those described in this report because of numerous factors, many of which are beyond our control. These factors include, without limitation, those risk factors discussed in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 10, 2026. We undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date of this report or to reflect actual outcomes.

Overview

We were incorporated on June 5, 2014, under the laws of the State of Delaware. We are a digital asset advisory firm providing consulting services to institutions navigating the digital asset economy. Our advisory services include strategic guidance on digital asset adoption, treasury strategy, and related operational and market considerations, and are delivered through both retainer-based and project-based engagements. We also intend to establish a rules-based digital asset corporate treasury, subject to the availability of sufficient capital.

The Company is not a registered investment company under the Investment Company Act of 1940, as amended (the "1940 Act") and does not engage primarily in the business of investing, reinvesting, or trading in securities. The Company is not managed like an active investment vehicle, is not an investment company registered under the 1940 Act and is not required to register under the 1940 Act.

Plan of Operations

Our plan is to leverage our advisory expertise to support institutional clients evaluating, deploying, or operationalizing digital asset strategies. We expect to expand our client base through professional referrals, conference participation, and direct outreach to institutional decision-makers. We intend to formalize relationships with subcontracted professionals and service providers to support our advisory engagements as our client base grows.

Our primary requirement for funding is for working capital in order to accommodate temporary negative cash flows from operations (see "Liquidity and Capital Resources").

Results of Operations

Three Months Ended March 31, 2026 Compared with Three Months Ended March 31, 2025

Revenue.

During the three months ended March 31, 2026, we generated $32,667 of consulting revenue from advisory services, all of which was unbilled at quarter-end. We did not generate any revenue during the three months ended March 31, 2025.

Operating Expenses.

Total operating expenses for the three months ended March 31, 2026 were $520,754, an increase of $441,915 from $78,839 for the three months ended March 31, 2025. The increase was driven primarily by salaries and wages, which increased from $49,542 to $471,577. The Q1 2026 salaries and wages line includes $329,153 of non-cash stock-based compensation expense related to the vesting of the equity award granted to the Company's Chief Executive Officer in August 2025, in addition to cash salaries, wages, and payroll taxes incurred during the quarter. Professional fees increased from $25,035 to $43,199 as the Company incurred additional accounting and legal costs in connection with its quarterly reporting obligations and equity-related matters. General and administrative expenses increased modestly from $4,262 to $5,978.

Other Income (Expense).

Total other income (expense), net was income of $665,890 for the three months ended March 31, 2026, compared to income of $72,433 for the three months ended March 31, 2025. The change was primarily driven by a non-cash gain of $706,056 on remeasurement of the derivative liability associated with the Chief Executive Officer's anti-dilution provision, partially offset by an unrealized loss of $27,901 on our holdings of NextNRG Inc. common stock and interest expense of $12,265. The three months ended March 31, 2025 included a one-time non-recurring gain of $127,579 on settlement of accounts payable and interest expense of $56,740 (substantially higher than the current period due to the November 2025 conversion of legacy debt into equity).

Net Income (Loss).

As a result of the foregoing, we recognized net income of $177,803 for the three months ended March 31, 2026, compared to a net loss of $6,406 for the three months ended March 31, 2025. The current period net income was driven by the non-cash gain of $706,056 on remeasurement of the derivative liability, which more than offset the loss from operations of $488,087 (which itself includes $329,153 of non-cash stock-based compensation expense). Excluding the non-cash gain on derivative remeasurement and stock-based compensation expense, the Company's underlying operating performance reflects ongoing operating cash needs.

Reported net income for the three months ended March 31, 2026 reflects the impact of significant non-cash items. The following table summarizes these non-cash items recorded during the period and their effect on reported net income:

Non-Cash Item		Amount
Stock-based compensation expense		$	(329,153	)
Gain on remeasurement of derivative liability			706,056
Unrealized loss on marketable securities			(27,901	)
Total non-cash items, net effect on net income		$	349,002

In the aggregate, the non-cash items above contributed $349,002 of net income during the three months ended March 31, 2026. Excluding these non-cash items, the Company's cash-basis operating loss for the three months ended March 31, 2026 was approximately $171,199, which management believes is more representative of the Company's underlying operating performance. Management believes the gain on remeasurement of the derivative liability reflects period-over-period changes in the estimated fair value of an anti-dilution obligation embedded in the Chief Executive Officer's employment agreement and does not reflect the Company's ongoing operational performance or cash requirements.

Liquidity and Capital Resources

We measure our liquidity in a number of ways, including the following:

		March 31, 2026				December 31, 2025
Cash		$	216,366			$	358,975
Working capital deficiency		$	(2,869,383	)		$	(3,376,339	)

Net Cash Used in Operating Activities

Net cash used in operating activities for the three months ended March 31, 2026 was $142,609, compared to net cash used of $22,659 for the three months ended March 31, 2025. Although the Company reported net income of $177,803 for the current quarter, the result includes a $706,056 non-cash gain on remeasurement of the derivative liability and $329,153 of non-cash stock-based compensation expense. Adjusting for these and other non-cash items, and for changes in operating assets and liabilities (most notably an increase in accounts payable and accrued expenses), produced a net cash outflow consistent with the underlying operating cost structure.

Net Cash Provided by Investing Activities

There was no cash provided by or used in investing activities during the three months ended March 31, 2026 or March 31, 2025.

Net Cash Provided by Financing Activities

There was no cash provided by financing activities during the three months ended March 31, 2026. During the three months ended March 31, 2025, financing activities provided $12,500 in proceeds from short-term advances from related parties.

Substantial Doubt Exists About Our Ability to Continue as a Going Concern

The unaudited condensed consolidated financial statements in this report on Form 10-Q have been prepared assuming that the Company will continue as a going concern. As discussed in the notes to the unaudited condensed consolidated financial statements, the Company used $142,609 of cash in operating activities during the three months ended March 31, 2026, had $216,366 in cash as of March 31, 2026, had an accumulated deficit of $37,473,843 and a working capital deficit of $2,869,383 at March 31, 2026, and there is substantial doubt about the Company's ability to continue as a going concern for a period of twelve months from the date the financial statements were available to be issued. The Company's plans in regard to these matters are also described in the notes to the Company's unaudited condensed consolidated financial statements. The unaudited condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should the Company be unable to continue as a going concern.

The Company anticipates the receipt of funding within such period, but there can be no assurance that it will occur. If the Company is unable to meet its internal revenue forecasts or obtain additional financing on a timely basis, it may have to delay vendor payments and/or initiate cost reductions, which would have a material adverse effect on the Company's business, financial condition and results of operations, and ultimately it could be forced to discontinue the Company's operations, liquidate, and/or seek reorganization under the U.S. bankruptcy code. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, it may contain restrictions on our operations, in the case of debt financing or cause substantial dilution for our stockholders, in case of equity financing.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Critical Accounting Policies and Estimates

Use of Estimates

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Estimates may include those pertaining to the fair value of the derivative liability, accruals, stock-based compensation and income taxes. Actual results could materially differ from those estimates.

Revenue Recognition

The Company accounts for revenues under FASB ASC 606, which is a comprehensive new revenue recognition model that requires revenue to be recognized in a manner to depict the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. The Company considers revenue realized or realizable and earned when all the five following criteria are met: (1) Identify the Contract with a Customer, (2) Identify the Performance Obligations in the Contract, (3) Determine the Transaction Price, (4) Allocate the Transaction Price to the Performance Obligations in the Contract, and (5) Recognize Revenue When (or As) the Entity Satisfies a Performance Obligation.

Derivative Liability

The Company accounts for the anti-dilution provision contained in the Chief Executive Officer's August 2025 employment agreement as a derivative liability under ASC 815, Derivatives and Hedging. The derivative liability is initially recognized at fair value and is remeasured to fair value at each reporting date, with changes in fair value recorded in earnings. Fair value is estimated using a Monte Carlo simulation model. As of March 31, 2026, the derivative liability was $1,238,750.

Fair Value of Financial Instruments

The Company measures its financial assets and liabilities in accordance with GAAP. For certain of our financial instruments, including cash, accounts payable, and the short-term portion of long-term debt, the carrying amounts approximate fair value due to their short maturities.

We adopted accounting guidance for financial and non-financial assets and liabilities (ASC 820). This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements. This guidance does not apply to measurements related to share-based payments. The guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels.

Recent Accounting Standards

We have implemented all new accounting standards that are in effect and may impact our consolidated financial statements and do not believe that there are any other new accounting standards that have been issued that might have a material impact on our financial position or results of operations.

In November 2023, the FASB issued ASU 2023-07, which introduces enhancements to the disclosure requirements for reportable segments. The Company adopted ASU 2023-07 effective January 1, 2024. This adoption did not have a material impact on the Company's consolidated financial statements.