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

This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our financial statements are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this quarterly report.

In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to "common shares" refer to the common shares in our capital stock.

As used in this quarterly report, the terms "we", "us", "our" and "our company" mean Lingerie Fighting Championships, Inc., unless otherwise indicated.

General Overview

We were incorporated under the laws of the State of Nevada on November 29, 2006 under the name "Sparking Events, Inc.". Our name was changed to Xodtec Group USA, Inc. in June 2009, Xodtec LED, Inc. in May 2010, Cala Energy Corp. in September 2013 and Lingerie Fighting Championships, Inc. on April 1, 2015.

We are a media company focused on the development, production, promotion and distribution of original entertainment which we make commercially available predominantly through live entertainment events, as well as through digital home video, broadcast television networks, video-on-demand, streaming platforms and digital media channels.

Our business and corporate address is 6955 North Durango Drive, Suite 1115-129, Las Vegas NV 89149. Our corporate website is www.LFCfights.com.

We do not have any subsidiaries.

We have never declared bankruptcy nor have we ever been in receivership.

Our Current Business

LFC is a sports entertainment league that utilizes wrestling and mixed martial arts ("MMA") fighting techniques for entertainment purposes. We promote and market our brand, our programming, our events and our products via television deals, social media platforms and our own subscription website.

Our mission is to continually increase the popularity of the LFC league and brand by holding live events around the world and to promote our athletes via a reality series and merchandise such as t-shirts and calendars. Our uniqueness is derived from our all female league structure, where a diverse roster of beautiful, athletic women engage in wrestling and MMA fighting techniques against one another for purposes of delivering high quality entertainment to mature audiences.

Management believes that LFC's unique content gives us a substantial competitive advantage to build the popularity of the league and the fighters.

Recent Business Development

Over the past year we have seen a massive increase in the popularity of our social media, growing nearly 500% to 5.5 million followers and averaging 300 million views per month.

The Company has done 3 events already this year and plan at least three more including the season finale in Italy on Halloween.

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Results of Operations

Three months ended March 31, 2026 as compared to the three months ended March 31, 2025

Our operating results for the three months ended March 31, 2026 and March 31, 2025, and the changes between those periods for the respective items are summarized as follows:

		Three Months Ended
		March 31,								Changes
Statement of Operations Data:		2026				2025				Amount				%
Revenue		$	49,192			$	27,487			$	21,705				79	%
Cost of services			(40,967	)			(11,064	)			(29,903	)			270	%
Gross profit			8,225				16,423				(8,198	)		(50%)
Total operating expenses			(403,310	)			(90,893	)			(312,417	)			344	%
Other income			834,366				1,353,978				(519,612	)		(38%)
Net income		$	439,281			$	1,279,508			$	(840,227	)		(66%)

Revenue

We generated revenues of $49,192 and $27,487 for the three months ended March 31, 2026 and 2025, respectively. The Company's revenue derives from the development, promotion and distribution of our live events, televised entertainment programming, sponsorship, site subscription, licensing and advertising. The increase in revenues was attributed to an increase in advertising revenue with agreement signed with Meta during mid-2025.

Cost of Services

We incurred total cost of services of $40,967 and $11,064 for the three months ended March 31, 2026 and 2025, respectively. The cost of services incurred consist of labor, material, equipment and subcontractor expenses. The increase in cost of services was mainly due to the increase in subcontractor costs and consulting fees for YouTube channel.

Gross Profit

We incurred gross profit of $8,225 and recognized gross profit $16,423 for the three months ended March 31, 2026 and 2025, respectively. The decrease in gross profit was mainly due to the increase in subcontractor cost and consulting fees for YouTube channel.

Operating Expenses

We incurred total operating expenses of $403,310 and $90,893 for the three months ended March 31, 2026 and 2025, respectively. During the three months ended March 31, 2026, the Company incurred stock-based compensation of $276,638 for common shares issued to consultants and director for service rendered.

Other Income

We recognized other income of $834,366 and $1,353,978 for the three months ended March 31, 2026 and 2025, respectively. The decrease in other income was attributed to the increase in interest expense from convertible and promissory notes. During the three months ended March 31, 2026 and 2025, the Company recognized gain from changes in fair value of derivatives from the convertible notes and warrants of $1,052,473 and $1,462,313 due to the decrease in the Company's stock price during the respective period.

Net Income

We recognized net income of $439,281 and $1,279,508 during the three months ended March 31, 2026 and 2025, respectively. The decrease in our net income was mainly attributed to the increase in operating expenses and the decrease in other income.

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Liquidity and Capital Resources

		March 31,				December 31,				Changes
Working Capital Data:		2026				2025				Amount				%
Current Assets		$	44,620			$	40,141			$	4,479				11	%
Current Liabilities		$	5,676,417			$	6,438,960			$	(762,543	)			(12	)%
Working Capital Deficiency		$	(5,631,797	)		$	(6,398,819	)		$	767,022				(12	)%

At March 31, 2026, we had a working capital deficiency of $5,631,797 and an accumulated deficit of $11,298,674. The Company intends to fund future operations through equity financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements for the year ending December 31, 2026.

The decrease in working capital deficiency of $767,022 as of March 31, 2026 from $6,398,819 as of December 31, 2025 was mainly due to the decrease in derivative liabilities.

The ability of the Company to realize its business plan is dependent upon, among other things, obtaining additional financing to continue operations, and development of its business plan. In response to these problems, management intends to raise additional funds through public or private placement offerings.

These factors, among others, raise substantial doubt about the Company's ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

The following table sets forth certain information about our cash flow during the three months ended March 31, 2026 and March 31, 2025:

		Three Months Ended
		March 31,								Changes
Cash Flows Data:		2026				2025				Amount				%
Cash Flows used in Operating Activities		$	(84,926	)		$	(48,202	)		$	(36,724	)			76	%
Cash Flows used in Investing Activities			-				-				-				-
Cash Flows provided by Financing Activities			91,500				46,722				44,778				96	%
Net change in cash during period		$	6,575			$	(1,480	)		$	8,055				(544	)%

Cash Flows from Operating Activities

We have not generated positive cash flows from operating activities.

During the three months ended March 31, 2026, net cash flows used in operating activities was $84,926, consisting of a net income of $439,281, increased by depreciation of $322, stock-based compensation of $276,638, loss on change in fair value of digital assets of $14,922, amortization of debt discount of $126,907, net changes in operating assets and liabilities of $109,477 and decreased by gain on change in fair value of derivative liabilities of $1,052,473.

During the three months ended March 31, 2025, net cash flows used in operating activities was $48,202, consisting of a net income of $1,279,508, decreased by gain on change in fair value of derivative liabilities of $1,462,313, and increased by depreciation of $322 and amortization of debt discount of $41,673 and net changes in operating liabilities of $92,608.

Cash Flows from Investing Activities

There was no investing activities during the three months ended March 31, 2026 and 2025.

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Cash Flows from Financing Activities

During the three months ended March 31, 2026 and 2025, net cash provided by financing activities was $91,500 and $46,722 attributed to proceeds from the issuance of convertible notes, respectively.

Off-Balance Sheet Arrangements

As of March 31, 2026, we had no off-balance sheet arrangements.

Critical Accounting Policies

Critical Accounting Policies and Significant Judgments and Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management 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 reported amounts of income and expense during the reporting periods presented.

Our critical estimates include intangible assets and derivatives. Although we believe that these estimates are reasonable, actual results could differ from those estimates given a change in conditions or assumptions that have been consistently applied. We also have other policies that we consider key accounting policies, such as our policy for revenue recognition, however, the application of these policies does not require us to make significant estimates or judgments that are difficult or subjective.

The critical accounting policies used by management and the methodology for its estimates and assumptions are as follows:

Convertible Financial Instruments

We bifurcate conversion options from their host instruments and accounts for them as free standing derivative financial instruments if certain criteria are met. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. An exception to this rule is when the host instrument is deemed to be conventional, as that term is described under applicable GAAP.

When we have determined that the embedded conversion options should not be bifurcated from their host instruments, discounts are recorded for the intrinsic value of conversion options embedded in the instruments based upon the differences between the fair value of the underlying Common Stock at the commitment date of the transaction and the effective conversion price embedded in the instrument.

Stock-Based Compensation

We measure the cost of services received in exchange for an award of equity instruments based on the fair value of the award. For employees and directors, the fair value of the award is measured on the grant date. For non-employees, as per ASU No. 2018-7, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Stock-Based Payment Accounting, remeasurement is not required. The fair value amount is then recognized over the period during which services are required to be provided in exchange for the award, usually the vesting period. Stock-based compensation expense is recorded by us in the same expense classifications in the consolidated statements of operations, as if such amounts were paid in cash. Also, refer to Note 3 - Summary of Significant Accounting Policies, in the financial statements that are included in this Annual Report.

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