ASFT 10-Q
Appsoft Technologies, Inc. (ASFT)
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended:
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ________ to _________
Commission file number:
(Name of Small Business Issuer in its charter) |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Address of registrant's principal executive offices
(
Issuer’s telephone number
_________________________________________________________
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
None |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ☒
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company.
Large accelerated filer | ☐ | Accelerated filer | ☐ |
☒ | Smaller reporting company | ||
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| Emerging Growth Company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
At August 14, 2026, there were
PART I — FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
AppSoft Technologies, Inc.
Balance Sheets
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| June 30, 2026 (Unaudited) |
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| December 31, 2025 (Audited) |
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| CURRENT ASSETS |
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Cash |
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TOTAL CURRENT ASSETS |
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TOTAL ASSETS |
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| LIABILITIES |
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Accounts Payable and Accruals |
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Accrued Interest - Related Party |
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TOTAL CURRENT LIABILITIES |
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Note Payable - Related Party |
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TOTAL LIABILITIES |
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| COMMITMENTS AND CONTINGENCIES |
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| STOCKHOLDER'S EQUITY |
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Series A Cumulative, Convertible Preferred stock ($ |
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Common stock ($ |
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Additional Paid in Capital |
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Accumulated Deficit |
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TOTAL STOCKHOLDER'S EQUITY (DEFICIT) |
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TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY/(DEFICIT) |
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The accompanying notes are an integral part of these financial statements.
| 2 |
AppSoft Technologies, Inc.
Statements of Operations
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| For the Three Months Ended June 30, |
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| For the Six Months Ended June 30, |
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| 2026 (Unaudited) |
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Sales |
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Total Revenue |
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EXPENSES: |
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Selling, General and Administrative |
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Interest Expense |
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Outside Services |
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Professional Fees |
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Total Expense |
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Loss from operations |
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Other Income/(Loss) |
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Interest Income |
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Provision for Income Taxes |
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NET LOSS |
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Weighted average common shares outstanding, basic and fully diluted |
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Basic and fully diluted net loss per common share: |
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The accompanying notes are an integral part of these financial statements.
| 3 |
AppSoft Technologies, Inc.
Statements of Cash Flows
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| For the Six Months Ended June 30, |
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| 2026 (Unaudited) |
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| 2025 (Unaudited) |
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CASH FLOWS FROM OPERATING ACTIVITIES: |
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Net loss |
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Adjustments to reconcile net (loss) to net cash provided by (used in) operations: |
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Changes in Assets and Liabilities: |
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Increase (decrease) in Accounts Payable and Other Accruals |
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Increase (decrease) in Accrued Interest Expense |
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NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES |
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CASH FLOWS TO/(FROM) FINANCING ACTIVITIES: |
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Note Payable - borrowings (Related Party) |
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Owner Contributions |
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NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES |
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NET INCREASE(DECREASE) IN CASH AND CASH EQUIVALENTS |
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CASH AND CASH EQUIVALENTS, |
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BEGINNING OF THE PERIOD |
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END OF THE PERIOD |
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SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: |
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CASH PAID DURING THE PERIOD FOR: |
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Interest |
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Taxes |
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The accompanying notes are an integral part of these financial statements.
| 4 |
AppSoft Technologies, Inc.
Statement of Stockholders' Equity
For the Six Months Ended June 30, 2026 (Unaudited)
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Balances, January 1, 2026 |
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Net Loss |
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Balances, March 31, 2026 |
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Net Loss |
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Balances, June 30, 2026 |
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For the Six Months Ended June 30, 2025 (Unaudited)
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Balances, January 1, 2025 |
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Net Loss |
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Balances, March 31, 2025 |
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Net Loss |
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Balances, June 30, 2025 |
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The accompanying notes are an integral part of these financial statements.
| 5 |
NOTE A—BUSINESS ACTIVITY
AppSoft Technologies (“AppSoft” or the “Company”) was organized under the laws of the State of Nevada March 24, 2015. The Company’s fiscal year-end is December 31st. Historically, AppSoft has developed games/mobile apps and published an as Esports/E-gaming platforms, but has suspended those operations as it endeavors to raise capital to fund its operations.
NOTE B—GOING CONCERN
The accompanying financial statements have been prepared on a going concern basis, which assumes the Company will realize its assets and discharge its liabilities in the normal course of business. As reflected in the accompanying financial statements, the Company has a deficit accumulated of $
The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. These circumstances raise substantial doubt about the Company’s ability to continue as a going concern for the 12 months from the date when these financial statements were issued. The accompanying financial statements do not include any adjustments that might arise because of this uncertainty.
To address these aforementioned, management has undertaken the following initiatives: 1) enter into discussions to secure additional equity funding from current or new shareholders; 2) undertake a program to continue to monitor the Company’s ongoing working capital requirements and minimum expenditure commitments; 3) continue their focus on maintaining an appropriate level of corporate overhead in line with the Company’s available cash resources.
NOTE C—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation- The financial statements included herein were prepared under Generally Accepted Accounting Principles (GAAP). All adjustments have been made which in the opinion of management are necessary, normal, and recurring in nature for presentation.
The results for interim financial statements are not necessarily indicative of the results of operations for the full year. Interim financial statements and related footnotes should be read in conjunction with the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10K for the year ended December 31, 2025, filed with the Securities and Exchange Commission.
The accompanying condensed financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at June 30, 2026 and for the related periods presented.
Cash and Cash Equivalents- For the purposes of the Statement of Cash Flows, the Company considers liquid investments with an original maturity of three months or less to be cash equivalents.
Management’s Use of 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 disclosures of contingent assets and liabilities at the date of financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The financial statements above reflect all the costs of doing business.
Revenue Recognition- On May 28, 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.2014-09, Revenue from Contracts with Customers, Topic 606 (“ASC 606”), requiring an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The new revenue standard replaces most existing revenue recognition guidance in GAAP and permits the use of either the full retrospective or modified retrospective transition method.
| 6 |
NOTE C—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—CONT’D
The Company adopted this standard using the modified basis effective January 1, 2019, and given the Company's limited revenue, the modified retrospective basis has no material impact on prior years given the limited revenue.
Comprehensive Income (Loss) - The Company reports Comprehensive income and its components following guidance set forth by section 220-10 of the FASB Accounting Standards Codification which establishes standards for the reporting and display of comprehensive income and its components in the financial statements. There were no items of comprehensive income (loss) applicable to the Company during the period covered in the financial statements.
Net Income per Common Share- Net loss per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted average number of shares of common stock and potentially outstanding shares of common stock during each period. There was a total of
Deferred Taxes- The Company accounts for income taxes under Section 740-10-30 of the FASB Accounting Standards Codification. Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years 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 statements of operations in the period that includes the enactment date.
Fair Value of Financial Instruments- The carrying amounts reported in the balance sheet for cash, accounts receivable and accounts payable approximate fair value based on the short-term maturity of these instruments.
Accounts Receivable- Accounts deemed uncollectible are written off in the year they become uncollectible. As of June 30, 2026 and 2025, the balance in Accounts Receivable was $
Impairment of Long-Lived Assets- The Company evaluates the recoverability of its fixed assets and other assets in accordance with section 360-10-15 of the FASB Accounting Standards Codification for disclosures about Impairment or Disposal of Long-Lived Assets. Disclosure requires recognition of impairment of long-lived assets in the event the net book value of such assets exceeds its expected cash flows. If so, it is impaired and is written down to fair value, which is determined based on either discounted future cash flows or appraised values. The Company adopted the statement on inception. No impairments of these types of assets were recognized during the periods ended June 30, 2026 and 2025.
Stock-Based Compensation- The Company accounts for stock-based compensation using the fair value method following the guidance set forth in section 718-10 of the FASB Accounting Standards Codification for disclosure about Stock-Based Compensation. This section requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award- the requisite service period (usually the vesting period). No compensation cost is recognized for equity instruments for which employees do not render the requisite service.
Fair Value for Financial Assets and Financial Liabilities- The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP) and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels.
| 7 |
NOTE C—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—CONT’D
The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:
Level 1 | Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. |
Level 2 | Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. |
Level 3 | Pricing inputs that are generally unobservable inputs and not corroborated by market data. |
The carrying amounts of the Company’s financial assets and liabilities, such as cash and accrued expenses, approximate their fair values because of the short maturity of these instruments. The Company’s note payable approximates the fair value of such instrument based upon management’s best estimate of interest rates that would be available to the Company for similar financial arrangement at the periods ended June 30, 2026 and 2025.
The Company does not have any assets or liabilities measured at fair value on a recurring or a non-recurring basis, consequently, the Company did not have any fair value adjustments for assets and liabilities measured at fair value at June 30, 2026, nor gains or losses are reported in the statement of operations that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date for the periods ended June 30, 2026 and 2025.
Recently Issued Accounting Pronouncements
In November 2024, the Financial Accounting Standards Board (FASB) issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Topic 220): Disaggregation of Income Statement Expenses, which requires additional disclosure of certain amounts included in the expense captions presented on the statement of operations, as well as disclosures about selling expenses. ASU 2024-03 is effective for the Company’s annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027, on a prospective basis, with the option for retrospective application. Early adoption is permitted for annual financial statements that have not yet been issued. The Company is currently evaluating the impact that the standard will have on its condensed financial statements
Other pronouncements issued by the FASB or other authoritative accounting standards groups with future effective dates are either not applicable or are not expected to be significant to the Company’s financial position, results of operations or cash flows.
NOTE D—SEGMENT REPORTING
The Company follows the guidance set forth by section 280-10 of the FASB Accounting Standards Codification for reporting and disclosure on operating segments of the Company. It also requires segment disclosures about products and services, geographic areas, and major customers. The Company determined that it did not have any separately reportable operating segments as of June 30, 2026 and 2025.
| 8 |
NOTE E—CAPITAL STOCK
The Company is authorized to issue
Total issued and outstanding shares of common stock is
Total issued and outstanding shares of preferred stock is
The Company is authorized to issue
The Company agreed to reduce the price at which each share of Series A Preferred Stock, of which Ventureo is the sole holder, converts into Common Stock from $
During 2021, the Company converted
Capital Contributions
Brian Kupchik, President, and CEO made no capital contributions during the period ended June 30, 2026 and no capital contributions during the period ended June 30, 2025.
NOTE F—INCOME TAX
The Company provides for income taxes under (now included under Accounting Standards Codification (ASC), 740), Accounting for Income Taxes. ASC 740 requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse.
ASC 740 requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all the deferred tax assets will not be realized. For Federal income tax purposes,
No tax benefit has been reported in the financial statements because after evaluating our own potential tax uncertainties,
The Company is not obligated to pay State Income Taxes because it is a Nevada corporation. The Company does not currently have any tax returns open for examination.
| 9 |
NOTE G—RELATED PARTY NOTES PAYABLE AND NOTE EXCHANGE AGREEMENT
The total amount of Related Party Notes Payable is $
Details of the Related Party Notes Payable is as follows:
2018 Notes Payable
2018 Principal and Interest were consolidated into promissory note in the amount of $
On November 30, 2018, the Company entered into an Exchange Agreement with its Creditors under which each Creditor agreed to cancel the Original Notes issued and accept a new promissory note in the amount of $
In consideration for the exchange of the Original Notes for the New Notes, the Company agreed to reduce the price at which each share of Series A Preferred Stock, of which Ventureo is the sole holder, converts into Common Stock from $
Although new borrowings are not yet formalized into a note agreement, the Company and the lender agree that the new loans have the same terms and conditions for the formalized notes.
2019 Notes Payable
In 2019 an additional $
BGS Drawdown Promissory Note (Related Party)
On March 31, 2020, the Company executed a Drawdown Promissory Note in favor of Bryan Glass Securities, Inc. (“BGS”) under which the Company is entitled to borrow up to an aggregate of $
| · | During the year 2020, $ |
|
|
|
| · | During the year 2021, $ |
|
|
|
| · | During the year 2022, $ |
|
|
|
| · | During the year 2023, $ |
|
|
|
| · | During the year 2024, $ |
|
|
|
| · | During the year 2025, $ |
| 10 |
NOTE G--NOTES PAYABLE AND NOTE EXCHANGE AGREEMENT—CONT’D
| · | During the 1st Quarter 2026, $ |
|
|
|
| · | During the 2nd Quarter 2026, $ |
As of June 30, 2026, the Company has borrowed an aggregate of $
NOTE H—MATERIAL EVENTS/SUBSEQUENT EVENTS
Since the close of the period covered by the financial statements of which these notes form a part, the following material transactions have occurred:
Subsequent Events
The Company evaluated for subsequent events from June 30, 2026 through August 14, 2026 (the issuance date of the Company’s financial statements) and has determined that the only subsequent event that has occurred is the additional $
Material Events
On November 12, 2025, BGS agreed to extend the maturity date of the Drawdown note to December 31, 2027.
| 11 |
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Forward Looking Statements
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q, or Report.
This Quarterly Report on Form 10-Q contains forward-looking statements, including statements regarding the Company’s plans, objectives, expectations, intentions and beliefs concerning future events, business strategy, financing needs and operating performance. Forward-looking statements are based on current expectations and assumptions and involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied.
Although we believe that we have a reasonable basis for each forward-looking statement contained in this Report, we caution you that these statements are based on a combination of facts and factors currently known by us and our projections of the future, about which we cannot be certain. We caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and the development of the industry in which we operate may differ materially from the forward-looking statements contained in this Report. Factors that might cause such a discrepancy include, but are not limited to:
| · | Our ability to obtain financing as and when needed on acceptable terms. |
| · | Our failure to develop or acquire and publish new Apps that achieve market acceptance or we do not continue to enhance our existing Apps. |
| · | Our inability to maintain a good relationship with the markets where our Apps are distributed. |
| · | Our ability to develop our eSports business and generate revenue from sales, sponsorships, merchandise and advertiser supporter content; |
| · | Our inability to keep pace with technological changes and market conditions in the Apps industry. |
| · | Our inability to compete against a wide range of companies that market Apps, many of which have significantly greater resources than we do. |
We caution readers not to place undue reliance on any forward-looking statements made by us, which speak only as of the date they are made. We disclaim any obligation, except as specifically required by law and the rules of the Securities and Exchange Commission, to publicly update or revise any such statements to reflect any change in our expectations or in events, conditions or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements.
Overview
AppSoft Technologies, Inc. (“we,” “us,” or the “Company”) was incorporated in Nevada on March 24, 2015. Historically, we have developed, published and marketed mobile software applications for smartphones and tablet devices (“Apps”). During the last twelve months, we introduced AI Profit Lab, a secure e-learning platform through which entrepreneurs and businesses may access AI-related educational content, templates and prompt packs To date, we have not generated any revenue from this business line.
Due to resource constraints, we have discontinued our Esportsreporter and Gamerfy services and halted the promotion of our apps library.
Our ability to pursue and achieve our objectives is predicated on our receipt of meaningful revenue from sales of our products or investment in our company. We cannot be sure that the additional capital we require will be available on acceptable terms or at all. If adequate funds are not available on acceptable terms or at all, we may be unable to develop or commercialize products, take advantage of future opportunities or respond to competitive pressures, any of which would have a material adverse effect on our business, prospects, financial condition, and results of operations.
| 12 |
Our ability to achieve and sustain profitability will depend not only on our ability to generate meaningful revenues, but also on our ability to manage our operating expenses. Currently, we have one full-time employee, who receives compensation when and as determined by the Board. For the foreseeable future, we expect to utilize the services of independent contractors and consultants, who we believe are readily available for our purposes, in order to manage our personnel costs. We also will continue to maintain a virtual office as long as our operations permit us to do so to control our office space overhead.
Results of Operations for the Three Months Ended June 30, 2026 Compared to the Three Months Ended June 30, 2025 (unaudited)
The following table presents our results of operations for the three months ended June 30, 2026 and 2025:
|
| Three Months Ended June 30, |
| |||||
|
| 2026 |
|
| 2025 |
| ||
Revenue |
| $ | - |
|
| $ | - |
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
|
Selling, General and Administrative |
|
| 2,515 |
|
|
| 5,983 |
|
Interest Expense |
|
| 2,772 |
|
|
| 2,433 |
|
Outside Services |
|
| 5,490 |
|
|
| 14,810 |
|
Professional Fees |
|
| 6,160 |
|
|
| 7,170 |
|
Total Expenses |
|
| 16,937 |
|
|
| 30,396 |
|
Net loss from operations |
| $ | (16,937 | ) |
| $ | (30,396 | ) |
Net loss decreased by $13,459, or 44%, to $16,937 for the three months ended June 30, 2026 from $30,396 for the comparable 2025 period. The decrease primarily reflected lower outside-services, selling, general and administrative and professional-fee expenses, partially offset by higher interest expense as related-party borrowings increased.
Results of Operations for the Six Months Ended June 30, 2026 Compared to the Six Months Ended June 30, 2025 (unaudited).
The following table presents our results of operations for the six months ended June 30, 2026 and 2025:
|
| Six Months Ended June 30, |
| |||||
|
| 2026 |
|
| 2025 |
| ||
Revenue |
| $ | - |
|
| $ | - |
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
|
Selling, General and Administrative |
|
| 5,183 |
|
|
| 6,974 |
|
Interest Expense |
|
| 5,453 |
|
|
| 4,701 |
|
Outside Services |
|
| 11,640 |
|
|
| 17,910 |
|
Professional Fees |
|
| 15,110 |
|
|
| 26,405 |
|
Total Expenses |
|
| 37,386 |
|
|
| 55,990 |
|
Net loss from operations |
| $ | (37,386 | ) |
| $ | (55,990 | ) |
Net loss decreased by $18,604, or 33%, to $37,386 for the six months ended June 30, 2026 from $55,990 for the comparable 2025 period. The decrease primarily reflected lower professional-fee and outside-services expenses, partially offset by higher interest expense as related-party borrowings increased.
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Liquidity and Capital Resources
Our principal liquidity requirements are to fund the continued development and potential commercialization of AI Profit Lab and to pay the legal, accounting and other costs of remaining a public reporting company. The Company has not generated revenue from AI Profit Lab and does not currently maintain material inventory or accounts receivable.
Since our inception, we have financed our operations through the sale of equity securities, from third party loans and from internally generated revenue from operations.
As of June 30, 2026, we had cash of $9 and a working-capital deficit of $51,185, compared with cash of $7 and a working-capital deficit of $45,734 at December 31, 2025. These amounts assume the classification of the related-party notes payable reflected in the accompanying condensed balance sheets.
During the six months ended June 30, 2026, we borrowed $31,935 under the BGS Drawdown Note. At June 30, 2026, aggregate borrowings under the Drawdown Note were $356,058 and $43,942 remained available for additional advances, subject to BGS’s right to approve or decline each draw request.
We have only nominal cash on hand and have not generated operating cash flow sufficient to support our operations. We have relied on related-party borrowings to fund operating costs. Our ability to continue operations depends on our ability to obtain additional financing and on the willingness of BGS or other financing sources to provide funds after the remaining availability under the Drawdown Note is exhausted. Financing may include additional debt or equity securities, which could be dilutive or include rights senior to those of existing common stockholders. We cannot assure investors that financing will be available on acceptable terms or at all. If we are unable to obtain additional financing, we may be required to curtail development and commercialization efforts or cease operations.
Cash Flows:
The following table presents summary cash flow information:
|
| For the six months ended June 30, 2026 |
|
| For the six months ended June 30, 2025 |
| ||
|
|
|
|
|
|
| ||
Net cash used in operating activities |
| $ | (31,933 | ) |
| $ | (51,587 | ) |
Net cash provided by financing activities |
|
| 31,935 |
|
|
| 53,300 |
|
Net increase (decrease) in cash |
| $ | 2 |
|
| $ | 1,713 |
|
Net cash used in operating activities decreased by $19,654 to $31,933 during the six months ended June 30, 2026, compared with $51,587 during the comparable 2025 period, principally reflecting the lower net loss. Financing activities provided $31,935 during the 2026 period, consisting entirely of related-party borrowings under the BGS Drawdown Note.
Material Cash Requirements
Our material cash requirements consist principally of operating expenses, public-company reporting costs, accrued interest of $51,194 and obligations under the related-party notes described in Note G to the condensed financial statements. We expect to fund these requirements through additional related-party borrowings or other debt or equity financing. The timing and amount of required payments on the 2018 and 2019 notes remain subject to confirmation of their current contractual terms.
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Going Concern
Note B to our condensed financial statements for the six months ended June 30, 2026 and the report of our independent registered public accounting firm on our financial statements for the year ended December 31, 2025 describe substantial doubt about our ability to continue as a going concern. At June 30, 2026, we had an accumulated deficit of $1,146,748, cash of $9 and had used $31,933 of cash in operating activities during the six-month period. Our ability to continue as a going concern depends on our ability to generate profitable operations or obtain additional financing sufficient to meet our obligations as they become due. The condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty.
We expect to continue incurring losses until we generate sufficient revenue to offset our operating and public-company costs. We will need additional capital to fund our near-term plans, and we cannot assure investors that such capital will be available on acceptable terms or at all. If adequate funds are not available, we may be unable to develop or commercialize our products, repay obligations as they become due or continue operations.
Off-Balance Sheet and Other Arrangements
We do not engage in any activities involving variable interest entities or off-balance sheet arrangements.
Inflation
We do not believe that inflation has had a material effect on our business, financial condition or results of operations. If our costs were to become subject to significant inflationary pressures, we might not be able to fully offset these higher costs through price increases. Our inability or failure to do so could harm our business, operating results and financial condition.
Critical Accounting Policies and Use of Estimates
The preparation of our condensed financial statements requires management to make estimates and assumptions. Based on the nature of our current assets, liabilities and operations, management has not identified a critical accounting estimate involving a significant level of estimation uncertainty that is reasonably likely to have a material effect on our financial condition or results of operations.
Recent Accounting Pronouncements
See Note C to the financial statements furnished with this report for a discussion of recent accounting pronouncements that had a material effect on the financial statements presented herein.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
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ITEM 4. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e)) under the Exchange Act) that is designed to ensure that information required to be disclosed by the Company in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time specified in the Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer's management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Management, with the participation of Brian Kupchik, the Company’s President and Chief Executive Officer and its principal executive officer, principal financial officer and principal accounting officer, evaluated the effectiveness of the Company’s disclosure controls and procedures as of June 30, 2026. Based on that evaluation, Mr. Kupchik concluded that the Company’s disclosure controls and procedures were not effective because of the material weaknesses described below.
The material weaknesses consist of (i) inadequate segregation of duties in the handling of cash, cash receipts and cash disbursements due to the Company’s limited personnel and (ii) the lack of an independent board to oversee management decisions and the use of funds. These material weaknesses were disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 and continued to exist at June 30, 2026. The Company’s limited financial and personnel resources make remediation difficult. Management intends to continue formalizing cash-handling and review procedures and to seek qualified independent directors when resources permit, but cannot assure that remediation will be completed in a timely manner.
Changes in Internal Controls
There were no changes in the Company’s internal control over financial reporting during the quarter ended June 30, 2026 that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
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PART II--OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are presently no pending legal proceedings to which the Company is a party or as to which any of its property is subject, and no such proceedings are known to the Company to be threatened or contemplated against it.
ITEM 1A. RISK FACTORS
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended, and are not required to provide the information required under this item.
ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4- MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5 - OTHER INFORMATION
None.
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ITEM 6 - EXHIBITS.
Exhibit |
| Description |
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101.INS |
| Inline XBRL Instance Document |
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101.SCH |
| Inline XBRL Taxonomy Extension Schema Document |
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101.CAL |
| Inline XBRL Taxonomy Extension Calculation Linkbase Document |
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101.DEF |
| Inline XBRL Taxonomy Extension Definition Linkbase Document |
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101.LAB |
| Inline XBRL Taxonomy Extension Label Linkbase Document |
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101.PRE |
| Inline XBRL Taxonomy Extension Presentation Linkbase Document |
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|
|
104 |
| Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101). |
* | In accordance with Item 601 of Regulation S-K, this Exhibit is hereby furnished to the SEC as an accompanying document and is not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933. |
| 18 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
APPSOFT TECHNOLOGIES, INC. |
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Date: August 19, 2026 | By: | /s/ Brian Kupchik |
|
Name: | Brian Kupchik |
| |
Title: | President, Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer |
| |
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