SPECTRAL CAPITAL Corp 10-Q for FY2026 Q1

SPECTRAL CAPITAL Corp (FCCN)

10-Q 2026-05-13 For: 2026-03-31

Added on May 14, 2026

About this 10-Q

SPECTRAL CAPITAL Corp filed this 10-Q on May 13, 2026, covering the quarter ended March 31, 2026 (FY2026 Q1).

Headline figures

Quarter ended March 31, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $328.51M; compared with $0 a year earlier
Net loss: $9.49M; compared with a net loss of $660K a year earlier

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Nevada	51-0520296
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)
701 Fifth Ave, Suite 4200 Seattle WA	98104
(Address of principal executive offices)	(Zip/Postal Code)
(206) 262-7799
(Telephone Number)

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	x	Smaller reporting company	☒
		Emerging growth company	☐

PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements	F-1

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	33

Item 4.	Controls and Procedures	33

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	34

Item 1A.	Risk Factors	34

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34

Item 3.	Defaults Upon Senior Securities	34

Item 4.	Mine Safety Disclosures	34

Item 5.	Other Information	34

Item 6.	Exhibits	35

SIGNATURES		36

INDEX TO UNAUDITED CONDENSED CONSOLIDATED STATEMENTS

Condensed Consolidated Financial Statements of Spectral Capital Corporation, Inc.

	Condensed Consolidated Balance Sheets as of March 31, 2026 (unaudited) and December 31, 2025	F-2

	Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three Months Ended March 31, 2026 and 2025 (unaudited)	F-3

	Condensed Consolidated Statements of Stockholders' Equity (Deficit) for the Three Months Ended March 31, 2026 and 2025 (unaudited)	F-4

	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2026 and 2025 (unaudited)	F-6

	Notes to the Condensed Consolidated Financial Statements (unaudited)	F-7

			March 31,	December 31,
			2026	2025
			(Unaudited)
ASSETS
Current assets:
	Cash and cash equivalents		`$2,705`	`$2,087`
	Restricted cash		`21`	`21`
	Accounts receivable, net		`272,584`	`32,528`
	Accounts receivable, related party		`9,332`	`11,710`
	Contract assets		`793`	`3,840`
	Contract assets, related party		`-`	`2,634`
	Due from related party		`1,357`	`1,358`
	Prepaid expenses and other current assets		`4,075`	`5,273`
		Total current assets	`290,867`	`59,451`
Property, plant and equipment, net			`117`	`126`
Intangible assets, net			`39,612`	`41,438`
Capital work-in-progress			`331`	`439`
Goodwill			`48,697`	`48,697`
Other receivable, related party			`416`	`427`
Right of use asset			`148`	`168`
		Total assets	`$380,188`	`$150,746`

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
	Accounts payable		`$270,977`	`$34,441`
	Accounts payable, related party		`4,296`	`9,261`
	Accrued expenses and other current liabilities		`3,131`	`2,407`
	Due to related party		`7,273`	`7,997`
	Accounts receivable financing facility		`13,747`	`12,674`
	Contingent consideration		`40,753`	`34,839`
	Contract liabilities		`257`	`335`
	Operating lease liability, current portion		`64`	`65`
		Total current liabilities	`340,498`	`102,019`
	Operating lease liability, net of current portion		`83`	`102`
	Deferred tax liability		`4,469`	`4,470`
		Total liabilities	`345,050`	`106,591`

Commitments and contingencies (Note 14)

Stockholders' equity:
	Preferred stock, par value $0.0001, 5,000,000 shares authorized no shares issued and outstanding
	Series Quantum Preferred stock, par value $0.0001, 2,000,000 shares authorized, 0 shares issued and outstanding as of March 31, 2026 and December 31, 2025		`-`	`-`
	Common stock, par value $0.0001, 300,000,000 shares authorized 89,354,216 and 88,254,216 shares issued and outstanding as of March 31, 2026 and December 31, 2025		`9`	`9`
	Common stock to be issued (500,000 and 1,500,000 shares as of March 31, 2026 and December 31, 2025)		`1,135`	`3,407`
	Additional paid-in capital		`76,990`	`74,243`
	Accumulated deficit		`(42,820)`	`(33,415)`
	Accumulated other comprehensive income		`46`	`133`
		Total stockholders' equity	`35,360`	`44,377`
	Non-controlling interest		`(222)`	`(222)`
		Total liabilities and stockholders' equity	`35,138`	`44,155`
			`$380,188`	`$150,746`

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
	SECURITIES EXCHANGE ACT OF 1934

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
	SECURITIES EXCHANGE ACT OF 1934

	Three Months Ended
	March 31,
	2026	2025

Revenue	`$328,512`	`$-`
Total revenues	`328,512`	`-`
Cost of revenue	`326,322`	`-`
Gross profit	`2,190`	`-`

Operating expenses:
Selling, general and administrative	`2,440`	`624`
Wages and benefits	`741`	`36`
Depreciation and amortization	`1,988`	`-`
Total operating expenses	`5,169`	`660`
Loss from operations	`(2,979)`	`(660)`

Other income (expense):
Interest expense, net	`(415)`	`-`
Loss from change in fair value of contingent consideration	`(5,914)`
Other income	`3`	`-`
Total other expense	`(6,326)`	`-`
Loss before income taxes	`(9,305)`	`(660)`
Income taxes	`100`	`-`
Net loss	`$(9,405)`	`$(660)`

Net loss attributable to non-controlling interests	`$-`	`$-`
Net loss attributable to the Company	`$(9,405)`	`$(660)`

Other comprehensive income (loss):
Foreign currency translation loss	`(87)`	`-`
Total comprehensive loss	`$(9,492)`	`$(660)`


Net loss per share attributable to the Company	`$(0.11)`	`$(0.01)`
Basic	`$(0.11)`	`$(0.01)`
Diluted
Weighted average shares outstanding
Basic	`88,983,938`	`67,699,302`
Diluted	`88,983,938`	`67,699,302`

			Total
Cash and cash equivalents			`$276`
Restricted cash			`21`
Accounts receivables, net			`1,271`
Contract assets			`833`
Prepaid expenses and other current assets			`424`
Property, plant and equipment, net			`112`
Capital work-in-progress			`279`
Intangible assets:
Developed technology			`5,800`
Customer relationships			`3,100`
Tradename			`600`
Goodwill			`12,520`
Other receivable, related party			`417`
Right of use asset			`191`
Accounts payable			`(1,289)`
Accrued expenses and other current liabilities			`(741)`
Contract liabilities			`(251)`
Operating lease liability			`(180)`
Loan payable			`(1)`
Deferred tax liability- Intangible asset			`(3,268)`
Deferred tax liability - pre existing temporary differences			`(114)`
Purchase price consideration			`$20,000`

			Total
Cash and cash equivalents			`$1,094`
Accounts receivables, net			`37,334`
Due from related party			`1,358`
Prepaid expenses and other current assets			`482`
Deferred tax assets			`42`
Intangible assets:
Customer relationships			`10,700`
Tradename			`3,100`
Goodwill			`35,487`
Accounts payable			`(32,402)`
Accrued expenses and other current liabilities			`(825)`
Accounts receivable financing facility			`(12,342)`
Deferred tax liability- Intangible asset			`(2,238)`
Due to related party			`(7,277)`
Purchase price consideration			`$34,513`

	Level 1	Level 2	Level 3	Total

March 31, 2026
Liabilities:
Contingent consideration - 42 Telecom Ltd.	`$-`	`$-`	`$6,614`	`$6,614`
Contingent consideration - Telvantis Voice Services, Inc.	`$-`	`$-`	`$34,139`	`$34,139`
Total liabilities	`$-`	`$-`	`$40,753`	`$40,753`

December 31, 2025
Liabilities:
Contingent consideration - 42 Telecom Ltd.	`$-`	`$-`	`$3,733`	`$3,733`
Contingent consideration - Telvantis Voice Services, Inc.	`$-`	`$-`	`$31,106`	`$31,106`
Total liabilities	`$-`	`$-`	`$34,839`	`$34,839`

								Contingent
								Consideration
Balance, December 31, 2025								$ 34,839
Change in fair value - 42 Telecom Ltd.								2,882
Change in fair value - Telvantis Voice Servies, Inc.								3,032
Balance, March 31, 2026								$ 40,753

2026 (remaining 9 months)		`$5,918`
2027		`7,891`
2028		`7,808`
2029		`7,691`
2030		`5,611`
Thereafter		`4,693`
		`$39,612`

Weighted Average Remaining Lease Term (in years)		2.25
Weighted Average Discount Rate		4%

March 31,
2026 (remaining 9 months)		`$52`
2027		`69`
2028		`343`
Total lease payments		`154`
Less: imputed interest		`(7)`
Total		`$147`

	March 31,	December 31,
	2026	2025
Prepaid consulting and marketing services	`$3,239`	`$4,336`
Deposits	`37`	`37`
VAT and taxes	`41`	`40`
Prepaid expenses	`231`	`217`
Settlement receivable	`57`	`173`
Other receivable	`470`	`470`
Prepaid and other current assets	`$4,075`	`$5,273`

	March 31,	December 31,
	2026	2025
Office equipment	`$5`	`$5`
Computers	`120`	`115`
Furniture and fixtures	`26`	`26`
Leasehold improvements	`7`	`7`
	`158`	`153`
Less: Accumulated depreciation	`(41)`	`(27)`
Property, plant and equipment, net	`$117`	`$126`

	March 31,	December 31,
	2026	2025

Developed technology	`$5,479`	`$5,479`
Internally developed software	`489`	`321`
Customer relationships	`13,800`	`13,800`
Tradenames	`3,700`	`3,700`
Acquired intellectual property	`19,710`	`19,710`
	`43,178`	`43,010`
Less: Accumulated amortization	`(3,566)`	`(1,572)`
Intangible assets, net	`$39,612`	`$41,438`

	March 31,	December 31,
	2026	2025
Malta	`$111`	`$119`
Sweden	`6`	`7`
	`$117`	`$126`

		Weighted	Weighted
	Stock	Average	Average Life
	Options	Exercise Price	Remaining
Outstanding, December 31, 2025	`3,646,875`	`$0.43`	8.45
Issued	`200,000`	`3.99`	5
Exercised	`-`	`-`	-
Forfeited/Expired	`-`	`-`	-
Outstanding, March 31, 2026	`3,846,875`	`$0.62`	8.02

Vested, December 31, 2025	`2,746,875`	`$0.43`	8.45
Vested, March 31, 2026	`3,213,539`	`$0.45`	8.19

List of Exhibits
3(i)(1)	Articles of Incorporation of Spectral Capital Corporation, dated September 13, 2000, incorporated by reference to Exhibit 3(a) on Form 10-SB filed May 1, 2003.
3(i)(2)	Certificate of Amendment to Articles of Incorporation of Spectral Capital Corporation, dated June 17, 2007, incorporated by reference to Exhibit 2.1 on Form 8-K filed July 7, 2004.
3(ii)	By-laws of Spectral Capital Corporation, dated September 14, 2000, incorporated by reference to Exhibit 3(b) on Form 10-SB filed May 1, 2003.
10.1	Definitive Share Exchange (previously filed on form 8K on July 15, 2025). between Spectral Capital Corporation and 42 Telecom Ltd.
10.2	Closing Certificated dated August 1, 2025, executed by Spectral Capital Corporation, Heritage Ventures Ltd., and 42 Telecom Ltd. (previously filed on form 8K on August 4, 2025)
10.3	Addendum dated August 1, 2025 to the Definitive Share Exchange Agreement dated July 15, 2025, by and among Spectral Capital Corporation, Heritage Ventures Ltd., and 42 Telecom Ltd. (previously filed on form 8K on August 4, 2025)
10.4	Binding Term Sheet. Between Spectral Capital Corporation and Telvantis Voice Services, Inc., dated September 29, 2025.
31.1	Certification of Chief Executive Officer pursuant to Section 302 of Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial and Principal Accounting Officer pursuant to Section 302 of Sarbanes-Oxley Act of 2002
32.1	Certification of the Company’s Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of the Company’s Chief Financial and Principal Accounting Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Dated: May 13, 2026	Spectral Capital Corporation

	/s/ Jenifer Osterwalder
	Jenifer Osterwalder
	President and Chief Executive Officer

	/s/ Daniel Gilcher
	Daniel Gilcher
	Chief Financial Officer and Principal Financial and Accounting Officer