GCAN 10-Q
Trafalgar International, Inc. (GCAN)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For
the quarterly period ended
For the transition period from ______________ to ______________
Commission
File Number:
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
(Address of principal executive offices, including Zip Code)
(Issuer’s telephone number, including area code)
Not applicable
(Former name or former address 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 | N/A | N/A |
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 past 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 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 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. See the definitions of “large accelerated filer,” “accelerated filer,” “non-accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ |
| Smaller
reporting company | |
| Emerging
growth company |
If an emerging growth company, indicate by checkmark 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). Yes ☐ No
State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: shares of common stock as of August 14, 2026.
TABLE OF CONTENTS
| Page | ||
| PART I | FINANCIAL INFORMATION | |
| Item 1 | Financial Statements | F-2 |
| Item 2 | Management’s Discussion and Analysis of Financial Condition and Results of Operation | 4 |
| Item 3 | Quantitative and Qualitative Disclosures About Market Risk | 6 |
| Item 4 | Controls and Procedures | 6 |
| PART II | OTHER INFORMATION | |
| Item 1 | Legal Proceedings | 7 |
| Item 1A | Risk Factors | 7 |
| Item 2 | Unregistered Sales of equity Securities and Use of Proceeds | 7 |
| Item 3 | Defaults Upon Senior Securities | 7 |
| Item 4 | Mine Safety Disclosures | 7 |
| Item 5 | Other Information | 7 |
| Item 6 | Exhibits | 8 |
| Item 7 | Signatures | 9 |
| 2 |
Cautionary Note Regarding Forward Looking Statements
This quarterly report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “may,” “should,” “could,” “will,” “plan,” “future,” “continue, “and other expressions that are predictions of or indicate future events and trends and that do not relate to historical matters identify forward-looking statements. These forward-looking statements are based largely on our expectations or forecasts of future events, can be affected by inaccurate assumptions, and are subject to various business risks and known and unknown uncertainties, a number of which are beyond our control. Therefore, actual results could differ materially from the forward-looking statements contained in this document, and readers are cautioned not to place undue reliance on such forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. A wide variety of factors could cause or contribute to such differences and could adversely impact revenues, profitability, cash flows and capital needs. There can be no assurance that the forward-looking statements contained in this document will, in fact, transpire or prove to be accurate. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk 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 any forward-looking statements.
Important factors that may cause the actual results to differ from the forward-looking statements, projections or other expectations include, but are not limited to, the following:
| ● | risk that we will not be able to remediate identified material weaknesses in our internal control over financial reporting and disclosure controls and procedures; | |
| ● | risk that we fail to meet the requirements of the agreements under which we acquired our business interests, including any cash payments to the business operations, which could result in the loss of our right to continue to operate or develop the specific businesses described in the agreements; | |
| ● | risk that we will be unable to secure additional financing in the near future in order to commence and sustain our planned development and growth plans; | |
| ● | risk that we cannot attract, retain and motivate qualified personnel, particularly employees, consultants and contractors for our operations; | |
| ● | risks and uncertainties relating to the various industries and operations we are currently engaged in; | |
| ● | results of initial feasibility, pre-feasibility and feasibility studies, and the possibility that future growth, development or expansion will not be consistent with our expectations; | |
| ● | risks related to the inherent uncertainty of business operations including profit, cost of goods, production costs and cost estimates and the potential for unexpected costs and expenses; | |
| ● | risks related to commodity price fluctuations; | |
| ● | the uncertainty of profitability based upon our history of losses; | |
| ● | risks related to failure to obtain adequate financing on a timely basis and on acceptable terms for our planned development projects; | |
| ● | risks related to environmental regulation and liability; | |
| ● | risks related to tax assessments; | |
| ● | other risks and uncertainties related to our prospects, properties and business strategy. |
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. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this report. Except as required by law, we do not undertake to update or revise any of the forward-looking statements to conform these statements to actual results, whether as a result of new information, future events or otherwise.
As used in this quarterly report, “Trafalgar,” the “Company,” “we,” “us,” or “our” refer to Trafalgar International, Inc., f/k/a The Greater Cannabis Company, Inc., unless otherwise indicated.
| 3 |
TRAFALGAR INTERNATIONAL, INC.
JUNE 30, 2026
FORM 10-Q
INDEX
| F-1 |
PART I- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
TRAFALGAR INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
June 30, 2026 (unaudited) and December 31, 2025
| June 30, 2026 | December 31, 2025 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash | $ | $ | ||||||
| Total current assets | ||||||||
| OTHER ASSETS | ||||||||
| Right of first refusal agreement cost (less accumulated amortization of $ | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIENCY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued officers’ compensation | ||||||||
| Loans payable to related parties | ||||||||
| Total current liabilities and total liabilities | ||||||||
| STOCKHOLDERS’ (DEFICIENCY) | ||||||||
| Preferred stock; shares authorized, $ par value: Series A Convertible Preferred- and shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively | ||||||||
| Series B Convertible Preferred shares: shares authorized, $ par value: shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively | ||||||||
| ; shares authorized, $ par value, as of June 30, 2026 and December 31, 2025, there are and shares outstanding, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ (deficiency) | ( | ) | ( | ) | ||||
| Total liabilities and stockholders’ (deficiency) | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-2 |
TRAFALGAR INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended June 30, 2026 and 2025 (Unaudited)
| June 30, 2026 | June 30, 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Revenue: | ||||||||
| Product sales | $ | $ | ||||||
| Consulting fees | ||||||||
| Total revenue | ||||||||
| Cost of product sales | ||||||||
| Gross profit (loss) | ||||||||
| Operating Expenses: | ||||||||
| Officers compensation | ||||||||
| Stock-based compensation | ||||||||
| Other operating expenses | ||||||||
| Total operating expenses | ||||||||
| Income (loss) from operations | ( | ) | ( | ) | ||||
| Other income (expenses): | ||||||||
| Gain on cancellation of debt | ||||||||
| Gain on cancellation of preferred stock A | ||||||||
| Interest expense | ( | ) | ||||||
| Note default penalties and interest | ( | ) | ||||||
| Loss on conversion of notes payable | ( | ) | ||||||
| Total other income (expenses) | ( | ) | ||||||
| Income (loss) before provision for income taxes | ( | ) | ||||||
| Provision for income taxes | ||||||||
| Net income (loss) | $ | $ | ( | ) | ||||
| Basic and diluted income (loss) per common share | $ | $ | ) | |||||
| Weighted average common shares outstanding-basic and diluted | ||||||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-3 |
TRAFALGAR INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Six Months Ended June 30, 2026 and 2025 (Unaudited)
| June 30, 2026 | June 30, 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Revenue: | ||||||||
| Product sales | $ | $ | ||||||
| Consulting fees | ||||||||
| Total revenue | ||||||||
| Cost of product sales | ||||||||
| Gross profit (loss) | ||||||||
| Operating Expenses: | ||||||||
| Officers compensation | ||||||||
| Stock-based compensation | ||||||||
| Amortization of Right of First Refusal Agreement cost | ||||||||
| Other operating expenses | ||||||||
| Total operating expenses | ||||||||
| Income (loss) from operations | ( | ) | ( | ) | ||||
| Other income (expenses): | ||||||||
| Gain on cancellation of debt | ||||||||
| Gain on cancellation of preferred stock A | ||||||||
| Interest expense | ( | ) | ||||||
| Note default penalties and interest | ( | ) | ||||||
| Loss on conversion of notes payable | ( | ) | ||||||
| Total other income (expenses) | ( | ) | ||||||
| Income (loss) before provision for income taxes | ( | ) | ||||||
| Provision for income taxes | ||||||||
| Net income (loss) | $ | $ | ( | ) | ||||
| Basic and diluted income (loss) per common share | $ | $ | ) | |||||
| Weighted average common shares outstanding-basic and diluted | ||||||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-4 |
TRAFALGAR INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIENCY
For the Three and Six Months Ended June 30, 2026 and 2025
Unaudited
Series A Preferred | Additional | |||||||||||||||||||||||||||
| stock | Common Stock | Paid in | Accumulated | |||||||||||||||||||||||||
| For the six months ended | Shares | Amount | Shares | Amount | Capital | Deficit | Total | |||||||||||||||||||||
| June 30, 2025: | ||||||||||||||||||||||||||||
| Balances at December 31, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Issuance of common stock for notes payable conversion | ( | ) | ||||||||||||||||||||||||||
| Issuance of common stock for compensation | ( | ) | ||||||||||||||||||||||||||
| Net loss for the three months ended March 31, 2025 RESTATED-Note-K | ( | ) | ( | ) | ||||||||||||||||||||||||
| Balances at March 31, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Issuance of common stock for notes payable conversion | ( | ) | ||||||||||||||||||||||||||
| Issuance of common stock for accrued compensation | ( | ) | ||||||||||||||||||||||||||
| Net loss for the three months ended June 30, 2025 | ( | ) | ( | ) | ||||||||||||||||||||||||
| Balances at June 30, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
The accompanying notes are an integral part of these financial statements.
| F-5 |
TRAFALGAR INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIENCY
Three and Six Months Ended June 30, 2026 and 2025 (Unaudited)
Series A Preferred Stock | Series B Preferred Stock | Common stock | Additional | Total | ||||||||||||||||||||||||||||||||
| No. of shares | Amount | No. of shares | Amount | No. of shares | Amount | Paid in capital | Retained earnings | shareholders’ equity | ||||||||||||||||||||||||||||
| Balance as of December 31, 2025, | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||
| Net loss for the three months ended March 31, 2026 | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Balance as of March 31, 2026 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||
| Cancellation of preferred stock A | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Issuance of preferred stock A | ||||||||||||||||||||||||||||||||||||
| Issuance of common stock for | ||||||||||||||||||||||||||||||||||||
| accrued compensation | ||||||||||||||||||||||||||||||||||||
| Net income for the three months ended June 30, 2026 | - | - | - | |||||||||||||||||||||||||||||||||
| Balance as of June 30, 2026 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||
The accompanying notes are an integral part of these financial statement
| F-6 |
TRAFALGAR INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended June 30, 2026 and 2025 (Unaudited)
| June 30, 2026 | June 30, 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| OPERATING ACTIVITIES | ||||||||
| Net income (loss) | $ | $ | ( | ) | ||||
| Adjustments to reconcile net income (loss) to net cash provided (used) in operating activities: | ||||||||
| Amortization of Right of First Refusal Agreement cost | ||||||||
| Issuance of common stock for compensation | ||||||||
| Issuance of common stock for accrued compensation | ||||||||
| Loss on conversion of notes | ||||||||
| Note default penalties and interest | ||||||||
| Gain on cancellation of debt | ( | ) | ||||||
| Gain on cancellation of preferred stock A | ( | ) | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts payable | ( | ) | ||||||
| Accrued interest | ||||||||
| Accrued officers’ compensation | ( | ) | ||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| INVESTING ACTIVITIES | ||||||||
| Net cash used in investing activities | ||||||||
| FINANCING ACTIVITIES | ||||||||
| Proceeds from notes payable to related party | ||||||||
| Net cash provided by financing activities | ||||||||
| NET (DECREASE) IN CASH | ( | ) | ( | ) | ||||
| CASH BALANCE, BEGINNING OF PERIOD | ||||||||
| CASH BALANCE, END OF PERIOD | $ | $ | ||||||
| Supplemental Disclosures of Cash Flow Information: | ||||||||
| Interest paid | $ | $ | ||||||
| Income tax paid | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements
| F-7 |
TRAFALGAR INTERNATIONAL, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Six Months Ended June 30, 2026 and 2025
(Unaudited)
NOTE A – NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations
Trafalgar International, Inc., f/k/a The Greater Cannabis Company, Inc. (the “Company”) was formed in March 2014 as a limited liability company under the name, The Greater Cannabis Company, LLC. The Company was a wholly owned subsidiary of Sylios Corp (“Sylios”) until March 10, 2017.
On
July 31, 2018, the Company acquired
Green C was incorporated on December 21, 2017 under the laws of the Province of Ontario Canada with its principal place of business in North York, Ontario.
Green C was the owner of an exclusive, worldwide license for an eluting transmucosal patch platform (“ETP”) for non-invasive drug delivery in the cannabis field as further described in the exclusive license agreement dated June 21, 2018 with Pharmedica Ltd. (see Note J).
After the consummation of the above-described transactions, the Company switched its business model in fiscal 2018 and no longer intended to pursue E-commerce, advertising, licensing (except as specified below) or direct investment operations to the development and commercialization of innovative cannabinoid therapeutic delivery systems.
From July 2018 through mid-2021, the Company focused on commercializing its own and licensed technologies worldwide for transmucosal and transdermal delivery of legal medical or recreational cannabis (other than in the field of oral care) and cannabinoids. The Company’s initial product was an oral transmucosal patch platform which for provides for loaded actives to be absorbed by the buccal mucosa into the body. Although the Company was able to launch the product and received some limited initial orders, the Company’s management ultimately elected to pursue other opportunities which they believed offered the Company greater potential for growth and ultimate profitability.
Accordingly, on October 19, 2021 the Company entered into a license agreement with Shaare Zedek Scientific Ltd. (“SZS”), the technology transfer arm of Jerusalem’s Shaare Zedek Medical Center (SZMC). The license agreement covers the license of SZS’s novel cannabinoid therapeutic focused on treatment of autism, schizophrenia, Parkinson’s disease, Alzheimer’s disease and other neuropsychiatric disorders.
Accompanying the license agreement is a joint research and development agreement, which will focus on continuing the clinical program spearheaded by Dr. Adi Aran, M.D. Director of Pediatric Neurology at SZMC, Board Member of the Israeli Society for Pediatric Neurology, and co-inventor of the novel cannabinoid therapy.
| F-8 |
TRAFALGAR INTERNATIONAL, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Six Months Ended June 30, 2026 and 2025
(Unaudited)
NOTE A – NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
The
licensing agreement requires the Company to pay $
Reverse
Stock Split and Series B Preferred Shares: The Company filed an amendment to its Certificate of Incorporation with the Secretary
of State of Florida to effectuate a
This
Information Statement (the “Information Statement”) has been filed with the Securities and Exchange Commission and
is being furnished, pursuant to Section 14C of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
to the holders of common stock, par value $ per share (the “Common Stock”), of The Greater Cannabis Company, Inc.,
a Florida corporation (the “Company”), to notify shareholders that on or about April 4, 2025, the Company received
written consents in lieu of a meeting from (a) the sole director of the Company; and (b) holders of shares of voting stock of the Company
representing approximately
| ● | to effectuate a reverse stock split of the Company’s issued outstanding shares of common stock in a ratio of one-for-1,500; and | |
| ● | create a new class of shares of preferred stock, $ per share, designated as Series B Convertible Preferred Stock |
The reverse stock split became effective upon the filing of an amendment to the Company’s Articles of Incorporation with the Florida Secretary of State, a copy of which is included as Exhibit 33.1 in this Quarterly Report (the “Reverse Stock Split Amendment”). The amendment creating the Series B Preferred Shares was subsequently filed with the Florida Secretary of State following the filing of the Reverse Stock Split Amendment.
Also on June 29, 2026, the Company entered into certain Debt Cancellation and Release Agreements with certain creditors of the Company pursuant to which certain outstanding indebtedness of the Company was compromised, settled, canceled, released, and extinguished. Copies of such Debt Cancellation and Release Agreements are filed as Exhibits 10.3 and 10.4 to this Current Report and incorporated herein by reference. The material terms of such transactions are set forth in such agreements. Porfirio Sanchez Talavera was appointed as Chief Executive Officer, Chairman of the Board, and a member of the Board of Directors of the Company. Aitan Zacharin resigned from all officer positions effective immediately upon such appointment and agreed to remain as a member of the Board of Directors solely until the expiration of the ten (10) day period required under Rule 14f-1. Upon expiration of such period, Mr. Zacharin’s resignation as a director will become effective and Mr. Sanchez Talavera will remain as the sole director of the Company.
Principles of Consolidation
The consolidated financial statements include the accounts of Trafalgar International, Inc., and its wholly owned subsidiary Biocanrx, Inc. All intercompany balances and transactions have been eliminated in consolidation.
| F-9 |
TRAFALGAR INTERNATIONAL, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Six Months Ended June 30, 2026 and 2025
(Unaudited)
NOTE A – NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Interim Financial Statements
The interim financial statements as of June 30, 2026 are unaudited and have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. These statements reflect all normal and recurring adjustments that, in the opinion of management, are necessary for a fair presentation of the information contained herein. Operating results for the six months ended June 30, 2026 are not necessarily indicative of results that may be expected for the year ending December 31, 2026.
Certain information and finance disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the Securities and Exchange Commission’s rules and regulations. These unaudited financial statements should be read in conjunction with our audited financial statements and notes for the year ended December 31, 2025 as included in our report on Form 10-K.
Cash and Cash Equivalents
Investments
having an original maturity of 90 days or less that are readily convertible into cash are considered to be cash equivalents. For the
periods presented, the Company had
Notes and Accounts Receivable
The Company maintains an allowance for doubtful accounts for estimated losses from the failure of its customers to make required payments for products and other consideration delivered. The Company estimates this allowance based on the age of the related receivable, knowledge of the financial condition of customers, review of historical receivables and reserve trends and other pertinent information. If the financial condition of customers deteriorates or an unfavorable trend in receivable collections is experienced in the future, additional allowances may be required. Historically, the Company’s reserves have approximated actual experience.
Income Taxes
In accordance with Accounting Standards Codification (ASC) 740 - Income Taxes, the provision for income taxes is computed using the asset and liability method. The asset and liability method measures deferred income taxes by applying enacted statutory rates in effect at the balance sheet date to the differences between the tax basis of assets and liabilities and their reported amounts on the financial statements. The resulting deferred tax assets or liabilities are adjusted to reflect changes in tax laws as they occur. A valuation allowance is provided when it is more likely than not that a deferred tax asset will not be realized.
We
expect to recognize the financial statement benefit of an uncertain tax position only after considering the probability that a tax authority
would sustain the position in an examination. For tax positions meeting a “more-likely-than-not” threshold, the amount to
be recognized in the financial statements will be the benefit expected to be realized upon settlement with the tax authority. For tax
positions not meeting the threshold, no financial statement benefit is recognized. As of June 30, 2026, we had
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 disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates.
Financial Instruments and Fair Value of Financial Instruments
We follow ASC Topic 820, Fair Value Measurements and Disclosures, for assets and liabilities measured at fair value on a recurring basis. ASC Topic 820 establishes a common definition for fair value to be applied to existing US GAAP that requires the use of fair value measurements that establishes a framework for measuring fair value and expands disclosure about such fair value measurements.
ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC Topic 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:
| F-10 |
TRAFALGAR INTERNATIONAL, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Six Months Ended June 30, 2026 and 2025
(Unaudited)
NOTE A – NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
| Level 1: | Observable inputs such as quoted market prices in active markets for identical assets or liabilities | |
| Level 2: | Observable market-based inputs or unobservable inputs that are corroborated by market data | |
| Level 3: | Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions. |
The carrying value of financial assets and liabilities recorded at fair value is measured on a recurring or nonrecurring basis. Financial assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared. Financial assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when a significant event occurs. Except for derivative liabilities, we had no financial assets or liabilities carried and measured on a recurring or nonrecurring basis during the reporting periods.
Derivative Liabilities
We evaluate convertible notes payable, stock options, stock warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under the relevant sections of ASC Topic 815-40, Derivative Instruments and Hedging: Contracts in Entity’s Own Equity.
The result of this accounting treatment could be that the fair value of a financial instrument is classified as a derivative instrument and is marked-to-market at each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operations as other income or other expense. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. Financial instruments that are initially classified as equity that become subject to reclassification under ASC Topic 815-40 are reclassified to a liability account at the fair value of the instrument on the reclassification date.
Long-lived Assets
Long-lived assets such as property and equipment and intangible assets are periodically reviewed for impairment. We test for impairment losses on long-lived assets used in operations whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability of an asset to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the asset. If such asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. Impairment evaluations involve management’s estimates on asset useful lives and future cash flows. Actual useful lives and cash flows could be different from those estimated by management which could have a material effect on our reporting results and financial positions. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary.
| F-11 |
TRAFALGAR INTERNATIONAL, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Six Months Ended June 30, 2026 and 2025
(Unaudited)
NOTE A – NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Equity Instruments Issued to Non-Employees for Acquiring Goods or Services
Issuances of our common stock or warrants for acquiring goods or services are measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The measurement date for the fair value of the equity instruments issued to consultants or vendors is determined at the earlier of (i) the date at which a commitment for performance to earn the equity instruments is reached (a “performance commitment” which would include a penalty considered to be of a magnitude that is a sufficiently large disincentive for nonperformance) or (ii) the date at which performance is complete.
Although situations may arise in which counter performance may be required over a period of time, the equity award granted to the party performing the service may be fully vested and non-forfeitable on the date of the agreement. As a result, in this situation in which vesting periods do not exist if the instruments are fully vested on the date of agreement, we determine such date to be the measurement date and will record the estimated fair market value of the instruments granted as a prepaid expense and amortize such amount to expense over the contract period. When it is appropriate for us to recognize the cost of a transaction during financial reporting periods prior to the measurement date, for purposes of recognition of costs during those periods, the equity instrument is measured at the then-current fair values.
Related Parties
A party is considered to be related to us if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with us. Related parties also include our principal owners, our management, members of the immediate families of our principal owners and our management and other parties with which we may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties, or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests, is also a related party.
| F-12 |
TRAFALGAR INTERNATIONAL, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Six Months Ended June 30, 2026 and 2025
(Unaudited)
NOTE A – NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Revenue Recognition
Revenue recognition:
The Company adopted Accounting Standards Codification Topic 606, “Revenue from Contracts with Customers” (“ASC 606”) on January 1, 2018. In accordance with ASC 606, revenue is recognized when promised goods or services are transferred to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services, in accordance with the following five-step process:
| ● | Identify the contract(s) with a customer | |
| ● | Identify the performance obligations | |
| ● | Determine the transaction price | |
| ● | Allocate the transaction price | |
| ● | Recognize revenue when the performance obligations are met |
The Company recognizes revenue from the sale of products when its performance obligation, consisting of the delivery of the purchased goods to the customer, has been satisfied and the customer takes possession. The Company had no revenue during the periods presented.
Advertising Costs
Advertising costs are expensed as incurred. For the periods presented, we had no advertising costs.
Basic net income (loss) per common share is computed by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per common share is computed using the weighted average number of common shares outstanding during the period, adjusted for the effect of potentially dilutive securities, including convertible preferred stock, stock options, warrants and other convertible securities, when their inclusion would be dilutive. Potential common shares are excluded from the calculation of diluted net income (loss) per common share when their effect would be anti-dilutive.
For the periods presented, shares issuable upon conversion of the Company’s Series A Convertible Preferred Stock were excluded from the calculation of diluted net income (loss) per common share because the effect of their inclusion would be anti-dilutive. As of June 30, 2026, the Company had no outstanding convertible notes payable to third parties (see Note E – Notes Payable to Third Parties) and no outstanding warrants (see Note G – Capital Stock and Warrants).
| F-13 |
TRAFALGAR INTERNATIONAL, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Six Months Ended June 30, 2026 and 2025
(Unaudited)
NOTE A – NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Recently Enacted Accounting Standards
In August 2020, the FASB issued ASU 2020-06, “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40)”. This ASU reduces the number of accounting models for convertible debt instruments and convertible preferred stock. As well as amend the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. In addition, this ASU improves and amends the related EPS guidance. This standard is effective for us on July 1, 2024, including interim periods within those fiscal years. Adoption is either a modified retrospective method or a fully retrospective method of transition. We are currently evaluating the impact of the adoption of ASU 2020-06 on our financial statements.
In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). Financial Instruments—Credit Losses (Topic 326) amends guideline on reporting credit losses for assets held at amortized cost basis and available-for-sale debt securities. For assets held at amortized cost basis, Topic 326 eliminates the probable initial recognition threshold in current GAAP and, instead, requires an entity to reflect its current estimate of all expected credit losses. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected. For available-for-sale debt securities, credit losses should be measured in a manner similar to current GAAP, however Topic 326 will require that credit losses be presented as an allowance rather than as a write-down. ASU 2016-13 affects entities holding financial assets and net investment in leases that are not accounted for at fair value through net income. The amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. The amendments in this ASU will be effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. We are currently evaluating the impact of the adoption of ASU 2016-13 on our financial statements.
Other standards not presented are not deemed to be material.
| F-14 |
TRAFALGAR INTERNATIONAL, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Six Months Ended June 30, 2026 and 2025
(Unaudited)
NOTE B - GOING CONCERN
Under ASC 205-40, we have the responsibility to evaluate whether conditions and/or events raise substantial doubt about our ability to meet our future obligations as they become due within one year after the date the financial statements are issued. As required by this standard, our evaluation shall initially not take into consideration the potential mitigating effects of our plans that have not been fully implemented as of the date the financial statements are issued.
In
performing the first step of this assessment, we concluded that the following conditions raise substantial doubt about our ability to
meet our financial obligations as they become due. As of June 30, 2026, the Company had cash of $
In performing the second step of this assessment, we are required to evaluate whether our plans to mitigate the conditions above alleviate the substantial doubt about our ability to meet our obligations as they become due within one year after the date that the financial statements are issued. Our future plans include securing additional funding sources.
There is no assurance that sufficient funds required during the next year or thereafter will be generated from operations or that funds will be available through external sources. The lack of additional capital resulting from the inability to generate cash flow from operations or to raise capital from external sources would force the Company to substantially curtail or cease operations and would, therefore, have a material effect on the business. Furthermore, there can be no assurance that any such required funds, if available, will be available on attractive terms or that they will not have a significant dilutive effect on the Company’s existing shareholders. We have therefore concluded there is substantial doubt about our ability to continue as a going concern through June 2027.
The accompanying consolidated financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The accompanying consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of the uncertainty related to our ability to continue as a going concern.
| F-15 |
TRAFALGAR INTERNATIONAL, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Six Months Ended June 30, 2026 and 2025
(Unaudited)
NOTE C – RIGHT OF FIRST REFUSAL AGREEMENT
On
January 30, 2020, the Company executed a Right of First Refusal Agreement with an entity engaged in the business of cosmetics, health,
and well-being. The Agreement provided for the Company to pay Kol Tuv Ventures, LLC (“KTV”), $
NOTE D - LOANS PAYABLE TO RELATED PARTIES
Loans payable to related parties consist of:
| June 30, 2026 | December 31, 2025 | |||||||
| Loans from Elisha Kalfa and Yonah Kalfa, holders of a total of shares of Series A Convertible Preferred stock | $ | $ | ||||||
| Loan from Aitan Zacharin,CEO | ||||||||
| Loan from Fernando Bisker and Sigalush, LLC, holders of a total of shares of Series A Convertible Preferred stock | ||||||||
| Total | $ | $ | ||||||
Pursuant
to loan and contribution agreements dated July 31, 2018, the above loans are non-interest bearing and are to be repaid after the Company
raises from investors no less than $
| F-16 |
TRAFALGAR INTERNATIONAL, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Six Months Ended June 30, 2026 and 2025
(Unaudited)
NOTE E - NOTES PAYABLE TO THIRD PARTIES
Notes payable to third parties consist of:
June 30, 2026 | December 31, 2025 | |||||||
| Promissory Note dated March 28, 2017 payable to John T. Root, Jr., interest at | $ | $ | ||||||
| Convertible Promissory Note dated March 15, 2021 payable to FirstFire Global Opportunities Fund, LLC (“FF”), interest at | ||||||||
| Total | $ | $ | ||||||
| (i) |
On
June 1, 2022, the Company issued shares for the conversion of $
During
the three months ended September 30, 2022, the Company issued shares for the conversion of $
During
the three months ended December 31, 2022, the Company issued shares for the conversion of $
During
the three months ended March 31, 2025, the Company issued shares for the conversion of $
During
the three months ended June 30, 2025, the Company issued shares for the conversion of $
The FF Note may be pre-paid in whole or in part by paying FF the following premiums:
| PREPAY DATE | PREPAY AMOUNT | |
| ≤ 30 days | ||
| 31- 60 days | ||
| 61-90 days | ||
| 91-120 days | ||
| 121-150 days | ||
| 151-180 days |
| F-17 |
TRAFALGAR INTERNATIONAL, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Six Months Ended June 30, 2026 and 2025
(Unaudited)
NOTE E - NOTES PAYABLE TO THIRD PARTIES (continued)
Any
amount of principal or interest on the FF Note, which is not paid when due shall bear interest at the rate of twenty-four (24%) per annum
from the due date thereof until the same is paid (“Default Interest”). FF has the right beginning on the date which is the
earlier of
On June 12, 2025, the Company and FirstFire agreed to amend and modify the note as follows:
The
Parties agree and acknowledge that as of the date hereof, the amount under due under the Note is $
The
Company completed the
Copies of Warrant A, Warrant B and Warrant C are attached as Exhibits 10.4, 10.5 and 10.6 to our current report on Form 8-K dated March 16, 2021.
The
valuation of the above warrants issued and recorded during the three months ended June 30, 2021 was $
See NOTE -A -Nature of Operations (Debt Cancellation and Release Agreement)
NOTE F - DERIVATIVE LIABILITY
The derivative liability consists of:
June 30, 2026 | December 31, 2025 | |||||||
| Convertible Promissory Note dated March 15, 2021 and June 30, 2021
payable to FirstFire Global Opportunities Fund, LLC, See Note E (i) Due | $ | $ | ||||||
| Total derivative liability | $ | $ |
The Convertible Promissory Notes (the “Notes”) contain a variable conversion feature based on the future trading price of the Company’s common stock. Therefore, the number of shares of common stock issuable upon conversion of the Notes is indeterminate.
The
fair value of the derivative liability is measured at the respective issuance dates and quarterly thereafter using the Black Scholes
option pricing model. Assumptions used for the calculation of the derivative liability of the Notes at December 31, 2020 were (1) stock
price of $ per share, (2) conversion price of $ per share, (3) term of
(i)As discussed in Note A above, warrants with “down round” features (and do not contain variable conversion features) are not subject to derivative liability treatment effective January 1, 2019.
| F-18 |
TRAFALGAR INTERNATIONAL, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Six Months Ended June 30, 2026 and 2025
(Unaudited)
NOTE G - CAPITAL STOCK AND WARRANTS
Preferred Stock
On
July 31, 2018, The Greater Cannabis Company, Inc. (the “Company”) acquired
On
February 14, 2019, the Company issued shares of Series B Convertible Preferred Stock to Emet Capital Partners, LLC (“Emet”)
in exchange for the surrender of all outstanding warrants held by Emet.
On September 21, 2021, shares of Series A Preferred Shares were converted into shares of common stock.
Designation of Series B Convertible Preferred Stock
On October 22, 2025, the Company filed Articles of Amendment to its Articles of Incorporation with the Secretary of State of Florida creating a new class of shares of preferred stock, par value $ per share, designated as Series B Convertible Preferred Stock (the “Series B Preferred Shares”).
On
October 22, 2025, the Company issued all Series B Preferred Shares to Aitan Zacharin, then the Company’s Chief Executive
Officer and sole director, in consideration of his waiver of $
The Series B Preferred Shares have the following rights, features, privileges and limitations (in pertinent part):
| F-19 |
TRAFALGAR INTERNATIONAL, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Six Months Ended June 30, 2026 and 2025
(Unaudited)
NOTE G - CAPITAL STOCK AND WARRANTS (continued)
Voting
Rights. The Series B Preferred Shares vote together with shares of our common stock and our Series A Preferred Shares as a single
class on all matters presented to a vote of holders of our capital stock, except as required by law. The Series B Preferred Shares entitle
the holder thereof to
Dividends. The Series B Preferred Shares do not have dividend rights.
Liquidation, Dissolution, or Winding Up. Series B Preferred Shares will be entitled to a preference of $ per share to shares of our common stock and Series B Preferred Shares in the event of a liquidation, dissolution or winding up of the Company.
Conversion Rate and Adjustments.
Conversion Rate. The Conversion Rate shall be shares of common stock (as adjusted as provided for below) for each Series B Preferred Share.
Adjustment for Stock Splits and Combinations. If the Company shall at any time or from time to time after the issuance of the Series B Preferred Shares effect a subdivision of the outstanding common stock, the Conversion Rate then in effect immediately before that subdivision shall be proportionately increased. If the Company shall at any time or from time to time after the issuance of the Series B Preferred Shares combine the outstanding shares of common stock, the conversion rate then in effect immediately before the combination shall be proportionately decreased. Any adjustment under this paragraph shall become effective at the close of business on the date the subdivision or combination becomes effective.
Adjustment for Merger or Reorganization, etc. If there shall occur any reorganization, recapitalization, reclassification, consolidation, or merger involving the Company in which the common stock (but not the Series B Preferred Shares) is converted into or exchanged for securities, cash, or other property, then, following any such reorganization, recapitalization, reclassification, consolidation, or merger, each Series B Preferred Share shall thereafter be convertible in lieu of the common stock into which it was convertible prior to such event into the kind and amount of securities, cash or other property that a holder of the number of shares of common stock of the Company issuable upon conversion of one Series B Preferred Share immediately prior to such reorganization, recapitalization, reclassification, consolidation, or merger would have been entitled to receive pursuant to such transaction.
Conversion.
(a) Series B Preferred Shares are convertible into common stock at the option of the holder in whole or in part at any time at the conversion rate then in effect.
(b) If so required by the Company, certificates surrendered for conversion shall be endorsed or accompanied by written instrument or instruments of transfer, in form satisfactory to the Company, duly executed by the registered holder or by his, her, or its attorney duly authorized in writing. As soon as practicable after a conversion and the surrender of the certificate or certificates for Series B Preferred Shares, the Company shall cause to be issued and delivered to such holder, or on his, her, or its written order, a certificate or certificates for the number of full shares of common stock issuable on such conversion and cash b) in respect of any fraction of a share of common stock otherwise issuable upon such conversion.
(c) All certificates or other form of ownership evidencing shares of Series Preferred Shares (if any) that are required to be surrendered for conversion in accordance with the provisions hereof shall, from and after the date on which such preferred shares were converted, be deemed to have been retired and canceled and the shares of Series B Preferred Shares represented thereby converted into common stock for all purposes, notwithstanding the failure of the holder or holders thereof to surrender such certificates or other form of ownership on or prior to such date. Such converted Series B Preferred Shares may not be reissued as shares of such Series, and the Company may thereafter take such appropriate action (without the need for shareholder action) as may be necessary to reduce the authorized number of Series B Preferred Shares accordingly.
| F-20 |
TRAFALGAR INTERNATIONAL, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Six Months Ended June 30, 2026 and 2025
(Unaudited)
NOTE G - CAPITAL STOCK AND WARRANTS (continued)
Common Stock
Effective
March 10, 2017, in connection with a partial spin-off of the Company from Sylios Corp, the Company issued a total of shares
of its common stock. shares were issued to Sylios Corp (representing
On
January 4, 2019, the Company issued shares of its common stock pursuant to a conversion of $
On
January 4, 2019, the Company issued shares of its common stock pursuant to an exercise of the equivalent of
On
April 16, 2019, the Company issued shares of its common stock pursuant to conversions of $
On May 29, 2019, the Company issued a total of shares of its common stock to two consulting firm entities for certain specified investor relations and advisory services. The $ fair value of the shares was charged to Other Operating Expenses in the three months ended June 30, 2019.
| F-21 |
TRAFALGAR INTERNATIONAL, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Six Months Ended June 30, 2026 and 2025
(Unaudited)
NOTE G - CAPITAL STOCK AND WARRANTS (continued)
On
August 15, 2019, the Company issued shares of its common stock to an entity consultant for accounting services rendered. The
$
On
October 18, 2019, the Company entered into two Exchange Agreements with Emet Capital Partners, LLC (“Emet”). The first Exchange
Agreement provided for the exchange of three outstanding convertible notes payable to Emet with a total remaining principal balance of
$
On
November 11, 2019, the Company issued shares of its common stock pursuant to a conversion of $
On
December 20, 2019, the Company issued shares of its common stock pursuant to a conversion of $
On
December 24, 2019, the Company issued shares of its common stock pursuant to a conversion of $
During
the three months ended March 31, 2020, the Company issued a total of shares of common stock pursuant to conversions of an
aggregate of $
During
the three months ended June 30, 2020, the Company issued a total of shares of common stock pursuant to conversions of an aggregate
of $
During
the three months ended September 30, 2020, the Company issued a total of shares of common stock pursuant to conversions of
an aggregate of $
During
the three months ended December 31, 2020, the Company issued a total of shares of common stock pursuant to conversions of
an aggregate of $
During
the three months ended March 31, 2021, the Company recorded the conversion of note payable ($
| F-22 |
TRAFALGAR INTERNATIONAL, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Six Months Ended June 30, 2026 and 2025
(Unaudited)
NOTE G - CAPITAL STOCK AND WARRANTS (continued)
During
the three months ended June 30, 2021, the Company recorded the value of the warrants at $
On
July 15, 2021, the Company issued shares for the conversion of $
On
June 1, 2022, the Company issued shares for the conversion of $
During
the three months ended September 30, 2022, the Company issued shares for the conversion of $
During
the three months ended December 31, 2022, the Company issued shares for the conversion of $
During
the year ended December 31, 2023, the Company issued shares for the conversion of $
During
the three months ended March 31, 2025, the Company issued shares for the conversion of $
On February 17, 2025, the Company issued shares of common stock for compensation valued at $ .
On
April 3, 2025, the Company issued shares of common stock at $
During
the three months ended June 30, 2025, the Company issued shares for the conversion of $
The
Company implemented a
The Company’s common stock will begin trading on a post-Reverse Split basis at the opening of trading on Thursday, October 16, 2025. In connection therewith, the Company’s ticker symbol will be GCAND for twenty (20) trading days to designate that it is trading on a post-Reverse Split basis. In addition, our post-Reverse Split common stock will trade under the new CUSIP Number 391657202.
Following the Reverse Split, the number of shares of the Company’s issued and outstanding Common Stock was reduced from shares to approximately shares. No fractional shares of Common Stock were issued as a result of the Reverse Split. Instead, the Company issued one whole share of post-Reverse Split Common Stock to any stockholder who otherwise would have received a fractional share as a result of the Reverse Split. The number of authorized shares of Common Stock remained unaffected, and the par value remained $ per share..
In connection with the reverse stock split, we filed Articles of Amendment to our Articles of Incorporation with the Secretary of State of Florida, a copy of which is included as Exhibit 35.1 to this Report.
On
October 22, 2025, the Company issued shares of common stock for the conversion of $
During the second quarter 2026, the Company issued shares of common stock for accrued compensation.
| F-23 |
TRAFALGAR INTERNATIONAL, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Six Months Ended June 30, 2026 and 2025
(Unaudited)
NOTE G - CAPITAL STOCK AND WARRANTS (continued)
Warrants
On
March 11, 2021, in connection with the issuance of a Convertible Promissory Note to FirstFire Global Opportunities Fund, LLC (“FF”)
(see Note E), the Company issued three warrants to FF: Warrant A to purchase
Warrant A, Warrant B and Warrant C expired by their terms on September 11, 2022. As of June 30, 2026, none of such warrants remained outstanding or exercisable, and the Company had no outstanding warrants.
NOTE H - INCOME TAXES
The Company and its United States subsidiaries file consolidated Federal income tax returns. Green C Corporation, its Ontario Canada subsidiary, files Canada and Ontario income tax returns.
At June 30, 2026 the Company has available for federal income tax purposes a net operating loss carry forward that may be used to offset future taxable income. The Company has provided a valuation reserve against the full amount of the net operating loss benefit, since in the opinion of management based upon the earnings history of the Company, it is not more likely than not that the benefits will be realized. If there are significant changes in the Company’s ownership, the future use of its existing net operating losses will be limited.
All tax years of the Company and its United States subsidiaries remain subject to examination by the Internal Revenue Service.
| F-24 |
TRAFALGAR INTERNATIONAL, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Six Months Ended June 30, 2026 and 2025
(Unaudited)
NOTE I - COMMITMENTS AND CONTINGENCIES
Pharmedica Exclusive License Agreement
On
June 21, 2018, Green C executed an Exclusive License Agreement with Pharmedica, Ltd. (“Pharmedica”), an Israeli company,
to exploit certain Pharmedica intellectual property for the development and distribution of a certain Licensed Product involved in the
transmucosal delivery of medicinal or recreational cannabis. The agreement provides for Green C payments to Pharmedica of a $
The
Company generated only minimal revenues from this asset through December 31, 2019 and did not pay the Year 1 Minimum Annual Royalty of
$
On September 2, 2020, Green C notified Pharmedica of Green C’s termination of the Exclusive License Agreement and Green C’s intention to wind up Green C.
On
September 17, 2020, Pharmedica notified Green C of Pharmedica’s acceptance of Green C’s proposal to terminate the license
agreement and Pharmedica’s intention not to burden Green C further. Accordingly, we recorded “Forgiveness of Royalty Payable”
other income of $
Sub-License Agreement with Symtomax Unipessoal Lda
On July 15, 2019, the Company executed a Sub-License Agreement with Symtomax Unipessoal Lda (“Symtomax”).
The
agreement provides for the Company’s grant to Symtomax of a non-exclusive right and sub-license to use certain Company technology
and intellectual property to develop and commercialize products for sale in Europe, the Middle East, and Africa. The agreement provides
for Symtomax payments of royalties to the Company (payable monthly) ranging from
On
May 27, 2020, the Company executed an amended and restated sub-license agreement with Symtomax (the “Amended License Agreement”).
The term of the Amended License Agreement ends the earlier of (i) August 31, 2021 and (ii) the date that Symtomax is no longer commercializing
any of the products. The term is extended for an additional year on each anniversary of the agreement for any country where the royalty
payment in respect of such country was equal to or greater than $
To date, Symtomax has not made any sales requiring the payment of royalties to the Company.
Agreements
On
July 31, 2018, the Company executed Services Agreements with its newly appointed Chief Executive Officer (the “CEO”), for
terms of five years. The Agreement provides for a monthly base salary of $
See Note-A-Nature of Operations - Change in Control.
NOTE J-RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS
The Company restated the consolidated financial statements for the three months ended March 31, 2025 (which were previously included in the Company’s Form 10-Q filed with the SEC on May 12, 2025) in order to correct the terms of the note agreement to FirstFire. (see Note-E-NOTES PAYABLE TO THIRD PARTIES)
As
restated, the default of penalties and interest was recorded as of March 31, 2025 in the amount of $
NOTE K – SUBSEQUENT EVENTS
On July 29, 2026, the Board of Directors appointed Carlos Septién as Chief Operating Officer, Michelle Cervantes Vivanco as Chief Financial Officer, and Ernesto Gómez Berjón as Chief Growth Officer. Mr. Septién, Ms. Cervantes Vivanco and Mr. Gómez Berjón were also appointed as members of the Company’s Board of Directors. Porfirio Sanchez Talavera continues to serve as the Company’s Chief Executive Officer, Chairman of the Board of Directors and a director.
Also on July 29, 2026, the Company filed Articles of Amendment with the Florida Secretary of State changing its corporate name from The Greater Cannabis Company, Inc. to Trafalgar International, Inc. The Company has submitted the related corporate action to the Financial Industry Regulatory Authority (“FINRA”) for processing. Pending completion of the FINRA corporate action, the Company’s common stock continues to trade under the symbol “GCAN.”
| F-25 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Company Overview
From July 2018 through mid-2021, Greater Cannabis focused on commercializing its own and licensed technologies worldwide for transmucosal and transdermal delivery of legal medical or recreational cannabis (other than in the field of oral care) and cannabinoids (“CBD”) (. While part of the cannabis family, CBD, which contains less than 0.3% tetrahydrocannabinol (“THC”), the psychoactive compound that produces the “high” in marijuana, is distinguished from cannabis by its use, physical appearance and lower THC concentration (cannabis generally has a THC level of 10% or more). The Company’s initial product was an oral transmucosal patch platform which for provides for loaded actives to be absorbed by the buccal mucosa into the body. Although the Company was able to launch the product and received some limited initial orders, Greater Cannabis management ultimately elected to pursue other opportunities which they believed offered the Company greater potential for growth and ultimate profitability.
Accordingly, on October 19, 2021 the Company entered into a license agreement with Shaare Zedek Scientific Ltd. (“SZS”), the technology transfer arm of Jerusalem’s Shaare Zedek Medical Center (SZMC). The license agreement covers the license of SZS’s novel cannabinoid therapeutic focused on treatment of autism, schizophrenia, Parkinson’s disease, Alzheimer’s disease and other neuropsychiatric disorders. Shaare Zedek Medical Center, founded in 1901, is one of the largest multidisciplinary research hospitals in Israel with 1,000 beds and over 850,000 patient visits a year. The SZMC Center for Research and Development has over 300 annual publications of investigator initiated studies in medical journals in addition to almost 160 clinical trials.
Accompanying the license agreement is a joint research and development agreement, which will focus on continuing the clinical program spearheaded by Dr. Adi Aran, M.D. Director of Pediatric Neurology at SZMC, Board Member of the Israeli Society for Pediatric Neurology, and co-inventor of the novel cannabinoid therapy. Dr. Aran is a world renowned expert in cannabis research and pediatric neurology and was the principal investigator of the first ever cannabis research study conducted on autistic children.
Dr. Aran’s pioneering study assessed safety, tolerability and efficacy of CBD based medical cannabis as an adjuvant therapy for refractory behavioral problems in children with ASD. The results provided very compelling evidence that medical cannabis is an effective therapy for children on the autism spectrum. Conditions in 80% of the children improved, with 62% of parents reporting substantial improvements. Half of the children had improved communication and 40% reported a decrease in anxiety. The same children had not shown improvement with conventional drug therapies. Dr. Aran and his team have now developed a novel combination therapy that is believed to be significantly more effective than the cannabis-only formulation that had been used in the aforementioned study. The Company plans to further develop this therapeutic and conduct clinical studies to further substantiate its safety and efficacy beginning in neuropsychiatric disorders.
The clinical studies of the therapeutic are expected to require an investment of up to $1,000,000 and up to two years to finalize.
Following the change in control completed on June 29, 2026, the Company commenced a transition to a broader business strategy focused on acquiring, developing and growing businesses in the financial services, technology and intellectual property sectors. The Company intends to pursue this strategy through acquisitions, direct investments, joint ventures, licensing arrangements and other strategic transactions and business development opportunities.
See Note-A-Nature of Operations - Change in Control.
| 4 |
Results of operations
The Company had no revenue during each of the three and six months ended June 30, 2026 and 2025.
Our operating expenses in the six months ended June 30, 2026 decreased to $44,929, from $91,787 for the same period of 2025. Major operating expenses include officers compensation of $30,000, amortization expense, professional fees and research and development costs.
Other income and (expenses) was $642,933 for the six months ended June 30, 2026, as compared to $(541,483) for the same quarter in 2025. The increase in income is due to the cancellation of debt in the amount of $621,450 and cancellation of preferred stock B in the amount of $21,483.
Our net income for the six months ended June 30, 2026, was $598,004 as compared to the net loss of $633,270 during the same quarter in 2025.
Liquidity and Capital Resources
We had $111 cash at June 30, 2026, compared to $815 cash at December 31, 2025.
At June 30, 2026 and December 31, 2025 we had $0 and 263,600 in loans payable to related parties.
The following table provides detailed information about our net cash flows for the six months ended June 30, 2026 and 2025.
June 30, 2026 | June 30, 2025 | |||||||
| Net cash used in operating activities | $ | (11,204 | ) | $ | (30,656 | ) | ||
| Net cash used in investing activities | - | - | ||||||
| Net cash provided by financing activities | 10,500 | - | ||||||
| Net decrease in cash | $ | (704 | ) | (30,656 | ) | |||
Critical Accounting Policies and Estimates
The SEC issued Financial Reporting Release No. 60, “Cautionary Advice Regarding Disclosure About Critical Accounting Policies” suggesting that companies provide additional disclosure and commentary on their most critical accounting policies. In Financial Reporting Release No. 60, the SEC has defined the most critical accounting policies as the ones that are most important to the portrayal of a company’s financial condition and operating results and require management to make its most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. Based on this definition, we have identified the following significant policies as critical to the understanding of our financial statements. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make a variety of estimates and assumptions that affect (i) the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and (ii) the reported amounts of revenues and expenses during the reporting periods covered by the financial statements. Our management expects to make judgments and estimates about the effect of matters that are inherently uncertain. As the number of variables and assumptions affecting the future resolution of the uncertainties increase, these judgments become even more subjective and complex. Although we believe that our estimates and assumptions are reasonable, actual results may differ significantly from these estimates. Changes in estimates and assumptions based upon actual results may have a material impact on our results.
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Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a “smaller reporting company,” we are not required to provide this information.
ITEM 4. CONTROLS AND PROCEDURES
Management is responsible for establishing and maintaining adequate internal control over financial reporting. As defined in Rules 13a-15(f) under the Exchange Act, internal control over financial reporting is a process designed by, or under the supervision of, Porfirio Sanchez Talavera, the Company’s Chief Executive Officer (principal executive, financial and accounting officer), and effected by the Company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP.
The Company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records, that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of the Company’s management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Our Chief Executive Officer Porfirio Sanchez Talavera (principal executive, financial and accounting officer) assessed the effectiveness of our internal control over financial reporting at June 30, 2026. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework (2013). Based on that assessment under those criteria, management has determined that, as of June 30, 2026, our internal controls over financial reporting was not effective for the reasons set forth in our Annual Report on Form 10-K for the year ended December 31, 2025.
As set forth in that Report the Company intends to take various remedial measures described therein as its capital resources permit.
See Note-A-Nature of Operations - Change in Control.
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Changes in Internal Controls
During the quarter ended June 30, 2026, there was no change in internal control over financial reporting that has materially affected or is reasonably likely to materially affect our internal control over financial reporting.
PART II- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 1A. RISK FACTORS
As a “smaller reporting company” as defined in Rule 12b-2 under the Exchange Act, disclosure of this Item is not required.
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 No. | Description | |
| 31.1 | Certification of Chief Executive Officer (Principal Executive, Financial and Accounting Officer) pursuant to Rule 13(a)-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended (filed herewith). | |
| 32.1 | Certification of Chief Executive Officer (Principal Executive, Financial and Accounting Officer) pursuant to 18 U.S.C. Section 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith). | |
| 101.INS | Inline XBRL Instance Document | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| TRAFALGAR INTERNATIONAL, INC. | |
| August 14, 2026 | /s/ Porfirio Sanchez-Talavera |
| Chief Executive Officer | |
| (Principal executive, financial and accounting officer). |
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