Global AI, Inc 10-Q for FY2026 Q2
Global AI, Inc. (GLAI)
About this 10-Q
Global AI, Inc filed this 10-Q on August 13, 2026, covering the quarter ended June 30, 2026 (FY2026 Q2).
Headline figures
Quarter ended June 30, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $115.72K
- up 37.2% from $84.33K a year earlier
- Net loss
- $817.36K
- compared with a net loss of $503.48K a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Mark One)
| 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
(Exact name of registrant as specified in its charter)
(State or other jurisdiction Of incorporation or organization) |
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(Address of principal executive offices, including zip code)
(Registrant’s telephone number, including area code)
Securities Registered pursuant to Section 12(b) of the Act: None
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| N/A | 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 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 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, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “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 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). Yes ☐ No
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
| Class of Common Stock | Shares Outstanding at August 13, 2026 | |
| Class A common stock, $ par value | ||
| Class B common stock, $ par value |
TABLE OF CONTENTS
| i |
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws, which statements involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “can,” “would,” “intend,” “target,” “goal,” “outlook,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential,” “future,” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans, or intentions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:
| ● | our expectations regarding financial performance and liquidity, including but not limited to our expectations regarding revenue, cost of revenue, operating expenses, stock-based compensation, our ability to achieve and maintain future profitability, and cash flows; | |
| ● | our ability to successfully execute our business and growth strategy; | |
| ● | the sufficiency of our available funds to meet our liquidity needs; | |
| ● | our ability to increase our number of customers and revenue generated from customers; | |
| ● | our expectations regarding the future contribution margin of our existing and future customers; | |
| ● | our ability to compete with existing and new competitors in existing and new markets and products; | |
| ● | our expectations regarding litigation and legal and regulatory matters; | |
| ● | our expectations regarding our ability to meet existing performance obligations and maintain the operability of our products; | |
| ● | our expectations regarding the effects of existing and developing laws and regulations, including with respect to taxation, privacy, data protection, cybersecurity, and artificial intelligence (“AI”); | |
| ● | our expectations regarding new and evolving markets, such as AI; | |
| ● | our ability to develop and protect our brand; | |
| ● | our expectations and management of future growth; | |
| ● | our expectations concerning relationships with third parties, including our customers, partners, and vendors; | |
| ● | our expectations regarding our investments in, and enterprise agreements with, various entities, including special purpose acquisition companies and/or other privately-held or publicly-traded entities; | |
| ● | our ability to maintain, protect, and enhance our intellectual property; | |
| ● | our expectations regarding macroeconomic conditions, including global political and economic uncertainty, heightened interest rates, or monetary policy changes; | |
| ● | the impacts of catastrophic events, including natural disasters, global pandemics, geopolitical tensions, terrorism, or other events beyond our control, on our and our customers’, vendors’, and partners’ respective businesses and the markets in which we and our customers, vendors, and partners operate; | |
| ● | the impacts of the volatility and fluctuations in currency exchange rates, including an increase in the strength of the United States (“U.S.”) dollar, on the costs of our products outside of the U.S. and on customer demand; and | |
| ● | the increased expenses associated with being a public company. |
We caution you that the foregoing list may not contain all of the forward-looking statements made in this Quarterly Report on Form 10-Q.
You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations, and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on any forward-looking statements contained in this Quarterly Report on Form 10-Q. We cannot assure you that the results, events, and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events, or circumstances could differ materially from those described in such forward-looking statements.
Neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. Moreover, the forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, restructurings, joint ventures, partnerships, channel sales relationships, or investments we may make.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements
| ii |
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
GLOBAL AI, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| ASSETS: | ||||||||
| Current Assets: | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable | ||||||||
| Prepaid expenses | ||||||||
| Total current assets | ||||||||
| Long-term deposit | ||||||||
| Property and equipment, net | ||||||||
| Capitalized research and development costs, net | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Advance payable – related party | ||||||||
| Deferred revenue | ||||||||
| Accrued expenses | ||||||||
| Current Tax Liabilities | ||||||||
| Total current liabilities | ||||||||
| TOTAL LIABILITIES | ||||||||
| STOCKHOLDERS’ DEFICIT: | ||||||||
| Class A common stock, $ par value; shares authorized; issued and outstanding as of June 30, 2026, and December 31, 2025, respectively | ||||||||
| Class B common stock, $ par value; shares authorized; issued and outstanding as of June 30, 2026 and December 31, 2025, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| TOTAL STOCKHOLDERS’ DEFICIT | ( | ) | ( | ) | ||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
| 1 |
GLOBAL AI, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| June 30, 2026 | June 30, 2025 | June 30, 2026 | June 30, 2025 | |||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, 2026 | June 30, 2025 | June 30, 2026 | June 30, 2025 | |||||||||||||
| Revenues: | ||||||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||
| Cost of revenues (exclusive of amortization shown separately below) | ||||||||||||||||
| Gross margin (exclusive of amortization shown separately below) | ||||||||||||||||
| Operating expenses: | ||||||||||||||||
| Amortization of capitalized research and development costs | ||||||||||||||||
| General and administrative expenses | ||||||||||||||||
| Research and development | ||||||||||||||||
| Sales and marketing | ||||||||||||||||
| Professional fees | ||||||||||||||||
| Stock-based compensation | ||||||||||||||||
| Total Operating Expenses | ||||||||||||||||
| LOSS FROM OPERATIONS | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| OTHER INCOME (EXPENSE): | - | |||||||||||||||
| Financial expenses, net | ( | ) | ( | ) | ( | ) | ||||||||||
| Total Other Income (Expense) | ( | ) | ( | ) | ( | ) | ||||||||||
| - | ||||||||||||||||
| Net loss before taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income tax provision (benefit) | ||||||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Net loss per share (Class A and Class B common stock), basic and diluted | ) | ) | ) | ) | ||||||||||||
| Weighted average shares outstanding (Class A and Class B common stock), basic and diluted | ||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 2 |
GLOBAL AI, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
(Unaudited)
| Shares | Amount | Shares | Amount | In Capital | Receivable | Deficit | Deficit | |||||||||||||||||||||||||
| Class A Common Stock | Class B Common Stock | Additional Paid | Stock | Accumulated | Total | |||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | In Capital | Receivable | Deficit | Equity | |||||||||||||||||||||||||
| Balance as of December 31, 2025 | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Net Loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balance as of March 31, 2026 | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Stock-based compensation | ||||||||||||||||||||||||||||||||
| Net Loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balance at June 30, 2026 | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Class A Common Stock | Class B Common Stock | Additional Paid | Stock | Accumulated | Total | |||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | In Capital | Receivable | Deficit | Equity | |||||||||||||||||||||||||
| Balance at December 31, 2024 | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Common stock issued in offering | - | |||||||||||||||||||||||||||||||
| Net Loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balance at March 31, 2025 | ( | ) | ||||||||||||||||||||||||||||||
| Net Loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balance at June 30, 2025 | ( | ) | ( | ) | ||||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 3 |
GLOBAL AI, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| 2026 | 2025 | |||||||
| For the Six Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net loss | ( | ) | ( | ) | ||||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Amortization of capitalized research and development costs | ||||||||
| Depreciation expense | ||||||||
| Stock-based compensation | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Decrease (Increase) in accounts receivable | ( | ) | ||||||
| Decrease in prepaid expenses | ( | ) | ( | ) | ||||
| Increase in accounts payable and accrued liabilities | ||||||||
| Increase in deferred revenues | ||||||||
| Increase in current tax liability | ||||||||
| Net cash used in operating activities | $ | ( | ) | $ | ( | ) | ||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Capitalization of research and development costs | ( | ) | ( | ) | ||||
| Increase in restrictive deposit | ( | ) | ||||||
| Increase in long-term deposit | ( | ) | ||||||
| Purchase of property and equipment | ( | ) | ( | ) | ||||
| Net cash used in investing activities | $ | ( | ) | $ | ( | ) | ||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Proceeds from sale of common stock | ||||||||
| Increase in advance payable - related party | ||||||||
| Net cash provided by financing activities | $ | $ | ||||||
| Net (decrease) increase in cash | ( | ) | ||||||
| Cash, beginning of period | ||||||||
| Cash, end of period | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 4 |
Global AI, Inc.
Notes to unaudited Condensed Consolidated Financial Statements
June 30, 2026
Note 1 - Nature of Operations and Summary of Significant Accounting
Policies Nature of Operations
Global AI was organized as Mycatalogsonline.com, Inc. in the state of Nevada on January 6, 2009. In April 2009, the Company changed its name to My Catalogs Online, Inc. In November 2012, the Company changed its name to Bright Mountain Holdings, Inc. In August 2013, the Company changed its name to Wall Street Media Co, Inc.
On
September 12, 2023, Ingenious Investment AG purchased, from its own funds, from existing shareholders of the Company, in a series of
private transactions, a total of shares of the Company’s Class A common stock, representing
In October 2023, the Company changed its name to Global AI, Inc.
On February 6, 2024, Ingenious Investment AG transferred an aggregate of shares of Series A common stock. As a result of such transfers:
| ● | Darko Horvat, our current Chief Executive Officer and Chairman of the Board and a significant stockholder of the Company, acquired shares of Class A common stock, representing over % of our then-outstanding Class A common stock; |
| ● | Nevenka Cresnar Pergar, a current member of our Board, acquired shares of Class A common stock; |
| ● | Each of Danko Djunic, GlobalTI Tech Investment GmbH, and Marktflagge GmbH acquired shares of Class A common stock, representing over % of our then-outstanding Class A common stock; and |
| ● | Weiss Media GmbH acquired shares of Class A common stock, representing over % of our then-outstanding Class A common stock. |
Messrs. Horvat and Djunic, GlobalTI Tech Investment GmbH, and Marktflagge GmbH continue to be significant stockholders of the Company.
On
November 1, 2023, the Company issued shares of Series B common stock to each of Ingenious Investment AG and Mr. Horvat for
a purchase price of $ per share (representing an aggregate purchase price of $
On December 14, 2024, the Company established a subsidiary in Israel named GL AI Ltd. On September 5, 2025, the Company established a subsidiary in Romania named GLOBAL AI RO Ltd.
On
January 24, 2025, Ingenious Investment AG sold shares of Class A common stock and shares of Class B common stock
to Mr. Horvat. As a result of this transaction, Mr. Horvat held shares of Class A common stock, representing approximately
% of our total outstanding shares of Class A common stock. In addition, following this transaction, Mr. Horvat held (and, as of the
date of this filing, continued to hold) shares of our Class B common stock.
The Company is engaged in the development and commercialization of an enterprise-grade agentic artificial intelligence (“AI”) platform (the “Agentic AI Platform”) and a suite of related agentic AI products. The Agentic AI Platform is designed to enable enterprises to discover, deploy, govern, measure, and continuously improve agentic AI-driven business operations across a broad range of industries, including regulated sectors such as banking, financial services, insurance, healthcare, and life sciences.
| 5 |
In parallel with its internal product development and organic growth, the Company has implemented a strategic mergers and acquisitions (“M&A”) program (the “M&A Program”), focused on identifying, acquiring, integrating, and further developing AI-based technology companies and assets. The Company’s M&A Program is concentrated on companies operating in agentic AI and adjacent AI technologies serving enterprises, institutions, and industries.
The Company believes that its combined strategy of organic product development and growth, together with strategic acquisitions through its M&A Program, will enable it to accelerate growth, broaden its addressable market, deepen its competitive position in the agentic AI sector, and create long-term value for its stockholders. There can be no assurance, however, that the Company will identify suitable acquisition targets, complete any contemplated acquisitions on favorable terms, or at all, or successfully integrate acquired businesses.
The Company’s stock is quoted on the OTCQB tier of the OTC Markets under the symbol “GLAI.”
Principles of Consolidation and Basis of Presentation
The consolidated financial statements include the accounts of Global AI Inc. and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.
Basis of Presentation
The interim unaudited condensed consolidated financial statements included herein have been prepared by the Company, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). In the opinion of the Company’s management, all adjustments (consisting of normal recurring adjustments and reclassifications and non-recurring adjustments) necessary to present fairly the results of operations and cash flows for the six months ended June 30, 2026, and the financial position as of June 30, 2026, have been made. The results of operations for such interim periods are not necessarily indicative of the operating results to be expected for the full year. Certain information and disclosures normally included in the notes to the annual financial statements have been condensed or omitted from these interim condensed financial statements. Accordingly, these unaudited interim condensed consolidated financial statements should be read in conjunction with the Audited Financial Statements and Notes thereto as of and for the year ended December 31, 2025, included in our Report on Form 10-K as filed with the SEC on May 28, 2026.
Use of Estimates
The financial statements are prepared in accordance with Accounting Principles Generally Accepted in the United States (“GAAP”). These accounting principles require the Company to make certain estimates, judgments and assumptions. The Company believes that the estimates, judgments and assumptions upon which it relies are reasonable based upon information available at the time that these estimates, judgments and assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. The financial statements would be affected to the extent there are material differences between these estimates and actual results. In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management’s judgment in its application. There are also areas in which management’s judgment in selecting any available alternative would not produce a materially different result. Significant estimates include the capitalization or research and development costs and related amortization period, stock-based compensation, and the valuation allowance on deferred tax assets.
Research and Development Costs
The Company capitalizes costs in accordance with the FASB’s Accounting Standards Codification (“ASC”) 985-20 “Software – Costs of Software To Be Sold, Leased, or Marketed.” Beginning January 1, 2025, as technological feasibility had been established, all internal software development costs are capitalized until the product is available for general release to customers.
| 6 |
Judgment is required in determining when technological feasibility of a product is established. Management has determined that technological feasibility for its software products is reached after all high-risk development issues have been resolved through coding and testing. Generally, this occurs shortly before the commencement of product sales. The amortization of these costs is included in operating expenses over the estimated life of the products, which the Company has determined to be three years. The Company evaluates the capitalized research and development costs once a year to determine if any impairment has occurred. The Company determined that there was no impairment to the value of the capitalized research and development costs as of June 30, 2026.
Segment Information
ASC 280, “Segment Reporting” establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organization structure as well as information about services categories, business segments and major customers in financial statements. Operating segments are identified as components of an enterprise for which separate discrete financial information is available for evaluation by the Company’s chief operating decision maker (“CODM”) and relied upon when making decisions regarding resource allocation and assessing performance. When evaluating the Company’s financial performance, the CODM reviews total revenues, total expenses, and expenses by functional classification, using this information to make decisions on a company-wide basis.
The
Company currently operates in
Related Party Transactions
The Company follows ASC 850, “Related Party Disclosures” for the identification of related parties and disclosure of related party transactions. See Note 4 for details of related party transactions.
Share–based compensation
The Company applies ASC 718-10, “Share- Based Payment,” which requires the measurement and recognition of compensation expenses for all share-based payment awards made to employees and directors including employee stock options under the Company’s stock plans and equity awards issued to non-employees based on estimated fair values.
ASC 718-10 requires companies to estimate the fair value of equity-based option awards on the date of grant using an option-pricing model. The fair value of the award is recognized as an expense on a straight-line basis over the requisite service periods in the Company’s statement of operations.
The fair value of an option award is estimated on the date of grant using the Black–Scholes option valuation model. The Black–Scholes option valuation model requires the development of assumptions that are inputs into the model. These assumptions are the expected stock volatility, the risk–free interest rate, the expected life of the option, the dividend yield on the underlying stock and the expected forfeiture rate. Since the Company does not have sufficient historical data regarding its volatility of its common stock, the expected volatility used is based on volatility of similar publicly listed companies in comparable industries. Risk–free interest rates are calculated based on continuously compounded risk–free rates for the appropriate term.
Determining the appropriate fair value model and calculating the fair value of equity–based payment awards require the input of the subjective assumptions described above. The assumptions used in calculating the fair value of equity–based payment awards represent management’s best estimates, which involve inherent uncertainties and the application of management’s judgment.
| 7 |
The Company computes net income (loss) per share of common stock in accordance with Accounting Standards Codification (“ASC”) Topic 260, Earnings Per Share. Basic net income (loss) per share is computed by dividing the net income (loss) by the weighted average number of common stock outstanding during the period. Diluted net income (loss) per share of common stock is computed by dividing the net income (loss) by the weighted average number of shares of common stock outstanding for the period and, if diluted, potential common stock outstanding during the period. Potentially dilutive securities consist of the incremental shares of common stock issuable upon exercise of common stock equivalents such as stock options and convertible debt instruments. Potentially dilutive securities are excluded from the computation if their effect is anti-dilutive. Although the Company issued employee stock options during the three months ended June 30, 2026, they have not reached the first vesting cliff and therefore are not exercisable as of the balance sheet date. There were potentially dilutive securities outstanding at June 30, 2026, or December 31, 2025.
Recently Issued Accounting Pronouncements
The Company evaluates the impact of newly issued accounting pronouncements by the Financial Accounting Standards Board (“FASB”) and other standard-setting bodies on an ongoing basis, and adopts those that are applicable as of their effective dates.
In December 2023, the FASB issued ASU 2023-09-Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which is intended to enhance the transparency and decision usefulness of income tax disclosures, primarily by amending disclosure requirements for the effective tax rate reconciliation and income taxes paid. ASU 2023-09 should be applied on a prospective basis, and retrospective application is permitted. ASU 2023-09 is effective for annual periods beginning after December 15, 2024. Early adoption is permitted. The Company has adopted this guidance with no impact on its disclosures.
In 2024, the FASB issued guidance, ASU 2024-03, which requires the disaggregated disclosure of certain costs and expenses on an interim and annual basis. The new standard is effective for annual periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027 and can be applied prospectively with the option for retrospective application to all prior periods presented in the financial statements, with early adoption permitted. The Company is currently evaluating the potential impact of adopting this new guidance on its consolidated financial statements and related disclosures.
Reclassification
Certain prior year balances have been reclassified to conform to current period presentation.
Note 2 - Going Concern
The
accompanying 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. For the six months ended June 30, 2026, the Company incurred a net loss of $
Management
is actively seeking investor funding and pursuing strategic alternatives, including a potential merger or combination with another operating
company, to improve liquidity and financial position. On July 9, 2026, the Company issued shares of Class A common stock to KSY
Capital Investments, Inc. at a purchase price of $ per share, for aggregate proceeds to the Company of $
| 8 |
Note 3 – Capitalized research and development costs, net
Beginning January 1, 2025, as technological feasibility had been established, all internal software development costs are capitalized until the product is available for general release to customers. These costs are amortized over the estimated life of the products, which the Company has determined to be three years.
| Balance at January 1, 2025 | ||||
| Additions | ||||
| Balance at December 31, 2025 | ||||
| Additions | ||||
| Amortization | ( | ) | ||
| Balance at March 31, 2026 | ||||
| Additions | ||||
| Amortization | ( | ) | ||
| Balance at June 30, 2026 |
The Company had recorded amortization of Capitalized
project costs in the amount of $
Note 4 – Related Party Transactions
As
of June 30, 2026, and December 31, 2025, the Company had an outstanding balance of $
These advance payables carry no interest and do not have a maturity date. The cash proceeds from these advances were used for operating purposes.
The
Company recorded director fees in the amount of $
Note 5 – Stockholders’ Deficit
As
of June 30, 2026 and December 31, 2025, the Company had authorized shares of common stock, consisting of (i)
shares of Class A common stock, $ par value per share, and (ii) shares of Class B common stock, $ par value per
share.
Class A Common Stock
As
of June 30, 2026, and December 31, 2025, the Company had of Class A common stock issued and outstanding.
Class B Common Stock
As
of June 30, 2026, and December 31, 2025, the Company had shares of Class B common stock issued and outstanding.
Shares issued in offering
On
January 28, 2025, the Company entered into securities purchase agreements with an investor, pursuant to which the Company agreed to sell
and issue an aggregate of shares of Class A common stock at a purchase price of $ per share for aggregate proceeds to the
Company of $
Global Equity Incentive Plan (2026)
On January 30, 2026, the Board and the Company’s majority stockholder approved the Global Equity Incentive Plan (2026) (the “Equity Plan”). The Equity Plan provides for the grant of equity-based awards to employees, directors and other service providers of the Company and its affiliates. A total of shares of the Company’s Class A common stock has been reserved for issuance under the Equity Plan.
| 9 |
On
April 6, 2026, the Company granted an aggregate of
options to purchase shares of Class A common stock to certain
consultants as compensation for services rendered. The options have a -year
term and an exercise price of $
The Company recorded stock-based compensation expense of $ for each of the three and six months ended June 30, 2026. As of June 30, 2026, unrecognized compensation cost related to unvested options was $, which the Company expects to recognize over a weighted average period of years. of the options were exercisable as of June 30, 2026.
Note 6 – Commitments and Contingencies
From
time to time, the Company may be involved in asserted claims arising out of our operations in the normal course of business. As of June
30, 2026, and December 31, 2025, there were
Note 7 – Subsequent Events
The Company has evaluated subsequent events through August 13, 2026, the date the financial statements were available to be issued. Based on this evaluation, except as set forth below, no events have occurred that require disclosure or adjustment to the financial statements as of and for the period ended June 30, 2026.
Shares Issued in Offering
On
July 9, 2026, the Company issued shares of Class A common stock to KSY Capital Investments, Inc. at a purchase price of $
per share, for aggregate proceeds to the Company of $
| 10 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion of our financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and the notes to those financial statements that are included elsewhere in this Quarterly Report on Form 10-Q.
Company Overview
The Company is engaged in the development and commercialization of an enterprise-grade agentic artificial intelligence (“AI”) platform (the “Agentic AI Platform”) and a suite of related agentic AI products. The Agentic AI Platform is designed to enable enterprises to discover, deploy, govern, measure, and continuously improve agentic AI-driven business operations across a broad range of industries, including regulated sectors such as banking, financial services, insurance, healthcare, and life sciences.
In parallel with its internal product development and organic growth, the Company has implemented a strategic mergers and acquisitions (“M&A”) program (the “M&A Program”), focused on identifying, acquiring, integrating, and further developing AI-based technology companies and assets. The Company’s M&A Program is concentrated on companies operating in agentic AI and adjacent AI technologies serving enterprises, institutions, and industries.
The Company believes that its combined strategy of organic product development and growth, together with strategic acquisitions through its M&A Program, will enable it to accelerate growth, broaden its addressable market, deepen its competitive position in the agentic AI sector, and create long-term value for its stockholders. There can be no assurance, however, that the Company will identify suitable acquisition targets, complete any contemplated acquisitions on favorable terms, or at all, or successfully integrate acquired businesses.
We have a dedicated R&D and engineering team which is tasked with developing a suite of AI products and solutions designed to tackle complex challenges and automate processes across industries, leveraging an agentic-AI approach. Our focus is on building AI applications and solutions that are secure, scalable, and privacy-centric. Our R&D and engineering team, led by 14 senior AI specialists and software engineers, is tasked with driving the development of groundbreaking AI technologies, positioning Global AI at the forefront of enterprise AI innovation.
The Company’s results of operations and financial condition are, and are expected to continue to be, materially influenced by the following factors:
| ● | the rate at which the Company commercializes the Agentic AI Platform and successfully introduces new products and capabilities; |
| ● | the Company’s ability to identify, complete, integrate, and realize the anticipated benefits of acquisitions; |
| ● | the Company’s ability to acquire, retain, and expand customer relationships, including through cross-selling of products across acquired businesses; |
| ● | the pace of investment in research and development, sales and marketing, and infrastructure required to support growth; |
| ● | prevailing macroeconomic conditions, the regulatory environment for AI technologies, and the competitive landscape in the agentic AI sector; and |
| ● | the Company’s ability to access capital on favorable terms to fund operations and acquisitions. |
Components of Results of Operations
Revenue. The Company generates revenues primarily from (i) software license for access to the Agentic AI Platform and related products, (ii) support and maintenance fees tied to platform usage, (iii) outcome-indexed fees tied to realized customer outcomes, and (iv) professional services fees related to implementation, integration, and advisory engagements.
| 11 |
Cost of Revenues. Cost of revenues consists primarily of expenses related to hosting and infrastructure (including third-party cloud computing services and foundation model usage), personnel costs (including salaries, benefits, and stock-based compensation) for employees engaged in delivering the Company’s products and services, and allocated overhead. Cost of revenues is expected to vary with the modality and configuration of customer deployments, including the proportion of workloads executed on customer-owned infrastructure versus cloud-based infrastructure.
Operating Expenses
Research and Development. Research and development expenses consist primarily of personnel costs (including salaries, benefits, and stock-based compensation) for engineers and other personnel engaged in the design, development, and enhancement of the Agentic AI Platform and related products, costs of foundation model access and experimentation, third-party software and tools, and allocated overhead. The Company expects research and development expenses to increase in absolute dollars as the Company continues to invest in product innovation, although such expenses may decline as a percentage of revenues over time.
Sales and Marketing. Sales and marketing expenses consist primarily of personnel costs (including salaries, commissions, benefits, and stock-based compensation) for sales and marketing personnel, costs of demand generation, marketing programs, customer events, travel, and allocated overhead. Sales and marketing expenses also include costs associated with the Company’s forward-deployed engineering model, in which technical personnel are embedded directly with customers during the pursuit and early deployment phases of the customer lifecycle. The Company expects sales and marketing expenses to increase in absolute dollars as the Company expands its sales organization, deepens enterprise customer relationships, and supports the integration of Acquisitions.
General and Administrative. General and administrative expenses consist primarily of personnel costs (including salaries, benefits, and stock-based compensation) for executive, finance, legal, human resources, and information technology functions, professional services fees (including audit, legal, and consulting fees), insurance, public-company compliance costs, and allocated overhead. The Company expects general and administrative expenses to increase in absolute dollars in support of growth, regulatory and compliance obligations, and costs associated with being a public reporting company.
Recent Developments
Commercial Launch of the Agentic AI Platform
The principal commercial achievement of fiscal year 2025 was the commencement of revenue-generating sales of the Company’s Agentic AI Platform to enterprise customers. During December 2025, the Company executed software license and platform contracts with six enterprise customers, marking the transition of the Company’s business from a development and early-stage commercialization phase to a phase characterized by enterprise-grade, contracted deployments of the Agentic AI Platform.
The six enterprise contracts executed in December 2025 spanned multiple regulated and mission-critical industry verticals, including pharmaceutical and life sciences, insurance, and retail. A number of these customers are among the largest enterprises in their respective sectors and geographies, with operations in Europe and globally. The Company’s customer engagements reflect its strategic focus on, among others, regulated, mission-critical enterprise environments, and we believe demonstrate the commercial viability of the Agentic AI Platform across multiple industry verticals.
Management believes that the 2025 commercial launch of the Agentic AI Platform, together with the customer engagements executed in connection with that launch, establishes a foundation for the Company’s continued enterprise customer acquisition strategy, validates the technical and operational scalability of the Agentic AI Platform, and creates reference architectures suitable for replication across customers, industries, and geographies in future periods.
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2026 Customer Engagements
In 2026, the Company had a number of additional customer deployments, expansions of existing customer engagements, and new enterprise contracts, including the following:’
| ● | The Company entered into an agreement to deploy the Agentic AI Platform with one of Europe’s larger energy and utilities companies. The deployment is focused on enabling near real-time pricing synchronization across the customer’s commercial systems during month-end sales cycles, orchestrating and governing the customer’s existing system integrations without requiring replacement of core infrastructure. The engagement marked the Company’s expansion into regulated, mission-critical energy and utilities environments. | |
| ● | The Company deployed the Agentic AI Platform with a leading European insurance and asset management group to modernize and automate a high-volume, compliance-critical insurance back-office workflow. The deployment replaced a fully manual, document-intensive process with a governed agentic AI validation layer, fully integrated with the customer’s existing customer channels and core back-office systems, executed in alignment with the customer’s enterprise security, data privacy, and regulatory compliance standards. | |
| ● | ‘The Company executed a contract with one of the world’s largest pharmaceutical and life sciences companies to automate and govern multiple compliance-critical and data-intensive business processes. Under the agreement, the Company is deploying the Agentic AI Platform to support regulatory monitoring, compliance reporting, and internal human resources operations, with full auditability across the reporting lifecycle and alignment with the regulatory standards applicable to global pharmaceutical organizations operating across multiple jurisdictions. | |
| ● | ‘The Company entered into a contract with one of the world’s largest supermarket operators to deploy the Agentic AI Platform across the customer’s supplier invoice lifecycle. The deployment automates how supplier invoices are received, validated, and recorded across the customer’s finance systems, with the Agentic AI Platform’s agents operating continuously, processing invoices without manual intervention, and escalating exceptions for finance team review. | |
| ● | The Company deployed an agentic automated invoice processing solution for a leading European insurance group, representing a live, production implementation within a highly regulated financial environment. The deployment automates the full invoice processing workflow, including ingestion, processing, and system integration, operates on a scheduled basis with multiple daily processing cycles, and provides full auditability of each processing run. | |
| ● | The Company effectuated a full production deployment of the Agentic AI Platform with a Fortune Global 500 pharmaceutical company. ‘The Agentic AI Platform is operating in production across regulatory reporting and payroll workflows, with end-to-end integration with the customer’s ERP, human resources, inventory, and financial systems.’ |
Industry Diversification
Considering the six enterprise contracts executed in 2025 and the 2026 customer engagements, the Company’s customer base reflects a deliberate strategy of industry diversification. The Company has commercialized the Agentic AI Platform across pharmaceutical and life sciences, insurance and asset management, retail and supermarket operations, energy and utilities, commercial aviation, and with customers based primarily in Europe and operating across multiple regulatory jurisdictions. The Company believes that this diversification reduces dependence on any single industry, mitigates customer-concentration risk, and provides a foundation for cross-vertical product enhancement and customer reference development.
RESULTS OF OPERATIONS
Financial Overview
For the three months ended June 30, 2026 and 2025, we generated revenues of $115,724 and $84,328, respectively, and reported a net loss of $817,360 and $503,483, respectively. For the six months ended June 30, 2026 and 2025, we generated revenues of $160,471 and $120,032, respectively, and reported a net loss of $1,594,508 and $1,241,262, respectively. We had negative cash flows used in operating activities of $362,850 and $651,083 for the six months ended June 30, 2026 and 2025, respectively. As noted in our unaudited condensed consolidated financial statements, as of June 30, 2026, we had an accumulated deficit of $7,018,542.
| 13 |
For the three months ended June 30, 2026 compared to the three months ended June 30, 2025
| Three Months Ended | ||||||||||||||||
| June 30, 2026 | June 30, 2025 | Variance | Variance % | |||||||||||||
| Revenues: | ||||||||||||||||
| Revenue | 115,724 | 84,328 | 31,396 | 37 | % | |||||||||||
| Cost of revenues (exclusive of amortization shown separately below) | 33,278 | 41,703 | (8,425 | ) | (20 | )% | ||||||||||
| Gross margin (exclusive of amortization shown separately below) | 82,446 | 42,625 | 39,821 | 93 | % | |||||||||||
| Operating expenses: | ||||||||||||||||
| Amortization of Capitalized research and development costs | 342,910 | - | 342,910 | 100 | % | |||||||||||
| General and administrative expenses | 239,632 | 148,224 | 91,408 | 62 | % | |||||||||||
| Research and development | 68,353 | - | 68,353 | 100 | % | |||||||||||
| Sales and marketing | 152,811 | 33,946 | 118,865 | 350 | % | |||||||||||
| Professional fees | 63,815 | 338,694 | (274,879 | ) | (81 | )% | ||||||||||
| Stock-based compensation | 23,888 | - | 23,888 | 100 | % | |||||||||||
| Total Operating Expenses | 891,409 | 520,864 | 370,545 | 71 | % | |||||||||||
| LOSS FROM OPERATIONS | (808,963 | ) | (478,239 | ) | (330,724 | ) | 69 | % | ||||||||
| OTHER INCOME (EXPENSE): | ||||||||||||||||
| Financial expenses, net | (8,397 | ) | (10,887 | ) | 2,490 | (23 | )% | |||||||||
| Total Other Income (Expense) | (8,397 | ) | (10,887 | ) | ||||||||||||
| Net loss before taxes | (817,360 | ) | (489,126 | ) | (328,234 | ) | 67 | % | ||||||||
| Income tax provision (benefit) | - | 14,357 | (14,357 | ) | (100 | )% | ||||||||||
| Net loss | (817,360 | ) | (503,483 | ) | ||||||||||||
Revenues
For the three months ended June 30, 2026, the Company generated revenues of $115,724, compared to $84,328 for the three months ended June 30, 2025, representing an increase of 37%. This increase was primarily due to an increase in revenues from software license sales and related services in 2026.
Operating Expenses
Operating expenses increased to $891,409 for the three months ended June 30, 2026, from $520,864 for the three months ended June 30, 2025, a 71% increase. The primary reason for the increase in operating expenses was the commencement of the amortization of capitalized research and development costs of $342,910 or 100%, increases in general and administrative expenses of $91,408 or 62%, sales and marketing expenses of $118,865 or 350%, research and development costs of $68,353 or 100%, and stock-based compensation of $23,888 or 100%, partially offset by a decrease in professional fees of $274,879 or 81%.
| 14 |
Amortization of Capitalized Research and Development Costs
Amortization of capitalized research and development costs was $342,910 for the three months ended June 30, 2026, compared to $0 for the three months ended June 30, 2025. The Company capitalized all research and development costs in 2025 and began amortizing those costs during the six months ended June 30, 2026.
General and Administrative Expenses
General and administrative expenses were $239,632 for the three months ended June 30, 2026, compared to $148,224 for the three months ended June 30, 2025. The increase in general and administrative expenses of $91,408, or 62%, was primarily due to costs incurred by the Romanian subsidiary, which began operations in late 2025, and an increase in software license costs during the three months ended June 30, 2026.
Research and Development Expenses
Research and development expenses were $68,353 for the three months ended June 30, 2026, compared to $0 for the three months ended June 30, 2025, an increase of $68,353, or 100%. The increase was primarily due to the capitalization of all research and development costs in 2025, with costs related to product maintenance being expensed during the three months ended June 30, 2026.
Sales and Marketing Expenses
Sales and marketing expenses were $152,811 for the three months ended June 30, 2026, compared to $33,946 for the three months ended June 30, 2025. The increase in sales and marketing expenses of $118,865, or 350.2%, was primarily due to increased sales and marketing activity relating to the release of the first version of the Company’s product in late 2025.
Professional Fees
Professional fees were $63,815 for the three months ended June 30, 2026, compared to $338,695 for the three months ended June 30, 2025. The decrease in professional fees of $274,880, or 81.2%, was primarily due to the professional fees incurred relating to the Tectu transaction costs in 2025.
Loss from Operations
The Company reported a loss from operations of $808,963 for the three months ended June 30, 2026, compared to a loss of $478,239 for the three months ended June 30, 2025, representing an increase of 69%. The primary reason for this was the commencement of the amortization of Capitalized research and development costs, increases in revenues, general and administrative expenses, sales and marketing expenses, research and development expenses and stock-based compensation partially offset by a decrease in professional fees during the current period.
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For the six months ended June 30, 2026 compared to the six months ended June 30, 2025
| Six Months Ended | ||||||||||||||||
| June 30, 2026 | June 30, 2025 | Variance | Variance % | |||||||||||||
| Revenues: | ||||||||||||||||
| Revenue | 160,471 | 120,032 | 40,439 | 34 | % | |||||||||||
| Cost of revenues (exclusive of amortization shown separately below) | 64,727 | 64,996 | (269 | ) | 0 | % | ||||||||||
| Gross margin (exclusive of amortization shown separately below) | 95,744 | 55,036 | 40,708 | 74 | % | |||||||||||
| Operating expenses: | ||||||||||||||||
| Amortization of Capitalized research and development costs | 648,323 | - | 648,323 | 100 | % | |||||||||||
| General and administrative expenses | 433,405 | 260,611 | 172,794 | 66 | % | |||||||||||
| Research and development | 116,175 | 116,175 | 100 | % | ||||||||||||
| Sales and marketing | 333,431 | 71,248 | 262,183 | 368 | % | |||||||||||
| Professional fees | 144,471 | 910,568 | (766,097 | ) | (84 | )% | ||||||||||
| Stock-based compensation | 23,888 | - | 23,888 | 100 | % | |||||||||||
| Total Operating Expenses | 1,699,693 | 1,242,427 | 457,266 | 37 | % | |||||||||||
| LOSS FROM OPERATIONS | (1,603,949 | ) | (1,187,391 | ) | (416,558 | ) | 35 | % | ||||||||
| OTHER INCOME (EXPENSE): | ||||||||||||||||
| Financial expenses, net | 9,441 | (23,954 | ) | 33,395 | (139 | )% | ||||||||||
| Total Other Income (Expense) | 9,441 | (23,954 | ) | |||||||||||||
| Net loss before taxes | (1,594,508 | ) | (1,211,345 | ) | (383,163 | ) | 32 | % | ||||||||
| Income tax provision (benefit) | - | 29,917 | (29,917 | ) | (100 | )% | ||||||||||
| Net loss | (1,594,508 | ) | (1,241,262 | ) | ||||||||||||
Revenues
For the six months ended June 30, 2026, the Company generated revenues of $160,471, compared to $120,032 for the six months ended June 30, 2025, representing an increase of 34%. This increase was primarily due to an increase in revenues from software license sales and related services in 2026.
Operating Expenses
Operating expenses increased to $1,699,693 for the six months ended June 30, 2026, from $1,242,427 for the six months ended June 30, 2025, a 71% increase. The primary reason for the increase in operating expenses was the commencement of the amortization of capitalized research and development costs of $648,323 or 100%, increases in general and administrative expenses of $172,794 or 66%, sales and marketing expenses of $262,183 or 368%, research and development costs of $116,175 or 100%, and stock-based compensation of $23,888 or 100%, partially offset by a decrease in professional fees of $766,097 or 84%.
Amortization of Capitalized Research and Development Costs
Amortization of capitalized research and development costs was $648,323 for the six months ended June 30, 2026, compared to $0 for the six months ended June 30, 2025. The Company began amortizing capitalized research and development costs during the six months ended June 30, 2026.
General and Administrative Expenses
General and administrative expenses were $433,405 for the six months ended June 30, 2026, compared to $260,611 for the six months ended June 30, 2025. The increase in general and administrative expenses of $172,794, or 66%, was primarily due to costs incurred by the Romanian subsidiary, which began operations in late 2025, and an increase in software license costs during the six months ended June 30, 2026.
Research and Development Expenses
Research and development expenses were $116,175 for the six months ended June 30, 2026, compared to $0 for the six months ended June 30, 2025, an increase of $116,175, or 100%. The increase was primarily due to the capitalization of all research and development costs in 2025, with costs related to product maintenance expensed during the six months ended June 30, 2026.
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Sales and Marketing Expenses
Sales and marketing expenses were $333,431 for the six months ended June 30, 2026, compared to $71,248 for the six months ended June 30, 2025. The increase in sales and marketing expenses of $262,183, or 368%, was primarily due to increased sales and marketing activity relating to the release of the first version of the Company’s product in late 2025.
Professional Fees
Professional fees were $144,471 for the six months ended June 30, 2026, compared to $910,568 for the six months ended June 30, 2025. The decrease in professional fees of $766,097, or 84.1%, was primarily due to the professional fees incurred relating to the Tectu transaction costs in 2025.
Loss from Operations
The Company reported a loss from operations of $1,603,949 for the six months ended June 30, 2026, compared to a loss of $1,187,391 for the six months ended June 30, 2025, representing an increase of 35%. The primary reason for this was the commencement of the amortization of capitalized research and development costs, increases in revenues, general and administrative expenses, sales and marketing expenses, research and development expenses and stock-based compensation partially offset by a decrease in professional fees during the current period.
LIQUIDITY AND CAPITAL RESOURCES
The Company has historically funded its operations through a combination of equity issuances, debt financings, and, to a lesser extent, cash generated from operating activities. The Company’s principal uses of cash include funding research and development activities, sales and marketing investments, general and administrative expenses, working capital requirements, capital expenditures.
The Company’s future capital requirements will depend on numerous factors, including the rate of growth of the Agentic AI Platform business, the timing and size of future acquisitions pursuant to the Company’s M&A Program, working capital and capital expenditure needs, and the timing of cash flows from operations. The Company may seek to raise additional capital through equity issuances, debt financings, or other arrangements, although there can be no assurance that such financing will be available on favorable terms, or at all.
The Company’s M&A Program is expected to require ongoing access to capital. The Company expects to finance future acquisitions through the issuance of equity securities, the incurrence of indebtedness, or other forms of consideration. The use of any particular form of consideration will depend on the size and structure of the applicable acquisition, prevailing market conditions, and the Company’s overall capital structure and strategic objectives.
As of June 30, 2026, the Company had $ 40,559 in cash and cash equivalents. The Company has sustained losses from operations, and such losses are expected to continue. The Company’s auditors have included a “Going Concern Qualification” in their report for the year ended December 31, 2025. In addition, the Company has a working capital deficit at June 30, 2026, of $7,553,968 with minimal revenues. The foregoing raises substantial doubt about the Company’s ability to continue as a going concern. The Company is actively seeking to combine or merge with another operating company. On July 9, 2026, the Company issued 250,000 shares of Class A common stock to KSY Capital Investments, Inc. at a purchase price of $2.00 per share, for aggregate proceeds to the Company of $500,000, pursuant to a subscription agreement. There can be no assurance that the level of funding needed will be acquired or that the Company will generate sufficient revenues to sustain operations for the next twelve months. The unaudited condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty.
| 17 |
Cash Flows for the Six Months Ended June 30, 2026 and 2025
| For the Six Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Net cash (used in) provided by: | ||||||||
| Operating activities | $ | (362,850 | ) | $ | (651,083 | ) | ||
| Investing activities | (1,094,529 | ) | (1,178,338 | ) | ||||
| Financing activities | 1,420,738 | 1,862,924 | ||||||
| Net increase (decrease) in cash | $ | (36,641 | ) | $ | 33,503 | |||
Net cash used in operating activities was $362,850 for the six months ended June 30, 2026, as compared to net cash used in operating activities of $651,083 for the six months ended June 30, 2025. This decrease was primarily due to the lower net loss, amortization of capitalized research and development costs, stock-based compensation, and changes in accounts payable and accrued liabilities and deferred revenues.
Net cash used in investing activities was $1,094,529 for the six months ended June 30, 2026, as compared to net cash used in investing activities of $1,178,338 for the six months ended June 30, 2025. This decrease was primarily due to less capitalization of research and development costs, partially offset by an increase in purchase of property and equipment.
Net cash provided by financing activities was $1,420,738 for the six months ended June 30, 2026, as compared to net cash provided by financing activities of $1,862,924 for the six months ended June 30, 2025. This decrease is due to no proceeds from the sale of common stock in the current period, partially offset by an increase in advance payable from a related party to $1,420,738 from $762,924.
Related Party Transactions
For information on related party transactions and their financial impact, see Note 4 to the financial statements.
Critical Accounting Policies and Estimates
Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements. These financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), which requires us to make estimates and assumptions that affect the reported amounts of our assets and liabilities and revenues and expenses, to disclose contingent assets and liabilities on the date of the consolidated financial statements, and to disclose the reported amounts of revenues and expenses incurred during the financial reporting period. We continue to evaluate the estimates and assumptions that we believe to be reasonable under the circumstances. We rely on these evaluations as the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from those estimates. Some of our accounting policies require higher degrees of judgment than others in their application. We believe critical accounting policies reflect the more significant judgments and estimates used in preparation of our consolidated financial statements.
| 18 |
Revenue Recognition
The Company recognizes revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers” (“ASC 606”). Revenues are recognized when control is transferred to customers in amounts that reflect the consideration the Company expects to be entitled to receive in exchange for those goods. Revenue recognition is evaluated through the following five steps: (i) identification of the contract, or contracts, with a customer; (ii) identification of the performance obligations in the contract; (iii) determination of the transaction price; (iv) allocation of the transaction price to the performance obligations in the contract; and (v) recognition of revenue when or as a performance obligation is satisfied.
Research and Development Costs
The Company capitalizes costs in accordance with ASC 985-20 “Software – Costs of Software To Be Sold, Leased, or Marketed.” Beginning January 1, 2025, as technological feasibility had been established, all internal software development costs are capitalized until the product is available for general release to customers.
Judgment is required in determining when technological feasibility of a product is established. We have determined that technological feasibility for our software products is reached after all high-risk development issues have been resolved through coding and testing. Generally, this occurs shortly before the commencement of product sales. The amortization of these costs is included in operating expenses over the estimated life of the products, which the Company has determined to be three years.
Recently Issued Accounting Pronouncements
In 2024, the FASB issued Accounting Standards Update 2024-03, which requires the disaggregated disclosure of certain costs and expenses on an interim and annual basis. The new standard is effective for annual periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027 and can be applied prospectively with the option for retrospective application to all prior periods presented in the financial statements, with early adoption permitted. The Company is currently evaluating the potential impact of adopting this new guidance on its consolidated financial statements and related disclosures.
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 is material to investors.
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Item 3. Quantitative and Qualitative Disclosure About Market Risk.
Not applicable to smaller reporting companies.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
As of June 30, 2026, we carried out an evaluation required by Rule 13a-15(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), under the supervision and with the participation of our management, including our Chief Executive Officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined in Exchange Act Rule 13a–15(e). Disclosure controls and procedures are designed with the objective of ensuring that (i) information required to be disclosed in an issuer’s reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and (ii) information is accumulated and communicated to management, including our Chief Executive Officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosures.
Based on this evaluation, our Chief Executive Officer and principal financial officer concluded that, as of June 30, 2026, our disclosure controls and procedures were not effective. The ineffectiveness of our disclosure controls and procedures was due to the existence of the following material weakness:
| ● | We did not maintain a sufficient complement of personnel with the appropriate level of technical accounting expertise to support effective controls, compounded by limitations in our financial reporting system, which required extensive manual reconciliation processes that lacked sufficient review and documentation, and we relied on outsourced or part-time chief financial officer/controller arrangements. |
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting during the three months ended June 30, 2026 that have materially affected, or are reasonably likely to affect, our internal control over financial reporting.
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PART II- OTHER INFORMATION
Item 1. Legal Proceedings.
From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. We are currently not aware of any such legal proceedings or claims that we believe will have, individually or in the aggregate, a material adverse effect on our business, financial condition or operating results. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. Defending such proceedings is costly and can impose a significant burden on management and employees. The results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors.
Item 1A. Risk Factors.
As a smaller reporting company, the Company is not required to disclose material changes to the risk factors that were contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, as updated from time to time.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
There were no reportable unregistered sales of equity securities during the quarter ended June 30, 2026.
On July 9, 2026, the Company issued 250,000 shares of Class A common stock to KSY Capital Investments, Inc. at a purchase price of $2.00 per share, for aggregate proceeds to the Company of $500,000, pursuant to a subscription agreement.
The issuance was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act and/or Rule 506 of Regulation D promulgated thereunder.
Item 3. Defaults upon Senior Securities.
Not applicable.
Item 4. Mine Safety Disclosures.
Not applicable.
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Item 5. Other Information.
(a) None.
(b) There have been no material changes to the procedures by which security holders may recommend nominees to the Company’s Board of Directors since the Company last provided disclosure in response to the requirements of Item 407(c)(3) of Regulation S-K.
(c)
During the registrant’s last fiscal quarter, no director or officer
Item 6. Exhibits
(a) Exhibits
| * | Filed herewith. |
| ** | Furnished herewith. |
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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, thereunto duly authorized.
| Global AI, Inc. | ||
| Date: August 13, 2026 | By: | /s/ Darko Horvat |
| Darko Horvat | ||
Chairman and Chief Executive Officer (principal executive officer and principal financial officer) | ||
| 23 |
EXHIBIT 31.1
CERTIFICATIONS
I, Darko Horvat, certify that:
1. I have reviewed this quarterly report on Form 10-Q for the quarter ended June 30, 2026 of Global AI, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| Date: August 13, 2026 | By: | /s/ Darko Horvat |
| Darko Horvat | ||
|
Chairman and Chief Executive Officer (principal executive officer and principal financial officer) |
EXHIBIT 31.2
CERTIFICATIONS
I, Darko Horvat, certify that:
1. I have reviewed this quarterly report on Form 10-Q for the quarter ended June 30, 2026 of Global AI, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| Date: August 13, 2026 | By: | /s/ Darko Horvat |
| Darko Horvat | ||
|
Chief Executive Officer (principal financial officer) |
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Global AI, Inc. (the “Company”) on Form 10-Q for the quarterly period ended June 30, 2026 (the “Report”) I, Darko Horvat, Chairman and Chief Executive Officer of the Company, certify, pursuant to 18 USC Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge and belief:
| (1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| Date: August 13, 2026 | By: | /s/ Darko Horvat |
| Darko Horvat | ||
|
Chief Executive Officer (principal executive officer and principal financial officer) |
This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.