MITI 10-Q
Mitesco, Inc. (MITI)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM
For the quarter ended
OR
For the transition period from to
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Table of Contents
| Page | |||
| PART I – FINANCIAL INFORMATION | |||
| Item 1. | Financial Statements (Unaudited) | ||
| Consolidated Balance Sheets as of June 30, 2026, and December 31, 2025 | 1 | ||
| Consolidated Statements of Operations for the six months ended June 30, 2026, and 2025 | 2 | ||
| Consolidated Stockholder’s Deficit for the six months ended June 30, 2026, and 2025 | 3 | ||
| Consolidated Statements of Cash Flows for the six months ended June 30, 2026, and 2025 | 4 | ||
| Notes to Consolidated Financial Statements | 5 | ||
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations. | 19 | |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk. | 22 | |
| Item 4. | Controls and Procedures. | 22 | |
| PART II – OTHER INFORMATION | |||
| Item 1. | Legal Proceedings. | 23 | |
| Item 1A. | Risk Factors. | 23 | |
| Item 2. | Sale of Unregistered Securities. | 23 | |
| Item 3. | Defaults Upon Senior Secured Securities. | 24 | |
| Item 4. | Mine Safety Disclosures. | 24 | |
| Item 5. | Other Information. | 24 | |
| Item 6. | Exhibits. | 24 | |
| Signatures | 25 | ||
i
MITESCO, INC.
CONSOLIDATED BALANCE SHEETS
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable, net | ||||||||
| Unsecured advances | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Total Assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued liabilities | $ | $ | ||||||
| Accrued interest | ||||||||
| Derivative liabilities | ||||||||
| Deferred Revenue | ||||||||
| Lease liability - operating leases, current | ||||||||
| Notes payable, net of discounts | ||||||||
| SBA loan payable | ||||||||
| Convertible Notes Payable, Net | ||||||||
| Other current liabilities | ||||||||
| Preferred stock dividends payable | ||||||||
| Legal settlements | ||||||||
| Series A preferred stock liability, current | ||||||||
| Total current liabilities | ||||||||
| Series A preferred stock liability, non-current | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (Note 12) | ||||||||
| Stockholders’ deficit | ||||||||
| Preferred stock, $0.01 par value, 100,000,000 shares authorized; 10,000,000 shares designated Series D; 10,000 shares designated as Series E; 140,000 shares designated as Series F; and 400,000 shares designated Series X: | ||||||||
| Preferred stock, Series D, $ | ||||||||
| Preferred stock, Series F, $ | ||||||||
| Preferred stock, Series X, $ | ||||||||
| Common stock, $ | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ deficit | ( | ) | ( | ) | ||||
| Total liabilities and stockholders’ deficit | $ | $ | ||||||
See accompanying notes to these unaudited consolidated financial statements.
1
MITESCO, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, 2026 | June 30, 2025 | June 30, 2026 | June 30, 2025 | |||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||
| OPERATING EXPENSES: | ||||||||||||||||
| Cost of operations | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Software development | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Net loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| OTHER INCOME (EXPENSES): | ||||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Interest expense - related parties | ( | ) | ||||||||||||||
| Gain on forgiveness of liabilities | ||||||||||||||||
| Loss on settlement of Series A Preferred | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Gain on revaluation of derivative liabilities | ||||||||||||||||
| Total other income (expense) | ( | ) | ( | ) | ||||||||||||
| Net income (loss) | ( | ) | ( | ) | ( | ) | ||||||||||
| Preferred stock dividends | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Preferred stock dividends - related parties | ( | ) | ||||||||||||||
| Net loss available to common shareholders | $ | ( | ) | $ | ( | ) | ( | ) | ||||||||
| Basic Net income (loss) per common share | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ||||||
| Dilutive Net income (loss) per common share | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted average shares outstanding – Basic | ||||||||||||||||
| Weighted average shares outstanding – Diluted | ||||||||||||||||
See accompanying notes to these unaudited consolidated financial statements.
2
MITESCO, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)
FOR THE SIX MONTHS ENDED JUNE 30, 2026 and 2025
(UNAUDITED)
| Preferred
Stock Series D | Preferred Stock
Series F | Preferred Stock
Series X | Common Stock | Additional Paid-in | Accumulated | |||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | Total | ||||||||||||||||||||||||||||||||||
| Balance, December 31, 2025 | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||||||
| Shares issued for Series A redemptions | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||
| Shares issued for Series X dividends | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||
| Stock-based compensation | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||
| Preferred stock dividends | - | - | - | - | - | - | - | - | ( | ) | - | ( | ) | |||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||
| Balance, March 31, 2026 | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||
| Shares issued for Series A redemptions | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||
| Shares issued for Series X dividends | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||
| Series X shares issued for compensation | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||
| Preferred stock dividends | - | - | - | - | - | - | - | - | ( | ) | - | ( | ) | |||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||
| Balance, June 30, 2026 | - | $ | - | - | $ | - | $ | $ | $ | $ | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||||||
| Shares issued for Series A redemptions | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||
| Shares issued for Series X dividends | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||
| Stock-based compensation | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||
| Preferred stock dividends | - | - | - | - | - | - | - | - | ( | ) | - | ( | ) | |||||||||||||||||||||||||||||||
| Net income | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||
| Balance, March 31, 2025 | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||
| Shares issued for Series A redemptions | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||
| Shares issued for Series X dividends | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||
| Shares issued for settlement of Series D, notes payable, and accrued liabilities | ( | ) | ( | ) | - | - | - | - | - | |||||||||||||||||||||||||||||||||||
| Stock-based compensation | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||
| Preferred stock dividends | - | - | - | - | - | - | - | - | ( | ) | - | ( | ) | |||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||
| Balance, June 30, 2025 | - | $ | - | - | $ | - | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||
See accompanying notes to these unaudited consolidated financial statements.
3
MITESCO, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| Six Months Ended | ||||||||
| June 30, 2026 | June 30, 2025 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net income (loss) | $ | ( | ) | $ | ||||
| Adjustments to reconcile net income to net cash used in operating activities: | ||||||||
| Amortization of intangible assets | ||||||||
| Amortization of debt discount | ||||||||
| Day one interest expense for derivative liability | ||||||||
| Stock-based compensation | ||||||||
| Accretion of Series A preferred recorded as interest expense | ||||||||
| Loss on revaluation of Series A preferred | ||||||||
| Gain on revaluation of derivative liabilities | ( | ) | ( | ) | ||||
| Gain on settlement of liabilities | ( | ) | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ( | ) | ||||
| Prepaid expenses | ||||||||
| Accounts payable and accrued liabilities | ||||||||
| Accrued interest | ( | ) | ||||||
| Accrued interest - related parties | ( | ) | ||||||
| Deferred revenue | ( | ) | - | |||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Unsecured advances | ||||||||
| Net cash used in investing activities | ( | ) | ||||||
| ( | ) | |||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Principal payments on SBA loan | ( | ) | ( | ) | ||||
| Proceeds from sale of Series A preferred stock | ||||||||
| Proceeds from notes payable | ||||||||
| Net cash provided by financing activities | ||||||||
| Net change in cash | ( | ) | ( | ) | ||||
| Cash at beginning of period | ||||||||
| Cash at end of period | $ | $ | ||||||
| Supplemental disclosure of cash flow information: | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Cash paid for taxes | $ | $ | ||||||
| Supplemental disclosure of financing cash flow information: | ||||||||
| Preferred stock dividends | $ | $ | ||||||
| Shares issued for Series X dividends | $ | $ | ||||||
| Shares issued for redemption of Series A preferred stock | $ | $ | ||||||
| Shares issued for settlement of Series D, notes payable, and accrued liabilities | $ | $ | ||||||
| Derivative liability established as debt discount upon note issuance | $ | $ | ||||||
See accompanying notes to these unaudited consolidated financial statements.
4
MITESCO, INC.
UNAUDITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2026
Note 1: Description of Business
Company Overview
Mitesco, Inc. (the “Company,” “we,” “us,” or “our”) was formed in the state of Delaware on January 18, 2012. On December 9, 2015, we restructured our operations and acquired Newco4pharmacy, LLC, a development stage company which sought to acquire compounding pharmacy businesses. As a part of the restructuring, we shut down our former business line. On April 24, 2020, we changed our name to Mitesco, Inc. In October 2023, the Company changed its domicile from Delaware to Nevada in order to effect reduced costs.
From 2020 through 2022, our operations were focused on establishing general practice medical clinics utilizing nurse practitioners under The Good Clinic name and development and acquisition of telemedicine technology. We opened our first The Good Clinic in Minneapolis, Minnesota in the first quarter of 2021 and had six operating clinics during the year ended December 31, 2022, with two additional sites under contract. In the fourth quarter of fiscal 2022, we made the strategic decision to close the entire clinic operation and release our staff due to a lack of profitability.
Current Business Operations
We are a holding company seeking to provide products, services and technology.
The Company currently operates through two primary business segments: its data center subsidiary, Centcore, and its software development division, Vero Technology Ventures (VTV).
Centcore initially entered the market through a colocation agreement
with a data center facility in Melbourne, Florida. However, the Company exited that arrangement in late 2025 due to operating costs
that were no longer competitive within the evolving market environment. In the first quarter of fiscal 2026, Centcore announced a strategic
focus on developing and operating smaller-footprint data centers, generally targeting facilities of approximately
Vero Technology Ventures' operations are centered on the development and commercialization of software and artificial intelligence solutions. Its flagship AI platform, Robo Agent, is designed to enhance sales productivity and workflow automation, with its initial market focus on the residential real estate sector and future expansion planned into financial services and related industries. The Robo Agent initial prototype is in testing with a small group of agents with varying levels of experience and technical skills.
In addition, VTV has developed Sportzfolio, a digital marketplace platform for the listing, marketing, and sale of sports-related properties and facilities. The platform supports a wide range of assets, including pickleball, golf, tennis, youth activity, and other specialized recreational properties. Sportzfolio is currently operational and features a user experience and property search functionality similar to leading online real estate marketplaces.
Note 2: Going Concern
As of June 30, 2026, the Company had cash and cash equivalents
of approximately $
The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts classified as liabilities that might be necessary should the Company be forced to take any such actions.
Note 3: Summary of Significant Accounting Policies
Basis of Presentation – The consolidated financial statements are prepared in conformity with accounting principles accepted in the United States of America (“GAAP”).
5
The consolidated financial statements and related disclosures as of June 30, 2026, are unaudited, pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted pursuant to such rules and regulations. In our opinion, these unaudited financial statements include all adjustments (consisting only of normal recurring adjustments) necessary for the fair statement of the results for the interim periods. These unaudited financial statements should be read in conjunction with the audited financial statements of the Company for the years ended December 31, 2025, and 2024 included in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on April 15, 2026. The results of operations for the six months ended June 30, 2026, are not necessarily indicative of the results to be expected for the full year ended December 31, 2026.
Principles of Consolidation – The accompanying consolidated financial statements include the accounts of Mitesco, Inc., and its wholly owned subsidiaries Mitesco NA, LLC, The Good Clinic, LLC, Vero Technology Ventures, LLC, and Centcore, LLC. In addition, we relied on the operating activities of certain legal entities in which we did not maintain a controlling ownership interest, but over which we had indirect influence and of which we were considered the primary beneficiary. These entities are typically subject to nominee ownership and transfer restriction agreements that effectively transfer the majority of the economic risks and rewards of their ownership to the Company. The Company’s management, restrictions and other agreements concerning such nominee-owned entities typically includes both financial terms and protective and participating rights to the entities’ operating, strategic and non-clinical governance decisions which transfer substantial powers over and economic responsibility for these entities to the Company. As such, the Company applies the guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810 – Consolidation (“ASC 810”), to determine when an entity that is insufficiently capitalized or not controlled through its voting interests, referred to as a variable interest entity should be consolidated. All intercompany balances and transactions have been eliminated.
Use of Estimates - The preparation of these financial statements requires our management to make estimates and assumptions about future events that affect the amounts reported in the financial statements and related notes. Future events and their effects cannot be determined with absolute certainty. Therefore, the determination of estimates requires the exercise of judgment.
Revenue Recognition – The Company recognizes revenue in accordance with ASC 606 when it has satisfied the performance obligations under an arrangement with the customer reflecting the terms and conditions under which products or services will be provided, the fee is fixed or determinable, and collection of any related receivable is probable. ASC Topic 606, “Revenue from Contracts with Customers” establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers. Revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements: 1) identify the contract with a customer; 2) identify the performance obligations in the contract; 3) determine the transaction price; 4) allocate the transaction price to performance obligations in the contract; and 5) recognize revenue as the performance obligation is satisfied.
Our revenues generally relate to data center services. Revenues are recorded during the period our obligations to provide services are satisfied. The Company’s performance obligation for its revenue stream is to provide the access to its data centers to the customer, and revenues associated with completed sales are recognized rateably over the contractual term as services are provided to the customer. There is no significant financing component to the Company’s sales.
In September 2025 we received a contract for development
of a new application intended to effect the listing and sale of properties and products specifically related to sports. We completed this
project as of June 30, 2026, with the fee of $
Capitalized Software Development Costs - Software development costs primarily consist of personnel costs. We capitalize software development costs upon the establishment of technological feasibility and prior to the availability of the product for general release to clients for software sold to third parties. During the six months ended June 30, 2026 and during the year ended December 31, 2025, no costs have been capitalized as we have not yet reached technological feasibility. We begin to amortize capitalized costs when a product is available for general release to clients. Amortization expense is determined on a product-by-product basis at a rate not less than straight-line basis over the software’s remaining estimated economic life.
Software Research and Development Costs
- Research and development costs are expensed as incurred and include compensation costs for engineering and product management personnel,
third-party contractor expenses, software development tools and other expenses related to researching and developing new solutions or
upgrading and enhancing existing solutions that do not qualify for capitalization. We expensed research and development costs of $
6
Segments - The Company manages its operations as a single segment for the purposes of assessing performance and making operating decisions. The Company’s Chief Operating Decision Maker (“CODM”) is its Chief Executive Officer. The CODM allocates resources and evaluates the performance of the Company at the consolidated level using information about its revenues, gross profit, and income from operations. All significant operating decisions are based upon an analysis of the Company as one operating segment, which is the same as its reporting segment.
Per Share Data - Basic income (loss) per share is computed by dividing net loss by the weighted average number of common shares outstanding for the year. Diluted loss per share is computed by dividing net loss by the weighted average number of common shares outstanding plus common stock equivalents (if dilutive) related to warrants, options, and convertible instruments.
The following table presents the effect of potential dilutive issuances for the six months ended June 30, 2026 and 2025:
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, 2026 | June 30, 2025 | June 30, 2026 | June 30, 2025 | |||||||||||||
| Net income (loss) attributable to common stockholders | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ||||||
| Preferred stock dividends | ||||||||||||||||
| Derivative gain | ( | ) | ( | ) | ||||||||||||
| Interest expense associated with convertible debt | ||||||||||||||||
| Net loss for dilutive calculation | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted average shares outstanding | ||||||||||||||||
| Dilutive effect of preferred stock | ||||||||||||||||
| Dilutive effect of convertible debt | ||||||||||||||||
| Dilutive effect of common stock warrants | - | |||||||||||||||
| Weighted average shares outstanding for diluted net income (loss) per share | ||||||||||||||||
During the three and six months ended June 30, 2026 the effect
of
Financial Instruments and Fair Values - The fair value of a financial instrument represents the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Fair value estimates are made at a specific point in time, based upon relevant market information about the financial instrument. In determining fair value, we use various valuation methodologies and prioritize the use of observable inputs. We assess the inputs used to measure fair value using a three-tier hierarchy based on the extent to which inputs used in measuring fair value are observable in the market:
Level 1 – inputs include exchange quoted prices for identical instruments and are the most observable.
Level 2 – inputs include brokered and/or quoted prices for similar assets and observable inputs such as interest rates.
Level 3 – inputs include data not observable in the market and reflect management judgment about the assumptions market participants would use in pricing the asset or liability.
The use of observable and unobservable inputs and their significance in measuring fair value are reflected in our hierarchy assessment. The carrying amount of cash, prepaid assets, accounts payable and accrued liabilities approximate fair value due to the short-term maturities of these instruments. Because cash and cash equivalents are readily liquidated, management classifies these values as Level 1. The fair value of the derivative liabilities approximates their book value as the instruments are short-term in nature and contain market rates of interest. Because there is no ready market or observable transactions, management classifies the derivative liabilities as Level 3.
Derivative Financial Instruments Policy
Fair value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity instruments and measurement of their fair value for accounting purposes. In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement. If the instrument is not considered conventional convertible debt under ASC 470, the Company will continue its evaluation process of these instruments as derivative financial instruments under ASC 815. The Company applies the guidance in ASC 815-40-35-12 to determine the order in which each convertible instrument would be evaluated for derivative classification. The Company’s sequencing policy is to evaluate for reclassification those contracts with the earliest maturity date first.
7
Recent Accounting Standards
In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses, and in January 2025, the FASB issued ASU 2025-01, Clarifying the Effective Date (“ASU 2025-01”). The amendments are intended to enhance disclosures regarding an entity’s costs and expenses by requiring additional disaggregated information disclosures about certain income statement expense line items. The amendments, as clarified by ASU 2025-01, are effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the effect of this pronouncement on its disclosures.
In July 2025, the FASB issued ASU 2025-05, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”). ASU 2025-05 amends ASC, Financial Instruments – Credit Losses (Topic 326) (“ASC Topic 326”) to simplify how entities measure credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC, Revenue from Contracts with Customers (Topic 606) (“ASC Topic 606”). This update allows entities to assume that current conditions as of the balance sheet date will remain unchanged for the remaining life of the asset when estimating expected credit losses. ASU 2025-05 is effective for interim and annual periods beginning after December 15, 2025. Early adoption is permitted. The Company adopted this standard effective January 1, 2026, which did not have a material impact on the Company’s consolidated financial statements.
There are various other updates recently issued, most of which represent technical corrections to the accounting literature or application to specific industries and are not expected to have a material impact on the Company’s consolidated financial position, results of operations or cash flows.
Note 4: Accounts Payable and Accrued Liabilities
Accounts payable and accrued liabilities consisted of the following at June 30, 2026, and December 31, 2025:
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Trade accounts payable | $ | $ | ||||||
| Accrued payroll and payroll taxes | ||||||||
| Total accounts payable and accrued liabilities | $ | $ | ||||||
Note 5: Right to Use Assets and Lease Liabilities – Operating Leases
The Company had operating leases for its clinics for which the Company is currently in negotiations with the Lessors to settle the remaining amounts owed after closing the clinic facilities. As of June 30, 2026 the Company had impaired all balances of the related right to use assets.
Operating lease liabilities are summarized below:
| June 30, 2026 | December 31, 2025 | |||||||
| Lease liability | $ | $ | ||||||
| Less: current portion | ( | ) | ( | ) | ||||
| Lease liability, non-current | $ | $ | ||||||
As a result of closing the facilities, the Company has made no further lease payments during the year ending December 31, 2025, or the six months ending June 30, 2026. As of June 30, 2026, the Company has either settled amounts owed or entered into default judgements for all leases except for the office lease, which we believe is nominal. For all leases for which a legal settlement has been entered into, all amounts have been reclassified to legal settlements as of June 30, 2026. See Note 12 for further details.
Note 6: SBA Loan Payable
PPP Loan Conversion to SBA Loan
During March 2020, in response to the COVID-19
crisis, the federal government announced plans to offer loans to small businesses in various forms, including the Payroll Protection Program,
or “PPP”, established as part of the Corona Virus Aid, Relief and Economic Security Act (“CARES Act”) and administered
by the U.S. Small Business Administration (the “SBA”). On April 25, 2020, the Company entered an unsecured Promissory Note
with Bank of America for a loan in the original principal amount of $
On July 12, 2023, the Company received confirmation of a payment
plan arrangement from the SBA for total principal and interest due on the loan of $
8
The following table provides the maturities as of June 30, 2026:
| Amount owed for Fiscal year ending December 31, | Principal | |||
| 2026 (6 months remaining) | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Thereafter | ||||
| Total | $ | |||
Note 7: Notes Payable
The following table summarizes the outstanding notes payable as of June 30, 2026 and December 31, 2025, respectively:
| June 30, 2026 | December 31, 2025 | |||||||
| Kishon Note | $ | $ | ||||||
| 2025 Bridge Notes | ||||||||
| Total Notes Payable | ||||||||
| Current Portion | ( | ) | ( | ) | ||||
| Long-term portion | $ | $ | ||||||
Kishon Note
On May 10, 2022, the Company entered into a Securities
Purchase Agreement (the “Kishon Agreement”) with Kishon Investments, LLC (“Kishon”) with respect to the sale and
issuance to Kishon of: (i) an initial commitment fee in the amount of $
The Kishon Note was issued in the principal amount
of $
During the year ended December 31, 2023, a default
penalty in the amount of $
At June 30, 2026, principal and interest in the
amount of $
2025 Bridge Notes
On May 6, 2025, the Company entered into a short term note payable
agreement with one of its investors and received cash proceeds of $
9
On May 19, 2025, the Company entered into Senior
Secured 5% Original Issue Discount Promissory Notes with three of its institutional investors for gross proceeds of $
On July 21, 2025, the Company entered into Senior
Secured
Aggregate interest expense on the notes payable
was $
Convertible Notes Payable
On October 31, 2025, the Company entered into
a Senior Secured
On December 19, 2025, the Company entered into
a Senior Secured
On December 19, 2025, the Company entered into
a Senior Secured
10
On February 20, 2026, the Company entered into
a third Senior Secured
On April 10, 2026 the Company entered into a convertible
promissory note with an institutional investor, with a $
On April 13, 2026 the Company entered into a convertible
promissory note with an institutional investor, with a $
On April 23, 2026 the Company entered into a convertible
promissory note with an institutional investor in the Company using the 2026 Bridge Note previously executed with other of its historical
investors with a $
On May 29, 2026 the Company entered into
a convertible promissory note with an institutional investor, with a $
On May 29, 2026 the Company entered into a convertible
promissory note with an institutional investor, with a $
11
The following table provides the maturities of June 30, 2026 of the Companies notes and convertible notes payable:
| Amount owed for Fiscal year ending December 31, | Principal | |||
| 2026 (6 months remaining) | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Thereafter | ||||
| Total | $ | |||
Aggregate amortization expense on the convertible
notes payable was $
Note 8: Derivative Liabilities
Certain of the Company’s convertible notes and warrants contain features that create derivative liabilities. The pricing model the Company uses for determining fair value of its derivatives related to the Kishon note is the Monte Carlo Model while the bridge notes are valued using the black-scholes model. Valuations derived from these models are subject to ongoing internal and external verification and review. The model uses market-sourced inputs such as interest rates and stock price volatilities. Selection of these inputs involves management’s judgment and may impact net income. The derivative components of these notes are valued at issuance, at conversion, at restructuring, and at each period end.
Derivative liability activity for the six months ended June 30, 2026, is summarized in the table below:
| December 31, 2025 | $ | |||
| New derivative liability related to issuance of convertible notes | ||||
| Gain on revaluation | ( | ) | ||
| June 30, 2026 | $ |
The following assumptions were used for the valuation of the derivative liability associated with this obligation:
| ● | The stock price on the date of valuation represents the fair market value of the stock | |
| ● | The notes convert with variable conversion prices based on percentages of the lowest trades over the prior 10- 20 trading days | |
| ● | Assumed volatility of | |
| ● | Assumed risk free rate of | |
| ● | The holder would automatically convert the note immediately (based on ownership or trading volume limitations) if the registration were effective and the Company was not in default |
Note 9: Series A Preferred stock
On October 28, 2024, the Company filed a Certificate
of Designation, Preferences and Rights of the Series A Preferred Stock with the Nevada Secretary of State (the “Certificate of Designation”).
The Company authorized
Holders of shares of the Series A Preferred Stock are not entitled to receive any dividends, and the security bears no interest.
The Series A Preferred Stock will rank, with respect to rights to the payment of dividends and the distribution of assets in the event of any liquidation, dissolution or winding up of the Company, (i) senior to all classes or series of the Company’s Common Stock except in relation to the Series X Preferred Stock, which ranks Pari passu to the Series A Preferred Stock, and to all other equity securities issued by the Company; and (ii) effectively junior to all existing and future indebtedness (including indebtedness convertible into our Common Stock or preferred stock) of the Company and to any indebtedness and other liabilities of (as well as any preferred equity interest held by others in) existing subsidiaries of the Company.
In addition to any other rights provided by law, except where the vote or written consent of the holders of a greater number of shares is required by law or by another provision of the Articles of Incorporation, without first obtaining the affirmative vote at a meeting duly called for such purpose or the written consent without a meeting of the majority of the outstanding Series A Preferred Stock, voting together as a single class, the Company shall not: (a) amend or repeal any provision of, or add any provision to, its Articles of Incorporation or bylaws, or file any certificate of designations or certificate of amendment, if such action would adversely alter or change in any respect the preferences, rights, privileges or powers, or restrictions provided for the benefit, of the Series A Preferred Stock, regardless of whether any such action shall be by means of amendment to the Articles of Incorporation or by merger, consolidation or otherwise; or (b) without limiting the provisions of the Certificate of Designation, circumvent a right of the Series A Preferred Stock.
12
As a result of the mandatory redemption features
requiring the Company to repay the Series A in either cash or shares of Common Stock of the Company, under ASC 480, the Company is required
to record the full redemption value of the Series A preferred shares as a liability on the accompanying balance sheet. The Company has
recorded the redemption value based on the
During the six months ended June 30, 2026, the Company redeemed
The following table provides the maturities of Series A preferred stock redemptions at June 30, 2026:
| Series A Preferred Stock | ||||
| 2026 (6 months remaining) | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 and thereafter | ||||
| Total future undiscounted redemption payments | ||||
| Less: Interest | ( | ) | ||
| Present value of redemption payments | ||||
| Current portion | ( | ) | ||
| Long term portion | $ | |||
Note 10: Stockholders’ Equity (Deficit)
Common Stock
The Company has authorized
Issuance of Restricted Common Stock for Series X Preferred Stock Dividends
During the six months ended June 30, 2026, the
Company issued
Issuance of Restricted Common Stock for the Redemption of Series A Preferred Stock
During the six months ended June 30, 2026, the
Company issued
Equity Line of Credit
On June 28, 2026, the Company entered into
a Common Stock Purchase Agreement (the “Purchase Agreement”) and a Registration Rights Agreement (the “Registration
Rights Agreement”) with an institutional investor (the “Investor”), pursuant to which the Investor is committed to purchase
up to $
In consideration for the Investor’s commitment
to purchase shares of common stock under the Purchase Agreement, the Company has issued to the Investor a Convertible Promissory Note
in the amount of $
13
The Company will control the timing and amount of any sales of common stock to the Investor. The Purchase Price per share will be equitably adjusted for any reorganization, recapitalization, noncash dividend, stock split or any other similar transaction occurring after the date of the Purchase Agreement.
Notwithstanding the foregoing, the Purchase Agreement
prohibits the Company from directing the Investor to purchase any shares of common stock if those shares, when aggregated with all other
shares of common stock then beneficially owned by the Investor and its affiliates, would result in the Investor and its affiliates having
beneficial ownership at any single point in time of more than
The Purchase Agreement prohibits the Company from entering into any other “equity line of credit,” “at the market offering” or other similar continuous offering in which the Company offers, issues or sells common stock or other equity securities at a future determined price.
The Company may at any time terminate the Purchase Agreement without fee, penalty or cost upon one (1) trading day’s written notice. The Investor may also terminate the Purchase Agreement upon ten (10) trading day’s written notice under certain circumstances set forth in the Purchase Agreement. The Investor may not assign or transfer its rights and obligations under the Purchase Agreement.
Pursuant to the Registration Rights Agreement, the Company agreed to register all shares of common stock issuable to the Investor under the Purchase Agreement (the “Registrable Securities”). The Company agreed to file an initial registration statement (the “Registration Statement”) with the SEC as soon as practicable, but in no event later than the forty-fifth (45th) calendar day after the date of the Registration Rights Agreement. If at any time all Registrable Securities are not covered by the Registration Statement, and if the Company desires to sell additional shares to the Investor under the Purchase Agreement, the Company shall then use its reasonable best efforts to file with the SEC one or more additional registration statements so as to cover all of the Registrable Securities not covered by the Registration Statement. Pursuant to the Registration Rights Agreement, the Company agreed to use its commercially reasonable efforts to cause the Registration Statement to become effective as soon as practicable after filing, but in no event later than the earlier of (i) the Sixtieth (60th) calendar day after the date of the Registration Rights Agreement, and (ii) the third (3rd) business day following the date the Company is notified by the SEC that the Registration Statement will not be reviewed.
The Purchase Agreement and the Registration Rights Agreement contain customary representations, warranties, agreements and conditions to completing future sale transactions, indemnification rights and obligations of the parties. Actual sales of shares of common stock to the Investor will depend on a variety of factors to be determined by the Company from time to time, including, among others, market conditions, the trading price of the common stock and determinations by the Company as to the appropriate sources of funding for the Company and its operations. The Investor has covenanted not to cause or engage in, in any manner whatsoever, any direct or indirect short selling or hedging of the Company’s common stock.
As of June 30, 2026, the Company has not issued
the $
Other Common stock Issuances
During the six months ended June 30, 2026, the
Company issued
Preferred Stock
We are authorized to issue
Series D Preferred Stock
The Series D Preferred Stock has a par value of
$
Series E Preferred Stock
The number of shares of Series E designated is
14
Series F Preferred Stock
The number of shares of Series F Preferred Stock
designated is
Series X Preferred Stock
The Company has
On April 20, 2026, the Company issued additional
shares of its Series X Preferred stock whereby each director received $
On April 20, 2026, the Company issued additional shares of its
Series X Preferred stock whereby a historical shareholder received $
The Company accrued dividends in the amount of
$
Warrants
The following table summarizes the warrants outstanding on June 30, 2026, and the related prices for the warrants to purchase shares of the Company’s common stock:
| Weighted | Weighted | |||||||||||||||||||||
| Weighted | average | average | ||||||||||||||||||||
| average | exercise | exercise | ||||||||||||||||||||
| Range of | Number of | remaining | price of | Number of | price of | |||||||||||||||||
| exercise | warrants | contractual | outstanding | warrants | exercisable | |||||||||||||||||
| prices | outstanding | life (years) | warrants | exercisable | warrants | |||||||||||||||||
| $ | $ | $ | ||||||||||||||||||||
| $ | $ | $ | ||||||||||||||||||||
| $ | $ | |||||||||||||||||||||
The following table summarizes the transactions involving options to purchase shares of the Company’s common stock:
| Shares | Weighted- Average Exercise Price ($) | |||||||
| Outstanding at December 31, 2025 | $ | |||||||
| Granted | $ | |||||||
| Cancelled | $ | |||||||
| Exercised | $ | |||||||
| Outstanding at June 30, 2026 | $ | |||||||
At June 30, 2026, there was no intrinsic value on the issued or vested warrants.
Note 11: Fair Value of Financial Instruments
The following summarizes the Company’s derivative financial liabilities that are recorded at fair value on a recurring basis at June 30, 2026 and December 31, 2025.
| June 30, 2026 | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Liabilities | ||||||||||||||||
| Derivative liabilities | $ | $ | $ | $ | ||||||||||||
| December 31, 2025 | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Liabilities | ||||||||||||||||
| Derivative liabilities | $ | $ | $ | $ | ||||||||||||
15
Note 12: Commitments and Contingencies
Legal
From time to time, we may become involved in legal proceedings or be subject to claims arising in the ordinary course of our business.
The Company has a number of legal situations involved with the winding down of its clinic’s business activities. These include claims regarding certain construction contracts and cancellation of leases as noted below:
Wayzetta Clinic
On April 4, 2022, we entered into an agreement
to open a clinic in Wayzata, Minnesota, which was expected to begin operations in the first quarter of 2023. The initial lease term was
for
Nordhaus Clinic
On November 1, 2020, we entered into an agreement
to open a clinic in Minneapolis, Minnesota. The initial lease term is
Egan Clinic a.k.a. Vikings
On October 14, 2021, we entered into an agreement
to open a clinic in Eagan, Minnesota, which began operations in the fourth quarter of 2021. The initial lease term is for
St. Paul Clinic a.k.a. The Grove
On August 31, 2021, we entered into an agreement
to open a clinic in St. Paul, Minnesota, which began operations in the fourth quarter of 2021. The initial lease term is for
St. Louis Park Clinic a.k.a. Excelsior & Grand
On May 24, 2021, we entered into an agreement
to open a clinic in St. Louis Park, Minnesota, which began operations in the third quarter of 2021. The initial lease term is
Eden Prairie Clinic a.k.a. TP Elevate
On June 8, 2021, we entered into an agreement
to open a clinic in Eden Prairie, Minnesota, which began operation in the third quarter of 2021. The initial lease term is
Maple Grove Clinic a.k.a. Arbor Lakes
On October 8, 2021, we entered into an agreement
to open a clinic in Maple Grove, Minnesota which began operation in the fourth quarter of 2021. The initial lease term is for
Radiant Clinic a.k.a. LMC Welton
On September 9, 2021, we entered into an agreement
to open a clinic in Denver, Colorado, which was expected to begin operation in the first quarter of 2023 but possession of which has been
relinquished to the landlords. The initial lease term is for
16
Quincy Clinic a.k.a. 1776 Curtis
On September 28, 2021, we entered into an agreement
to open a clinic in Denver, Colorado, which was expected to begin operation in the first quarter of 2023 but possession of which has been
relinquished to the landlords. The initial lease term is for
The following table summarizes the status of our property settlements as noted above and the total settlement amounts as of June 30, 2026:
| LOCATION | PROPERTY NAME | ORIGINAL OBLIGATION | SETTLEMENT AMOUNT | DATE OF AWARD | INTEREST RATE | INTEREST ACCRUED ON SETTLEMENT | TOTAL SETTLEMENT OBLIGATION | TYPE OF SETTLEMENT | ||||||||||||||||||
| WAYZETTA, MN | WAZETTA BAY | $ | $ | $ | CASH PAYMENT OBLIGATION | |||||||||||||||||||||
| EAGAN, MN | VIKINGS | $ | $ | % | $ | $ | DEFAULT JUDGEMENT | |||||||||||||||||||
| ST. LOUIS PARK, MN | EXCELSIOR | $ | $ | % | $ | $ | DEFAULT JUDGEMENT | |||||||||||||||||||
| ST. PAUL, MN | CONTINENTAL 560 | $ | $ | % | $ | $ | DEFAULT JUDGEMENT | |||||||||||||||||||
| MAPLE GROVE, MN | BUTTNICK | $ | $ | % | $ | $ | SETTLEMENT AGREEMENT | |||||||||||||||||||
| DENVER, CO | RADIANT | $ | $ | $ | DISMISSED | |||||||||||||||||||||
| DENVER, CO | QUINCY | $ | $ | % | $ | DEFAULT JUDGEMENT | ||||||||||||||||||||
| TOTAL | $ | $ | $ | $ | ||||||||||||||||||||||
Administrative offices
On June 24, 2021, we entered into an agreement
to open an administrative office in St. Louis Park, Minnesota. The initial lease term is . Fixed rent payments under
the initial term are approximately $
During the six months ending June 30, 2026 and
2025, the Company recorded interest expense of $
Note 13: Income Taxes
Deferred income taxes result from the temporary differences primarily attributable to amortization of intangible assets and debt discount and an accumulation of net operating loss carry forwards for income tax purposes with a valuation allowance against the carryforwards for book purposes.
In assessing the realizability of deferred tax
assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized.
Included in deferred tax assets are Federal and State net operating loss carryforwards of approximately $
For the six months ended June 30, 2026, the expected tax expense (benefit) based on the U. S. federal statutory rate is reconciled with the actual tax provision (benefit) as follows:
| For the Six Months Ended June 30, | ||||||||
| 2026 | ||||||||
| Expected tax at statutory rates | ||||||||
| Federal | $ | ( | ) | % | ||||
| State | ( | )% | ||||||
| Permanent Differences | ( | ) | % | |||||
| Temporary difference for derivative gain | ( | ) | % | |||||
| Temporary difference for stock compensation | ( | )% | ||||||
| Other | ( | )% | ||||||
| Prior Year True-Ups | % | |||||||
| Current Year Change in Valuation Allowance | ||||||||
| Federal | ( | )% | ||||||
| State | ( | ) | % | |||||
| Income tax expense | $ | % | ||||||
Deferred income taxes reflect the tax impact of temporary differences between the amounts of assets and liabilities for financial reporting purposes and such amounts as measured by tax laws and regulations.
17
Deferred income taxes include the net tax effects of net operating
loss (NOL) carryforwards and the temporary differences between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes.
| As of | ||||||||
| June 30, 2026 | December 31, 2025 | |||||||
| Deferred Tax Assets (Liabilities): | ||||||||
| Accrued payroll | $ | $ | ||||||
| ASC842-ROU (Liability) | ||||||||
| Loss from derivatives | ( | ) | ( | ) | ||||
| Stock based compensation | ( | ) | ( | ) | ||||
| Depreciation | ||||||||
| Net operating loss | ||||||||
| Net deferred tax assets (liabilities) | ||||||||
| Valuation allowance | ( | ) | ( | ) | ||||
| Net deferred tax assets (liabilities) | $ | $ | ||||||
Note 14: Subsequent Events
Series X Preferred Stock dividend payments for Q2 FY2026
In July 2026, the Company issued a total of
Series A Preferred Stock redemptions for Q2 FY2026
In July 2026, the Company issued a total of
Series X Preferred Stock issuances
On July 21, 2026 the Company issued
As a result of these issuances the Company now
has
Other common stock issuances
Subsequent to June 30, 2026 the Company
issued
Subsequent to June 30, 2026 the Company issued
an aggregate of
Subsequent to June 30, 2026 the Company issued
Subsequent to June 30, 2026 the Company executed
an Advisory Agreement with Dawson James Securities, and with that the issuance of
Subsequent to June 30, 2026 the Company issued
Subsequent to June 30, 2026 the Company awarded
each of the members of the Board of Directors
Subsequent to June 30, 2026 the Company
amended the June 2025 Bridge Note and the July 21, 2025 note with an institutional investor, which had an original maturity date of
Subsequent to June 30, 2026 the Company amended
the two May 20, 2025 Bridge Notes and the July 22, 2025 Note with an institutional investors, which had an original maturity dates of
On August 2, 2026 the Company entered into a convertible
promissory note with an institutional investor with a $
On August 12, 2026, the Company entered into a
short term note payable agreement for $
On August 12, 2026, the Company entered into a
short term note payable agreement for $
18
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
References to the “Company,” “Mitesco, Inc.,” “our,” “us” or “we” refer to Mitesco, Inc. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited interim financial statements and the notes thereto contained elsewhere in this report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act. We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our 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 such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other SEC filings.
Company Overview
Mitesco, Inc. (the “Company,” “we,” “us,” or “our”) was formed in the state of Delaware on January 18, 2012. On December 9, 2015, we restructured our operations and acquired Newco4pharmacy, LLC, a development stage company which sought to acquire compounding pharmacy businesses. As a part of the restructuring, we shut down our former business line. On April 24, 2020, we changed our name to Mitesco, Inc. In October 2023, the Company changed its domicile from Delaware to Nevada in order to effect reduced costs.
Current Business Operations
We are a holding company seeking to provide products, services and technology.
The Company currently operates through two primary business segments: its data center subsidiary, Centcore, and its software development division, Vero Technology Ventures (VTV).
Centcore initially entered the market through a colocation agreement with a data center facility in Melbourne, Florida. However, the Company exited that arrangement in late 2025 due to operating costs that were no longer competitive within the evolving market environment. In the first quarter of fiscal 2026, Centcore announced a strategic focus on developing and operating smaller-footprint data centers, generally targeting facilities of approximately 10,000 square feet. Building on that strategy, the Company recently unveiled plans to deploy an edge computing network utilizing its proprietary TC/DC modular data center node design, which is intended for residential, rural, and office-based deployments.
Vero Technology Ventures' operations are centered on the development and commercialization of software and artificial intelligence solutions. Its flagship AI platform, Robo Agent, is designed to enhance sales productivity and workflow automation, with its initial market focus on the residential real estate sector and future expansion planned into financial services and related industries.
In addition, VTV has developed Sportzfolio, a digital marketplace platform for the listing, marketing, and sale of sports-related properties and facilities. The platform supports a wide range of assets, including pickleball, golf, tennis, youth activity, and other specialized recreational properties. Sportzfolio is currently operational and features a user experience and property search functionality similar to leading online real estate marketplaces.
The Robo Agent initial prototype is in testing with a small group of agents with varying levels of experience and technical skills. Management believes it will be able to create its first licensing in Q4 FY2026 as it rolls out its full production version in late FY2026. It is intended only to be licensed to major players, of which most are publicly held companies. The smaller players in the industry will be sold and supported by third parties who specialize in supporting that segment of the marketplace.
The Robo Agent project has been strongly influenced by executives at one of the largest publicly held brokerages, who employs over 84,000 agents. The software will be running exclusively on the Company’s Centcore Data Center platform. Further, management believes the same user base can be engaged to deploy the new TC/DC edge computing platform aimed at residential and rural installations.
The new data center effort is focused on edge computing and is moving forward with a small engineering group set to build the first units, dubbed TC/DC and establish standards for the larger scale assembly effort. An executive with extensive data center operations is heading the project and has been working with the Company on the design of the application software for managing the network and allocation of tasks. Management is believes it can place up to 10,000 units over 2 – 3 years using its real estate agent user base to place units at residential sites, including owners of public housing, with larger installations on ranch and rural properties, and sparsely used areas such as golf courses and schools.
19
The Company intends to deploy three (3) models of the TC/DC, one with (2) processors, one with (5) processors and one with (10) processors. While the initial design is contemplated using Apple’s A5 processors, it expects a second vendor version as well, likely with processors from AMD, or a similar provider. Since the whole concept is low power consumption, the evaluation of “tokens per kWh” is a key factor. (A token is the measurement of computing resources used in AI operations.) The unit resembles a conventional trash can (hence the “TC” in the name) with versions intended for inside a garage, fully weatherproofed for outdoor settings, and a version to go inside of a home. The internet connection may be made by satellite (i.e. Starlink), conventional internet (Comcast, etc.) or a private 5G radio link. The battery systems will be recharged by 110v or in some cases solar panels.
Pulte Homes recently announced a prototype effort in a similar vein, though much more expensive and complicated than the TC/DC design.
https://que.com/nvidia-pulte-help-startup-deploy-mini-data-centers-in-homes/
https://www.realtor.com/news/trends/nvidia-pultegroup-span-date-center-backyard/
The Company is currently working through its corporate real estate brokerage connections to explore similar relationships with other large-scale production home builders, and regional builders. Also, with its larger relationships, it is evaluating certain rural applications where a barn or utility building might house multiple units with significant “off grid” power from solar panels.
The initial units are expected to cost around $10,000 each, dropping on volume over time.
FY2024 Debt Restructuring
From FY2021 until late FY2022 the Company invested in an operating subsidiary, The Good Clinic, which was developing a series of primary care healthcare facilities. In late FY2022, as a result of a lack of adequate revenues and limited funding, it ceased operations. As of June 30, 2024, the Company had over $30 million in senior securities, notes and accounts payable related to that discontinued operation. In order to clear those obligations management began a restructuring which involved negotiations to reduce the overall debt, converting certain accredited institutional investors into a newly created Series A Amortizing Preferred stock (“Series A Preferred”), and all others into restricted common stock using a price per share of $4.00.
As of the date of this filing it has converted approximately $26 million of its obligations, representing approximately $21.7 million of its senior securities, and approximately $4.3 million of notes and accounts payable, into 2,628,179 shares of restricted Common Stock, and 562,998 Series A Preferred stock (before giving effect to redemptions made in Q1, Q2 and Q3 FY2025). The Series A Preferred stock is held by six (6) accredited institutional investors, while over 40 holders of obligations of the Company elected to receive common stock using the $4 per share valuation.
Included in the above totals, effective December 31, 2024, the Company entered into Obligation Exchange Agreements pursuant to which it has converted $580,132, including $32,132 of principal and interest, of its 2024 Bridge Notes into Series A Preferred shares, which resulted in the issuance of 23,206 shares of Series A Preferred shares to three (3) of its institutional investor. This extinguishes $580,132 of its short-term debt. As of the date of this filing all FY2024 bridge notes have been extinguished. Further, during January 2025 the Company issued 4,000 shares of its Series A Preferred shares in consideration of an investment of $100,000 by three (3) of its institutional investors.
As part of the restructuring, the Company agreed to register shares of Common Stock issued and to be issued to Series A Preferred Stockholders.
Comparison of the Three Months Ended June 30, 2026, and 2025.
Revenues
We had revenues of $20,000 for the three months ended June 30, 2026, compared to $18,700 in the comparable period. The revenue for the three months ended June 30, 2026 were related to the development of a new software for a customer compared to the prior year which were related to our subsidiary Centcore, LLC, which provides data center services.
Operating Expenses
Our total operating expenses for the three months ended June 30, 2026, were $478,872. For the comparable period in 2025, the operating expenses were $370,454. The increase is the result of the Company’s focus on establishing future business opportunities as well as development of a software platform.
Other Income and Expenses
Interest expense was $561,525 for the three months ended June 30, 2026, compared to $358,607 for the comparable period in 2025. The increase was a result of the increased debt discount amortization related to the convertible notes and day one interest charges of $210,813 related to the derivative liabilities in excess of the face value.
During the three months ended June 30, 2026, we recorded a gain on settlement of liabilities of $0, compared to $562,793 in the prior period.
During the three months ended June 30, 2026, we recorded a gain on revaluation of derivative liabilities of $137,665, compared to $68,222 in the prior period.
During the three months ended June 30, 2026 we recorded a loss on the settlement of Series A preferred shares of $94,652, compared to $8,038 in the prior period.
20
Comparison of the Six Months Ended June 30, 2026, and 2025.
Revenues
We had revenues of $20,000 for the six months ended June 30, 2026, compared to $35,700 in the comparable period. The revenue for the six months ended June 30, 2026 were related to the development of a new software for a customer compare to the prior year which were related to our subsidiary Centcore, LLC, which provides data center services.
Operating Expenses
Our total operating expenses for the six months ended June 30, 2026, were $831,801. For the comparable period in 2025, the operating expenses were $654,440. The increase is the result of the Company’s focus on establishing future business opportunities as well as development of a software platform.
Other Income and Expenses
Interest expense was $879,764 for the six months ended June 30, 2026, compared to $750,656 for the comparable period in 2025. The increase was a result of increased debt discount amortization and day one interest charges of $210,813 related to the derivative liabilities in excess of the face value.
Interest expense – related parties was $0 for the six months ended June 30, 2026, compared to $2,297 in the prior period. The decrease was a result of reduced debt balances in the current period.
During the six months ended June 30, 2026, we recorded a gain on settlement of liabilities of $0, compared to $562,793 in the prior period.
During the six months ended June 30, 2026, we recorded a gain on revaluation of derivative liabilities of $133,277, compared to $4,430,867 in the prior period.
During the six months ended June 30, 2026, we recorded a loss on revaluation of Series A preferred shares of $196,385, compared to $259,015 in the prior period.
Liquidity and Capital Resources
To date, we have not generated sufficient revenue from operations to support our operations. We have financed our operations through the sale of equity securities and short-term borrowings. As of August 17, 2026, we had cash of approximately $5,700 compared to cash of approximately $8,000 as of June 30, 2026. Our Company’s recurring losses from operations, negative cash flows from operations and our need to raise additional funding to finance our operations raise substantial doubt about our ability to continue as a going concern.
Net cash used in operating activities was $495,106 for the six months ended June 30, 2026. This is the result of the development of its new software platforms and other administrative activities. Cash used in operations for the six months ended June 30, 2025 was $188,060.
Net cash used in investing activities was the result of the Company advancing $55,000 in unsecured funds to an unrelated third party for the six months ended June 30, 2026 compared to no investing activities for the six months ended June 30, 2025.
Net cash provided by financing activities for the six months ended June 30, 2026, was $457,233, compared to $187,382 for the six months ended June 30, 2025. Cash provided by financing activities for the six months ended June 30, 2026 was the result of cash proceeds from convertible promissory notes of $471,000, offset by the repayment of principal on the SBA loan in the amount of $13,767. Cash provided by financing activities for the six months ended June 30, 2025, was the result of cash proceeds from sales of Series A preferred shares of $100,000 and cash proceeds from notes payable of $100,000, offset by the repayment of principal on the SBA loan in the amount of $12,618.
At June 30, 2026 we had the following current liabilities which are payable in cash: Accounts payable and accrued liabilities of $4.1 million; notes payable of $0.6 million; convertible notes payable of $0.7 million; SBA Loan Payable of $0.4 million; legal settlements of $3.5 million; accrued interest payable of $0.5 million; and other current liabilities of $0.2 million. We also have the following liabilities which are payable in stock: derivative liabilities of $0.8 million, Series A Preferred Stock liability of $11.6 million and preferred stock dividends payable of $0.03 million.
The Company has relationships with a number of consultants who are assisting in the creation of the new business units. It is anticipated that this approach will continue indefinitely as it does not desire to create the overhead associated with a large employment force.
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The following table summarizes the status of our property-related settlements as noted above and the total settlement amounts as of the date of the filing:
| LOCATION | PROPERTY NAME | ORIGINAL OBLIGATION | SETTLEMENT AMOUNT | DATE OF AWARD | INTEREST RATE | INTEREST ACCRUED ON SETTLEMENT | TOTAL SETTLEMENT OBLIGATION | TYPE OF SETTLEMENT | ||||||||||||||||||
| WAYZETTA, MN | WAZETTA BAY | $ | 407,000 | $ | 25,000 | NA | - | - | $ | 25,000 | CASH PAYMENT OBLIGATION | |||||||||||||||
| EAGAN, MN | VIKINGS | $ | 767,000 | $ | 488,491 | 12/7/2023 | 10 | % | $ | 125,268 | $ | 613,759 | DEFAULT JUDGEMENT | |||||||||||||
| ST. LOUIS PARK, MN | EXCELSIOR | $ | 673,000 | $ | 425,350 | 5/22/2024 | 10 | % | $ | 89,615 | $ | 514,965 | DEFAULT JUDGEMENT | |||||||||||||
| ST. PAUL, MN | CONTINENTAL 560 | $ | 1,153,000 | $ | 415,606 | 1/22/2024 | 10 | % | $ | 101,340 | $ | 516,946 | DEFAULT JUDGEMENT | |||||||||||||
| MAPLE GROVE, MN | BUTTNICK | $ | 1,153,127 | $ | 219,000 | 10/3/2022 | 10 | % | $ | 81,960 | $ | 300,960 | SETTLEMENT AGREEMENT | |||||||||||||
| DENVER, CO | RADIANT | $ | 782,000 | $ | 530,557 | - | - | $ | 530,557 | DISMISSED | ||||||||||||||||
| DENVER, CO | QUINCY | $ | 1,079,000 | $ | 848,764 | 11/14/2023 | 12 | % | 154,892 | $ | 1,003,656 | DEFAULT JUDGEMENT | ||||||||||||||
| TOTAL | $ | 6,014,127 | $ | 2,952,768 | $ | 553,075 | $ | 3,505,843 | ||||||||||||||||||
Critical Accounting Estimates
Management uses various estimates and assumptions in preparing our financial statements in accordance with generally accepted accounting principles. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Accounting estimates that are the most important to the presentation of our results of operations and financial condition, and which require the greatest use of judgment by management, are designated as our critical accounting estimates. We have the following critical accounting estimates:
| ● | Estimates and assumptions used in the valuation of derivative liabilities: Management utilizes a Monte Carlo model and the Black Scholes option pricing model to estimate the fair value of derivative liabilities. The models include subjective assumptions that can materially affect the fair value estimates. |
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not applicable.
ITEM 4. CONTROLS AND PROCEDURES.
(a) Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Based on such an evaluation, the Company’s management has identified what it believes are material weaknesses in the Company’s disclosure controls and procedures and concluded that we did not have effective disclosure controls and procedures.
The deficiencies in our disclosure controls and procedures included (i) lack of formal documentation of policies and procedures, (ii) lack of segregation of duties and multiple levels of review, and (iii) lack of sufficient resources with appropriate accounting experience, especially with regards to equity-based transactions and tax accounting expertise.
The Company intends to take corrective action to ensure that information required to be disclosed by the Company pursuant to the reports that the Company files or submits to the SEC is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
(b) Changes in Internal Control Over Financial Reporting
There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that occurred during the six months ended June 30, 2026, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company has a number of legal situations involved with the winding down of its clinic business activities. These include claims regarding certain construction contracts and cancellation of leases as noted below:
| LOCATION | PROPERTY NAME | ORIGINAL OBLIGATION | SETTLEMENT AMOUNT | DATE OF AWARD | INTEREST RATE | INTEREST ACCRUED ON SETTLEMENT | TOTAL SETTLEMENT OBLIGATION | TYPE OF SETTLEMENT | ||||||||||||||||||
| WAYZETTA, MN | WAZETTA BAY | $ | 407,000 | $ | 25,000 | NA | - | - | $ | 25,000 | CASH PAYMENT OBLIGATION | |||||||||||||||
| EAGAN, MN | VIKINGS | $ | 767,000 | $ | 488,491 | 12/7/2023 | 10 | % | $ | 125,268 | $ | 613,759 | DEFAULT JUDGEMENT | |||||||||||||
| ST. LOUIS PARK, MN | EXCELSIOR | $ | 673,000 | $ | 425,350 | 5/22/2024 | 10 | % | $ | 89,615 | $ | 514,965 | DEFAULT JUDGEMENT | |||||||||||||
| ST. PAUL, MN | CONTINENTAL 560 | $ | 1,153,000 | $ | 415,606 | 1/22/2024 | 10 | % | $ | 101,340 | $ | 516,946 | DEFAULT JUDGEMENT | |||||||||||||
| MAPLE GROVE, MN | BUTTNICK | $ | 1,153,127 | $ | 219,000 | 10/3/2022 | 10 | % | $ | 81,960 | $ | 300,960 | SETTLEMENT AGREEMENT | |||||||||||||
| DENVER, CO | RADIANT | $ | 782,000 | $ | 530,557 | - | - | $ | 530,557 | DISMISSED | ||||||||||||||||
| DENVER, CO | QUINCY | $ | 1,079,000 | $ | 848,764 | 11/14/2023 | 12 | % | 154,892 | $ | 1,003,656 | DEFAULT JUDGEMENT | ||||||||||||||
| TOTAL | $ | 6,014,127 | $ | 2,952,768 | $ | 553,075 | $ | 3,505,843 | ||||||||||||||||||
Quincy Clinic a.k.a. 1776 Curtis
On September 28, 2021, we entered into an agreement to open a clinic in Denver, Colorado, which was expected to begin operation in the first quarter of 2023 but possession of which has been relinquished to the landlords. The initial lease term is 94 months. Fixed rent payments under the initial term are approximately $1,079,000. A Final Judgment was granted on November 14, 2023, in the amount of $348,764 including interest, fees and other costs. The Company has released the property back to the leaseholder. The owner of the Quincy Clinic property filed before the same court, an action against the Company seeking to modify the final settlement for an additional $1,250,000, including $350,000 which represent amounts paid to the contractor who was performing the build out, who had filed liens on the property. As of August 8th, 2025, we settled this matter by providing an additional judgment in the amount of $500,000.
Administrative office
On June 24, 2021, we entered into an agreement to open an administrative office in St. Louis Park, Minnesota. The initial lease term was 2.5 years. Fixed rent payments under the initial term were approximately $244,000. We believe that there is no further obligation in this situation, but we do not have such documented in writing at this time.
Gardner Debt for Equity Agreement and other obligations
The Company entered into a debt-for-equity exchange agreement with Gardner Builders Holdings, LLC (the “Creditor”) on January 7, 2022 (the “Agreement”). Pursuant to the Agreement, the Company issued shares of restricted common stock, par value $0.01 per share, of MITI (the “Restricted Shares”) to the Creditor in exchange for the Company Debt Obligations, as defined below.
The Agreement settled certain accounts payable amounts owed by the Company to the Creditor (the “Accounts Payable Amount”) as well as then upcoming amounts that would become due between the date of the Agreement and April 1, 2022. The Agreement also settled incurred interest and penalties on the amounts due through January 5, 2022, as well as future interest payments on amounts to be incurred in the first quarter of 2022 (collectively, the “Additional Costs”, and combined with the Accounts Payable Amount, the “Company Debt Obligations”). The Accounts Payable Amount was $500,000, the Additional Costs were $294,912 and the conversion price was $12.50. As a result, 63,593 Restricted Shares were authorized to be issued. The Company’s Board of Directors approved the Agreement on January 5, 2022. Much of the amounts claimed by Gardner have been resolved by the settlements with the various leaseholders where Gardner had filed liens. During 2021 and through 2022 a total of $2,305,155 was paid by the Company directly to Gardner for their services. As of the date of this filing the Company is continuing an effort to negotiate a settlement of any remaining obligations to this vendor.
ITEM 1A. RISK FACTORS
Our business is subject to risks and events that, if they occur, could adversely affect our financial condition and results of operations and the trading price of our securities. In addition to the other information set forth in this quarterly report on Form 10-Q, you should carefully consider the factors described in Part I, Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the Securities and Exchange Commission on April 15, 2026. There have been no material changes to the risk factors described in that report.
ITEM 2. SALE OF UNREGISTERED SECURITIES
During the period ending June 30, 2026 the Company made the following issuances of restricted common stock
Issuance of Restricted Common Stock for Series X Preferred Stock Dividends
During the three months ended June 30, 2026, the Company issued 222,142 shares of common stock for dividends payable on its Series X Preferred Stock
Issuance of Restricted Common Stock for the Redemption of Series A Preferred Stock
During the three months ended June 30, 2026, the Company issued 2,922,915 shares of its restricted common stock in order to redeem $201,400 of its Series A Preferred stock.
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ITEM 3. DEFAULTS ON SENIOR SECURED SECURITIES
Not Applicable.
ITEM 4. MINE SAFETY DISCLOSURES
Not Applicable.
ITEM 5. OTHER INFORMATION
ITEM 6. EXHIBITS
The following exhibits are included with this Quarterly Report on Form 10-Q.
| # | Management contract or compensatory plan or arrangement required to be identified pursuant to Item 15(a)(3) of this report. |
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SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Quarterly Report on Form 10-Q for the period ended June 30, 2026, to be signed on its behalf by the undersigned, thereunto duly authorized.
| MITESCO, INC. | ||
| Dated: August 17, 2026 | By: | /s/ Brian Valania |
| Brian Valania | ||
| Chief Executive Officer and Chief Financial Officer | ||
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