MYSE 10-Q
Myseum.AI, Inc. (MYSE)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the quarterly period ended
or
For the transition period from ___________ to ___________
Commission File Number:
(Exact name of registrant as specified in its charter)
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| incorporation or organization) | Identification No.) |
| (Address of principal executive offices) | (Zip Code) |
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Indicate by checkmark 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 pursuant to Rule 405 of Regulations S-T (§232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “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
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standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by checkmark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of August 14, 2026, there were
MYSEUM.AI, INC.
FORM 10-Q
June 30, 2026
INDEX
-i-
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Any statements in this Quarterly Report on Form 10-Q about our expectations, beliefs, plans, objectives, assumptions or future events or performance are not historical facts and are forward-looking statements. These statements are often, but not always, made through the use of words or phrases such as “believe,” “will,” “expect,” “anticipate,” “estimate,” “intend,” “plan” and “would.” For example, statements concerning financial condition, possible or assumed future results of operations, growth opportunities, industry ranking, plans and objectives of management, markets for our common stock and future management and organizational structure are all forward-looking statements. Forward-looking statements are not guarantees of performance. They involve known and unknown risks, uncertainties and assumptions that may cause actual results, levels of activity, performance or achievements to differ materially from any results, levels of activity, performance or achievements expressed or implied by any forward-looking statement.
Any forward-looking statements are qualified in their entirety by reference to the risk factors discussed throughout our Annual Report on Form 10-K as filed with the SEC on March 30, 2026. Some of the risks, uncertainties and assumptions that could cause actual results to differ materially from estimates or projections contained in the forward-looking statements include, but are not limited to:
| ● | our business strategies; |
| ● | our ability to attract and retain users; |
| ● | risks related to market acceptance of products; |
| ● | intellectual property risks; |
| ● | risks associated to our reliance on third party organizations; |
| ● | our competitive position; |
| ● | our industry environment; |
| ● | our anticipated financial and operating results, including anticipated sources of revenues; |
| ● | assumptions regarding the size of the available market, benefits of our products, product pricing and timing of product launches; |
| ● | management’s expectation with respect to future acquisitions; |
| ● | statements regarding our goals, intentions, plans and expectations, including the introduction of new products and markets; and |
| ● | our cash needs and financing plans. |
The foregoing list sets forth some, but not all, of the factors that could affect our ability to achieve results described in any forward-looking statements. You should read this Quarterly Report on Form 10-Q and the documents that we reference herein and have filed as exhibits to our Annual Report on Form 10-K, completely and with the understanding that our actual future results may be materially different from what we expect. You should assume that the information appearing in this Quarterly Report on Form 10-Q is accurate as of the date hereof. Because the risk factors referred to in our Annual Report on Form 10-K, as filed with the SEC on March 30, 2026, could cause actual results or outcomes to differ materially from those expressed in any forward-looking statements made by us or on our behalf, you should not place undue reliance on any forward-looking statements. Further, any forward-looking statement speaks only as of the date on which it is made, and except as required by law, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for us to predict which factors will arise. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. We qualify all the information presented in this Quarterly Report on Form 10-Q, and particularly our forward-looking statements, by these cautionary statements.
-ii-
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
MYSEUM.AI, INC. AND SUBSIDIARIES AND CONSOLIDATED ENTITIES
CONSOLIDATED BALANCE SHEETS
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Short-term investments, at fair value | ||||||||
| Accounts receivable | ||||||||
| Prepaid expenses | ||||||||
| Total Current Assets | ||||||||
| NON-CURRENT ASSETS: | ||||||||
| Deferred offering costs | ||||||||
| Property and equipment, net | ||||||||
| Investment in equity securities, at fair value | ||||||||
| Operating lease right-of-use asset, net | ||||||||
| Total Non-current Assets | ||||||||
| Total Assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Operating lease liability, current portion | ||||||||
| Contract liabilities | ||||||||
| Total Current Liabilities | ||||||||
| LONG-TERM LIABILITIES: | ||||||||
| Operating lease liability, less current portion | ||||||||
| Total Long-Term Liabilities | ||||||||
| Total Liabilities | ||||||||
| Commitments and Contingencies (Note 11) | ||||||||
| STOCKHOLDERS’ EQUITY: | ||||||||
| Preferred stock ($ | ||||||||
| Series B Preferred stock ($ | ||||||||
| Common stock ($ | ||||||||
| Common stock to be issued ( | ||||||||
| Additional paid-in capital | ||||||||
| Treasury stock, at cost ( | ( | ) | ( | ) | ||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Stockholders’ Equity | ||||||||
| Total Liabilities and Stockholders’ Equity | $ | $ | ||||||
See accompanying notes to unaudited consolidated financial statements.
-1-
MYSEUM.AI, INC. AND SUBSIDIARIES AND CONSOLIDATED ENTITIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| NET REVENUES | $ | $ | $ | $ | ||||||||||||
| OPERATING EXPENSES: | ||||||||||||||||
| Compensation and related expenses | ||||||||||||||||
| Marketing and advertising expenses | ||||||||||||||||
| Professional and consulting expenses | ||||||||||||||||
| General and administrative expenses | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| LOSS FROM OPERATIONS | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| OTHER INCOME (EXPENSES): | ||||||||||||||||
| Interest income, net | ||||||||||||||||
| Unrealized loss on equity securities | ( | ) | ( | ) | ||||||||||||
| Total other income (expenses), net | ( | ) | ( | ) | ||||||||||||
| LOSS FROM CONTINUING OPERATIONS | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| DISCONTINUED OPERATIONS: | ||||||||||||||||
| Loss from discontinued operations, net of tax | ( | ) | ( | ) | ||||||||||||
| Total loss from discontinued operations, net | ( | ) | ( | ) | ||||||||||||
| NET LOSS | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net loss of former subsidiary attributable to noncontrolling interest of discontinued operations | ||||||||||||||||
| NET LOSS ATTRIBUTABLE TO MYSEUM.AI, INC. SHAREHOLDERS | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| NET LOSS PER COMMON SHARE: | ||||||||||||||||
| Basic and diluted - continuing operations | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Basic and diluted - discontinued operations | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
| Basic and diluted net loss per common share attributable to Myseum.AI, Inc. shareholders | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING: | ||||||||||||||||
| Basic and diluted | ||||||||||||||||
See accompanying notes to unaudited consolidated financial statements.
-2-
MYSEUM.AI, INC. AND SUBSIDIARIES AND CONSOLIDATED ENTITIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026 AND 2025
(Unaudited)
| Series B Preferred Stock | Common Stock | Common Stock to be Issued | Additional Paid-in | Treasury Stock | Accumulated | Noncontrolling | Total Stockholders’ | |||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Capital | Shares | Amount | Deficit | Interest | Equity | |||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2025 | $ | $ | | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | |||||||||||||||||||||||||||||||||||
| Accretion of stock-based compensation in connection with stock option grants | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||
| Accretion of stock-based professional fees in connection with stock option grants | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common shares for services | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||
| Issuance of warrants for services | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||
| Net loss for the period | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||
| Balance, March 31, 2026 | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||
| Accretion of stock-based compensation in connection with stock option grants | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||
| Accretion of stock-based professional fees in connection with stock option grants | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock for cash, net of allocated offering costs of $ | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common shares for services | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||
| Net loss for the period | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2026 | - | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | |||||||||||||||||||||||||||||||||||
| Series B Preferred Stock | Common Stock | Common Stock to be Issued | Additional Paid-in | Treasury Stock | Accumulated | Noncontrolling | Total Stockholders’ | |||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Capital | Shares | Amount | Deficit | Interest | Equity | |||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||||||||||||||
| Accretion of stock based compensation in connection with stock option grants | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock for cash, net of allocated offering costs of $ | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||
| Initial recording on noncontrolling interest | - | - | - | - | ( | ) | ||||||||||||||||||||||||||||||||||||||||||
| Net loss for the period | - | - | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||
| Balance, March 31, 2025 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||
| Accretion of stock based compensation in connection with stock option grants | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||
| Accretion of stock based professional fees in connection with stock option grants | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||
| Changes in noncontrolling interest | - | - | - | ( | ) | - | ||||||||||||||||||||||||||||||||||||||||||
| Net loss for the period | - | - | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||||||||||||||||
See accompanying notes to unaudited consolidated financial statements.
-3-
MYSEUM.AI, INC. AND SUBSIDIARIES AND CONSOLIDATED ENTITIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| 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: | ||||||||
| Depreciation and amortization | ||||||||
| Amortization of right-of-use asset | ||||||||
| Stock-based compensation | ||||||||
| Stock-based professional fees | ||||||||
| Changes in accrued interest income | ||||||||
| Unrealized loss on equity securities | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ||||||
| Prepaid expenses | ||||||||
| Assets of discontinued operations | ||||||||
| Accounts payable and accrued expenses | ( | ) | ( | ) | ||||
| Contract liabilities | ( | ) | ||||||
| Operating lease liability | ( | ) | ( | ) | ||||
| Liabilities of discontinued operations | ||||||||
| NET CASH USED IN OPERATING ACTIVITIES | ( | ) | ( | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Proceeds from sale of short-term investments | ||||||||
| Purchase of short-term investments | ( | ) | ( | ) | ||||
| Purchases of property and equipment | ( | ) | ||||||
| NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES | ( | ) | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds from sale of common stock, net | ||||||||
| Payment of deferred offering costs | ( | ) | ( | ) | ||||
| NET CASH PROVIDED BY FINANCING ACTIVITIES | ||||||||
| NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | ( | ) | ||||||
| CASH AND CASH EQUIVALENTS - beginning of period | ||||||||
| CASH AND CASH EQUIVALENTS - end of period | $ | $ | ||||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||
| Cash paid for: | ||||||||
| Interest | $ | $ | ||||||
| Income taxes | $ | $ | ||||||
| NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||||||
| Warrants issued for future services | $ | $ | ||||||
| Common stock issue for future services | $ | $ | ||||||
| Common stock issued for future sale pursuant to ATM offering | $ | $ | ||||||
| Amortization of deferred offering costs to Equity | $ | |||||||
| Initial recording and changes in noncontrolling interest deficit | $ | $ | ||||||
| Initial recognition of right-of-use asset and lease liability | $ | $ | ||||||
See accompanying notes to unaudited consolidated financial statements.
-4-
MYSEUM.AI,
INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
(Unaudited)
NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
Myseum.AI, Inc. (the “Company” or
“Myseum”) was incorporated in the State of Nevada on
On June 16, 2022, the Company formed a majority owned subsidiary, RPM Interactive, Inc. under the name SmarterVerse, Inc., a company incorporated under the laws of the State of Nevada (“RPM Interactive”). On February 14, 2024, RPM Interactive filed a Certificate of Amendment with the State of Nevada to change its name from SmarterVerse, Inc. to Dragon Interactive Corporation. On August 7, 2024, RPM Interactive filed a Certificate of Amendment with the State of Nevada to change its name from Dragon Interactive Corporation to Dragon Interact, Inc. On November 21, 2024, RPM Interactive filed a Certificate of Amendment with the State of Nevada to change its name from Dragon Interact, Inc. to RPM Interactive, Inc.
On December 12, 2025, RPM Interactive entered
into an Agreement and Plan of Merger (the “Merger Agreement”) with Avalon GloboCare Corp., a Delaware corporation (“Avalon”),
and certain other parties, pursuant to which the Company sold its minority interest in RPM Interactive to Avalon. Upon the closing of
the transaction, the Company received
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
Management acknowledges its responsibility for the preparation of the accompanying unaudited consolidated financial statements which reflect all adjustments, consisting of normal recurring adjustments, considered necessary in its opinion for a fair statement of its financial position and the results of its operations for the periods presented. The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (the “U.S. GAAP”) for interim financial information and with the instructions Article 8-03 of Regulation S-X. Operating results for interim periods are not necessarily indicative of results that may be expected for the fiscal year as a whole.
-5-
MYSEUM.AI, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
(Unaudited)
Certain information and note disclosure normally included in financial statements prepared in accordance with U.S. GAAP has been condensed or omitted from these statements pursuant to such accounting principles and, accordingly, they do not include all the information and notes necessary for comprehensive financial statements. These unaudited consolidated financial statements should be read in conjunction with the summary of significant accounting policies and notes to the financial statements for the year ended December 31, 2025 of the Company which were included in the Company’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission on March 30, 2026.
The Company consolidates its subsidiaries that are wholly-owned and majority owned, and entities that are variable interest entities (“VIE”) where the Company is determined to be the primary beneficiary. The Company’s consolidated financial statements include the accounts of the parent entity. Myseum.AI, Inc., and RPM Interactive, which was a majority-owned subsidiary through August 27, 2024, became a VIE after August 27, 2024, and was deconsolidated on December 12, 2025. All intercompany accounts and transactions have been eliminated in consolidation.
On December 12, 2025, based on the Company’s analysis, the Company deconsolidated RPM Interactive following the sale of its interest in this VIE (see Note 3). In accordance with ASC 205-20, the results of operations and the gains on deconsolidation for RPM Interactive are presented as discontinued operations for all periods presented. As of December 31, 2025, the assets and liabilities of these entities are no longer included in the consolidated balance sheet.
Going concern considerations
The accompanying unaudited consolidated financial statements have been
prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of
liabilities in the normal course of business. The Company’s ability to continue as a going concern is dependent on its ability to
raise additional capital to fund its research and development (“R&D”) activities and meet its obligations on a timely
basis. As of June 30, 2026, the Company had cash and cash equivalents of $
Noncontrolling interests
The Company follows ASC Topic 810, “Consolidation,” governing the accounting for and reporting of noncontrolling interests (“NCI”) in partially owned consolidated subsidiaries and the loss of control of subsidiaries. In accordance with ASC Topic 810-10-45, the Company presented noncontrolling interests as a separate component of total shareholders’ equity on the unaudited consolidated balance sheets. Certain provisions of this standard indicate, among other things, that increases and decreases in the parent’s ownership interest that leave control intact be treated as equity transactions rather than as step acquisitions or dilution gains or losses, and that losses of a partially-owned consolidated subsidiary be allocated to noncontrolling interests even when such allocation might result in a deficit balance. For the three and six months ended June 30, 2025, the net loss attributed to NCI was separately designated in the accompanying unaudited consolidated statements of operations. As of December 31, 2025 and during the three and six months ended June 30, 2026, the Company had noncontrolling interest. Losses attributable to NCI in a subsidiary may exceed a NCI’s interests in the subsidiary’s equity. The excess attributable to NCI is attributed to those interests. NCI was attributed to their share of losses even if that attribution resulted in a deficit NCI balance.
-6-
MYSEUM.AI, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
(Unaudited)
Prior to December 12, 2025, the Company allocated certain corporate common expenses to its subsidiaries based on the ratio of direct subsidiary expenses to total consolidated expenses. Management believes that this allocation method is reasonable.
Due to the issuance of common shares by RPM Interactive,
during the six months ended June 30, 2025, the Company recorded aggregate initial negative noncontrolling interest of $
Variable interest entities
Pursuant to ASC 810-10-25-22, an entity is defined as a VIE if it either lacks sufficient equity to finance its activities without additional subordinated financial support, or it is structured such that the holders of the voting rights do not substantively participate in the gains and losses of the entity. When determining whether an entity that meets the definition of a business qualifies for a scope exception from applying VIE guidance, the Company considers whether: (i) it has participated significantly in the design of the entity, (ii) it has provided more than half of the total financial support to the entity, and (iii) substantially all of the activities of the VIE are conducted on its behalf. A VIE is consolidated by its primary beneficiary, the party that has the power to direct the activities that most significantly impact the VIE’s economic performance and has the right to receive benefits or the obligation to absorb losses of the entity that could be potentially significant to the VIE. The primary beneficiary assessment must be re-evaluated on an ongoing basis.
RPM Interactive
Based on the Company’s analysis, on August
27, 2024, the Company determined that RPM Interactive met the definition of a VIE under the VIE model, which provides for situations
in which control may be demonstrated other than by the possession of voting rights in RPM Interactive. Until the date of sale on December
12, 2025, the Company continued to have the power to direct the activities of RPM Interactive that most significantly impact RPM Interactive’s
economic performance and the obligation to absorb losses of RPM Interactive that could potentially be significant to RPM Interactive
or the right to receive benefits from RPM Interactive that could potentially be significant to RPM Interactive. Immediately prior to
the sale and deconsolidation, the Company retained approximately
As of June 30, 2026 and December 31, 2025, the Company’s consolidated balance sheets do not include any assets and liabilities from VIEs.
See Note 3 – Discontinued Operations And Deconsolidation.
Use of estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and the related disclosures at the date of the consolidated financial statements and during the reporting period. Actual results could materially differ from these estimates. Significant estimates include assumptions used in assessing impairment of long-term assets, the valuation of equity securities, the valuation of lease liabilities and related right of use assets, the valuation of short-term investments, the valuation of deferred tax assets, the allocation of corporate expenses to subsidiaries which impacts noncontrolling interest, and the fair value of non-cash equity transactions.
-7-
MYSEUM.AI, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
(Unaudited)
Cash and cash equivalents
The Company considers all highly liquid debt
instruments and other short-term investments with maturities of three months or less, when purchased, to be cash equivalents. The
Company maintains cash and cash equivalent balances at one financial institution that is insured by the Federal Deposit Insurance Corporation
(“FDIC”). The Company’s account at this institution is insured by the FDIC up to $
Fair value measurements and fair value of financial instruments
The carrying value of certain financial instruments, including cash and cash equivalents, accounts payable and accrued expenses, and due to related party are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments.
The Company analyzes all financial instruments with features of both liabilities and equity under the Financial Accounting Standard Board’s (the “FASB”) accounting standard for such instruments. Under this standard, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.
The guidance requires that assets and liabilities carried at fair value be classified and disclosed in one of the following categories:
| ● | Level 1: Quoted market prices in active markets for identical assets or liabilities. |
| ● | Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. |
| ● | Level 3: Unobservable inputs that are not corroborated by market data. |
The following table represents the Company’s fair value hierarchy of its financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2026 and December 31, 2025.
| June 30, 2026 | December 31, 2025 | |||||||||||||||||||||||
| Description | Level 1 | Level 2 | Level 3 | Level 1 | Level 2 | Level 3 | ||||||||||||||||||
| Short-term investments | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Equity securities | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
The Company’s short-term investments are level 1 measurements and are based on redemption value at each date. The Company’s investment in equity securities are level 3 measurements fair values are considered Level 3 when management makes significant assumptions to determine the fair value of the equity securities. On June 30, 2026 and December 31, 2025, the Company recorded the investment in equity securities, which consisted of Series E preferred shares in Avalon GloboCare Corp., a publicly held company, at estimated fair value using a dribble out method using the following assumptions:
| ● | A discount for the five-month prohibition on conversion |
| ● | A liquidity discount resulting from the |
| ● | Market volatility and time value considerations associated with phased conversion |
The level 3 investment value may fluctuate from period to period based on changes in the market volatility and trading volume of the investees common stock.
The change in the fair value measurement using significant inputs (Level 3) is summarized below:
| Investment in equity securities: | ||||
| Balance at December 31, 2025 | $ | |||
| Change in fair value - unrealized loss on equity securities | ( | ) | ||
| Balance at June 30, 2026 | $ | |||
-8-
MYSEUM.AI, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
(Unaudited)
Short-term investments
The Company’s portfolio of short-term investments consists of marketable debt securities which are comprised solely of highly rated U.S. government securities with maturities of more than three months, but less than one year. The Company classifies these as available-for-sale at purchase date and will reevaluate such designation at each period end date. The Company may sell these marketable debt securities prior to their stated maturities depending upon changing liquidity requirements. These debt securities are classified as current assets in the unaudited consolidated balance sheets and recorded at fair value, with unrealized gains or losses included in accumulated other comprehensive gain (loss) and as a component of the unaudited consolidated statements of operations. Gains and losses are recognized when realized. Gains and losses are determined using the specific identification method and are reported in other income (expense), net in the unaudited consolidated statements of operations. Short-term investments are carried at fair value, which is based on quoted market prices for such securities, if available, or is estimated on the basis of quoted market prices of financial instruments with similar characteristics.
An impairment loss may be recognized when the decline in fair value of the debt securities is determined to be other-than-temporary. The Company evaluates its investments for other-than-temporary declines in fair value below the cost-basis each quarter, or whenever events or changes in circumstances indicate that the cost basis of the short-term investments may not be recoverable. The evaluation is based on a number of factors, including the length of time and the extent to which the fair value has been below the cost basis, as well as adverse conditions related specifically to the security, such as any changes to the credit rating of the security and the intent to sell or whether the Company will more likely than not be required to sell the security before recovery of its amortized cost basis.
Investment in equity securities, at fair value
Equity investments are carried at fair value with unrealized gains or losses recorded on the accompanying consolidated statement of operations. Realized gains and losses are determined on a specific identification basis which is recorded in earnings or loss as a net realized gain (loss) on equity investments in the unaudited consolidated statement of operations. The Company reviews investments in equity securities, at fair value, for impairment whenever circumstances and situations change such that there is an indication that the carrying amounts may not be recovered.
Accounts receivable
The Company recognizes an allowance for losses
on accounts receivable and notes receivable in an amount equal to the estimated probable losses net of recoveries under the current expected
credit loss method. The allowance is based on an analysis of historical bad debt experience, current receivables aging and expected future
write-offs, as well as an assessment of specific identifiable customer accounts and notes receivable considered at risk or uncollectible.
On January 1, 2023, the Company adopted ASC 326, “Financial Instruments - Credit Losses”. In accordance with ASC 326, an
allowance is maintained for estimated forward-looking losses resulting from the possible inability of customers to make the required
payments (current expected losses). The amount of the allowance is determined principally on the basis of past collection experience
and known financial factors regarding specific customers. The expense associated with the allowance for doubtful accounts on accounts
receivable is recognized in general and administrative expenses. As of June 30, 2026 and December 31, 2025, accounts receivable amounted
to $
Property and equipment
Property and equipment are stated at cost and are depreciated using the straight-line method over their estimated useful lives, which range from three to five years. Leasehold improvements are depreciated over the shorter of the useful life or lease term including scheduled renewal terms. Maintenance and repairs are charged to expense as incurred. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. The Company examines the possibility of decreases in the value of these assets when events or changes in circumstances reflect the fact that their recorded value may not be recoverable.
-9-
MYSEUM.AI, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
(Unaudited)
Capitalized internal-use software costs
The Company capitalizes costs to develop or purchase internal-use software in accordance with ASC section 350-40, Intangibles — Goodwill and Other — Internal-Use Software. Costs incurred to develop internal-use software are expensed as incurred during the preliminary project stage. Internal-use software development costs are capitalized upon purchase and during the application development stage, which is after: (i) the preliminary project stage is completed; and (ii) management authorizes and commits to funding the project and it is probable the project will be completed and used to perform the intended function. Capitalization ceases at the point where the software project is substantially complete and ready for its intended use, and after all substantial testing is completed. Upgrades and enhancements are capitalized if it is probable that those expenditures will result in additional functionality. Amortization is provided for on a straight-line basis over the expected useful life of the internal-use software development costs and related upgrades and enhancements. When the existing software is replaced with new software, the unamortized costs of the old software are expensed when the new software is ready for its intended use.
Impairment of long-lived assets
In accordance with ASC Topic 360, the Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable, or at least annually. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value.
Deferred offering costs
The Company complies with the requirements of ASC 340-10-S99-1 and SEC Staff Accounting Bulletin Topic 5A. Deferred offering costs consist of legal, accounting, and underwriting fees directly related to proposed equity offerings. Deferred offering costs will be deferred until the completion of the private offerings, at which time they will be reclassified to additional paid-in capital as a reduction of the offering proceeds. Should a proposed offering be abandoned, these deferred costs are charged to operations in the period the abandonment occurs.
As of June 30, 2026 and December 31, 2025, the
Company has capitalized certain offering costs related to its efforts to raise capital through the sale of its common stock pursuant
to an Equity Sales Agreement and additional capitalized costs related to legal fees and the preparation of its registration statement
on Form S-3 (File No. 333-291818). As of June 30, 2026 and December 31, 2025, capitalized deferred offering costs amounted to $
Revenue recognition
The Company recognizes revenue in accordance with ASC Topic 606 Revenue from Contracts with Customers, which requires revenue to be recognized in a manner that depicts the transfer of goods or services to customers in amounts that reflect the consideration which the entity expects to be entitled in exchange for those goods or services.
In accordance with ASU Topic 606 - Revenue from Contracts with Customers, the Company recognizes revenue in accordance with that core principle by applying the following steps:
Step 1: Identify the contract(s) with a customer.
Step 2: Identify the performance obligations in the contract.
Step 3: Determine the transaction price.
Step 4: Allocate the transaction price to the performance obligations in the contract.
Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.
The Company recognizes revenues from subscription fees from the Company’s messaging application in the month they are earned. Annual and lifetime subscription payments received that are related to future periods are recorded as deferred revenue to be recognized as revenues over the contract term or period. Lifetime subscriptions are being recognized to revenues over the estimated useful life of the subscription of 12 months. During the three and six months ended June 30, 2026 and 2025, all of the Company’s revenue was generated from subscription revenues.
-10-
MYSEUM.AI, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
(Unaudited)
Advertising costs
The Company applies ASC 720 “Other Expenses”
to account for advertising related costs. Pursuant to ASC 720-35-25-1, the Company expenses advertising costs as they are incurred. Advertising
costs were $
Leases
The Company applied ASC Topic 842, Leases (Topic 842) to arrangements with lease terms of 12 months or more. Operating lease right of use assets (“ROU”) represents the right to use the leased asset for the lease term and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most leases do not provide an implicit rate, the Company use an incremental borrowing rate based on the information available at the adoption date in determining the present value of future payments. Lease expense for minimum lease payments is amortized on a straight-line basis over the lease term and is included in general and administrative expenses in the unaudited consolidated statements of operations.
Income Taxes
The Company accounts for income taxes pursuant to the provision of Accounting Standards Codification (“ASC”) 740-10, “Accounting for Income Taxes” (“ASC 740-10”), which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized.
The Company follows the provision of ASC 740-10
related to Accounting for Uncertain Income Tax Positions. When tax returns are filed, there may be uncertainty about the merits of positions
taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of
a tax position is recognized in the consolidated financial statements in the period during which, based on all available evidence, management
believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation
processes, if any. Tax positions taken are not offset or aggregated with other positions.
The Company has adopted ASC 740-10-25, “Definition of Settlement”, which provides guidance on how an entity should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits and provides that a tax position can be effectively settled upon the completion and examination by a taxing authority without being legally extinguished. For tax positions considered effectively settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely than not to be sustained based solely on the basis of its technical merits and the statute of limitations remains open. The federal and state income tax returns of the Company are subject to examination by the IRS and state taxing authorities, generally for three years after they are filed.
-11-
MYSEUM.AI, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
(Unaudited)
Stock-based compensation
Stock-based compensation is accounted for based on the requirements of ASC 718 – “Compensation–Stock Compensation”, which requires recognition in the consolidated financial statements of the cost of employee, non-employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. The Company has elected to account for forfeitures as they occur.
Basic and diluted net loss per share
Basic net loss per share is computed by dividing
the net loss by the weighted average number of common shares during the period. Diluted net loss per share is computed using the
weighted average number of common shares and potentially dilutive securities outstanding during the period.
| June 30, | ||||||||
| 2026 | 2025 | |||||||
| Common stock equivalents: | ||||||||
| Common stock warrants | ||||||||
| Common stock options | ||||||||
| Total | ||||||||
Segment reporting
The Company operates as a single operating segment
as a technology-based company that is developing social media applications and technologies.
Recent accounting pronouncements
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), which requires entities to provide more detailed disaggregation of expenses in the income statement, focusing on the nature of the expenses rather than their function. The new disclosures will require entities to separately present expenses for significant line items, including but not limited to, depreciation, amortization, and employee compensation. Entities will also be required to provide a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, disclose the total amount of selling expenses and, in annual reporting periods, provide a definition of what constitutes selling expenses. This pronouncement is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company does not expect the adoption of this new guidance to have a material impact on its consolidated financial statements.
In September 2025, the FASB issued ASU 2025-06, Targeted Improvements to the Accounting for Internal-Use Software. The amendments in this update require internal-use software development cost capitalization to begin when both of the following occur: management has authorized and committed to funding the software project, and it is probable that the project will be completed and that the software will be used to perform its intended function. The amendments also eliminate the accounting considerations of software development stages. The amendments in ASU 2025-06 are effective for fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is evaluating the impact ASC 2025-06 will have on its consolidated financial statements.
Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on its consolidated financial statements.
-12-
MYSEUM.AI, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
(Unaudited)
NOTE 3 – DISCONTINUED OPERATIONS AND DECONSOLIDATION
Sale and deconsolidation of RPM Interactive
On December 11, 2025, in anticipation of the
sale of RPM Interactive as discussed below, the Company entered into a debt forgiveness and capital contribution agreement with RPM Interactive.
Pursuant to the agreement, the Company forgave outstanding intercompany debt owed by RPM Interactive of $
On December 12, 2025, the Company completed a
merger pursuant to the Merger Agreement by and among the Company, RPM Interactive, and Avalon. Under the terms of the Merger Agreement,
RPM Interactive merged with and into a wholly-owned subsidiary of Avalon, and the Company ceased to have a controlling financial interest
in or be a primary beneficiary of RPM Interactive. In consideration for the merger, Avalon issued
Each share of Series E Preferred Stock has a
stated value of $
Pursuant to ASC 810-10-40-4, on December 12, 2025, the Company deconsolidated RPM Interactive since it no longer had a controlling financial interest in and was no longer a primary beneficiary of RPM Interactive and RPM Interactive became a wholly-owned subsidiary of Avalon. The Company will have no continuing involvement in RPM Interactive after it has been deconsolidated.
In accordance with ASC 205-20, the disposal of
RPM Interactive represents a strategic shift away from the development and costs with RPM Interactive products in order to concentrate
on the Company’s product offerings. Accordingly, the results of operations of RPM interactive have been classified as discontinued
operations in the accompanying unaudited consolidated statements of operations for all periods presented.
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Operating expenses | $ | $ | $ | $ | ||||||||||||
| Total loss from discontinued operations, net | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
As of June 30, 2026 and December 31, 2025, the Company had assets and liabilities of discontinued operations.
-13-
MYSEUM.AI, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
(Unaudited)
NOTE 4 – INVESTMENT IN EQUITY SECURITIES
On December 12, 2025, in connection with the merger and deconsolidation
of RPM Interactive (see Note 3), the Company received
NOTE 5 – SHORT-TERM INVESTMENTS
On June 30, 2026 and December 31, 2025, the Company’s short-term investments consisted of the following:
| June 30, 2026 | December 31, 2025 | |||||||||||||||||||||||
| Cost | Unrealized Gain | Fair Value | Cost | Unrealized Gain | Fair Value | |||||||||||||||||||
| US Treasury bills | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Total short-term investments | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
As of June 30, 2026, short-term investments mature between July 2026 and October 2026.
The following table summarizes activity in the Company’s short-term investments, at fair value for the period presented:
| Six Months Ended June 30, | ||||
| 2026 | ||||
| Fair Value, December 31, 2025 | $ | |||
| Purchases of short-term investments | ||||
| Sales of short-term investments | ( | ) | ||
| Changes in accrued interest income | ( | ) | ||
| Fair Value, June 30, 2026 | $ | |||
NOTE 6 – PROPERTY AND EQUIPMENT
On June 30, 2026 and December 31, 2025, property and equipment consisted of the following:
| Useful life | June 30, 2026 | December 31, 2025 | ||||||||
| Furniture and fixture | $ | $ | ||||||||
| Computer equipment | ||||||||||
| Leasehold improvements | ||||||||||
| Less: accumulated depreciation | ( | ) | ( | ) | ||||||
| $ | $ | |||||||||
For the three months ended June 30, 2026 and
2025, depreciation of property and equipment amounted to $
-14-
MYSEUM.AI, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
(Unaudited)
NOTE 7 – INTERNAL-USE SOFTWARE
During the six months ended June 30, 2025, RPM
Interactive capitalized certain software development costs incurred amounting to $
For the three and six months ended June 30, 2025,
amortization of intangible assets related to RPM Interactive amounted to $
Upon the sale and deconsolidation of RPM Interactive
on December 12, 2025 (see Note 3), all associated internal-use software assets were removed from the Company’s consolidated balance
sheet. Accordingly, the balance of internal-use software as of June 30, 2026 and December 31, 2025 was $
NOTE 8 – OPERATING LEASE RIGHT-OF-USE ASSETS AND OPERATING LEASE LIABILITIES
On August 27, 2021, the Company entered into
an amendment to its lease agreement with its landlord to modify the facility lease to relocate and increase the square footage of the
lease premises. The term of
On April 24, 2025, upon the execution of the
amendment agreement, the Company recorded right-of-use assets and operating lease liabilities of $
Right-of- use assets are summarized below:
| June 30, 2026 | December 31, 2025 | |||||||
| Office lease | $ | $ | ||||||
| Less accumulated amortization | ( | ) | ( | ) | ||||
| Right-of-use asset, net | $ | $ | ||||||
Operating lease liabilities are summarized below:
| June 30, 2026 | December 31, 2025 | |||||||
| Office lease | $ | $ | ||||||
| Reduction of lease liability | ( | ) | ( | ) | ||||
| Total lease liability | ||||||||
| Less: current portion | ( | ) | ( | ) | ||||
| Long term portion of lease liability | $ | $ | ||||||
-15-
MYSEUM.AI, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
(Unaudited)
Minimum lease payments under the non-cancelable operating lease on June 30, 2026 are as follows:
| For the year ending December 31: | ||||
| Remainder of 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| Total | ||||
| Less: present value discount | ( | ) | ||
| Total operating lease liability | $ | |||
NOTE 9 – RELATED PARTY TRANSACTIONS
See Note 11 for Employment Agreement with the Company’s chief executive officer, Darin Myman.
During the six months ended June 30, 2026 and
2025, the wife of the Company’s chief executive officer was employed as an executive secretary and earned $
NOTE 10 – STOCKHOLDERS’ EQUITY
Shares Authorized
The authorized capital stock consists of
2021 Omnibus Equity Incentive Plan
On July 26, 2021, the Company adopted the 2021
Omnibus Equity Incentive Plan (the “2021 Equity Plan”) and authorized the reservation of
Preferred Stock
Series A Preferred Stock
-16-
MYSEUM.AI, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
(Unaudited)
Series B Preferred Stock
On August 4, 2023, the Board filed the Certificate
of Designation of Preferences (“COD”), Rights and Limitations of Series B Preferred Stock (the “Series B COD”)
with the Secretary of State of the State of Nevada designating
The outstanding shares of Series B preferred
shall be redeemed in whole, but not in part (i) if such redemption is ordered by the board of directors, or (ii) automatically and effective
immediately after the effectiveness of an anticipated Authorized Stock increase. The aggregate consideration payable for the outstanding
Series B Preferred redeemed in the redemption shall be $
From and after the time at which the shares of Series B Preferred Stock is called for Redemption (whether automatically or otherwise) in accordance with Series B COD, such shares of Series B Preferred Stock shall cease to be outstanding, and the only right of the former holder of such shares of Series B Preferred Stock, as such, will be to receive the applicable Redemption Price. The shares of Series B Preferred Stock redeemed by the Company pursuant to the Series B COD shall be automatically retired and restored to the status of an authorized but unissued share of Preferred Stock, effective immediately after such Redemption.
On August 4, 2023, the Company issued
Pursuant to the automatic cancellation terms
set forth in the Certificate of Designation, Rights and Limitations, in 2025 all
Common Stock
Common Stock Sold for Cash
On January 7, 2025, the Company entered into
an engagement agreement with The Benchmark Company, LLC, as exclusive placement agent (“Benchmark” or the “Placement
Agent”), pursuant to which the Placement Agent agreed to act as placement agent on a reasonable “best efforts” basis
in connection with the Offering. The Company agreed to pay the Placement Agent an aggregate cash fee equal to
On January 8, 2025, in connection with the Benchmark
engagement letter, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with certain institutional
investors, pursuant to which the Company agreed to sell to such investors
-17-
MYSEUM.AI, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
(Unaudited)
Equity Sales Agreement
On February 10, 2025, the Company entered into
a Sales Agreement (the “Sales Agreement”) with The Benchmark Company, LLC (“Benchmark”) to sell shares of the
Company’s common shares (the “Shares”) having an aggregate sales price of up to $
The Company will pay Benchmark a commission rate
equal to
On February 6, 2026, the Company entered into
a First Amendment to Sales Agreement (the “First Amendment”) with Benchmark, which amends the Sales Agreement dated February
10, 2025. The First Amendment was executed to (i) reflect the Company’s name change to Myseum, Inc. and (ii) update the shelf registration
statement to Form S-3 (File No. 333-291818), which was filed on November 26, 2025, and declared effective on December 3, 2025. Under
the Sales Agreement, as amended, the Company may offer and sell shares of common stock having an aggregate sales price of up to $
On April 23, 2026, the Company filed Amendment
No. 1 to the prospectus supplement dated February 6, 2026 and filed with the Securities and Exchange Commission on February 6, 2026 for
an additional $
The offering of Shares pursuant to the Sales
Agreement will terminate on the earlier of (1) the sale, pursuant to the Sales Agreement, of Shares having an aggregate offering
price of $
On March 27, 2025, the Company issued
In April 2026, the Company sold
During the six months ended June 30, 2026, the
Company paid an aggregate of $
In April and June 2026, the Company issued an aggregate of
-18-
MYSEUM.AI, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
(Unaudited)
2023 Stock Repurchase Plan
On January 6, 2023, the Board of Directors of
the Company approved a stock repurchase program authorizing the purchase of up to $
Common Stock Issued for Professional Services
On March 5, 2026, the Company issued
On April 23, 2026, the Company entered into a
six-month consulting agreement with its consultant to which it agreed to pay such consultant a monthly fixed fee of $
On June 11, 2026, pursuant to a service agreement
entered into on July 25, 2023, the Company issued to its investor relations consultant an aggregate of
Cancellation of RPM Interactive Shares
On January 14, 2025, the Company agreed to cancel
Stock Options
2025
On January 14, 2025, the Company granted an aggregate
of
On June 8, 2025, the Company granted an aggregate
of
-19-
MYSEUM.AI, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
(Unaudited)
During the six months ended June 30, 2025, certain
employees were terminated and accordingly,
During the six months ended June 30, 2026, accretion
of stock-based expense related to stock options amounted to $
As of June 30, 2026, a balance of $
During the six months ended June 30, 2025, the
stock options were valued at the grant date using a Black-Scholes option pricing model with the following assumptions. The Company did
not issue any stock options during the six months ended June 30, 2026.
| 2025 | ||||
| Dividend rate | ||||
| Estimated expected term (in years) | ||||
| Volatility | ||||
| Risk—free interest rate |
The following is a summary of the Company’s stock option activity for the six months ended June 30, 2026 as presented below:
| Number of Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (Years) | ||||||||||
| Balance on December 31, 2025 | $ | |||||||||||
| Granted | - | |||||||||||
| Cancelled | - | |||||||||||
| Balance on June 30, 2026 | $ | |||||||||||
| Options exercisable on June 30, 2026 | $ | |||||||||||
| Weighted average fair value of options granted during the six months ended June 30, 2026 | $ | |||||||||||
On June 30, 2026, the aggregate intrinsic value
of options outstanding was $
Common Stock Warrants
On January 7, 2025, in connection with the engagement
agreement with The Benchmark Company, LLC (“Benchmark” or the “Placement Agent”), the Company issued the Placement
Agent a warrant (“Placement Agent Warrant”) to purchase up to
On March 2, 2026, pursuant to a 6-month marketing
services agreement, the Company granted
-20-
MYSEUM.AI, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
(Unaudited)
A summary of the Company’s outstanding
stock warrants, including
| Number of Warrants | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (Years) | ||||||||||
| Balance on December 31, 2025 | $ | |||||||||||
| Granted | - | |||||||||||
| Exercised | - | |||||||||||
| Balance on June 30, 2026 | $ | |||||||||||
| Warrants exercisable on June 30, 2026 | $ | |||||||||||
On June 30, 2026, the aggregate intrinsic value
of warrants outstanding was $
NOTE 11 – COMMITMENTS AND CONTINGENCIES
Operating Lease Agreement
See Note 8 for disclosure on the Company’s operating lease for its offices.
Employment Agreement
Chief Executive Officer of Myseum.AI, Inc.
On August 27, 2021 (the “Effective Date”),
the Company entered into an agreement (the “Employment Agreement”) with Darin Myman effective as of August 15, 2021 pursuant
to which Mr. Myman’s (i) base salary will increase to $
On January 14, 2025, the compensation committee
of the board of directors of the Company approved and the Company recorded a bonus to the Company’s chief executive officer in
the amount of $
On April 17, 2026, the compensation committee
of the board of directors of the Company approved and the Company recorded a bonus to the Company’s chief executive officer in
the amount of $
During the six months ended June 30, 2026 and
2025, the Company recorded a bonus of $
-21-
MYSEUM.AI, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026 AND 2025
(Unaudited)
Ambassador Settlement
Prior to the Company’s IPO, the Company
initiated a proposed “Ambassador Program” as a means to reward early investors for being Company brand ambassadors, helping
the Company create value by using and letting others know about the Company and its products. However, the program never came to full
fruition. In connection with a recent review and evaluation of this initiative, management made a determination regarding the value of
what the eligible investors would have received. As a result, the Company made outreach to these investors to provide them with an opportunity
to claim their reward payments, and distributions began in January 2025. The maximum estimated total potential distribution under this
program is expected to be approximately $
NOTE 12 – SUBSEQUENT EVENTS
Amendment to the 2021 Omnibus Equity Incentive Plan
On August 6, 2026, the Company held its 2026 annual meeting of shareholders.
At the meeting, the Company’s shareholders approved an amendment to the Company’s Amended and Restated 2021 Omnibus Equity Incentive
Plan to increase the number of shares of common stock reserved for issuance thereunder to
Reverse Stock Split Authorization
At the annual meeting, the Company’s shareholders granted the Company’s board of directors the authority, at its discretion, to effect a reverse stock split of the Company’s outstanding common stock at a ratio of not less than 1-for-2 and not greater than 1-for-25, without reducing the number of authorized shares of common stock, with the exact ratio to be determined by the board of directors. Any such reverse stock split may be effected, if at all, at any time before August 6, 2027. As of the date these unaudited consolidated financial statements were issued, the board of directors had not selected a ratio for, or effected, any reverse stock split, and accordingly no retroactive adjustment has been made to the share and per share amounts in the accompanying unaudited consolidated financial statements.
-22-
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited consolidated financial statements and the related notes appearing elsewhere in this Quarterly Report on Form 10-Q and the audited financial statements and related notes for the year ended December 31, 2025 included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission, or SEC. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section titled “Risk Factors” included elsewhere in this Quarterly Report on Form 10-Q. All amounts in this report are in U.S. dollars, unless otherwise noted.
Overview
We are a privacy and social media technology company focused on innovative and creative user platforms. Our flagship platform is “Picture Party by Myseum”, a next-generation social sharing platform that makes it easier to share your photos and videos both today, and for generations to come. Our innovative social media platform brings a fresh and needed approach to digital media and content management, allowing users to create a digital legacy that makes it easier to share both today, and with future generations. The platform is backed by both patented technology and proprietary software.
We also operate the DatChat Messenger & Private Social Network, which presents technology that allows users to change how long their messages can be viewed before or after users send them, prevents screenshots, and hides encrypted photos in plain sight on camera rolls. The patented technology offers users a traditional texting experience while providing control and security for their messages. With the DatChat Messenger, a user can decide how long their messages last on a recipient’s device while feeling secure that at any time, and delete individual messages or entire message threads, making it like the conversation never happened.
DatChat Messenger & Private Social Network
Our platform allows users to exercise control over their messages and posts, even after they are sent. Through our application, users can delete messages that they have sent, on their own device and the recipient’s device as well. There is no set time limit within which they must exercise this choice. A user can elect at any time to delete a message that they previously sent to a recipient’s device.
The application also enables users to hide secret and encrypted messages behind a cover, which messages can only be unlocked by the recipient and which are automatically destroyed after a fixed number of views or fixed amount of time. Users can decide how long their messages last on the recipient’s device. The application also includes a screenshot protection system, which makes it virtually impossible for the recipient to screenshot a message or picture before it gets destroyed. In addition, users can delete entire conversations at any time, making it like the conversation never even happened.
In addition to the foregoing, the application also provides users with the ability to connect via an encrypted live video chat that also is designed to prevent screenshots or screen grabs. The application integrates with iMessage, making private messages potentially available to hundreds of millions of users.
Myseum Social Media Platform
In March 2025, we launched our Myseum social media platform, an innovative social media platform that brings a fresh approach to digital media and content management, allowing users to create a digital legacy that can be easily shared today and with future generations. Backed by Proprietary technology, the multi-tiered social media ecosystem enables individuals, families, and other groups to store and share digital content such as messages, photos, videos, and documents within a highly secure and private family library. Myseum allows users to create amazing albums and galleries for everyone to see, create special private and secure galleries with limited access, personalize a user’s newsfeed with updates from other Myseums and leave time released video messages for both now and future generations.
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Picture Party Platform
In December 2025, we launched Picture Party by Myseum, a new instant social networking and social sharing platform designed to address growing concerns around content control, security, and intentional digital connection. The platform was developed to capitalize on the widespread need for a more controlled and purposeful way to share photos and videos-one that solves persistent privacy and ownership challenges not adequately addressed by existing social media offerings. Picture Party by Myseum introduces a new way to make sharing photos and videos easier, a lot more fun and private. Picture party is much more than a shared album; it’s a complete personal and private social network with a live feed that updates instantly as all guests’ posts. A user can share a post with dozens of pictures, comment and react. It even organizes the photos in an album, or the user can relive the Picture Party with all the comments and posts as they happened. Unlike group chats that are unorganized, no matter when a user joins the Picture Party, they can see everything from the beginning. Picture Party by Myseum makes it easier and more fun to share with the people right next to the user, or anywhere in the world.
Picture Party by Myseum solves everyday sharing frustrations by eliminating the common headaches of modern photo sharing:
| ● | No more passing around a phone for others to view photos and videos. |
| ● | No more crowds gathering over a user’s shoulder to see a clip. |
| ● | No more debating whether to text, drop, email, or tag group photos. |
| ● | No more struggling with social media privacy, data exposure, or AI training risks. |
Recent Events
Name Change and AI Developments
On April 15, 2026, the Company filed a Certificate of Amendment to its Amended and Restated Articles of Incorporation with the Secretary of State of the State of Nevada to change the name of the Company to “Myseum.AI, Inc.”
The rebrand illuminates the Company’s core technology platform which will integrate proprietary privacy-first artificial intelligence (AI) into its secure messaging and social media platforms. The Company is developing privacy-first agentic localized AI agents that assist in managing personal media such as photos, videos, and messages, while maintaining privacy. The technology will adapt to individual patterns and preferences to better assist the user while maintaining data integrity and encryption to help ensure that user information is never shared with any other social platforms or large language models used to train traditional AI. The Company’s goal is to maintain user privacy while providing personalized AI agents that can perform tasks such as creating user-defined albums automatically, turning photos into videos, repairing damaged media, sorting and identifying media, facial recognition auto-tagging and other media organizational tasks. The personalized AI assistant will learn from the user’s individual actions and will not share that information with traditional AI models.
Basis of Presentation
The financial statements contained herein have been prepared in accordance with accounting principles generally accepted in the United States of America (the “U.S. GAAP”) and the requirements of the Securities and Exchange Commission.
Critical Estimates
This management’s discussion and analysis of financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reported period. In accordance with U.S. GAAP, we base our estimates on historical experience and on various other assumptions we believe to be reasonable under the circumstances. Actual results may differ from these estimates if conditions differ from our assumptions. While our significant accounting policies and significant estimates are more fully described in Note 2 in the “Notes to Financial Statements”, we believe the following estimates are critical to the process of making significant judgments and estimates in preparation of our consolidated financial statements.
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Stock-based compensation
Stock-based compensation is accounted for based on the requirements of ASC 718 – “Compensation–Stock Compensation”, which requires recognition in the consolidated financial statements of the cost of employee, non-employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. The Company has elected to account for forfeitures as they occur.
Recently Issued Accounting Pronouncements
Refer to the notes to the unaudited financial statements.
Results of Operations
Revenue
During the three months ended June 30, 2026 and 2025, we generated revenues of $37 and $78, respectively. During the six months ended June 30, 2026 and 2025, we generated revenues of $110 and $161, respectively. Revenue consisted of subscription revenues.
Operating expenses
For the three months ended June 30, 2026, operating expenses amounted to $2,152,348 as compared to $1,194,239 for the three months ended June 30, 2025, an increase of $958,109, or 80.2%. For the six months ended June 30, 2026, operating expenses amounted to $3,837,891 as compared to $2,628,283 for the six months ended June 30, 2025, an increase of $1,209,659, or 46.0%. For the three and six months ended June 30, 2026 and 2025, operating expenses consisted of the following:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Compensation and related expenses | $ | 1,187,674 | $ | 660,534 | $ | 1,984,215 | $ | 1,576,696 | ||||||||
| Marketing and advertising expenses | 131,451 | 59,121 | 363,190 | 92,958 | ||||||||||||
| Professional and consulting expenses | 671,720 | 274,225 | 1,188,902 | 604,823 | ||||||||||||
| General and administrative expenses | 161,503 | 200,359 | 301,584 | 353,806 | ||||||||||||
| Total | $ | 2,152,348 | $ | 1,194,239 | $ | 3,837,891 | $ | 2,628,283 | ||||||||
Compensation and related expenses
Compensation and related expenses include salaries, stock-based compensation, health insurance and other benefits.
During the three months ended June 30, 2026 and 2025, compensation and related expenses amounted to $1,187,674 and $660,534, respectively, an increase of $527,140, or 79.8%. The increase was attributable to an increase in bonus of $350,000, an increase in stock-based compensation of $71,250, and an overall increase in compensation and other related expenses of $105,890 partially as a result of a decrease in the allocation of compensation and related expenses to RPM, which is included in loss from discontinued operations.
During the six months ended June 30, 2026 and 2025, compensation and related expenses amounted to $1,984,215 and $1,576,696, respectively, an increase of $407,519, or 25.8%. The increase was attributable to an increase in stock-based compensation of $142,056, and an overall increase in compensation and other related expenses of $265,463 partially as a result of a decrease in the allocation of compensation and related expenses to RPM, which is included in loss from discontinued operations.
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Marketing and advertising expenses
During the three months ended June 30, 2026 and 2025, marketing and advertising expenses amounted to $131,451 and $59,121, respectively, an increase of $72,330, or 122.3%. During the six months ended June 30, 2026 and 2025, marketing and advertising expenses amounted to $363,190 and $92,958, respectively, an increase of $270,232, or 290.7%. The increases were primarily due to an overall increase in promotions, branding and digital marketing strategies and social media advertisements.
Professional and consulting expenses
During the three months ended June 30, 2026 and 2025, we reported professional and consulting expenses of $671,720 and $274,225, respectively, an increase of $397,495, or 145.0%. The increase was attributable to an increase in stock-based consulting of $367,258, an increase in other consulting fees of $118,100, and an increase in other professional fees of $29,605, primarily due to a decrease in the allocation of professional and consulting expenses to RPM, which is included in loss from discontinued operations, offset by a decrease in investor relations of $101,472 and a decrease in legal fees of $15,996.
During the six months ended June 30, 2026 and 2025, we reported professional and consulting expenses of $1,188,902 and $604,823, respectively, an increase of $584,079, or 96.6%. The increase was attributable to an increase in stock-based consulting fees of $531,024, an increase in other consulting fees of $152,600, and an increase in other professional fees of $61,477, primarily due to a decrease in the allocation of professional and consulting expenses to RPM, which is included in loss from discontinued operations, offset by a decrease in legal fees of $92,848 and a decrease in investor relations of $68,444.
General and administrative expenses
During the three months ended June 30, 2026 and 2025, general and administrative expenses amounted to $161,503 and $200,359, respectively, a decrease of $38,856, or 19.4%. The decrease was primarily attributable to a decrease in computer and internet expenses of $28,463, a decrease in travel expenses of $16,050, and a decrease in proxy meeting expenses of $10,000, offset by an increase in other general and administrative expenses of $15,657 primarily due to a decrease in the allocation of general and administrative expenses to RPM, which is included in loss from discontinued operations.
During the six months ended June 30, 2026 and 2025, general and administrative expenses amounted to $301,584 and $353,806, respectively, a decrease of $52,222, or 14.8%. The decrease was primarily attributable to a decrease in computer and internet expenses of $29,446, a decrease in travel expenses of $24,585, and a decrease in proxy meeting expenses of $20,749, offset by an increase in other general and administrative expenses of $22,558 primarily due to a decrease in the allocation of general and administrative expenses to RPM, which is included in loss from discontinued operations.
Loss from Operations
During the three months ended June 30, 2026, loss from operations amounted to $2,152,311 as compared to $1,194,161 during the three months ended June 30, 2025, an increase of $958,150, or 80.2%. During the six months ended June 30, 2026, loss from operations amounted to $3,837,781 as compared to $2,628,122 during the six months ended June 30, 2025, an increase of $1,209,659, or 46.0%. The increase was primarily a result of the changes in operating expenses discussed above.
Other Income (Expense)
Other income (expenses) primarily consisted of interest income and an unrealized loss on equity securities. During the three months ended June 30, 2026 and 2025, we reported other (expenses) income, net of $(898,053) and $49,639, respectively, a negative change of $947,692, or 1,909.2%. The negative change was primarily due to an increase in unrealized loss on equity securities of $910,000 that are primarily related to the decrease in the valuation of the fair value of the Avalon Series E Preferred Stock caused by the decrease in Avalon’s quoted common share price, and a decrease in interest income, net of $37,692.
During the six months ended June 30, 2026 and 2025, we reported other (expenses) income, net of $(2,074,193) and $90,975, respectively, a negative change of $2,165,168, or 2,380.0%. The negative change was primarily due to an increase in unrealized loss on equity securities of $2,104,000 that are primarily related to the decrease in the valuation of the fair value of the Avalon Series E Preferred Stock caused by the decrease in Avalon’s quoted common share price, and a decrease in interest income, net of $61,168.
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Loss from Continuing Operations
During the three months ended June 30, 2026, loss from continuing operations amounted to $3,050,364 as compared to $1,144,522 during the three months ended June 30, 2025, an increase of $1,905,842, or 166.5%. During the six months ended June 30, 2026, loss from continuing operations amounted to $5,911,974 as compared to $2,537,147 during the six months ended June 30, 2025, an increase of $3,374,827, or 133.0%. The increase was primarily a result of the changes in operating expenses discussed above.
Loss from Discontinued Operations
For the three and six months ended June 30, 2026, there were no loss from discontinued operations. For the three and six months ended June 30, 2025, loss from discontinued operations amounted to $212,667 and $439,152, respectively. The following table summarizes the results of the discontinued operations for the three and six months ended June 30, 2026 and 2025:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Operating expenses | $ | - | $ | 212,667 | $ | - | $ | 439,152 | ||||||||
| Other expenses | - | - | - | - | ||||||||||||
| Loss from discontinued operations, net of tax | - | (212,667 | ) | - | (439,152 | ) | ||||||||||
| Gain on sale and deconsolidation of variable interest entities | - | - | - | - | ||||||||||||
| Total loss from discontinued operations, net | $ | - | $ | (212,667 | ) | $ | - | $ | (439,152 | ) | ||||||
Net Loss and Net Loss Attributable Common Shareholders
Due to the foregoing reasons, during the three months ended June 30, 2026 and 2025, our net loss was $3,050,364 and $1,357,189, respectively, an increase of $1,693,175, or 124.8%. During the three months ended June 30, 2026 and 2025, our net loss attributable to Myseum.AI, Inc. shareholders was $3,050,364 and $1,216,872, respectively, an increase of $1,833,492, or 150.7%.
Due to the foregoing reasons, during the six months ended June 30, 2026 and 2025, our net loss was $5,911,974 and $2,976,299, respectively, an increase of $2,935,675, or 98.6%. During the six months ended June 30, 2026 and 2025, our net loss attributable to Myseum.AI, Inc. shareholders was $5,911,974 and $2,690,068, respectively, an increase of $3,211,906, or 119.8%.
During the three and six months ended June 30, 2026, our total basic and diluted net loss per common share attributable to Myseum.AI, Inc. shareholders was $0.61 and $1.28, respectively. During the three and six months ended June 30, 2025, our total basic and diluted net loss per common share attributable to Myseum.AI, Inc. shareholders was $0.29 and $0.65, respectively.
Liquidity, Capital Resources and Plan of Operations
Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. On June 30, 2026, we had a cash balance of $1,874,149, short-term investments of $2,056,196, and working capital of $3,373,096. Short-term investments include U.S. Treasury bills that are all highly rated and have initial maturities between one and four months. During the six months ended June 30, 2026, we incurred a net loss of $5,911,974 and used net cash in operations of $2,762,657. Additionally, we had nominal revenues in 2026.
The accompanying unaudited consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company’s ability to continue as a going concern is dependent on its ability to raise additional capital to fund its research and development (“R&D”) activities and meet its obligations on a timely basis. There can be no assurance that sufficient funding will be available to allow the Company to successfully continue its R&D activities and meet its obligations. If the Company is unable to obtain the necessary funds, significant reductions in spending and the delay or cancellation of planned activities may be necessary. These actions would have a material adverse effect on the Company’s business, results of operations, and prospects. These conditions raise substantial doubt about the Company’s ability to continue as a going concern within one year from the date these consolidated financial statements are issued. These consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.
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Our primary uses of cash have been for research and development, compensation and related expenses, fees paid to third parties for professional services, marketing and advertising expenses, and general and administrative expenses. All funds received have been expended in the furtherance of growing the business. We received funds from the sale of our common stock, sale of common stock of RPM, and the exercise of warrants. The following trends are reasonably likely to result in changes in our liquidity over the near to long term:
| ● | An increase in working capital requirements to finance our current business, |
| ● | Cost of research and development, |
| ● | Addition of administrative, technical and sales personnel as the business grows, and |
| ● | The cost of being a public company. |
Cash Flows from Operating Activities
Net cash used in operating activities totaled $2,762,657 and $2,482,210 for the six months ended June 30, 2026 and 2025, respectively, an increase of $280,447.
Net cash flow used in operating activities for the six months ended June 30, 2026 primarily reflected a net loss of $5,911,974 adjusted for the add-back of non-cash items consisting of depreciation and amortization of $8,528, amortization of right of use assets of $24,879, accretion of stock-based stock option, compensatory warrants, and common stock expense of $986,747, changes in accrued interest income of $52,043, and an unrealized loss on equity securities of $2,104,000, offset by changes in operating assets and liabilities primarily consisting of a decrease in accounts receivable of $31, a decrease in prepaid expenses of $149,158, a decrease in accounts payable and accrued expenses of $151,813, a decrease in contract liabilities of $10, and a decrease in operating lease liabilities of $24,246.
Net cash flow used in operating activities for the six months ended June 30, 2025 primarily reflected a net loss of $2,976,299 adjusted for the add-back of non-cash items consisting of depreciation and amortization of $11,209, amortization of right of use assets of $10,318, and accretion of stock-based stock option and common stock expense of $313,666, offset by changes in operating assets and liabilities primarily consisting of an increase in accounts receivable of $13, a decrease in prepaid expenses of $55,128, a decrease in assets of discontinued operations of $139,898, a decrease in accounts payable and accrued expenses of $132,181, an increase in contract liabilities of $17, a decrease in operating lease liabilities of $3,562, and an increase in liabilities of discontinued operations of $99,609.
Cash Flows from Investing Activities
Net cash provided by (used in) investing activities amounted to $873,670 and $(2,358,664) for the six months ended June 30, 2026 and 2025, respectively, a positive change of $3,232,334.
During the six months ended June 30, 2026, cash flows provided by investing activities comprised of gross proceeds from the sale of short-term investments of $4,017,475, offset by purchases of short-term investments of $3,143,805.
During the six months ended June 30, 2025, we purchased short-term investments of $5,317,735 and received gross proceeds from the sale of short-term investments of $2,963,546. Additionally, we purchased property and equipment of $4,475.
Cash Flows from Financing Activities
Net cash provided by financing activities totaled $3,014,106 for the six months ended June 30, 2026 as compared to net cash provided by financing activities of $4,477,972 for the six months ended June 30, 2025, a decrease of $1,463,866.
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During the six months ended June 30, 2026, cash flows provided by financing activities comprised of proceeds from sale of common stock, net of $3,208,239 offset by payments of deferred offering costs of $194,133.
During the six months ended June 30, 2025, cash flows provided by financing activities comprised of proceeds from sale of common stock, net of $4,532,000 offset by payments of deferred offering costs of $54,028.
Off-Balance Sheet Arrangements
We have not entered into any other financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not entered into any derivative contracts that are indexed to our shares and classified as shareholders’ equity or that are not reflected in our financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us.
JOBS Act
On April 5, 2012, the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) was enacted. Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.
We have chosen to take advantage of the extended transition periods available to emerging growth companies under the JOBS Act for complying with new or revised accounting standards until those standards would otherwise apply to private companies provided under the JOBS Act. As a result, our financial statements may not be comparable to those of companies that comply with public company effective dates for complying with new or revised accounting standards.
Subject to certain conditions set forth in the JOBS Act, as an “emerging growth company,” we intend to rely on certain of these exemptions, including, without limitation, (i) providing an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002, as amended, and (ii) complying with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements, known as the auditor discussion and analysis. We will remain an “emerging growth company” until the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1.235 billion or more; (ii) the last day of our fiscal year following the fifth anniversary of the date of our initial public offering, which would be December 31, 2026; (iii) the date on which we have issued more than $1 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the SEC.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
We are a “smaller reporting company,” as defined in Rule 12b-2 of the Exchange Act and are not required to provide the information required by this Item.
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ITEM 4. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that material information required to be disclosed in our periodic reports filed under the Securities Exchange Act of 1934, as amended, or 1934 Act, is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and to ensure that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer as appropriate, to allow timely decisions regarding required disclosure. We carried out an evaluation, under the supervision and with the participation of our management, including the principal executive officer and the principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rule 13(a)-15(e) under the 1934 Act, as of the end of the period covered by this report. Based on this evaluation, because of the Company’s limited resources and limited number of employees, management concluded that our disclosure controls and procedures were not effective as of June 30, 2026.
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Exchange Act Rule 13a-15(f). Internal control over financial reporting is a process designed under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with GAAP. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.
The ineffectiveness of our internal control over financial reporting was due to the following material weaknesses which we identified in our internal control over financial reporting:
| ● | We lack segregation of duties within accounting functions as a result of our limited financial resources to support hiring of personnel. |
| ● | The lack of multiple levels of management review on complex business, accounting and financial reporting issues. |
| ● | We have not implemented adequate system and manual controls. |
Remediation Plans
Management is committed to the remediation of the material weaknesses described above, as well as the improvement of the Company’s overall internal control over financial reporting. Management plans on implementing actions to remediate the underlying causes of the control deficiencies that gave rise to the material weaknesses. Remediation efforts include the possible hiring of additional accounting and finance personnel with appropriate expertise to strengthen overall controls and the establishment of disbursement review and approval processes. The material weaknesses will not be considered remediated until management designs and implements effective controls that operate for a sufficient period of time and management has concluded, through testing, that these controls are effective. Our management will monitor the effectiveness of our remediation plan and will make changes management determines to be appropriate. Until the remediation efforts (including any additional measures management identifies as necessary) are completed, the material weaknesses described above will continue to exist.
Changes in Internal Control over Financial Reporting.
There have been no changes in our internal control over financial reporting during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Limitations on Effectiveness of Controls and Procedures
In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.
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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. 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. We are currently not aware of any such legal proceedings or claims that will have, individually or in the aggregate, a material adverse effect on our business, financial condition or operating results.
ITEM 1A. RISK FACTORS.
Risk factors that affect our business and financial results are discussed in Part I, Item 1A “Risk Factors,” in our Annual Report on Form 10-K for the year ended December 31, 2025 as filed with the SEC on March 30, 2026 (“Annual Report”). There have been no material changes in our risk factors from those previously disclosed in our Annual Report. You should carefully consider the risks described in our Annual Report, which could materially affect our business, financial condition or future results. The risks described in our Annual Report are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, and/or operating results. If any of the risks actually occur, our business, financial condition, and/or results of operations could be negatively affected.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
| (a) | Recent Sales of Unregistered Securities. |
On April 23, 2026, we issued 20,000 shares of common stock pursuant to a consulting agreement. These shares were valued at $59,800, or a per share price of $2.99, based on the quoted closing price of the Company’s common stock on the measurement date. On June 11, 2026, we issued an aggregate of 102,101 shares of restricted common stock to our investor relations consultant pursuant to a service agreement, valued at an aggregate of $200,000.
The foregoing issuances were made in reliance on an exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506(b) of Regulation D promulgated thereunder.
| (b) | Issuer Purchases of Equity Securities |
During the quarterly period ended June 30, 2026, we did not have any common stock repurchases.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
ITEM 5. OTHER INFORMATION.
Rule 10b5-1 Trading Plans
During the fiscal quarter ended June 30, 2026,
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ITEM 6. 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.
| MYSEUM.AI, INC. | |
| Dated: August 14, 2026 | /s/ Darin Myman |
| Darin Myman | |
| Chief Executive Officer and Director | |
| (Principal Executive Officer) | |
| Dated: August 14, 2026 | /s/ Brett Blumberg |
| Brett Blumberg | |
| Chief Financial Officer | |
| (Principal Financial and Accounting Officer) |
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