Nexscient, Inc 10-K, filed Sep 30, 2025
Nexscient, Inc. (NXNT)
About this 10-K
Nexscient, Inc filed this 10-K on September 30, 2025, covering the fiscal year ended June 30, 2025.
Headline figures
Fiscal year ended June 30, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $0
- compared with $0 a year earlier
- Net loss
- $529.7K
- compared with a net loss of $937.59K a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ______ to ______
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(Address of principal executive offices, including ZIP code)
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Securities registered pursuant to Section 12(b) of the Exchange Act: None
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act
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As of September 30, 2025 there were
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain information included in this Annual Report on Form 10-K and other filings of the Registrant under the Securities Act of 1933, as amended (the “Securities Act”), and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as well as information communicated orally or in writing between the dates of such filings, contains or may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Forward-looking statements in this Annual Report on Form 10-K, including without limitation, statements related to our plans, strategies, objectives, expectations, intentions and adequacy of resources, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks, trends and uncertainties that could cause actual results to differ materially from expected results. Among these risks, trends and uncertainties are the availability of working capital to fund our operations, the competitive market in which we operate, the efficient and uninterrupted operation of our computer and communications systems, our ability to generate a profit and execute our business plan, the retention of key personnel, our ability to protect and defend our intellectual property, the effects of governmental regulation, and other risks identified in the Registrant’s filings with the Securities and Exchange Commission from time to time.
In some cases, forward-looking statements can be identified by terminology such as “may,” “will,” “should,” “could,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of such terms or other comparable terminology. Although the Registrant believes that the expectations reflected in the forward-looking statements contained herein are reasonable, the Registrant cannot guarantee future results, levels of activity, performance or achievements. Moreover, neither the Registrant, nor any other person, assumes responsibility for the accuracy and completeness of such statements. The Registrant is under no duty to update any of the forward-looking statements contained herein after the date of this Annual Report on Form 10-K.
TABLE OF CONTENTS
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PART I
Item 1. Business
Company Overview
Nexscient, Inc. (the “Company”) is an emerging growth company focused on building a global collaborative network of AI-enabled intelligent enterprise solutions and technologies through internal development, synergistic acquisitions, and capital investments in companies involved in machine learning, artificial intelligence, and Industrial Internet of Things (IIoT) technologies.
The global market for AI-enabled enterprise applications is projected to grow significantly as companies pursue operational efficiencies, predictive capabilities, and digital transformation. We believe our platform will be well-positioned to participate in this growth by developing a scalable infrastructure and an integrated suite of applications designed to provide actionable insights for businesses seeking to improve operations, achieve differentiation in their markets, and enhance long-term relevance within their industries.
Our objective is to build a comprehensive platform that integrates enterprise applications and core business processes on an advanced AI technology foundation. By combining these capabilities, we aim to help enterprises unlock efficiencies, gain a competitive advantage, and address industry-specific challenges. Our intended solutions are designed to serve organizations operating in data-intensive and operationally complex environments, where the ability to capture, analyze, and act on information in real-time is increasingly crucial for maintaining competitiveness.
We intend to differentiate ourselves by focusing on industries and market segments that remain underpenetrated by AI solutions, despite their reliance on data, predictive analytics, and process optimization. Many of these sectors, including industrial operations, supply chain management, and other asset-intensive markets, represent opportunities where adoption has lagged but the potential benefits are significant. We believe this focus will enable us to capture niche opportunities where specialized solutions can command higher margins, particularly as broader AI adoption accelerates and commoditization increases across more mature sectors.
Corporate Information
Nexscient, Inc. was incorporated in the State of Delaware on March 14, 2023. Our fiscal year end is June 30. We are a development stage enterprise. Our principal office is located at 2029 Century Park East, Suite 400, Los Angeles, CA 90067. Our telephone number is (310) 494-6620 and our e-mail contact is info@nexscient.com. Our website can be viewed at nexscient.ai.
We intend to develop the Nexscient Intelligent Enterprise Solution (“Nexscient IES”) as a comprehensive platform that delivers insight, intelligence, and innovation to the business enterprise. We plan to assemble a digital ecosystem of enabling enterprise technologies by developing, acquiring, and investing in emerging companies that are capitalizing on machine learning and artificial intelligence (“AI”) revolution.
AI holds the promise of empowering computers to perceive and understand the world around us, enabling the advent of products and services that previously would have been unimaginable and impossible with traditional code. Since AI learns from data, training it with the highest-quality data will produce the highest-performing outputs.
The Nexscient IES platform takes as a holistic approach to deliver insight, intelligence, and innovation to the business enterprise. Nexscient IES intends to offer businesses data transformation services that can achieve efficiencies and enhance performance through digital realization, business process agility, and insight and innovation.
We intend to provide a comprehensive platform by integrating disparate technologies into a digital-ready ecosystem. Within our ecosystem, there will be a foundation of intelligent business applications connected to new and existing business operations, processes, and technologies.
Our focus is to identify and integrate synergistic businesses and technologies into a global collaborative network that leverages our collective pool of knowledge and resources brought together by our executive management team and partner companies to provide strategic guidance, operational support, and capital resources needed to fuel growth.
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Nexscient IES Platform
The penetration of artificial intelligence and machine learning across numerous industries will drive global market growth for enterprise applications. The increased allocation of cash by a large number of major participants would multiply the magnitude of the worldwide market boom. In this shifting landscape, startups have the chance to showcase the benefits of their innovations, demonstrate more potential for significant impact, and enjoy the flexibility that larger companies often lack -- by becoming part of a collaborative network of like-minded innovators, not just as a stopgap for these benefits but as a long-term destination that aligns with their desired growth and ambitions for success.
Management believes that there are significant opportunities for companies that exploit machine learning and AI to assist traditional businesses by using innovative approaches to create more efficient operations and markets. We intend to focus on emerging companies that can be incorporated into the Nexscient IES platform, operating in the following three domains:
Enterprise Applications
Enterprise applications are software solutions that integrate key operational aspects of entire organizations. By operationalizing AI, one can drive rapid, actionable insights for tangible business impact via enterprise-grade capabilities and solutions. Enterprises are investing in advanced analytics and machine learning solutions for its human-centric and cognitive capabilities, but practice and maturity still remain stagnant. Even as businesses take the plunge in AI adoption, they lack the governance structures and innovative systems to take full advantage of it. Our domain experience as an advanced analytics company and expertise in machine learning, data science, and engineering services help us go beyond possible for our partner companies. We help unlock the true potential of AI beyond adoption, we can enable long-term business transformation and enjoy short-term wins. Nexscient seeks opportunities that provide novel AI technologies and professional services to integrate, implement and support enterprise applications.
Business Process & Technology
Machine learning systems and artificial intelligence technologies are becoming ubiquitous across industries. However, 87% of machine learning (ML) and AI models never make it to production. Enterprises still face many challenges when it comes to scaling, automation, standardization, and cost-effectiveness of ML solutions. The lack of experienced ML teams, monitoring tools, and automated processes leads to poor development standards, duplication of efforts, and underperforming systems. Furthermore, ML projects implemented with sub-par standards expose enterprises to governance, security, and compliance risks.
AI Training Data & Transformation
We believe AI-enabled managed platforms that integrate automation with expert data operations services provide superior opportunities for data acquisition, curation and continuous monitoring. These capabilities are essential to augment large-scale, human-intensive data operations to effectively address a large and growing market of enterprises seeking high-quality data engineering services. We believe a hybrid approach of using AI technology that harnesses machine learning and deep learning techniques, in conjunction with human-powered data annotation and labeling services will deliver superior quality outcomes.
Network Infrastructure
Network infrastructure products and services include computing and communications tools that enable companies to deploy enterprise applications. Many companies do not have the infrastructures in place to support leading edge enterprise AI applications. Nexscient seeks opportunities which include network security products and services, companies that service the AI market, machine learning services that enable products that optimize existing investments in enterprise applications and infrastructure management solutions.
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The Industry
Industrial revolutions have come along every hundred years over the past few centuries—think mechanization and steam power in the late 1700s, mass production in the late 1800s and computers in the late 1900s. And now, just half a century after the start of the electronic era, is the fourth industrial revolution, Industry 4.0 has introduced the ‘Age of Intelligence.’ It blends global networks, the Internet of things (IoT), artificial intelligence (AI), machine learning (ML), predictive analytics and much more—and it’s transforming businesses. However, transformation requires more than technology.
Enterprises are constrained by a lack of insight or enterprise intelligence. Skill shortages, inadequate tools and lack of experience, continue to inhibit transformation. When combined with the challenge of business process complexity, organizations become rigid and unable to connect business applications with new technologies and ultimately unable to activate insight, react to market challenges, or innovate at speed and scale. An organization’s ability to differentiate itself and lead markets becomes more difficult under these conditions. The culprits that hold back businesses include:
| · | Process complexity that degrades both customer experiences and employee productivity; |
| · | Lack of business insight needed to innovate for industry differentiation; and |
| · | Inadequate skills, tools and focus. |
Businesses understand that the latest technologies and trends are crucial to maximizing competitive advantage. That’s one reason they’re spending vast sums to adopt them—an anticipated $1.8 trillion in 2024, up by 45% from 2023, according to IDC. However, only some of these efforts will succeed - others will fall short because they require more than technology. Without insight, intelligence, and innovation, businesses can get stuck in reactive modes.
Enterprise AI Market
Enterprise AI is the segment of the enterprise software market that incorporates artificial intelligence technologies, such as machine learning, understanding, and interacting, into applications to achieve a level of advancement that eventually surpasses human capabilities in the enterprise infrastructure. This technological advancement helps in the everyday activities occurring within a company such as automation of interactions combined with improvement in functional productivity with steady development in an organization’s structure. Enterprise AI deployment automates a variety of functions and interactions, enabling organizations to achieve improved operations and provide better customer support and personalized experiences. In addition, enterprise AI equips the organization’s vital applications through application programming interface (API) integrations.
The enterprise AI market size was valued at $10 billion in 2023 and is predicted to reach $270 billion by 2032 with a CAGR of 37.87% from 2024-2032. Growing demand for enterprise AI in various industry verticals including manufacturing, healthcare, and automotive owing to its automatic features such as industrial robots, automated vehicles, and virtual reality drives the market growth.
AI Market Growth
The substantial growth in AI creates tremendous market opportunities for emerging companies with novel technologies. The global AI market was valued at $146 billion in 2023 and is expected to grow to $1,812 billion by the end of 2030, with a CAGR of over 38% between 2024 and 2030. The major drivers for this increase include the adoption of AI technologies across multiple industries, as well as advancements in algorithms and infrastructure.
The market is expected to see continued innovation and expansion over the next decade, with AI becoming an increasingly integral part of many business operations. With this growth, we are seeing a rush of new market entrants (startups) seeking to capitalize on this opportunity—many of which house brilliant minds, brimming with innovative ideas for AI-enabled technologies, products, and services embarking on a journey to build new enterprise. But many of these aspiring companies struggle to commercialize their ideas because they have difficulty accessing capital and strategic guidance, among other things.
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Market Opportunity
Companies across industry verticals seek to develop AI-based applications for an ever-increasing number of use cases, such as self-driving cars, medical diagnostics, surveillance systems, digital assistants, and chatbots to name a few. Unlike traditional computer applications that are coded using computer languages to perform functions, AI applications are trained with large quantities of data. These applications learn by processing data through high-performing AI algorithms and in order for these algorithms to perform accurately, they must be trained on large amounts of high-quality data. CubicShift seeks to become a leading data engineering company, helping data scientists with their most complex and mission-critical data preparation tasks.
The AI data training market is estimated to be $12.7 billion in 2024, projected to grow at a CAGR of 22% to reach $92.4 billion by 2034,1 essentially proxying the enormous growth expected in AI system spending overall ($632 billion by 2028, a 29% CAGR over the 2024-2028 forecast period).2. Similarly, the global data annotation tools market was valued at $2.02 billion in 2023, and is projected to reach $23.11 billion by 2032, which is a CAGR of 31.1%.3
AI Data Preparation
Data teams at some of the largest technology companies are accelerating development of generative AI technologies that produce high quality text, code, and images in response to user prompts. At their core, they rely upon large language models (LLMs), which use deep neural networks (an artificial intelligence architecture) with billions of parameters and requires massive amounts of training data to encode the essence of human language. They require fine-tuning through supervised learning and reinforcement learning from human feedback (RLHF) to render them suitable for specialized tasks and domains, to control hallucinations (models have a tendency to make up things), and to minimize the risk of generating unsafe or biased results. In addition, companies across industry verticals are seeking to develop AI-based applications for an ever-increasing number of use cases such as self-driving cars, surveillance systems, automated medical diagnostics, digital assistants, chatbots, content moderation, robotics, fraud detection and contract review.
The problem is that many projects fail, stall or perform inadequately because data teams are unable to perform the complex and resource-intensive data preparation tasks necessary to properly train, tune, and operationalize AI models. Preparing high-quality data takes up 80% of the time for most AI and machine learning projects. Data preparation includes data annotation (which is estimated to take up 25% of the time) and data transformation (which includes data identification, aggregation, cleansing and augmentation) is estimated to take 55% of the time). Moreover, many data teams within these organizations lack the technology and resources to perform data annotation and transformation tasks and identify lack of data or quality issues with data as a bottleneck in the adoption of AI. Thus, many data teams seek external partners to perform data preparation functions, at scale. Furthermore, as AI projects become more specialized, also introducing concerns over privacy and security, data preparation becomes increasingly more complex, requiring deep domain knowledge and an infrastructure where data security is assured.
We intend to work with technology companies to enable, accelerate or enrich the services they deliver to end users around generative AI foundation models that support autonomous vehicles, facial recognition, legal research and medical diagnostics, to name a few. We believe our contemplated Nexscient IES, coupled with acquired capabilities in collecting and annotating data at scale with consistency and high accuracy, will contribute meaningfully to the advancement of AI and our emerging business as a leading provider of data transformation services.
AI Model Deployment and Integration
We believe that over the next decade, almost all industries will experience a fundamental shift due to high-performing AI models. The current pace of AI innovation is accelerating and algorithms and techniques used today will likely be obsolete in the coming years. Many enterprises seek solutions that require intensive text data processing and analytics. For these businesses, in addition to deploying and integrating AI models, we intend to provide a range of data engineering support services including data transformation, curation, consolidation, extraction, hygiene, and compliance.
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1 Data Labeling Solution and Services Market, FactMR (Apr. 2024)
2 Worldwide Artificial Intelligence Systems Spending Guide, IDC (Aug. 2024)
3 Data Annotation Tools Market, Astute Analytica, (Nov. 2024)
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We intend to develop custom AI models, where we select the appropriate algorithms, tune hyperparameters, train and validate models. We also intend to help businesses fine-tune their custom versions of our proprietary models and third-party foundation models to address domain-specific and customer-specific use cases. Consequently, these enterprises are expected to benefit from the short time-to-value and high economic returns realized from our value-added AI solutions and platform.
Products and Services
We intend to provide a range of solutions and platforms for solving complex data challenges that companies face when they seek to obtain the benefits of AI systems and analytics platforms.
Intelligent Automation
Enterprises are increasingly looking to re-invent business processes to take advantage of advancements in AI and machine learning, computing, and storage. Many seek easier ways these advanced capabilities can be trained, deployed, and leveraged. For clients with critical business processes that involve documents, images, text, emails and other unstructured data, we plan to deploy a range of technologies, including AI and robotic process automation (RPA), to eliminate repetitive tasks, automate where possible, speed up operations, and shift internal talent to creative and analytical work. We intend to provide intelligent automation for an increasing diversity of complex functions.
Nexscient IES Comprehensive Approach
Companies across industries are increasingly adopting digital technologies to advance toward becoming intelligent enterprises. However, digital transformation can be complex, requiring significant investment of time and resources. Nexscient’s approach is to provide a comprehensive platform designed to reduce this complexity and improve the likelihood of successful outcomes. By assembling a digital ecosystem that integrates technology expertise, business process breadth, and industry insights, our platform is intended to offer enterprises greater efficiency, cost-effectiveness, and adaptability. The Nexscient IES platform is designed to deliver industry-specific configurations that can accelerate integration, streamline operations, and support improved business performance, helping organizations achieve measurable value from their digital transformation initiatives.
By leveraging a comprehensive platform rather than relying on multiple off-the-shelf applications, enterprises can reduce redundancies, lower integration costs, and streamline operations. Our platform incorporates cognitive capabilities that adapt to the specific needs of different industries, enabling organizations to replace fragmented solutions with a unified framework. This approach is designed to deliver greater cost-effectiveness and improved business outcomes by enhancing decision-making, accelerating deployment, and aligning digital investments more closely with strategic objectives.
Nexscient IES Principles
The Nexscient IES platform is premised on three fundamental principles: (i) digital realization, (ii) business process agility, and (iii) insight and innovation.
Digital Realization
The intelligent enterprise depends on more than technology. It requires the right skills, culture and tools within the organization, as well as the right partnerships. The use of smart technologies, for example, requires a partner that’s trained and motivated to use them. That partner must be equipped with the right digital tools, including business processes to accelerate transformation. The partner chosen to facilitate the realization must be fully trusted—and worthy of that trust. Given the inevitable risk in any major technology endeavor, a business that aspires to be an intelligent enterprise can afford no less.
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Business Process Agility
Aging business processes are stumbling blocks for creating great customer experiences and employee engagement. The intelligent enterprise can overcome this obstacle by creating operations and solutions that enable customers and employees to overcome complexity. A key element in business process agility is simplifying business processes and delivering them with an eye toward industry-specific requirements, insight and cultural alignment. The industry focus is crucial to meeting the distinctive needs of customers and employees in each market and the intelligent enterprise needs to handle the higher-order tasks. For example, CRM and ERP projects still focus too much on replicating the complexity of previous systems for the sake of matching unique industry or client-specific requirements. Intelligent enterprises could, instead, leverage the standard application from the cloud and adopt industry best practices for business processes to match the “last mile” functionality requirements. Simplification is the goal and the cloud delivery model for enterprise applications contributes to making it a reality.
Insights & Innovation
Systems of intelligence and technology advancement are key to enabling enterprises to innovate at scale and speed—and to disrupt their markets. This requires integration with the latest advancements in artificial intelligence, machine learning, automation, Internet of things, virtual reality/augmented reality, among others. To achieve this, enterprises need access to world-class skills, insight into new technologies and cross-industry experience at a global level. The holistic approach should infuse deeper intelligence at all levels of the enterprise, from strategy through operations. It should go beyond application silos to identify connected information anywhere in the enterprise but should be well-grounded in change management and user-adoption practices. To predict and lead markets is a key aspiration for business leaders and without intelligence, insight and innovation the business will be reactive at best.
Nexscient IES Process Flow
Our robust and scalable platform intends to exploit Intelligent Enterprise, Artificial Intelligence (AI), and Cloud-computing technologies to deliver an innovative solution for companies that helps improve business processes, avoid unscheduled downtimes, decrease equipment maintenance costs, and improve overall production efficiencies. Creating an intelligent enterprise solution involves several advanced technologies and analytic techniques that deploy neural networks, deep learning, machine learning and predictive analytics:
| · | Descriptive Analytics: This component generally provides a dimensional view of business performance. It collects and reveals present and historical data on an organization’s operating metrics such as revenues, customers, costs, operational KPIs, and other financial information, among other things. Then, this data is processed through predictive analytics. |
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| · | Predictive Analytics: As the name suggests, this technique will tell us what will happen next by using past experiences. With the application of several techniques in data science, such as clustering classification and regression, we’ll be able to answers questions like which product a customer will buy next or which equipment needs attention or even predict when it’s likely to fail. This information is further processed through cognitive analytics. |
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| · | Cognitive Analytics: This analytic technique involves applying human-like intelligence to a particular task for understanding, not only the words of information, but also the underlying context. It brings together several intelligent technologies that involve artificial intelligence algorithms, cognitive computing, and a number of machine learning technologies such as neural networks and deep learning. |
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| · | Prescriptive Analytics: This technique will help uncover actionable insights, that is, the best set of actions for a given situation by prescribing proper recommendations. It brings together several intelligent techniques such as neural networks, deep learning, and several other AI algorithms. |
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Nexscient IES Framework
At its core, the Nexscient IES platform breaks down the barriers between siloed applications and unifies business processes into one platform so they work seamlessly together to help run the enterprise’s business in the cloud, while delivering end-to-end support that integrates the entire ecosystem. The Nexscient IES framework integrates enterprise applications and business processes on an advanced technology platform within a scalable infrastructure to deliver transformative results. The key components within this framework include:
| · | Enterprise Applications: Includes various enterprise applications that offer solutions for customer experience, inventory and supply chain management, manufacturing and asset management systems. May include vertical solutions from organizations and partners that utilize industry best practices to extend their current business model via industry cloud. |
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| · | Business Process Intelligence: Includes business network and process intelligence, cloud-based solutions that allow all organizations to connect all their trading partners into a single directory and streamline their supply chain operations. Business process intelligence solutions enable organizations to analyze the performance of their business processes and then back the process insights into preferable actions to help drive digital transformation. |
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| · | Business Technology Platform: This platform comprises technology solutions such as database and data management, analytics, application development and integration, and intelligent technologies. It provides organizations with a capability in which they can build, manage, deploy, and connect data and business processes on one interconnected platform. |
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| · | Scalable Network Infrastructure: Provides the infrastructure to host applications in the data centers or one of the hyper-scalers, such as Amazon AWS, Microsoft Azure, and Google Cloud platform. It supports agility and scalability while reducing cost of ownership. |
Nexscient IES Platform Benefits
The Nexscient IES platform can provide the following key benefits:
| · | Visibility: removal of barriers to more data and process integration; the ability to join the organization’s ecosystem and integrate its software environment for maximum transparency, case of access, and on-demand access, analysis, and reporting in support of advanced pattern recognition on data, process minimization, proper decision making, and innovation. |
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| · | Focus: the ability to strengthen insights derived from improved visibility to model possible outcomes more effectively and create efficient and better use of resources, capital, and labor. |
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| · | Agility: capacity for swift, strategic, and value-focused responses to rapid changes in the supply chain, marketplace, or the organization itself. |
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| · | Efficiency: real-time data analytics and agility allow businesses to address ever-changing markets by adjusting operations efficiently during market fluctuations. Continuously collected and analyzed data provides insights and recommendations for automated business processes that can increase productivity, improve efficiency, and reduce costs. |
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| · | Innovation: integrated into team structure for efficient collaboration and customer-centric solutions, with high level of confidence from data-driven solutions, collaboratively assembled and customer approved. |
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| · | Customer-Centric: customer-focused solutions are realized with proper techniques and tools to accurately obtain data and gear that information based on customer needs, and integrated into the foundation of the intelligent enterprise. |
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Our Growth Strategy
We believe we are living in a transformative era—one in which artificial intelligence is rapidly becoming the “brain” behind our computers, robots, and vehicles. AI is no longer a futuristic concept; it is being embraced by thousands of enterprises to deliver products and services that would have been unimaginable using traditional software development methods.
Unlike conventional programming, AI systems learn by analyzing massive amounts of data—essentially writing their own logic. In this context, the adage “garbage in, garbage out” has never been more relevant. Success in AI hinges on a data-centric approach that prioritizes the consistent collection and precise annotation of high-quality data. This will ultimately determine which organizations lead—and which are left behind.
Our growth strategy is rooted in our deep expertise in delivering high-quality data. We are focused on serving large, fast-moving, and rapidly expanding markets centered around the development and commercialization of advanced AI systems and enterprise-scale deployments. Our solutions and contemplated platforms are built on a foundation of cutting-edge technology, skilled domain experts, and a relentless commitment to data integrity—supported by anticipated investments in AI and machine learning R&D.
We intend to shift the focus from “services” to “solutions” and introduce AI data operations-as-a-service offerings. We differentiate “solutions” from “services” by the extent to which they are technology-enabled, repeatable, and address generalized requirements. Solutions and SaaS products should result in revenue that produces relatively higher recurring margins.
To execute our strategy, we plan to strengthen our leadership team by recruiting senior executives in product management and technology, expanding our direct sales force, refreshing our brand messaging and visual identity, and bolstering our digital marketing and product engineering capabilities. Looking ahead, we plan to drive further operational efficiencies by simplifying our business—continuously evaluating product and service selections and assessing each asset's alignment with our mission and strategic objectives. We believe that as revenue scales, our business model is designed to deliver operating income growth at a rate that significantly outpaces revenue growth.
Key elements of our growth strategy include:
Driving New Customer Acquisition
We believe we are still in the early stages of penetrating our addressable markets. We intend to pursue new long-term, strategic customer relationships, especially with customers with large and growing commitments to AI innovation, where we can deliver a wide range of our capabilities and have meaningful impact. We are focused on hiring and retaining sales talent and building a data-driven sales organization. We believe that our current organization is operating well and will likely enable us to achieve our near-term growth targets.
Expanding Relationships with Customers
We intend to “land-and-expand” services within customer accounts. By initially engaging with a specific line of business and addressing targeted use cases, we intend to deliver measurable value that earns trust. As a result, we expect customers to expand their engagement with us—broadening the number of use cases and extending our solutions across additional business units.
Continue to Develop New Capabilities
We intend to develop new capabilities designed around emerging customer needs and advances in AI technologies. We intend to develop additional charter customer relationships, by enhancing our relationship with companies to co-develop an AI-enabled platforms.
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Continuing to Innovate
We believe that our ability to innovate will continue to be an important contributor to our growth and market traction. We intend to work closely with our customers, assessing their requirements for enhancements to our existing capabilities and new capabilities with the goal of better serving them. We have well-defined roadmaps for our contemplated AI platforms which will introduce new features and functions that will enable us to generate growth by broadening the appeal of our platforms to potential new customers as well as increasing the opportunities for further expansions with existing customers.
Competition
We operate in a highly competitive landscape that includes both specialized AI data service providers and large-scale IT services firms. Key competitors across industry verticals include Appen, CloudFactory, Surge AI, Innodata, Invisible Technologies, Turing, DefinedCrowd, Deepen.ai, Telus, Samasource, and Scale AI—several of which are well-established players with significant market presence. In addition, we compete with global technology service providers such as Cognizant Technology Solutions, EXL, Genpact, Infosys, and Tata Consultancy Services. We intend to differentiate ourselves by delivering high-quality, cost-effective solutions that leverage our proprietary platforms, robust IT infrastructure, our management’s global domain expertise, and operational efficiencies.
Sales and Marketing
We intend to sell our services through a direct inside sales team, a direct field sales team and indirect channel partner relationships. Teams will be designed to efficiently sell to organizations of all sizes and will initially focus on new customer acquisitions. As we expand, they will pursue up-selling and cross-selling opportunities of new offerings to existing customers. We plan to leverage the uniqueness of our solution to create brand preference and build a strong sales pipeline while cultivating customer relationships to help drive revenue growth efficiently and effectively. Our most important marketing goal as an emerging growth company is to establish product and brand awareness with customers in each target market. The way we go about this task will vary from one target market segment to another.
Direct Sales
Teams will be organized by geography as well as by target organization size. The inside and field sales teams will focus on small and middle-market transactions, while larger or more complex transactions will be handled by highly trained sales consulting engineers to help define customer use cases, manage solution evaluations, and train channel partners. Our sales force will work directly with, and be involved in sales to, substantially all of the end customers of our channel partners and we may sometimes engage a channel partner solely to assist with finalizing a purchase if for example the customer is working on broader software initiative with that channel partner. As growth allows, we intend to invest in a dedicated sales team focused on U.S. federal, state, and local government entities.
Channel Partners
We will focus efforts to partner with enterprise applications suppliers. We will emphasize our products' potential as an additional source of revenue for them with recurring monthly revenues; this should make our product very desirable as part of their product lines. By solidifying these partnership agreements, we will also enable cross-marketing back into the consumer market through their sales forces' efforts and their advertising, increasing our sales efforts nationwide without the expense of additional personnel to cover the entire U.S. We believe that once partnered with these companies, our channel market partners (resellers) will advertise the Nexscient and Nexscient IES system as new features in their traditional outlets, primarily print advertising and in-house POS material, in order to increase mutual sales and brand awareness, benefiting both organizations.
Marketing
We will focus our marketing efforts on increasing the strength of the ‘Nexscient’ brand, communicating product advantages and business benefits, generating leads for our sales teams and channel partners while driving product adoption. We will deliver targeted content to demonstrate our intelligent enterprise solutions platform and use digital advertising methods to deliver opportunities to our sales teams. We will engage with existing customers to provide education and awareness to promote expanded use of our software and services. We will work with our own researchers, as well as the broader AI data engineering and data science community, to share important information through the online community, social media, and traditional public relations.
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We also intend to market to businesses through traditional sales efforts, such as advertising in trade journals and publications and establishing a presence at select trade shows geared towards businesses in our market segment. For the larger companies we target, we will offer the free use of our service for a limited time, to prove their efficacy in order to penetrate and gain market share in this segment.
Trends
In the Age of Intelligence, the Nexscient IES platform can enable businesses to bolster their market potential through digital realization, empowering them with process agility, activating insight, and promoting innovation. The Nexscient IES platform marshals intelligent business applications to help companies gain insights, take predictive actions, and lead respective markets. Within the Nexscient IES platform, these intelligent business applications use data and intelligence to capture new business opportunities and enable better decisions at all levels of an organization.
The key business enablers of the Nexscient IES platform include a digital ecosystem of intelligent business applications, integrated technologies, and a connected system of intelligence and solutions developed with insight, industry relevance, and market differentiation. As a result, the intelligent enterprise is more likely to innovate with industry insight, simplify business processes, empower employees, improve customer experiences, and realize their business objectives.
Target Industries
Artificial intelligence is upending many industries. Accelerating innovation is imperative to how businesses achieve results while staying competitive in today’s business environment. In order to success, you need to have specialized solutions to achieve faster results and shorter go-to-market timelines. Our approach is to amass the unique, industry-specific knowledge needed to properly understand any project, technology or organization and the marketplace in which they operate in order to produce successful outcomes. Below we address four key industry sectors that can benefit from the Nexscient IES solution:
Manufacturing
AI is the engine for high-speed performance with manufacturing analytics as companies fast-track value in their production. The data volume coming in from various parts of the industrial value chain can be overwhelming. In a sector that lives on the proven edge of technology instead of the cutting edge, these businesses are still stuck with organizing their data pool around possible use cases. As a result, they are unprepared to handle heterogeneous data and derive actionable insights, leading to multiple challenges. Many organizations are hardly an avant-garde AI implementation. These sectors are typically quite traditional and reluctant to embrace new technology trends, especially if they are not solid market-proven. However, things are – slowly but surely – changing. AI started to gain a well-deserved spotlight as it became evident that it is a safe way to increase the overall operational performance. Under the broad “Artificial Intelligence” term” are hidden plenty of different approaches are hidden able to cover specific transformational needs perfectly, regardless of how different they may be.
Healthcare
As the healthcare landscape evolves, so do the expectations of patients, creating a pressing need for healthcare providers to forge deeper connections, streamline processes and enhance communication. Employing specialized knowledge and tailored solutions can offer patient experiences that nurture relationships and encourage better health outcomes. Value-based care driven with healthcare analytics can help individuals make informed decisions. By leveraging ML/AI in healthcare to organize, integrate, and decode health data, care providers can significantly improve value-driven patient insights. The sudden shift to remote healthcare, the surge of AI for patient monitoring, and the growing preference for telehealth practices has led to a proliferation of data sources for the healthcare sector. However, harnessing that data to improve processes and derive value has been an uphill task. Inefficient data management practices and complex, disparate care management platforms prevent health providers from getting deep insights into their care ecosystem and their patients’ health, leading to suboptimal processes and undesirable gaps in the healthcare ecosystem.
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Logistics & Autonomous Vehicles
Managing a supply chain logistics can be a daunting task due to organizational complexity, lack of transparency, or too much reliance on manual processes. This makes supply networks especially vulnerable amidst business disruptions. AI-powered insights improve the business’ ability to respond to dynamic shifts, but legacy systems and siloed data leave them with impaired visibility and poor predictability. AI and Machine Learning in vehicles, logistics, supply chains, and – in general, transport, support process optimization, and risk management to improve workflows. By taking into account all possible disruptions, unpredicted events, and historical and real-time data, AI solutions can detect patterns and – based on that – suggest what decisions should be taken to avoid delays, speed up deliveries, reduce costs, route optimization, and increase the efficiency at resource management.
Financial Services
AI is a powerful tool in creating actionable insights and generating tangible results for the financial services sector. With rising expectations, there’s never been a better time for financial services and fintech brands to invest in a high-tech, high-touch customer experience. The financial services sector has recently taken the lead in digital transformation, eagerly embracing the potential of Big Data, Data Engineering, AI, and Machine Learning. Those areas, used to collect, sort, process, analyze, and convert massive, complex data sets into meaningful business insights, are considered a “make or break” factor for traditional finance institutes, constantly threatened by tech-savvy FinTech start-ups. The potential of AI and Data Engineering is almost limitless. Data – text, numeric, and images – can be used in numerous ways to advance the ability to recognize patterns, anticipate future events, create smart rules, make intelligent, data-based decisions and automated communication with clients. More finance-oriented usages of AI are fraud detection, high-frequency trading, risk management, and investment management, but – as we said above – with AI sky is the limit.
Intellectual Property
To protect our unpatented proprietary technologies and processes, we rely on trade secret laws and confidentiality agreements with our employee(s), consultants, channel partners and vendors. At present our intellectual property is the Nexscient Intelligent Enterprise Solution which is currently in development. The company will rely on provisional patents in the near term, filing for full patent protection, as necessary.
We depend, in part, upon proprietary technologies and methodologies, AI-based data annotation and data transformations platforms, various applications of its platforms, trained machine learning algorithms that support discrete data annotation and transformation tasks, proprietary data models and other intellectual property rights. We rely on a combination of trade secret, license, nondisclosure and other contractual agreements and copyright and trademark laws to protect our intellectual property rights. We intend to file several patent applications to protect newly developed proprietary technologies and methodologies.
We enter into confidentiality agreements with our employees, contractors and customers, and limit access to and distribution of our proprietary information and that of our customers. We cannot assure that these arrangements will be adequate to deter misappropriation of our proprietary information or that we will be able to detect unauthorized use and take appropriate steps to enforce our intellectual property rights.
Registered Trademark
Our brand identity is a key asset in our business strategy and market recognition. The “Nexscient” name is protected as a registered trademark of the Company with the United States Patent and Trademark Office (“USPTO”). We consider this mark to be of material importance to our business, as it represents the foundation of our corporate brand, product offerings, and reputation in the marketplace.
We intend to actively monitor and enforce our trademark rights to prevent unauthorized use or infringement. We may pursue additional trademark registrations in the United States and other jurisdictions as our business expands. While we believe our intellectual property rights provide us with meaningful competitive advantages, they do not guarantee exclusivity.
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There can be no assurance that our intellectual property rights will not be challenged, invalidated, circumvented, or otherwise impaired. Competitors or other third parties may attempt to imitate our brand, claim rights in similar marks, or oppose our applications, which could result in costly legal proceedings and diversion of management resources. In addition, the laws of some foreign jurisdictions may not protect intellectual property rights to the same extent as the laws of the United States.
Our continued success depends in part on our ability to maintain the strength of the Nexscient brand. If we are unable to adequately protect our trademarks, trade secrets, and other intellectual property, or if we fail to enforce our rights effectively, our business, financial condition, and results of operations could be adversely affected.
Research & Development
We focus on advancing AI-based technologies that power both our internal operations and client-facing solutions. In parallel, our product engineering teams conduct ongoing R&D to continuously improve the functionality, scalability, and versatility of Nexscient IES and other AI industry platforms. These efforts support the development of new use cases and innovative capabilities, enabling us to maintain a competitive edge.
We view customer feedback as playing a critical role in guiding our product roadmap, ensuring we remain tightly aligned with client priorities while anticipating broader industry shifts. We believe our culture of innovation helps us attract and retain top-tier AI talent and technologists across a globally distributed R&D presence in North America, Europe, and the Asia-Pacific region.
Subsidiaries
The Company has no subsidiaries.
Employees
We currently employ three full-time employees and contracted consultants on an as-needed basis.
Legal Proceedings
We know of no material, existing or pending legal proceedings against our Company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which our directors, officers or any affiliates, or any registered or beneficial shareholder is an adverse party or has a material interest adverse to our interest.
Jumpstart Our Business Startups Act
In April 2012, the Jumpstart Our Business Startups Act ("JOBS Act") was enacted into law. The JOBS Act provides, among other things:
| · | Exemptions for emerging growth companies from certain financial disclosure and governance requirements for up to five years and provides a new form of financing to small companies; |
| · | Amendments to certain provisions of the federal securities laws to simplify the sale of securities and increase the threshold number of record holders required to trigger the reporting requirements of the Securities Exchange Act of 1934; |
| · | Relaxation of the general solicitation and general advertising prohibition for Rule 506 offerings; |
| · | Adoption of a new exemption for public offerings of securities in amounts not exceeding $50 million; and |
| · | Exemption from registration by a non-reporting company of offers and sales of securities of up to $1,000,000 that comply with rules to be adopted by the SEC pursuant to Section 4(6) of the Securities Act and exemption of such sales from state law registration, documentation or offering requirements. |
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In general, under the JOBS Act, a company is an emerging growth company if its initial public offering ("IPO") of common equity securities was effected after November 13, 2023 and the Company had less than $1 billion of total annual gross revenues during its last completed fiscal year. A company will no longer qualify as an emerging growth company after the earliest of:
| (i) | the completion of the fiscal year in which the company has total annual gross revenues of $1 billion or more, |
| (ii) | the completion of the fiscal year of the fifth anniversary of the company's IPO; |
| (iii) | the company's issuance of more than $1 billion in nonconvertible debt in the prior three-year period, or |
| (iv) | the company becoming a "larger accelerated filer" as defined under the Securities Exchange Act of 1934. |
The JOBS Act provides additional new guidelines and exemptions for non-reporting companies and for non-public offerings. Those exemptions that impact the Company are discussed below.
Financial Disclosure. The financial disclosure in a registration statement filed by an emerging growth company pursuant to the Securities Act of 1933 will differ from registration statements filed by other companies as follows:
| (i) | audited financial statements required for only two fiscal years; |
| (ii) | selected financial data required for only the fiscal years that were audited; |
| (iii) | executive compensation only needs to be presented in the limited format now required for smaller reporting companies. |
(A smaller reporting company is one with a public float of less than $75 million as of the last day of its most recently completed second fiscal quarter).
However, the requirements for financial disclosure provided by Regulation S-K promulgated by the Rules and Regulations of the SEC already provide certain of these exemptions for smaller reporting companies. The Company is a smaller reporting company. Currently a smaller reporting company is not required to file as part of its registration statement selected financial data and only needs audited financial statements for its two most current fiscal years and no tabular disclosure of contractual obligations.
The JOBS Act also exempts the Company's independent registered public accounting firm from complying with any rules adopted by the Public Company Accounting Oversight Board ("PCAOB") after the date of the JOBS Act's enactment, except as otherwise required by SEC rule.
The JOBS Act also exempts an emerging growth company from any requirement adopted by the PCAOB for mandatory rotation of the Company's accounting firm or for a supplemental auditor report about the audit.
Internal Control Attestation. The JOBS Act also provides an exemption from the requirement of the Company's independent registered public accounting firm to file a report on the Company's internal control over financial reporting, although management of the Company is still required to file its report on the adequacy of the Company's internal control over financial reporting.
Section 102(a) of the JOBS Act exempts emerging growth companies from the requirements in §14A(e) of the Securities Exchange Act of 1934 for companies with a class of securities registered under the 1934 Act to hold shareholder votes for executive compensation and golden parachutes.
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Other Items of the JOBS Act. The JOBS Act also provides that an emerging growth company can communicate with potential investors that are qualified institutional buyers or institutions that are accredited to determine interest in a contemplated offering either prior to or after the date of filing the respective registration statement. The Act also permits research reports by a broker or dealer about an emerging growth company regardless if such report provides sufficient information for an investment decision. In addition, the JOBS Act precludes the SEC and FINRA from adopting certain restrictive rules or regulations regarding brokers, dealers and potential investors, communications with management and distribution of research reports on the emerging growth company IPO.
Section 106 of the JOBS Act permits emerging growth companies to submit 1933 Act registration statements on a confidential basis provided that the registration statement and all amendments are publicly filed at least 21 days before the issuer conducts any road show. This is intended to allow the emerging growth company to explore the IPO option without disclosing to the market the fact that it is seeking to go public or disclosing the information contained in its registration statement until the company is ready to conduct a roadshow.
Election to Opt Out of Transition Period. Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a 1933 Act registration statement declared effective or do not have a class of securities registered under the 1934 Act) are required to comply with the new or revised financial accounting standard.
The JOBS Act provides a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. The Company has elected not to opt out of the transition period.
Item 1.A Risk Factors
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
Item 1.B Unresolved Staff Comments
None.
Item 2. Properties
Our executive offices are located at 2029 Century Park East, Suite 400, Los Angeles, CA 90067. We signed an office service agreement with Regus Management Group, LLC for mailbox plus virtual office and a single executive suite office. However, once we expand our business to a significant degree, we will have to lease office space. We do not foresee any significant difficulties in obtaining any required office space. We do not currently own any real property.
Item 3. Legal Proceedings
From time to time, the Company may become subject to various legal proceedings that are incidental to the ordinary conduct of its business. Although the Company cannot accurately predict the amount of any liability that may ultimately arise with respect to any of these matters, it makes provision for potential liabilities when it deems them probable and reasonably estimable. These provisions are based on current information and legal advice and may be adjusted from time to time according to developments.
We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial stockholder, is an adverse party or has a material interest adverse to our interest.
Item 4. Mine Safety Disclosures
Not applicable.
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PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Common Stock and Preferred Stock
Our Amended and Restated Articles of Incorporation authorize us to issue up to eighty-five million (85,000,000) shares, consisting of: (i) seventy-five million (75,000,000) shares of common stock, par value $0.001 per share (the “Common Stock”); and (ii) 10,000,000 shares of blank check preferred stock, par value $0.001 per share (the “Preferred Stock”).
Our articles of incorporation authorize our board, without stockholder approval, to issue up to 10,000,000 shares of Preferred Stock in one or more series, to determine the designations and the powers, preferences and rights and the qualifications, limitations and restrictions thereof, including the dividend rights, conversion or exchange rights, voting rights (including the number of votes per share), redemption rights and terms, liquidation preferences, sinking fund provisions and the number of shares constituting the series. Our board of directors has the discretion to issue Preferred Stock with voting and other rights that could adversely affect the voting power and other rights of the holders of Common Stock and which could have the effect of making it more difficult for a third party to acquire, or of discouraging a third party from attempting to acquire, a majority of our outstanding voting stock.
The following statements relating to the capital stock set forth the material terms of the securities of the Company. Reference is also made to the more detailed provisions of the certificate of incorporation and the by-laws, copies of which are filed as exhibits to this registration statement.
Voting Rights
Except as otherwise required by law or as may be provided by the resolutions of the board of directors authorizing the issuance of Common Stock, all rights to vote and all voting power shall be vested in the holders of Common Stock. Each share of Common Stock shall entitle the holder thereof to one vote.
No Cumulative Voting
Except as may be provided by the resolutions of the board of directors authorizing the issuance of Common Stock, cumulative voting by any shareholder is expressly denied.
No Preemptive Rights
Preemptive rights shall not exist with respect to shares of Common Stock or securities convertible into shares of Common Stock of the Company.
Dividends
We have not paid any cash dividends on our Common Stock since inception and presently anticipate that all earnings, if any, will be retained for development of our business and that no dividends on our Common Stock will be declared in the foreseeable future. Any future dividends will be subject to the discretion of our Board of Directors and will depend upon, among other things, future earnings, operating and financial condition, capital requirements, general business conditions and other pertinent facts. Therefore, there can be no assurance that any dividends on our Common Stock will be paid in the future.
Rights upon Liquidation, Dissolution or Winding-Up of the Company
Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, the remaining net assets of the Company shall be distributed pro rata to the holders of the Common Stock.
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Holders
As of September 30, 2025, we have 21,323,312 issued and outstanding shares of Common Stock, which are held by 88 shareholders of record.
Securities Authorized for Issuance Under Equity Compensation Plans
None.
Transfer Agent and Registrar
Nexscient, Inc. has appointed VStock Transfer, LLC as its transfer agent. VStock’s address is 18 Lafayette Place, Woodmere, NY 11598. The transfer agent is responsible for all record-keeping and administrative functions in connection with the common shares.
Market Information
The Company’s common stock was approved for trading on the OTCQB on August 2, 2024. Our common shares are currently quoted on the OTCQB under the symbol "NXNT". The following table sets forth the range of the high and low sale prices of the common stock for the periods indicated. The quotations reflect inter-dealer prices, without retail markup, markdown or commission, and may not represent actual transactions. Consequently, the information provided below may not be indicative of our common stock price under different conditions.
Period Ended |
| High |
|
| Low |
| ||
Year Ended June 30, 2025 |
|
|
|
|
|
| ||
June 30, 2025 |
| $ | 2.00 |
|
| $ | 0.27 |
|
March 31, 2025 |
| $ | 1.01 |
|
| $ | 0.55 |
|
December 31, 2024 |
| $ | 0.25 |
|
| $ | 0.25 |
|
September 30, 2024 |
| $ | 0.01 |
|
| $ | 0.01 |
|
Since being quoted, the high and low price of our common stock ranged between $2.00 per share and $0.25 per share, respectively. As of September 30, 2025, there were 21,323,312 shares of common stock outstanding held by approximately 88 stockholders of record.
Trades in our common stock may be subject to Rule 15g-9 of the Exchange Act, which imposes requirements on broker/dealers who sell securities subject to the rule to persons other than established customers and accredited investors. For transactions covered by the rule, broker/dealers must make a special suitability determination for purchasers of the securities and receive the purchaser’s written agreement to the transaction before the sale.
Penny Stock Regulation
Penny stocks generally are equity securities with a price of less than $5.00 per share other than securities registered on national securities exchanges or listed on the NASDAQ Stock Market, provided that current price and volume information with respect to transactions in such securities are provided by the exchange or system. The penny stock rules impose additional sales practice requirements on broker-dealers who sell such securities to persons other than established customers and accredited investors (generally those with assets in excess of $1,000,000 or annual income exceeding $200,000, or $300,000 together with their spouse). For transactions covered by these rules, the broker-dealer must make a special suitability determination for the purchase of such securities and have received the purchaser's written consent to the transaction prior to the purchase. Additionally, for any transaction involving a penny stock, unless exempt, the rules require the delivery, prior to the transaction, of a disclosure schedule prescribed by the SEC relating to the penny stock market. The broker-dealer also must disclose the commissions payable to both the broker-dealer and the registered representative and current quotations for the securities. Finally, monthly statements must be sent disclosing recent price information on the limited market in penny stocks. Because of these penny stock rules, broker-dealers may be restricted in their ability to sell the Company’s common stock. The foregoing required penny stock restrictions will not apply to the Company’s common stock if such stock reaches and maintains a market price of $5.00 per share or greater.
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Additional Information
We refer you to our Articles of Incorporation, Bylaws, and the applicable provisions of the Delaware Revised Statues for a more complete description of the rights and liabilities of holders of our securities.
Item 6. [Reserved]
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion of our financial condition and results of operations should be read in conjunction with the financial statements and related notes to the financial statements included elsewhere in this document. Some of the statements under “Management’s Discussion and Analysis,” “Description of Business” and elsewhere herein may include forward-looking statements which reflect our current views with respect to future events and financial performance. These statements include forward-looking statements both with respect to us specifically and the renewable energy industry in general. Statements which include the words “expect,” “intend,” “plan,” “believe,” “project,” “anticipate,” “will,” and similar statements of a future or forward-looking nature identify forward-looking statements for purposes of the federal securities laws or otherwise. The safe harbor provisions of the federal securities laws do not apply to any forward-looking statements contained in this document. All forward-looking statements address such matters that involve risks and uncertainties. Accordingly, there are or will be important factors that could cause our actual results to differ materially from those indicated in these statements. We undertake no obligation to publicly update or review any forward-looking statements, whether as a result of new information, future developments or otherwise. If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may vary materially from what we projected. Any forward-looking statements you read herein reflect our current views with respect to future events and are subject to these and other risks, uncertainties and assumptions relating to our written and oral forward-looking statements attributable to us or individuals acting on our behalf and such statements are expressly qualified in their entirety by this paragraph.
Overview
Nexscient, Inc. is an emerging-growth company that’s building a global collaborative network of AI-enabled Intelligent Enterprise Solutions and technologies through internal development, synergistic acquisitions, and capital investments in companies involved in machine learning, artificial intelligence, and the Industrial Internet of Things technologies. We plan to deliver an innovative solution for process automation in various industry sectors that helps improve business processes, decrease equipment maintenance costs, and improve overall efficiencies.
We intend to develop Nexscient IES as a holistic solution that delivers insight, intelligence, and innovation to the business enterprise. The platform is currently in development.
As part of our growth strategy, we also seek to acquire and integrate synergistic AI and machine learning companies and technologies into our collaborative network, further expanding our service offerings while enhancing shareholder value. Our objective is to build an ecosystem of intelligent enterprise AI applications, technologies, and business process solutions that deliver actionable insights for businesses seeking to improve their operations, realize market differentiation, and attain industry relevance.
With Nexscient IES, businesses can predict and lead through digital realization, business process agility, and insight and innovation. We intend to provide a comprehensive platform by integrating disparate technologies into a digital-ready ecosystem. Within our ecosystem, there will be a foundation of intelligent business applications connected to new and existing business operations, processes, and technologies.
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Results of operations for fiscal years ended June 30, 2025 compared to June 30, 2024.
Revenue
We are in our development stage and have not generated any revenue for the fiscal years ended June 30, 2025 and 2024.
Operating Expenses
During the fiscal year ended June 30, 2025 and 2024, we incurred total operating expenses of $488,042 and $937,592, respectively, a decrease of $449,550, or 48%, as a result of reducing project development expenses and focusing on identifying acquisition candidates. Of this total, for the fiscal years ended June 30, 2025 and 2024, $39,708 and $303,000, respectively, was accounted as a non-cash expense related to the issuance of shares paid to consultants in lieu of cash for services rendered related to the software development.
Operating expenses consisted of the following:
|
| For the Year Ended June 30, 2025 |
|
| For the Year Ended June 30, 2024 |
| ||
Research and development expenses |
|
| 97,364 |
|
|
| 205,286 |
|
General and administrative expenses |
|
| 390,678 |
|
|
| 732,306 |
|
Total operating expenses |
| $ | 488,042 |
|
| $ | 937,592 |
|
Research and development fees
We enter into agreements with third-party developers for development services. During the preliminary project stage and prior to the application development stage of the product, we record any costs incurred by third-party developers as research and development expenses.
During the fiscal years ended June 30, 2025 and 2024, we reported research and development fees of $97,364 and $205,286, respectively, a decrease of $107,922, or 53%, primarily due to reduced development efforts.
Interest expense
During the fiscal year ended June 30, 2025, the Company incurred a total interest expense of $41,662, which consists of $21,392 of interest accrued related to the 9% Convertible Debentures, and $20,270 related to the amortized interest expense related to the related-party loan issued with common shares.
General and administrative expenses
During the fiscal years ended June 30, 2025 and 2024, general and administrative expenses amounted to $390,678 and $732,306, respectively, a decrease of $341,628, or 47%, primarily attributed to scaling down expenses related to professional and management fees other general business expenses, primarily related to decreased stock-compensation. Of this total, for the fiscal years ended June 30, 2025 and 2024, $39,708 and $303,000, respectively, was accounted as a non-cash expense related to the issuance of shares as payment of professional fees to advisors and consultants in lieu of cash.
Net loss
During the fiscal years ended June 30, 2025 and 2024, we reported a net loss of $529,704 and $937,592, respectively, a decrease of $407,888, or 44%. The decrease in net loss was due to the decreases in research and development and general and administrative expenses discussed above.
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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.
During the fiscal ended June 30, 2025, the Company issued convertible debentures in the aggregate principal amount of $480,000 in exchange for cash. The convertible debt is unsecured, bears interest at 9% per annum compounded on the basis of a 365-day year and actual days lapsed due at maturity, and is convertible at the lower of $0.75 per share or 20% below the average VWAP (Volume Weighted Average Price) per share of common stock for the ten (10) days prior to the date of conversion, with a minimum price of the common stock at $0.50 per share. The debentures have a maturity date of two years from date of issuance and are convertible at the option of the holder.
The total amount of these debentures outstanding as of September 30, 2025, is $530,000. The Company uses the proceeds received from the private placement offering for research and development, general corporate purposes and working capital.
On June 30, 2025, we had a cash balance of $100,470, net working capital of $85,385, a net loss of $529,704, and has no revenues to cover our operating costs.
The ability of the Company to realize its business plan is dependent upon, among other things, obtaining additional financing to continue operations, and development of its business plan. In response to these requirements, management intends to raise additional funds through private placement and public offerings. Until such time that the Company implements its growth strategy, we expect to continue to generate operating losses in the foreseeable future, mostly due to corporate overhead, research and development, and costs of being a public company.
We believe that our existing working capital and cash on hand will provide sufficient cash to enable the Company to meet its operating needs and debt requirements for the next six months from the issuance date of this report.
These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Cash Flows from Operating Activities
For the year ended June 30, 2025, net cash used in operating activities was $407,834, which primarily resulted from a net loss of $529,704, plus an increase of $21,392 in accrued interest on convertible debentures; $43,500 in deferred and accrued wages; and a decrease of $3,000 in accounts payable and accrued liabilities. Net cash used in operating activities is adjusted by $39,708 and $20,270 in amortized, non-cash expenses for prepaid stock-based compensation and a debt discount, respectively.
For the year ended June 30, 2024, net cash used in operating activities was $645,452, which primarily resulted from a net loss of $937,952, adjusted for the stock-based compensation to employees and consultants of $303,000, and a decrease in accounts payable and accrued liabilities of $10,860.
Cash Flows from Investing Activities
For the year ended June 30, 2025, net cash used in investing activities totaled $47,500, paid as partial consideration for the purchase of software.
Cash Flows from Financing Activities
For the year ended June 30, 2025, net cash provided by financing activities totaled $480,000, resulting from the issuance of convertible debenture securities in a private placement offering. For the year ended June 30, 2024, net cash provided by financing activities was $518,797, resulting primarily from the sale of our common stock in private placements and a registered offering.
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Our ultimate success is dependent on our ability to obtain additional financing and generate sufficient cash flow to meet our obligations on a timely basis. We will require significant amounts of capital to sustain operations, and we will need to make the investments we need to execute our longer-term business plan to support new technologies and help advance innovation. Absent generation of sufficient revenue from the execution of our long-term business plan, we will need to obtain debt or equity financing, especially if we experience downturns in our business that are more severe or longer than anticipated, or if we experience significant increases in expense levels resulting from being a publicly-traded company or from operations. Such additional debt or equity financing may not be available to us on favorable terms, if at all. We plan to pursue our plans with respect to the research and development of our products and service and strategic acquisitions, which will require resources beyond those that we currently have, ultimately requiring additional capital from third party sources.
Going Concern
We have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive activities. Accordingly, management believes substantial doubt about the company’s ability to continue as a going concern exists. For these reasons, our auditors stated in their report on our audited financial statements that there is substantial doubt about the Company’s ability to continue as a going concern.
Contractual Obligations
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
Future Financings
We will continue to rely on equity sales of our common shares and debt proceeds in order to continue to fund our business operations. Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of the equity securities or arrange for debt or other financing to fund our operations and other activities.
Expected Purchase or Sale of Significant Equipment
We do not anticipate the purchase or sale of any significant equipment, as such items are not required by us at this time or in the next twelve months.
Off-Balance Sheet Arrangements
We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.
| 22 |
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Disagreements with Accountants on Accounting and Financial Disclosure
Other than the disclosure of uncertainty regarding the ability for us to continue as a going concern which was included in our accountant’s report on the financial statements for the year ended June 30, 2025; dbbmckennon’s report on the financial statements of the Company for the years ended June 30, 2025 did not contain an adverse opinion or a disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope, or accounting principles.
In connection with the audit of the financial statements of the Company for year ended June 30, 2025, there were no disagreements on any matter of accounting principles or practices, financial statement disclosures, or auditing scope or procedures, which disagreements if not resolved to their satisfaction would have caused them to make reference in connection with dbbmckennon’s opinion to the subject matter of the disagreement.
In connection with the audited financial statements of the Company for year ended June 30, 2025, there have been no reportable events with the Company as set forth in Item 304(a)(1)(v) of Regulation S-K.
Critical Accounting Policies and Estimates
See Note 2 – Summary of Significant Accounting Policies, in the notes of the financial statements for general policies, none of which we believe are critical based on the Company’s current operations.
Critical accounting estimates relate to the valuation of common stock. Management determined that the thinly traded price was not believed to be representative of fair value at the time of various transactions, due to the significant spread in bid and ask prices and minimal number of trades to date. Management determined the fair value of common stock considering the thinly traded nature of its stock, the prevailing bid and ask prices, historical sales of stock, and current circumstances of the entity. Management estimated the fair value to be $0.25 per share during the fiscal year ended June 30, 2025.
Item 7.A Quantitative and Qualitative Disclosures about Market Risk.
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
Item 8. Financial Statements and Supplementary Data.
| 23 |
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TABLE OF CONTENTS
Report of Independent Registered Public Accounting Firm (PCAOB # |
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REPORT OF INDEPENDENT PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of Nexscient Inc.,
Opinion on the Financial Statements
We have audited the accompanying balance sheets of Nexscient Inc. (the “Company”) as of June 30, 2025 and 2024, and the related statements of operations, stockholders’ equity (deficit), and cash flows for the years then ended, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2025 and 2024, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
Going Concern
The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has not generated revenues, incurred losses and expects to continue to incur losses, which raises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/
We have served as the Company’s auditor since 2023.
September 30, 2025
| F-2 |
| Table of Contents |
NEXSCIENT, INC.
BALANCE SHEETS
ASSETS |
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Prepaid expenses |
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Total current assets |
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Right of use asset |
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Software |
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TOTAL ASSETS |
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LIABILITIES AND STOCKOLDERS’ EQUITY (DEFICIT) |
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Current liabilities |
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Accounts payable |
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Deferred wages payable |
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Right of use liability, current portion |
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Total current liabilities |
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Accrued interest payable |
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Convertible debentures |
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Right of use liability |
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TOTAL LIABILITIES |
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STOCKHOLDERS’ EQUITY (DEFICIT) |
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Preferred Stock |
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Common Stock |
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Accumulated deficit |
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TOTAL STOCKHOLDERS’ EQUITY (DEFICIT) |
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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) |
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The accompanying notes are an integral part of these financial statements
| F-3 |
| Table of Contents |
NEXSCIENT, INC.
STATEMENTS OF OPERATIONS
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REVENUE |
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Revenues |
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OPERATING EXPENSES |
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Research and development |
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General and administrative |
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TOTAL OPERATING EXPENSES |
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Interest expense |
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NET LOSS |
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BASIC AND DILUTED LOSS PER COMMON SHARE |
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WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING – BASIC AND DILUTED |
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The accompanying notes are an integral part of these financial statements
| F-4 |
| Table of Contents |
NEXSCIENT, INC.
STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)
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Balance, June 30, 2023 |
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Stock issued for cash |
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Net loss |
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Balance, June 30, 2024 |
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Stock issued for software |
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Net loss |
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Balance, June 30, 2025 |
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The accompanying notes are an integral part of these financial statements
| F-5 |
| Table of Contents |
NEXSCIENT, INC.
STATEMENTS OF CASH FLOWS
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Adjustments to reconcile net loss to net cash used in operating activities |
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Changes in operating assets and liabilities: |
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CASH AT BEGINNING OF THE YEAR |
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Supplemental disclosure of non-cash investing and financing activities: |
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Right of use asset and liability |
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The accompanying notes are an integral part of these audited financial statements.
| F-6 |
| Table of Contents |
NEXSCIENT, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2025 AND 2024
NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS
Nexscient, Inc. (the “Company”) was incorporated in the State of Delaware on March 14, 2023. The Company is an emerging-growth company that’s building a global collaborative network of AI-enabled Intelligent Enterprise Solutions and technologies through internal development, synergistic acquisitions, and capital investments in companies involved in machine learning, artificial intelligence, and the Industrial Internet of Things technologies. As part of its growth strategy, the Company also seeks to acquire and integrate synergistic AI and machine learning companies and technologies into our collaborative network, further expanding its service offerings while enhancing shareholder value. The Company’s headquarters are in Los Angeles, California.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Risks and Uncertainties
The Company has a limited operating history and has not generated revenue intended operations. The Company's business and operations are sensitive to general business and economic conditions in the U.S. and worldwide along with local, state, and federal governmental policy decisions. A host of factors beyond the Company's control could cause fluctuations in these conditions, including but not limited to: increased inflation and interest rates; the perceived impact and effect of macroeconomic conditions; the effects of increased competition as well as innovations by new and existing competitors in our market; our ability to attract new clients, including our ability to generate revenue; our ability to attract and retain highly-skilled AI/ML/IT professionals at cost-effective rates; our ability to penetrate new industry verticals and geographies and grow our revenue in targeted industry verticals and geographies; our ability to maintain favorable pricing and utilization rates; our ability to successfully identify acquisition targets, consummate acquisitions and successfully integrate acquired businesses and personnel. Adverse developments in these general business and economic conditions could have a material adverse effect on the Company's financial condition and the results of its operations.
Basis of Presentation
The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America (“US GAAP”). The Company’s fiscal year is June 30.
Use of Estimates
In preparing financial statements in conformity with US GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made. However, actual results could differ materially from those estimates.
Concentrations of Credit Risk
Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash. As of June 30, 2025, substantially all of the Company’s cash was held by major financial institutions located in the United States, which at times may exceed federally insured limits.
| F-7 |
| Table of Contents |
Fair Value of Financial Instruments
Certain assets and liabilities of the Company are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:
| · | Level 1 - inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets. |
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| · | Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. |
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| · | Level 3 - inputs to the valuation methodology are unobservable and significant to the fair value. |
For cash and accounts payable, it is management’s opinion that the carrying values are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and if applicable, their stated interest rate approximates current rates available.
Cash
The Company considers all highly liquid investments with original or remaining maturities of three months or less on the purchase date to be cash equivalents. As of June 30, 2025 and 2024, the Company did not have any cash equivalents.
Leases
The Company determines if an arrangement is a lease at inception. Operating and financing right-of-use assets and lease liabilities are included on the balance sheet. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The Company uses its incremental borrowing rate, based on the information available at the commencement date, in determining the present value of future lease payments. Right-of-use assets include any prepaid lease payments and exclude any lease incentives and initial direct costs incurred.
Operating lease expenses are recognized on a straight-line basis over the term of the lease, consisting of interest accrued on the lease liability and depreciation of the right-of-use asset. The lease terms may include options to extend or terminate the lease if it is reasonably certain the Company will exercise that option.
Software
Software is stated at cost less accumulated amortization and is depreciated using the straight-line method over the estimated useful life of the asset. The estimated useful life of the Company’s current software assets is expected to be three years; however, depreciation of the software will not occur until it has been placed in use.
| F-8 |
| Table of Contents |
Convertible Instruments
GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free-standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. An exception to this rule is when the host instrument is deemed to be conventional as that term is described under applicable GAAP.
Research and Development
Research and development costs include costs to develop and refine technological processes used to carry out business operations. Research and development costs charged for the fiscal years ended June 30, 2025 and 2024 were $
Impairment of Long-Lived Assets
The Company continually monitors events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell. There were no impairments for the years ended June 30, 2025 and 2024.
Deferred Offering Costs
The Company complies with the requirements of ASC 340-10-S99-1 with regards to offering costs. Prior to the completion of an offering, offering costs are capitalized. The deferred offering costs are charged to additional paid-in capital or as a discount to debt, as applicable, upon the completion of an offering or to expense if the offering is not completed.
Segments
In accordance with criteria under ASC 280, which establishes standards for companies to report in their financial statement information about operating segments, products, services, geographic areas, and major customers, the Company’s chief operating decision maker (“CODM”) has been identified as the Chief Executive Officer. The Company’s CODM reviews results to assess performance, make decisions, and allocates operating and capital resources of the Company as a whole, therefore, there is only one reportable segment. The CODM does not distinguish its principal business activities for the purpose of internal reporting and uses net loss to allocate resources in the annual budgeting and forecasting process, along with using that measure as a basis for evaluating financial performance quarterly.
Significant segment expenses that are provided to CODM on a regular basis and are included within reported measure of segment profit or loss are research and development and general and administrative.
The statements of operations for the years ended June 30, 2025 and 2024, reflect the significant segment expenses and other segment items, as well as the balance sheets as of June 30, 2025 and 2024, for the one reportable segment.
Income Taxes
The Company uses the asset and liability method of accounting for income taxes pursuant to ASC 740 “Income Taxes”. ASC 740 requires an asset and liability approach for financial accounting and reporting for income taxes and allows recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Valuation allowances are provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain. The provision for income taxes represents current taxes payable net of the change during the period in deferred tax assets and liabilities.
| F-9 |
| Table of Contents |
Stock-Based Compensation
The Company accounts for stock-based compensation in accordance with ASC 718, Compensation – Stock Compensation. The Company measures all stock-based awards granted to employees, directors and non-employee consultants based on the fair value on the date of the grant and recognizes compensation expense for those awards over the requisite service period, which is generally the vesting period of the respective award. For awards with service-based vesting conditions, the Company records the expense for using the straight-line method. For awards with performance-based vesting conditions, the Company records the expense if and when the Company concludes that it is probable that the performance condition will be achieved. The Company classifies stock-based compensation expense in its statement of operations in the same manner in which the award recipient’s costs are classified.
The assumptions used in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment. As a result, if factors change and management uses different assumptions, stock-based compensation expense could be materially different for future awards.
Earnings (Loss) per Share
Basic earnings (loss) per share is computed by dividing income (loss) available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share is computed similar to basic earnings (loss) per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. Potentially dilutive securities are excluded from the computation of the diluted net earnings (loss) per share if their inclusion would be anti-dilutive.
The Company has convertible debentures outstanding as of June 30, 2025, for which the maximum number of shares issuable upon conversion is
Recently Issued Accounting Pronouncements
Management does not believe that any recently issued, but not yet effective, accounting standards could have a material effect on the accompanying financial statements. As new accounting pronouncements are issued, the Company will adopt those that are applicable under the circumstances.
NOTE 3 – GOING CONCERN
The financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future.
The Company has generated no revenues since inception and incurred losses since inception resulting in an accumulated deficit of $
The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management intends to finance operating costs over the twelve months with existing cash on hand and loans from directors, private placement of common stock, and/or a registered offering of its common stock.
| F-10 |
| Table of Contents |
NOTE 4 – CONVERTIBLE DEBENTURES
On July 1, 2024, the Board authorized a private placement offering to accredited investors of an unsecured
Interest expense on the convertible debentures for the year ended June 30, 2025 and 2024 was $
NOTE 5 – STOCKHOLDERS’ EQUITY (DEFICIT)
The Company’s authorized capital consists of eighty-five million (
In relation to the below value of common stock issued, management estimated the fair market value of the Company’s common stock considering the thinly traded nature of its stock, the prevailing bid and ask prices, historical sales of stock, and current circumstances of the entity. Management determined that the thinly traded price was not believed to be representative of fair value at the time of these transactions, due to the significant spread in bid and ask prices and minimal number of trades to date. Management estimated the fair value to be $
During the period from January through April 2025, as compensation to members of its Advisory Board, the Company issued a total of
During the period from March through June 2025, the Company issued a total of
In February 2025, the Company issued
NOTE 6 – COMMITMENTS AND CONTINGENCIES
Lease Commitments
In May 2024, the Company entered into a lease agreement for office space. The lease commenced on May 1, 2024 and expires on October 31, 2025 with monthly of $
The following is a summary of future annual minimum lease payments as of June 30, 2025:
Fiscal 2026 |
|
|
| |
Total minimum lease payments |
|
|
| |
Less: Imputed interest |
|
| ( | ) |
Total lease obligations |
|
|
| |
Less: current portion |
|
|
| |
Long-term portion of lease obligations |
|
|
|
| F-11 |
| Table of Contents |
Contingencies
The Company may be subject to pending legal proceedings and regulatory actions in the ordinary course of business. The results of such proceedings cannot be predicted with certainty, but the Company does not anticipate that the final outcome, if any, arising out of any such matters will have a material adverse effect on its business, financial condition or results of operations.
NOTE 7 – RELATED PARTY TRANSACTIONS
Related party transactions are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties. Related parties are natural persons or other entities that have the ability, directly, or indirectly, to control another party or exercise significant influence over the party in making financial and operating decisions. Related parties include other parties that are subject to common control or that are subject to common significant influences.
In February 2025, pursuant to terms of a promissory note the Company issued
NOTE 8 – INCOME TAXES
Deferred taxes are recognized for temporary differences between the basis of assets and liabilities for financial statement and income tax purposes. The differences relate primarily to capitalization of research and development costs for tax purposes, stock compensation and net operating loss carryforwards. As of June 30, 2025 and 2024, the Company had net deferred tax assets before valuation allowance of approximately $
The Company recognizes deferred tax assets to the extent that it believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. The Company assessed the need for a valuation allowance against its net deferred tax assets and determined a full valuation allowance is required due to cumulative losses through June 30, 2025. Therefore, a valuation allowance of $
| F-12 |
| Table of Contents |
The Company’s ability to utilize net operating loss carryforwards will depend on its ability to generate adequate future taxable income. At June 30, 2025, the Company had net operating loss carryforwards available to offset future taxable income in the amounts of approximately $
The Company has evaluated its income tax positions and has determined that it does not have any uncertain tax positions. The Company will recognize interest and penalties related to any uncertain tax positions through its income tax expense.
The Company is subject to taxation in the U.S. and state jurisdictions. The Company is not presently subject to any income tax audit in any taxing jurisdiction, though all tax years from Inception remain open to examination.
NOTE 9 – SUBSEQUENT EVENTS
During July 2025, the Company issued additional convertible debentures in return for total cash proceeds of $
On August 2, 2025, the Company entered into a non-binding Letter of Intent (the “LOI”) to purchase an AI data annotation and labelling company operating in the Philippines. The total consideration for the acquisition is, comprised of an upfront cash payment of $
| F-13 |
| Table of Contents |
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9.A Controls and Procedures.
Disclosure Controls and Procedures
Under the supervision of and with the participation of our management, including our principal executive officer and our principal financial officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of June 30, 2025, the end of the period covered by this report on Form 10-K. The term “disclosure controls and procedures,” as set forth in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to provide reasonable assurance that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms promulgated by the SEC. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.
In designing and evaluating our disclosure controls and procedures, management recognizes that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a control system, misstatements due to error or fraud may occur and not be detected.
As of June 30, 2025, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) pursuant to Rule 13a-15 of the Exchange Act. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are not effective.
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) or Rule 15d-15(f) under the Exchange Act). Our management assessed the effectiveness of our internal control over financial reporting as of June 30, 2025. In making this assessment, our management used the criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO Framework. Our management has concluded that, as of June 30, 2025 our internal control over financial reporting was not effective based on these criteria because of the material weaknesses described below.
Material weaknesses relate to the absence of a formal policies and procedures manual that governs reporting and oversight functions. Our size prevents us from being able to employ sufficient resources to a properly functioning reporting system; which also results in segregation of duties deficiencies. To the extent reasonably possible given our limited resources, we intend to take measures to cure the aforementioned weaknesses, including, but not limited to, increasing the capacity of our qualified financial personnel to ensure that accounting policies and procedures are consistent across the organization and that we have adequate controls over our Exchange Act reporting disclosures.
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Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting subsequent to the fiscal year ended June 30, 2025, which were identified in connection with our management’s evaluation required by paragraph (d) of rules 13a-15 and 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
The Company is not required by current SEC rules to include, and does not include, an auditor's attestation report. The Company's registered public accounting firm has not attested to Management's reports on the Company's internal control over financial reporting.
Limitations of the Effectiveness of Disclosure Controls and Internal Controls
Our management, including our Principal Executive Officer and Principal Financial Officer, does not expect that our disclosure controls and internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control.
The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving our stated goals under all potential future conditions; over time, a control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
Item 9.B Other Information
Not applicable.
Item 9.C Disclosure Regarding Foreign Jurisdiction the Prevent Inspection
Not applicable.
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| Table of Contents |
PART III
Item 10. Directors, Executive Officers and Corporate Governance
Identification of Directors and Executive Officers
The following table sets forth the names and ages of our current directors and executive officers as of September 30, 2025:
Name and Age |
| Position(s) Held |
| Date of Appointment |
| Other Public Company Directorships |
Fred E. Tannous, 59 |
| Director, President & Chief Executive Officer, Treasurer, Secretary |
|
March 14, 2023 |
|
None |
Tarek Shoufani, 45 |
| Director, Chief Operating Officer |
| March 14, 2023 |
| None |
Michael Portera, 67 |
| Director, Chief Financial Officer |
| July 12, 2023 |
| None |
Eric Manlunas, 57 |
| Director |
| April 19, 2023 |
| None |
Term of Office
Should a vacancy exist, the Company’s Board of Directors has the power to nominate and appoint a director or directors to fill such vacancy, and each shall hold office until the next annual meeting of stockholders and until his/her successor shall have been duly elected and qualified.
Background and Business Experience
Fred E. Tannous, MSEE, MBA – Director, President & Chief Executive Officer, Treasurer and Secretary
As President and Chief Executive Officer, Mr. Tannous is responsible for overseeing all aspects of Nexscient’s vision, strategy, and product development. Mr. Tannous has over thirty-five years of experience in finance, engineering and new business development and previously held senior level positions at Fortune 500 companies and several start-ups. Over the past fifteen years, he has worked extensively with development stage and emerging companies to improve performance, enhance enterprise value and maximize returns. Mr. Tannous has also helped effect transactions valued at more than $1.2 billion as well as launching several of his own start-ups in several industries, including mobile and wireless communications and networking technologies. One of his previous start-up companies partnered with Los Alamos National Laboratories to commercialize a declassified military technology for continuous remote sensing and monitoring applications. Previously, from 2000 to 2005, Mr. Tannous co-founded and was the Chief Executive Officer of Health Sciences Group, an innovative life sciences company, where he was instrumental in successfully taking it public by effecting a self-underwritten public offering (IPO) of its equity securities and growing its market value to more than $100 million. Prior, Mr. Tannous held the position of Senior Analyst at corporate treasury for Hughes Aircraft Company, a government contractor, before transitioning to the position of Manager of Investments & Acquisitions at DIRECTV, where he worked with the CFO in financial operations and was responsible for valuing, structuring and executing strategic investments and overseeing the company’s portfolio having a market valuation of over $1 billion. From 1996 to 1999, as CFO of Colorado Casino Resorts, a gaming and hospitality concern, Mr. Tannous was instrumental in obtaining its listing and trading on NASDAQ and raising over $65 million in combined private equity and debt financing to expand its operations. Mr. Tannous started his career as an electrical engineer at Hughes Aircraft, where he worked on advanced radar signal and data processing techniques for electronic counter-counter-measures used in radar systems onboard F-14, F-15 and F-18/A fighter aircraft. He has co-authored several papers on proprietary and unconventional methods for detecting and countering radar jamming. Mr. Tannous holds a Master of Business Administration (MBA) in Finance and Banking from the University of Chicago (Booth) Graduate School of Business (1994) as well as a Master of Science (1990) and a Bachelor of Science (1988) in Electrical Engineering from the University of Southern California.
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Tarek N. Shoufani – Director, Chief Operating Officer
Mr. Shoufani has over twenty-five years of experience at the forefront of new and innovative technology sectors where he has focused on implementing corporate strategy into daily operations to meet key objectives. Since 2010, as Managing Director of SinoAmerican Global Fund, Mr. Shoufani is involved in various stages of the Fund’s portfolio companies spanning across a broad spectrum of industries globally. Mr. Shoufani brings extensive management experience in the technology industry as well as valuable know-how and expertise in market development and finance structuring within various industry sectors throughout the Americas, Asia, Europe, and Middle East. While working with IZP (2012-2015), a leading global big data company in Shenzhen, China, Mr. Shoufani was instrumental in helping expand their financial and logistical transactions segment across Asia-Pacific, Latin America, Europe and Middle East. As a key liaison with MPR Tech (2010-2012), China’s equivalent to eBay, Mr. Shoufani worked with management to streamline online auction management operations and improve top line revenues while helping realize savings in operating expenses. As a key member of 4PX (2008-2010), an e-commerce solutions provider based in Shanghai, China, Mr. Shoufani worked with designers and engineers to implement custom supply chain systems and software services that delivered efficiencies across multiple levels including installation, training, maintenance, and security. Mr. Shoufani holds a Bachelor of Arts (BA) from University of California in Business Economics and Marketing, and is fluent in English, Arabic and French.
Michael J. Portera – Director, Chief Financial Officer
Mr. Portera joined the Company as a Director and Chief Financial Officer on July 12, 2023. With over forty years of experience in finance, sales, and business development, he is responsible for overseeing the financial operations of the Company, liaising with investment banks and financial institutions on fundraising initiatives, advising on merger and acquisition transactions, and implementing industry best practices for the Company’s finances and overall financial health. Over the past fifteen years, Mr. Portera has worked with seasoned executives, entrepreneurs, and start-up businesses to successfully consummate thousands of transactions on a global basis. As a former Managing Director with NYPPEX Private Markets (2000-2011), he assisted accredited investors achieve liquidity for over half a billion dollars in illiquid securities in secondary markets with venture capital and private equity funds and was instrumental in raising capital for founders and management teams of early-stage startups. Previously, as Senior Vice President of Investments at Gilford Securities (1995-1999), Mr. Portera worked with Fortune 500 CEOs, Forbes 400 members, and high-net-worth individuals and institutions in various financings and investment-related initiatives. Over the course of his early career as a registered representative, Mr. Portera held senior-level positions at several investment banking firms, including Smith Barney (1992-1995), UBS (1988-1992), and Drexel Burnham Lambert (1983-1987). Early in his career, as a Certified Public Accountant (CPA), Mr. Portera served as a senior auditor at Deloitte & Touche in New York City. Mr. Portera holds a Bachelor of Science (BS) in Economics with a concentration in Accounting from the Wharton School at the University of Pennsylvania.
Eric Manlunas – Director
Mr. Manlunas has over thirty years of experience in various aspects of financing and building new enterprise. He is a valuable member of our Board due to his depth of operating, strategic, and transactional experience. As a recognized business leader, Mr. Manlunas excels in demanding and fluid environments, often across multiple markets, continents, and cultures. Over the past twenty years, as founder and Managing Partner of Wavemaker Partners (2003 – Present), a cross-border venture capital firm with offices in Los Angeles and Singapore, Mr. Manlunas has been part of over 450 investments in early-stage businesses. He is adept at assimilating high levels of complexity, balancing competing factors, and quickly forming sensible and workable strategies to achieve stability and deliver sustainable outcomes. Prior to becoming a venture capitalist, from 1999 to 2003, Mr. Manlunas founded, built and successfully sold two businesses, an e-commerce and Internet Service Provider, to strategic buyers. During the early part of his career, he started as a consultant with Arthur Andersen’s Retail Management Group. Mr. Manlunas holds a Master of Business Administration (MBA) from Pepperdine University (1995) and earned a Bachelor of Arts (BA) in Communications from Florida International University (1990).
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| Table of Contents |
Term of Office
Each director serves for a term of one year and until his successor is elected at the Annual Shareholders’ Meeting and is qualified, subject to removal by the shareholders. Each officer serves for a term of one year and until his successor is elected at a meeting of the Board of Directors and is qualified.
Employees
We have three executive officers. These individuals are not obligated to devote any specific number of hours to our matters and intend to devote only as much time as they deem necessary to our affairs. Our officers are devoted full time to the Company; the amount of time they will devote in any time period will vary based on the stage of the business and progress the company is making. Accordingly, once we are beyond the developmental phase our management will spend more time on our affairs.
Limitation of Liability and Indemnification Matters
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act, and is, therefore, unenforceable.
Identification of Significant Employees
We have no significant employees other than the aforementioned Officers and Directors.
Family Relationship
Tarek N. Shoufani is the brother-in-law of Fred E. Tannous. Other than the foregoing, we currently do not have any officers or directors of our Company who are related to each other.
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| Table of Contents |
Involvement in Certain Legal Proceedings
During the past ten years no director, executive officer, promoter or control person of the Company has been involved in the following:
(1) A petition under the Federal bankruptcy laws or any state insolvency law which was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing;
(2) Such person was convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);
(3) Such person was the subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities:
| i. | Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity; |
| ii. | Engaging in any type of business practice; or |
| iii. | Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws; |
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| Table of Contents |
(4) Such person was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph (f)(3)(i) of this section, or to be associated with persons engaged in any such activity;
(5) Such person was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated;
(6) Such person was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;
(7) Such person was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:
| i. | Any Federal or State securities or commodities law or regulation; or |
| ii. | Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or |
| iii. | Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or |
(8) Such person was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.
Independence of Directors
The Board of Directors is currently composed of four members. Mr. Fred E. Tannous, Mr. Tarek N. Shoufani, Mr. Michael J. Portera, and Mr. Eric Manlunas. Messrs. Tannous, Shoufani and Portera do not qualify as independent Directors in accordance with the published listing requirements of the NASDAQ Global Market as they each hold officer positions. Mr. Eric Manlunas does qualify as an independent director as he is not an officer of the Company. The NASDAQ independence definition includes a series of objective tests, such as that the Director is not, and has not been for at least three years, one of the Company’s employees and that neither the Director, nor any of his family members has engaged in various types of business dealings with us. In addition, the Board of Directors has not made a subjective determination as to each Director that no relationships exist which, in the opinion of the Board of Directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a Director, though such subjective determination is required by the NASDAQ rules. Had the Board of Directors made these determinations, the Board of Directors would have reviewed and discussed information provided by the Directors and the Company with regard to each Director’s business and personal activities and relationships as they may relate to the Company and its management.
Committees
We do not currently have an audit, compensation or nominating committee. The Board of Directors as a whole currently acts as our audit, compensation and nominating committees. We intend to establish an audit, compensation and nominating committee of our Board of Directors once we expand the Board to include one or more independent directors and intend to adopt a charter for each committee.
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| Table of Contents |
Our audit committee shall be primarily responsible for reviewing the services performed by our independent auditors, evaluating our accounting policies and our system of internal controls. Our compensation committee shall assist the Board in reviewing and approving the compensation structure, including all forms of compensation, relating to our directors and executive officers and periodically reviewing and approving any long-term incentive compensation or equity plans, programs or similar arrangements. Our nominating committee shall assist the Board in selecting individuals qualified to become our directors and in determining the composition of the Board and its committees.
Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Securities Exchange Act of 1934 requires our directors and executive officers and persons who beneficially own more than ten percent of a registered class of our equity securities to file with the SEC initial reports of ownership and reports of change in ownership of our common stock and other equity securities. Officers, directors and greater than ten percent stockholders are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file. Since inception, we have not had a class of equity securities registered under the Securities Exchange Act of 1934, as amended. Hence, compliance with Section 16(a) thereof by our officers and directors is not required.
Risk Oversight
Effective risk oversight is an important priority of the Board of Directors. Because risks are considered in virtually every business decision, the Board of Directors discusses risk throughout the year generally or in connection with specific proposed actions. The Board of Directors’ approach to risk oversight includes understanding the critical risks in the Company’s business and strategy, evaluating the Company’s risk management processes, allocating responsibilities for risk oversight among the full Board of Directors, and fostering an appropriate culture of integrity and compliance with legal responsibilities.
Corporate Governance
The Company promotes accountability for adherence to honest and ethical conduct; endeavors to provide full, fair, accurate, timely and understandable disclosure in reports and documents that the Company files with the SEC and in other public communications made by the Company; and strives to be compliant with applicable governmental laws, rules and regulations. The Company has not formally adopted a written code of business conduct and ethics that governs the Company’s employees, officers and Directors as the Company is not required to do so.
In lieu of an Audit Committee, the Company’s Board of Directors is responsible for reviewing and making recommendations concerning the selection of outside auditors, reviewing the scope, results and effectiveness of the annual audit of the Company's financial statements and other services provided by the Company’s independent public accountants. The Board of Directors reviews the Company's internal accounting controls, practices and policies.
Code of Ethics
Our Board of Directors has not adopted a code of ethics. We anticipate that we will adopt a code of ethics when we increase either the number of our directors or the number of our employees.
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| Table of Contents |
Item 11. Executive Compensation
Name and Principal Position |
| Fiscal Year Ended June 30 |
| Salaries ($) |
|
| Bonus ($) |
|
| Stock Awards ($) |
|
| Option Awards ($) |
|
| All Other Compensation ($) |
|
| Total ($) |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Fred E. Tannous(1) |
| 2025 |
|
| 87,500 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 62,500 |
|
|
| 150,000 |
|
Director, President & Chief Executive Officer, Treasurer, Secretary |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tarek N. Shoufani(1) |
| 2025 |
|
| 77,000 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 77,000 |
|
Director, Chief Operating Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael J. Portera(1) |
| 2025 |
|
| 41,000 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 41,000 |
|
Director, Chief Financial Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Eric Manlunas |
| 2025 |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Director(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Officers received a nominal salary during the year, however, a portion of their salary was deferred and accrued; there are no formal employment contracts in place for their employment.
(2) Our outside board member did not receive any compensation. There are no arrangements for any future compensation.
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| Table of Contents |
Narrative Disclosure to Summary Compensation Table
There are no formal contracts in place for employment of any officers. In addition to the foregoing, there are no employment contracts, compensatory plans or arrangements, including payments to be received from the Company with respect to any executive officer, that would result in payments to such person because of his resignation, retirement or other termination of employment with the Company, or its subsidiaries, any change in control, or a change in the person’s responsibilities following a change in control of the Company.
Outstanding Equity Awards at Fiscal Year-End
There are no current outstanding equity awards to our executive officers.
Long-Term Incentive Plans
There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers.
Compensation of Directors
Our directors receive no annual salary or bonus for their service as members of the Company’s board of directors.
Security Holders Recommendations to Board of Directors
Shareholders can direct communications to our Chief Executive Officer, Fred E. Tannous, at our executive offices. However, while we appreciate all comments from shareholders, we may not be able to individually respond to all communications. We attempt to address shareholder questions and concerns in our press releases and documents filed with the SEC so that all shareholders have access to information about us at the same time. Mr. Tannous collects and evaluates all shareholder communications. All communications addressed to our directors and executive officers will be reviewed by those parties unless the communication is clearly frivolous.
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| Table of Contents |
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholders Matters
The following table sets forth certain information concerning the number of shares of our common stock owned beneficially as of June 30, 2025, by: (i) each of our directors; (ii) each of our named executive officers; and (iii) each person or group known by us to beneficially own more than 5% of our outstanding shares of common stock, par value $0.001 per share. Unless otherwise indicated, the shareholders listed below possess sole voting and investment power with respect to the shares they own. Unless otherwise specified, the address of each of the persons set forth below is care of the Company at the address 2029 Century Park East, Suite 400, Los Angeles, CA 90067.
Beneficial ownership has been determined in accordance with Rule 13d-3 under the Exchange Act. Under this rule, certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire shares (for example, upon exercise of an option or warrant) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares is deemed to include the amount of shares beneficially owned by such person by reason of such acquisition rights. As a result, the percentage of outstanding shares of any person as shown in the following table does not necessarily reflect the person’s actual voting power at any particular date.
Name and Address of Beneficial Owner |
| Title of Class |
| Amount and Nature of Beneficial Ownership(1) |
|
| Percent (%) of Class(2) |
| ||
Fred E. Tannous (3) |
| Common |
|
| 6,250,000 |
|
|
| 29.3 | % |
Tarek N. Shoufani (4) |
| Common |
|
| 3,000,000 |
|
|
| 14.1 | % |
Eric Manlunas (5) |
| Common |
|
| 1,773,000 |
|
|
| 8.3 | % |
Michael J. Portera (6) |
| Common |
|
| 1,500,000 |
|
|
| 7.0 | % |
All Officers, Directors and Beneficial Owners as a Group (4 persons) |
| Common |
|
| 12,523,000 |
|
|
| 58.7 | % |
(1) The number and percentage of shares beneficially owned is determined under rules of the SEC and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any shares as to which the individual has sole or shared voting power or investment power and also any shares, which the individual has the right to acquire within 60 days through the exercise of any stock option or other right. The persons named in the table have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them, subject to community property laws where applicable and the information contained in the footnotes to this table.
(2) Based on 21,323,312 issued and outstanding shares of common stock as of June 30, 2025.
(3) Fred E. Tannous is a Director and the Company's President, CEO, Secretary, and Treasurer. His beneficial ownership includes 6,250,000 common shares.
(4) Tarek Shoufani is a Director and the Company’s Chief Operating Officer. His beneficial ownership includes 3,000,000 common shares.
(5) Eric Manlunas is member of the Company’s Board of Directors. His beneficial ownership includes 1,773,000 common shares directly owned.
(6) Michael J. Portera is a Director and the Company’s Chief Financial Officer. His beneficial ownership includes 1,500,000 common shares directly owned.
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| Table of Contents |
Changes in Control
There are no present arrangements or pledges of the Company’s securities, which may result in a change in control of the Company.
Item 13. Certain Relationships and Related Transactions, and Director Independence
Related Party Transactions
Related party transactions are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties. Related parties are natural persons or other entities that have the ability, directly, or indirectly, to control another party or exercise significant influence over the party in making financial and operating decisions. Related parties include other parties that are subject to common control or that are subject to common significant influences.
In February 2025, pursuant to terms of a promissory note the Company issued 250,000 shares of its common stock to its chief executive officer as an accommodation for advancing the Company a zero-interest loan in the amount of $30,000. The loan was repayable within 30 days from date of issuance. The Company determined the relative fair value of the debt and equity. As of June 30, 2025, the Company had paid back the loan.
Other than the foregoing, none of the directors or executive officers of the Company, nor any person who owned of record or was known to own beneficially more than 5% of the Company’s outstanding shares of its Common Stock, nor any associate or affiliate of such persons or companies, has any material interest, direct or indirect, in any transaction that has occurred during the past fiscal year, or in any proposed transaction, which has materially affected or will affect the Company.
With regard to any future related party transaction, we plan to fully disclose any and all related party transactions in the following manner:
| · | Disclosing such transactions in reports where required; |
| · | Disclosing in any and all filings with the SEC, where required; |
| · | Obtaining disinterested directors’ consent; and |
| · | Obtaining shareholder consent where required. |
Review, Approval or Ratification of Transactions with Related Persons
Given our small size and limited financial resources, we have not adopted formal policies and procedures for the review, approval or ratification of transactions, such as those described above, with our executive officers, Directors and significant stockholders. However, all of the transactions described above were approved and ratified by our Board of Directors. In connection with the approval of the transactions described above, our Board of Directors, took into account several factors, including their fiduciary duties to the Company; the relationships of the related parties described above to the Company; the material facts underlying each transaction; the anticipated benefits to the Company and related costs associated with such benefits; whether comparable products or services were available; and the terms the Company could receive from an unrelated third party.
We intend to establish formal policies and procedures in the future, once we have sufficient resources and have appointed additional Directors, so that such transactions will be subject to the review, approval or ratification of our Board of Directors, or an appropriate committee thereof. With regard to any future related party transaction, we plan to fully disclose any and all related party transactions in the following manner:
| · | Disclosing such transactions in reports where required; |
| · | Disclosing in any and all filings with the SEC, where required; |
| · | Obtaining disinterested directors’ consent; and |
| · | Obtaining shareholder consent where required. |
Director Independence
Quotations for the Company’s common stock are entered on the Over-the-Counter Bulletin Board inter-dealer quotation system, which does not have director independence requirements. For purposes of determining director independence, the Company applied the definitions set out in NASDAQ Rule 4200(a)(15). Under NASDAQ Rule 4200(a)(15), a director is not considered to be independent if he or she is also an executive officer or employee of the corporation. As a result, the Company has one independent director, Eric Manlunas, as our other directors, Fred E. Tannous, Michael Portera, and Tarek Shoufani, are each also an executive officer of the Company.
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| Table of Contents |
Item 14. Principal Accountant Fees and Services
|
| Year Ended June 30, 2025 |
|
| Year Ended June 30, 2024 |
| ||
Audit Fees |
| $ | 48,500 |
|
| $ | 54,075 |
|
Audit Related Fees |
|
| - |
|
|
| - |
|
Tax Preparation |
|
| - |
|
|
| - |
|
Other |
|
| - |
|
|
| - |
|
Total |
| $ | 48,500 |
|
| $ | 54,075 |
|
Audit Fees consist of fees billed for professional services rendered for the audit of our financial statements and review of the interim financial statements included in quarterly reports and services that are normally provided by the above auditors in connection with statutory and regulatory fillings or engagements.
Audit-Related Fees are fees for assurance and related services by the principal accountant that are traditionally performed by the principal accountant and which are reasonably related to the performance of the audit or review of the registrant's financial statements and fees attributed to the audit.
In the absence of a formal audit committee, the full Board of Directors pre-approves all audit and non-audit services to be performed by the independent registered public accounting firm in accordance with the rules and regulations promulgated under the Securities Exchange Act of 1934, as amended. The Board of Directors pre-approved 100% of all services rendered the audit by the independent registered public accounting firm for the fiscal periods ended June 30, 2025 and June 30, 2024. There were no non-attest services provided by dbbmckennon.
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| Table of Contents |
PART IV
Item 15. Exhibits and Financial Statements.
(1) | Previously filed as an exhibit to Registration Statement on Form S-1 filed with SEC on September 21, 2023, incorporated herein by reference. |
(2) | Previously filed as an exhibit to Registration Statement, as amended, on Form S-1/A filed with the SEC on October 19, 2023, incorporated herein by reference. |
(3) | Previously filed as an exhibit to the Annual Report on Form 10-K for the fiscal year ended June 30, 2024, filed with the SEC on October 1, 2024, incorporated herein by reference. |
(*) | Filed herewith. |
(¥) | This exhibit is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall such exhibit be deemed to be incorporated by reference in any registration statement or other document filed under the Securities Act or the Exchange Act, except as otherwise stated in such filing. |
Item 16. Form 10-K Summary
None.
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| Table of Contents |
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Nexscient, Inc. |
| ||
| |||
Date: September 30, 2025 | By: | /s/ Fred E. Tannous |
|
| Fred E. Tannous |
| |
| Chief Executive Officer (Principal Executive Officer) | ||
Date: September 30, 2025 | By: | /s/ Michael J. Portera |
|
| Michael J. Portera |
| |
| Chief Financial Officer (Principal Accounting Officer) |
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EXHIBIT 10.6
SOFTWARE SUPPORT AGREEMENT
This SOFTWARE PURCHASE AGREEMENT is entered into as of this 13th day of February 2025 (the “Effective Date”) between Nexscient, Inc., a Delaware corporation (the “Buyer”) and i2 Analytics, Inc., a California corporation (the “Seller”) (this “Agreement”). The Company and the Seller are sometimes referred to herein individually as a “Party” and collectively as the “Parties.” This Agreement supersedes all previous support agreements between Buyer and Seller. The terms of this Agreement are based upon the following:
RECITALS
WHEREAS, the Buyer purchased Software from the Seller pursuant to terms and conditions described in the Software Purchase Agreement dated February 13, 2025 (the “Software”); and
WHEREAS, the Buyer wishes to retain the services of the Seller to provide support and maintenance services on the Software purchased from the Seller, and the Seller wishes to provide such support services to the Buyer during the implementation and transition period subject to the conditions set forth in this Agreement (“Software Support”);
NOW THEREFORE, in consideration of the premises and mutual covenants and agreements contained in this Agreement and other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:
1. SCOPE OF THE AGREEMENT
1.1. Term of the Agreement
The term of the Agreement commences with the Effective Date noted above and remains in effect until terminated as provided in this agreement.
1.2. Software Support Orders
The Services to be delivered to Buyer are summarized in the enclosed Software Support Order (the “Service Order”) (Exhibit A).
1.3. Service Order Term
For each Service Order, Seller shall provide services for a period of six (6) months from the Effective Date of the Service Order, unless otherwise specified on the Service Order (the “Term”).
1.4. Renewal of Support Service Order
The last day of the Term is considered the “Renewal Date” for the Service Order. On the Renewal Date, Software Support services will renew automatically for an additional six months of service and with the same maintenance and support package, unless either party notifies the other of its desire to either revise or terminate the Service Order for the following Term. Notification shall be in writing and sent by regular mail or facsimile at the addresses set forth above. Notification shall be given within thirty (30) days of the Renewal Date.
1.5. Additional Orders for Services
If during the Term of a Service Order, Buyer wishes to order additional service not provided under the Service Order, Buyer may request additional services pursuant to written purchase orders.
1.6. Additional Software Purchases During Service Order Year
If during the Term of the Service Order, Buyer purchases additional Software or Upgrades, Seller will enroll the components in the Service Order plan, according to the terms of the Service Order in effect for that Software at the time. The succeeding Software Support Invoice will show an added charge for the added component(s).
2. CHANGES TO SERVICES AND PRICE LISTS
Seller may amend or revise prices and services at any time upon thirty (30) days written notice to Buyer, subject to Buyer’s consent, which shall not be unreasonably denied. Seller agrees not to amend support agreement pricing until completion of initial term. If Buyer does not consent to suggested modifications by Seller, both parties shall use reasonable efforts to reach an amended schedule of services and prices agreeable to both parties.
2.1. Service Charges
Service charges for Software Support are set forth in the Software Support Order attached to this Agreement as Exhibit A.
2.2. Invoice and Payment Schedule
The service charges for Software Support shall be payable monthly in advance of the period for which support services are rendered. Any charges for any other products or services will be invoiced when provided and are due and payable upon receipt of such invoice.
2.3. Travel and Expense Charges
Buyer shall pay travel, accommodations, and other reasonable expenses including but not limited to meals, local transportation, and business communications of Seller personnel for all on-site services provided by Seller or its representatives, except as expressly provided in the Software Support Order.
3. PAYMENTS AND CORRESPONDENCE
3.1. Payments and Payee
Buyer may issue payments for Software Support fees through electronic wire transfer. The payment instructions are displayed in Exhibit B.
3.2. Inquiries and Correspondence
All notices required or permitted to be delivered in connection with this Agreement shall be in writing and shall be delivered to the following addresses:
| 2 |
| To i2Analytics, Inc.:
i2 Analytics, Inc. | To Nexscient, Inc.:
Nexscient, Inc. | |
| ________________________________ _______________________________ |
| 2029 Century Park East, Suite 400 Los Angeles, CA 90067 |
|
|
|
|
| Attention: Edward Morales Managing Director | Attention: Fred E. Tannous President & CEO | |
| Email: eddie@i2analytics.com | Email: fred@nexscient.com | |
4. LIMITATION OF SERVICES
4.1. Software Operation Must Be According to Documentation
Software Support shall not apply unless the Software is operated in strict accordance with the documentation furnished with the Software, and any subsequent updates to the documentation provided by Seller.
4.2. Services Do Not Extend to Non-Supported Software
Software Support is void in cases where Buyer has made unauthorized use of unapproved Software, or anything which is not directly a part of the Software, as supported by Seller.
4.3. Maintaining Current Software
As part of your software support agreement, Seller will continue to supply Buyer with upgrades that will update the latest versions of existing software modules.
5. LIMITATION OF LIABILITIES
5.1. Software Application
Except as specifically provided for in this Agreement, Seller extends no warranty, express or implied, including any warranty of merchantability or fitness for a particular purpose, to Buyer for the software Application or any other maintenance or support or for any additional service which Buyer may request through Seller for use in conjunction with the Software Support services or any other maintenance or support.
5.2. Cumulative Liability
Neither Seller nor any of its subcontractors’ agents shall be liable for any loss or damage to the Software Application or other property arising in connection with the Services or any other maintenance or support provided by Seller or its subcontractor under this Agreement. Notwithstanding any other provision of the Agreement, under no circumstances shall Seller or any of its subcontractors be liable to Buyer or any third party claiming under Buyer, for special, incidental, indirect or consequential damages as a result of a breach of any provision of the Agreement, or for any loss, damage, or any expense directly or indirectly arising from Buyer’s use or inability to use or a third party’s use, or inability to use, whether or not authorized, of the software or its components, either separately or in combination with other equipment, or for commercial loss of any kind, including costs of procurement of substitute services, loss of profits, and interruption of services. Seller’s cumulative liability under the Agreement for all causes of action shall be limited to and shall not exceed the amounts paid by Buyer under the Agreement, and in no event shall Seller be liable to Buyer for any amount exceeding amounts paid under the Agreement.
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5.3. Non-Performance Recourse
In all situations involving performance or non-performance by Seller under this Agreement, Buyer’s sole and exclusive remedy is (1) to terminate this Agreement by written notice to Seller and (2) to receive a pro-rated refund for the pre-paid Services, less any sum due and owing to Seller.
6. ERROR RESOLUTION RESPONSE
Our engineering personnel will respond to reported troubles under the following guidelines:
6.1 Trouble Priorities
Priority 1: A fatal error that has no work around. Generally, these errors will not allow a user to complete a required function.
Priority 2: An error that prevents a function from being completed as normally processed, but that has a work around that allows the user to complete the task at hand.
Priority 3: An error that does not stop a user from completing a task but does not work as would be expected.
6.2 Error Resolution Response
Once an error’s priority has been established and the relevant information has been collected, Seller will respond within the following guidelines:
Priority 1: During regular business hours, calls will be answered immediately; after regular business hours, a callback to the Buyer will be within 30 minutes of the initial call. Seller will work full time until an interim workaround or a permanent resolution is provided.
Priority 2: A resolution will be provided within five working days. The resolution could be a work around, or some other interim measure, if that interim measure is considered acceptable.
Priority 3: A resolution will be provided in a future release of the product.
Although Seller plans to resolve all problems in less time than the goals; some troubles will simply take longer than the guidelines due to their complexity. Seller will make its best effort to provide trouble resolution within these response time goals. In cases where there is a problem that is outside Seller’s control, for example, a problem with the operating system, database software, or any other part of the system that is not part of the Software, Seller will not be held liable or responsible for the problem.
| 4 |
7. MISCELLANEOUS
7.1. Time Limitation for Action
Any action for breach or to enforce any provision of this Agreement shall be brought within one year after the cause of action accrues or it will be deemed waived and barred.
7.2. Renegotiation of Unenforceable Provisions
If any provision of this Agreement is held to be unenforceable or invalid, the remaining provisions shall be given full effect, and the parties shall negotiate, in good faith, a substitute valid provision which most nearly approximates the parties’ intent of the unenforceable or invalid provision.
7.3. Force Majeure
Seller shall have no liability whatsoever for any delay or failure in providing Software Support or any other maintenance or support attributable to fires, strikes, embargoes, earthquakes, storms, wars, acts of war, governmental or state or any other contingency beyond the reasonable control of Seller.
7.4. Severability of Provisions
The provisions of this Agreement are severable, and if any provision hereof is held invalid or unenforceable, the remaining provisions of this Agreement shall not be affected thereby. Furthermore, failure by either party at any time to require the other party to perform any obligation under this Agreement shall not affect the party’s right subsequently to require the other party to perform that obligation.
7.5. Assignment
Buyer shall not assign this Agreement or any of its rights or obligations hereunder without the prior written consent of Seller; such consent shall not be unreasonably withheld. Seller may assign any obligation or Order placed under this Agreement to an affiliate, subcontractor, or other third party, provided that a comparable quality of service is provided to Buyer.
7.6. Waiver
No provision of this Agreement may be waived by either party, except in writing signed by that party. The waiver of any portion of this Agreement with respect to any person or invention, discovery, improvement, or work of authorship shall be construed narrowly and shall not affect the right of the party granting the waiver to enforce any other provision of this Agreement or to enforce any provision of this Agreement with respect to any other person or invention, discovery, improvement, or work of authorship.
7.7. Governing Law, Venue, and Dispute Arbitration
The English language shall govern all interpretations of this Agreement. This Agreement and any amendments hereto will be governed by the laws of the State of Delaware. The proper venue for any proceeding at law or in equity or under a mediation or arbitration provision (if any) will be Los Angeles County, California, and the parties waive any right to object to the venue.
The parties agree that prior to any legal action the parties in good faith will mediate any disputes between them. If any suit or action is filed by any party to enforce this Agreement, the prevailing party shall be entitled to recover reasonable attorney fees incurred in preparation or in prosecution or defense of such suit or action as fixed by the trial court, and if any appeal is taken from the decision of the trial court, reasonable attorney fees as fixed by the appellate court.
7.8. Entire Agreement
If any conflicting Order or invoice arises which does not comply with the terms of this Agreement, the terms identified in this Agreement will prevail. This Agreement represents the complete and entire agreement between Seller and Buyer and supersedes all prior agreements, statements, or negotiations with respect to the subject of Software Support.
| 5 |
IN WITNESS WHEREOF, the parties have duly executed and delivered this Agreement as of the date first written above.
I2 ANALYTICS, INC.
/s/ Edward Morales
Name: Edward Morales
Title: Managing Director
NEXSCIENT, INC.
/s/ Fred E. Tannous
Name: Fred E. Tannous
Title: President & CEO
| 6 |
EXHIBIT A
SOFTWARE SUPPORT ORDER
Software Support Rate:
· Includes up to 20 hours of maintenance and support per month: $3,500 per month
Software Support Services:
· Help Desk: Monday – Friday, 8:00 am – 6:00 pm PT
· Outside of these standard hours, emergency help is provided for switch outages 24 x 7
· Error resolution, patches, fixes, workarounds
· Upgrades to update your existing software modules
· Software diagnostics, remote analysis via secure line provided by Buyer (optional)
Initial Contract Value: $21,000
· Monthly payments in advance are required as noted in Section 2.2
· Rates subject to change as noted in Section 2; additional purchase(s) may result in increased rates
| 7 |
EXHIBIT B
WIRE TRANSFER INSTRUCTIONS
Buyer must make payments for Software Support fees to Seller through electronic wire transfer. The following described instructions for payment of funds by wire transfer:
| 8 |
EXHIBIT 10.7
SOFTWARE PURCHASE AGREEMENT
This SOFTWARE PURCHASE AGREEMENT is made as of this 13th day of February 2025 (this “Agreement”) between Nexscient, Inc., a Delaware corporation (the “Company”) and i2 Analytics, Inc. (the “Seller”). The Company and the Seller are sometimes referred to herein individually as a “Party” and collectively as the “Parties.”
RECITALS
WHEREAS, the Seller is the owner of the AI Media Toolkit SaaS software application (“Software”);
WHEREAS, the Company, a publicly held company trading on the OTC Venture Markets seeks to expand its business its collaborative network of intelligent enterprise applications and technologies through synergistic acquisitions of technologies involved in machine learning artificial intelligence; and
WHEREAS, the Seller wishes to sell to the Company, and the Company wishes to purchase from the Seller, the Software on the terms and subject to the conditions set forth in this Agreement.
NOW THEREFORE, in consideration of the premises and mutual covenants and agreements contained in this Agreement and other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:
1. INTERPRETATION
1.1. Definitions. In this Agreement:
(a) “Application” shall mean a computer program or group of computer programs designed for end users;
(b) “Closing” means the closing of the transactions contemplated in this Agreement;
(c) “Closing Date” means the date of Closing;
(d) “Company Shares” means shares of Common Stock, $0.001 per share, par value, of Nexscient, Inc. [OTCQB: NXNT] to be issued to the Seller on Closing.
(e) “Components” includes include all assets, i.e. any and all elements of the Software including without limitation any and all graphics, files, layout, maps, sketches, pictures, design documents, graphic files and tools. Such Components shall be provided in the two following forms: the raw data form, as it directly comes out of the commercially available tools used by Seller, and software data form in a form that is readable by the software during runtime;
(f) “Encumbrances” means any and all mortgages, liens, pledges, charges, security interests, encumbrances, actions, causes of action or demands of any nature whatsoever and however arising;
(g) “Improvement” or “Improvements” means any modification or variant of the Software which, if manufactured, used, or sold, would fall within the scope of the Software;
(h) “Intellectual Property” means: all (i) discoveries and inventions (whether patentable or unpatentable and whether or not reduced to practice), all improvements thereto, and all United States, international, and foreign patents, patent applications (either filed or in preparation for filing), patent disclosures and statutory invention registrations, including all reissuances, divisions, continuations, continuations in part, extensions and reexaminations thereof, all rights therein provided by international treaties or conventions, (ii) trademarks, service marks, trade dress, logos, trade names, corporate names, and other source identifiers (whether or not registered) including all common law rights, all registrations and applications for registration (either filed or in preparation for filing) thereof, all rights therein provided by international treaties or conventions, and all renewals of any of the foregoing, (iii) all copyrightable works and copyrights (whether or not registered), all registrations and applications for registration thereof, all rights therein provided by international treaties or conventions, and all data and documentation relating thereto, (iv) confidential and proprietary information, trade secrets, know-how (whether patentable or nonpatentable and whether or not reduced to practice), processes and techniques, research and development information including patent and/or copyright searches conducted by Seller and/or any third party, ideas, technical data, designs, drawings and specifications, (v) Software, (vi) coded values, formats, data and historical or current databases, whether or not copyrightable, (vii) domain names, Internet websites or identities used or held for use by the Seller, (viii) other proprietary rights relating to any of the foregoing (including without limitation any and all associated goodwill and remedies against infringements thereof and rights of protection of an interest therein under the laws of all jurisdictions), and (ix) copies and tangible embodiments of any of the foregoing.;
(i) “Know-how” means all know-how, knowledge, expertise, works of authorship, prototypes, technology, information, patterns, plans, designs, research, research data, trade secrets, drawings, unpatented blue prints, flow sheets, equipment or parts lists, descriptions, instructions, manuals, data, records, procedures, materials or tools relating to the Inventions or to the design, development, manufacture, use or commercial application of the Inventions;
(j) “Object Code” means the machine-readable binary version of a computer program that is used by the computer to run the program;
(k) “Person” means an individual, corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or any agency or subdivision thereof) or any other entity of any kind;
(l) “SEC Reports” has the meaning set forth in Section 4.2(h) of this Agreement;
(m) “Software" means the software Application, including the Source Code, Object Code, Components and Tools, as set forth in Exhibit A;
(n) “Source Code” means, with respect to the Software, the computer programs relating thereto in human readable form, including programmers’ comments, data files and structures, header and include files, macros, object libraries, programming tools not commercially available, technical specifications, flowcharts and logic diagrams, schematics, annotations and documentation reasonably required or necessary to enable an independent third party programmer with a reasonable level of programming skills to create, maintain, modify or enhance the Software without the help of any other person. Data files containing Source Code must be in standard ASCII format and be readable by any commercially available text editor;
| 2 |
(o) “Tools” mean all of the Seller’s proprietary tools used for the development of the Software and their related Source and Object Code;
(p) “Transaction Documents” means this Agreement, and all exhibits and schedules hereto and thereto and any other documents or agreements executed in connection with the transactions contemplated hereunder; and
(q) “US Exchange Act” means the United States Securities Exchange Act of 1934, as amended; and
(r) “US Securities Act” means the United States Securities Act of 1933, as amended.
2. SALE, ASSIGNMENT AND TRANSFER OF SOFTWARE
2.1. Sale and Assignment of Software. On the terms and subject to the conditions set forth in this Agreement, the Seller hereby covenants and agrees to sell, assign, transfer and convey all of its rights, title and interests in and to the Software to the Company free and clear of any and all Encumbrances whatsoever and the Seller further agrees to waive any moral rights that the Seller may have with respect to the Software in favor of the Company.
2.2. Purchase Price and Consideration for Software. In consideration for the sale, assignment, transfer and conveyance of the Software by the Seller to the Company and the waiver by the Seller of any moral rights they may have with respect to the Software, the Company agrees to pay total consideration in the amount of $135,000 as follows:
2.2.1.1. Cash: $47,500, whereby $19,000 (40%) is paid to Seller at signing of Agreement and balance of $28,500 (60%) is paid to Seller at Closing (see Exhibit D); and
2.2.1.2. Stock: Issuance of 350,000 Shares of Nexscient’s Common Stock, $0.001 per share, par value (OTCQB: NXNT), valued at $87,500 based on Company’s Common Stock price of $0.25 per Share, to the Seller at Closing.
2.2.1.3. Consulting Agreement. As a condition to Closing, Seller shall enter into a software support agreement with the Buyer, or its subsidiary, for an initial period of six (6) months, with an option to extend for a mutually agreed upon extension period. During the term of the engagement, Seller shall provide necessary software maintenance tasks including, but not limited to, quality assurance (QA), programming bug fixes, and critical updates to the Software. For such services, the Seller shall receive a monthly retainer of not less than $3,500 per month.
2.3. Further Assurances. At any time after Closing, and from time to time thereafter, the Seller shall, upon the Company’s written request, and at the Company’s expense, take any and all action and execute, acknowledge and deliver to the Company any and all further instruments and assurances necessary or expedient in order to fully vest in the Company the Software and to facilitate the Company’s enjoyment, defense and enforcement thereof. If, at any time after Closing, any entity or person directly or indirectly controlled by the Seller (a “Seller Affiliate”) is determined or deemed to have any right, title or interest in or to the Software, the Seller agrees to use their best efforts to cause that Seller Affiliate to transfer, assign, convey or release in favor of the Company any and all right, title or interest that Seller Affiliate may have in or to the Software without payment of any additional consideration by the Company. The Seller hereby irrevocable designates and appoints the Company and its duly authorized officers and agents, with full power of substitution, as the Seller’s agents and attorneys-in-fact to act for and on behalf and instead of the Seller, to take any and all actions, including proceedings at law, in equity or otherwise, to execute, acknowledge and deliver any and all instruments and assurances necessary or expedient in order to fully vest in the Company or perfect the sale, transfer, assignment and conveyance of the Software to the Company or to protect the same or to enforce any claim or right of any kind with respect thereto. The forgoing power is coupled with an interest and is irrevocable.
| 3 |
2.4. Later Improvements. If, after the date of this Agreement, the Seller, or any of them, develop or discover, or is a co-developer or co-discoverer of any Improvement, then such Seller shall promptly sell, assign and transfer the Improvement and all of that Seller’s rights to such Improvement to the Company without the payment of any additional payment or consideration.
2.5. Delivery of Know-how and Intellectual Property. The Seller shall communicate to the Company all Know-how and Intellectual Property in the possession of the Seller reasonably relevant to the Software. The Seller will continue to communicate to the Company all such further Know-how and Intellectual Property as may later come into the possession of any of the Seller.
2.6. Confidential Information. All Know-how, Intellectual Property and other technical information relating to the Software in the possession of the Seller shall be deemed to be confidential information. The Seller shall not disclose or authorize the disclosure of such information to any third party, except with the prior express written consent of the Company. The Seller shall take reasonable precautions to prevent the unauthorized disclosure to third parties of all such confidential information
3. CLOSING AND CONDITIONS OF CLOSING
3.1. Closing. Subject to the satisfaction or waiver of all of the conditions precedent to Closing as set out in this Agreement, Closing of the transactions contemplated herein shall take place at such place and time on the Closing Date as may be agreed to by the Parties hereto. The Closing Date shall be such date as is agreed upon by the Parties hereto, but shall be no later than February 28, 2025. Unless otherwise agreed to by each of the parties hereto, if Closing does not occur on or before February 28, 2025, this Agreement shall automatically be terminated and of no further force and effect except with respect to the provisions of Section 5.3 of this Agreement.
3.2. Closing Deliveries of Company. On or prior to the Closing Date, the Company shall deliver or cause to be delivered to the Seller a share certificate, or evidence of book entry deposit in the name of the Seller at the Company’s transfer agent, representing the Company Shares registered in the name of the Seller; and
3.3. Closing Deliveries of Seller. On or prior to the Closing Date, the Seller shall deliver or cause to be delivered to the Company the following:
(a) a bill of sale with respect to the sale, transfer and assignment of the Software to the Company in such form as may reasonably be requested by the Company;
(b) an intellectual property assignment, duly executed by the Seller; and
(c) such other documents and instruments as the Company may reasonably request.
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3.4. Conditions Precedent in Favor of Company. The obligations of the Company hereunder in connection with the Closing are subject to the following conditions precedent being met:
(a) the Company shall have completed its due diligence investigations into the Seller and the Software, and such other matters as it, in its sole discretion, deems relevant, and such investigations shall not have disclosed any matter that the Company, in its sole discretion, considers to be adverse to the completion of the transactions contemplated herein;
(b) each of the respective representations and warranties of the Seller contained in this Agreement or in any other certificate or document delivered by the Seller to the Company pursuant hereto shall be substantially true and correct as of the date hereof and as of the Closing Date with the same force and effect as though such representations and warranties had been made on and as of such date, regardless of the date as of which such information was given;
(c) all obligations, covenants and agreements of the Seller required to be performed at or prior to the Closing Date shall have been performed;
(d) at the Closing Date, there shall have been no materially adverse change in the status or condition of the Software or the rights of the Seller with respect thereto, or with respect to their ability to transfer the Software to the Company, except as may otherwise specifically contemplated hereunder.
3.5. Conditions Precedent in Favor of the Seller. The respective obligations of the Seller hereunder in connection with the Closing are subject to the following conditions being met:
(a) each of the respective representations and warranties of the Company contained in this Agreement or in any other certificate or document delivered by the Company to the Seller pursuant hereto shall be substantially true and correct as of the date hereof and as of the Closing Date with the same force and effect as though such representations and warranties had been made on and as of such date, regardless of the date as of which such information was given; and
(b) all obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date shall have been performed.
4. WARRANTIES, REPRESENTATIONS AND COVENANTS
4.1. Representations of Seller. The Seller represents, warrants and covenants to and with the Company as follows, and acknowledge that the Company is relying upon such representations, warranties covenants in entering into this Agreement and the transactions contemplated hereby:
(a) Seller is a corporation duly organized, validly existing and in good standing under the laws of its origin and has all requisite corporate power and authority to own, lease and to carry on its business as now being conducted. Seller is not in default of any of the provisions of its articles of incorporation, by laws or any other organizational or governing documents of Seller;
(b) Seller has all requisite corporate power and authority to execute and deliver this Agreement and the Transaction Documents to be signed by Seller and to perform all of its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement and each of the Transaction Documents to be signed by Seller and the consummation by Seller of the transactions contemplated hereby and thereby have been, or prior to the Closing Date, will be, duly authorized by Seller’s board of directors. No other corporate or shareholder proceedings on the part of Seller is or will be necessary to authorize such documents or to consummate the transactions contemplated hereby or thereby. This Agreement is, and the other Transaction Documents to be executed by Seller, when executed and delivered as contemplated herein or therein, will be duly and validly authorized, executed and delivered, and will be valid and binding obligations of Seller enforceable in accordance with their respective terms, except (1) as may be limited by any applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting the enforcement of creditors’ rights generally, (2) as may be limited by any applicable laws relating to the availability of specific performance, injunctive relief or other equitable remedies, and (3) as may be limited by public policy;
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(c) The Seller is the sole legal and beneficial owner of the Software free and clear of all Encumbrances, with good and marketable title thereto;
(d) The Seller has the right, power and authority to sell, assign and transfer the Software to the Company;
(e) No person has any right, agreement or option, or any right or privilege (whether legal, beneficial, court ordered, pre-emptive, contractual or otherwise) capable of becoming a right, agreement or option, for the purchase or acquisition, directly or indirectly, in or to the Software (or any portion thereof) or any rights to the Software (or any portion thereof);
(f) There are no bankruptcy proceedings pending, being contemplated by or threatened against the Seller;
(g) The Seller has not made, granted or entered into any assignment, encumbrance, license or other agreement affecting the Software (or any portion thereof);
(h) The entry by the Seller into this Agreement and each of the Transaction Documents to be executed by it, and the consummation of the transactions contemplated hereby and thereby, will not result in the violation of any term or provision of any instrument or agreement, written or oral, to which the Seller may be a party or to which the Software may be subject, and will not, to the best of the knowledge of the Seller, result in the violation of any applicable law or regulation to which the Seller or the Software may be subject;
(i) The Seller is not aware of any violation, infringement or misappropriation of any third party's rights (or any claim thereof) by the ownership, development, manufacture, sale or use of the Software (or any portion thereof);
(j) The use of the Software by the Seller has never given rise to any complaint alleging infringement of any patent, trademarks or other intellectual property rights of any other person;
(k) The Seller was not acting within the scope of employment of any third party when conceiving, creating or otherwise performing any activity with respect to the Software (or any portion thereof);
(l) There are no actions, suits, proceedings (whether or not purportedly on behalf of the Seller) or investigations, pending or, to the best of the Seller’s knowledge, threatened against or affecting any of the Seller or the Software which might result in the impairment or loss of the Seller’s rights, title or interests in or to the Software, or which might otherwise have a material adverse effect on the Software (including, but not limited to, any action, suit or proceeding which might prevent or otherwise impair the ability of the Seller to sell, assign, transfer and convey the Software to the Company), at law or in equity, or before or by any federal, state, municipal or other governmental department, commission, board, bureau, agency, court or instrumentality, domestic or foreign and the Seller is not aware of any existing ground on which any such action, suit or proceeding might be commenced with any reasonable likelihood of success;
(m) The Seller is not in material default or breach of any material contracts, agreements, written or oral, indentures or other instruments to which it is a party and which affect the Software or the ability of the Seller to sell, assign, transfer and convey the Software to the Company, and there are no facts, which, after notice or lapse of time or both, that would constitute such a default or breach;
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(n) The execution, delivery and performance of this Agreement by the Seller will not result in any violation of, or be in conflict with or constitute a default under (i) any judgment, decree, or order of any court, arbitrator or other governmental authority, or (ii) any statute, regulation, rule, ordinance or license of any governmental authority, including, without limitation, all foreign, federal, state and local laws applicable to the Seller or to which the Software may be subject;
(o) The Seller is not in default, and has not received any notice of default, with respect to any order, writ, injunction or decree of any court or of any commission or administrative agency, which might result in the impairment or loss of any of the Seller’s respective interests in and to the Software, or which might otherwise have a material adverse effect on the Software or impair the ability of the Seller to sell, assign, transfer and convey the Software to the Company;
(p) The Seller has made full disclosure to the Company of all aspects of the Software and has made all of its books and records available to the representatives of the Company in order to assist the Company in the performance of its due diligence searches and no material facts in relation to the Software have been concealed by the Seller; and
(q) At the request and cost of the Company, the Seller shall, before and after Closing, execute and deliver to the Company all documents, and will do all such other acts and things, as may be necessary or desirable to complete and ensure and perfect the sale, assignment, transfer and conveyance of the Software to the Company.
(r) No agent, broker, finder, investment banker, financial advisor or other similar Person will be entitled to any fee, commission or other compensation in connection with any of the transactions contemplated by this Agreement on the basis of any act or statement made or alleged to have been made by the Seller, any of its affiliates.
4.2. Representations of Company. The Company represents, warrants and covenants to and with the Seller as follows, and acknowledges that the Seller is relying upon such representations, warranties and covenants in entering into this Agreement and the transactions contemplated hereby:
(a) The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority to own, lease and to carry on its business as now being conducted. The Company is not in default of any of the provisions of its articles of incorporation, by laws or any other organizational or governing documents of the Company;
(b) The Company has all requisite corporate power and authority to execute and deliver this Agreement and the Transaction Documents to be signed by the Company and to perform all of its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement and each of the Transaction Documents to be signed by the Company and the consummation by the Company of the transactions contemplated hereby and thereby have been, or prior to the Closing Date, will be, duly authorized by the Company’s board of directors. No other corporate or shareholder proceedings on the part of the Company are or will be necessary to authorize such documents or to consummate the transactions contemplated hereby or thereby. This Agreement is, and the other Transaction Documents to be executed by the Company, when executed and delivered as contemplated herein or therein, will be duly and validly authorized, executed and delivered, and will be valid and binding obligations of the Company enforceable in accordance with their respective terms, except (1) as may be limited by any applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting the enforcement of creditors’ rights generally, (2) as may be limited by any applicable laws relating to the availability of specific performance, injunctive relief or other equitable remedies, and (3) as may be limited by public policy;
(c) The entering into of this Agreement and the Transaction Documents, and the consummation of the transactions contemplated hereby and thereby, will not result in the violation of any of the terms or provisions of the constating documents or bylaws of the Company or of any indenture, instrument or agreement, written or oral, to which the Company may be a party;
(d) The entering into of this Agreement and the consummation of the transactions contemplated hereby will not, to the best of the Company’s knowledge, result in the violation of any law or regulation of the United States, or of any local government bylaw or ordinance to which the Company or the Company's business may be subject;
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5. ADDITIONAL COVENANTS OF THE PARTIES
5.1. Assistance with Securities Law Disclosures. The Seller agrees to provide the Company with such information regarding the Seller and the Software as the Company may reasonably request for the purpose of preparing such reports, schedules, forms, statements or other documents required to be filed, furnished or disclosed by the Company with respect to, or in anticipation of Closing of, the transactions contemplated in the Transaction Documents under the under the provisions of the US Securities Act or the US Exchange Act, as applicable, and the Seller further agrees to provide the Company with reasonable assistance in the preparation of such reports, schedules, forms, statements or other documents.
5.2. Due Diligence. Upon the execution of this Agreement by the parties hereto, the Seller shall make available to the Company and the Company’s authorized representatives copies of all patents, Know-How, Intellectual Property or other agreements or documents relating to the Software or to which the Software is subject, together with such other information or documentation as the Company may reasonably request for the purpose of conducting its due diligence investigations hereunder.
5.3. Confidential Information. Prior to Closing of the transactions contemplated herein, the Seller and the Company may have access to material non-public information owned by the other (“Confidential Information”). Each of the parties hereto agree to keep all such Confidential Information confidential in accordance with reasonable industry practices and shall only make such information available to its employees, agents, consultants and advisors as may be necessary to complete the transactions contemplated herein. Each of the parties further agree not to use any Confidential Information of any other party for any purpose other than the pursuit of the transactions contemplated herein. Confidential Information shall not include any information that was known by the other party prior to its disclosure or is or becomes public knowledge through no fault of the receiving party, or is rightfully received by the receiving party from a source other than a party to this Agreement. Any Confidential Information provided by a party to this agreement to another party to this Agreement, and any derivatives thereof, whether created by the disclosing party or the recipient party, shall remain the property of the disclosing party.
5.4. Non-Compete. The Parties agree that the competitive use and knowledge of any Confidential Information would substantially and irreparably injure the Company’s business, prospects and good will. The Parties also agree that the Company’s business is global in nature due to the type of products and/or services being provided. Therefore, Seller agrees that for a period of twelve (12) months following Closing, Seller shall not, directly or indirectly, through any other person, firm, corporation or other entity (whether as an officer, director, consultant, partner, consultant, holder of equity or debt investment, lender or in any other manner or capacity):
(a) develop, sell, market, offer to sell products and/or services where the Company markets its business that have the same or similar technological approach or technology platform, offered or sold by the Company;
(b) solicit, induce, encourage or attempt to induce or encourage any employee or consultant of the Company to terminate his or her employment or consulting relationship with the Company or to breach any other obligation to the Company;
(c) solicit, interfere with, disrupt, alter or attempt to disrupt or alter the relationship, contractual or otherwise, between the Company and any consultant, contractor, customer, potential customer, or supplier of the Company; or
(d) engage in or participate in any business in the same industry as the Company which is conducted under any name that shall be the same as or similar to the name of the Company or any trade name used by the Company.
Seller acknowledges that the foregoing geographic, activity and time limitations contained in this Section are reasonable and properly required for the adequate protection of the Company’s business. In the event that any such geographic, activity or time limitation is deemed to be unreasonable by a court, the Seller shall submit to the reduction of either said activity or time limitation to such activity or period as the court shall deem reasonable. In the event that Seller is in violation of the aforementioned restrictive covenants, then the time limitation thereof shall be extended for a period of time equal to the pendency of such proceedings, including appeals.
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6. INDEMNITY. The Seller agrees to indemnify, defend and hold the Company, and each of their officers, directors, employees, agents, attorneys and consultants, harmless from and against any and all Losses (as hereinafter defined) arising out of or resulting from the breach by the Seller of any representation, warranty, covenant or agreement of the Seller contained in this Agreement or the schedules and exhibits hereto. The term “Losses” shall mean all damages, costs and expenses (including reasonable attorneys’ fees) of every kind, nature or description, it being the intent of the parties that the amount of any such Loss shall be the amount necessary to restore the indemnified party to the position it would have been in (economically or otherwise), including any costs or expenses incident to such restoration, had the breach, event, occurrence or condition occasioning such Loss never occurred.
7. SECURITIES PROVISIONS
7.1. The Seller acknowledges and agrees that the Company Shares are “restricted securities” within the meaning of the U.S. Securities Act and will be issued to the Seller in accordance with Regulation D of the U.S. Securities Act. Any certificates representing the Company Shares will be endorsed with the following legend in accordance with Regulation D of the U.S. Securities Act:
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND HAVE BEEN ISSUED IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT PROVIDED BY REGULATION D PROMULGATED UNDER THE ACT. SUCH SECURITIES MAY NOT BE REOFFERED FOR SALE OR RESOLD OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION D, PURSUANT TO AN EFFECTIVE REGISTRATION UNDER THE ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE ACT. HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE ACT”.
7.2. The Seller agrees not to reoffer, resell, transfer or dispose the Company Shares unless such reoffer, resale, transfer or disposition is made pursuant to an effective registration under the U.S. Securities Act and any applicable state securities laws, or pursuant to an available exemption from the registration requirements of the U.S. Securities Act, and any applicable state securities laws. The Seller further agrees that the Company may refuse to register any resale or transfer of the Company Shares not made pursuant to an effective registration under the U.S. Securities Act and any applicable state securities law or pursuant to an available exemption from the registration requirements of the U.S. Securities Act.
7.3. The Seller covenants, represents and warrants to the Company as follows, and acknowledges that the Company is relying upon such covenants, representations and warranties in connection with the sale of the Company Shares to the Seller:
(a) An investment in the Company’s securities is highly speculative, and the Seller is an investor in securities of companies in the development stage and acknowledges that it is able to fend for itself, can bear the economic risk of his investment, has such knowledge and experience in financial or business matters such that he is capable of evaluating the merits and risks of the investment in the securities of the Company.
(b) The Seller can bear the economic risk of an investment in the securities of the Company.
(c) The Seller has had full opportunity to review the Company’s filings with the SEC, including the Company’s annual reports on Form 10-K, quarterly reports on Form 10-Q, Current Reports on Form 8-K and additional information regarding the business and financial condition of the Company. The Seller believes it has received all the information it considers necessary or appropriate for deciding whether to purchase the Company Shares. The Seller further represents that it has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of the Company Shares under this Agreement and the business, properties, prospects and financial condition of the Company. The Seller has had full opportunity to discuss this information with the Seller’s legal and financial advisers prior to execution of this Agreement.
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(d) The Seller acknowledges that it has been informed that the offering of the Company Shares by the Company has not been reviewed by the SEC or any other regulatory body and that the Company Shares are being issued by the Company pursuant to an exemption from registration under the Securities Act and any applicable state securities laws.
(e) The Seller understands that the Company Shares will be "restricted securities" under the U.S. Securities Act and the rules and regulations promulgated thereunder as they are being acquired from the Company in a transaction not involving a public offering and that under such laws and applicable regulations such securities may be resold without registration under the U.S. Securities Act only in certain limited circumstances. In this connection, the Seller represents that it is familiar with SEC Rule 144, as presently in effect, and understands the resale limitations imposed thereby and by the U.S. Securities Act and the rules and regulations promulgated thereunder.
(f) The Seller acknowledges that the Company is in the early stages of development of its business and may require substantial funds in the near future in order to continue as a going concern.
(g) The Seller is not aware of any general solicitation or advertisement of the Company Shares.
8. GENERAL PROVISIONS
8.1. Entire Agreement. This Agreement, together with the other Transaction Documents, including the exhibits and schedules hereto and thereto, contain the entire understanding of the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral or written, with respect to such matters.
8.2. Amendments. Neither this Agreement nor any provision hereof may be amended, waived, discharged or terminated orally, but only by an instrument in writing signed by the party against whom enforcement of the amendment, waiver, discharge or termination is sought.
8.3. Survival. All covenants, agreements, representations and warranties on the part of each of the parties, notwithstanding any investigations or enquiries made by any of the parties prior to the date hereof or the waiver of any condition by any of the parties, shall survive for a period ending on the one (1) year anniversary of the Closing Date.
8.4. Action on Business Day. If the date upon which any act or payment hereunder is required to be done or made falls on a day which is not a business day, then such act or payment shall be performed or made on the first business day next following.
8.5. Severability. If any one or more of the provisions of this Agreement should be invalid, illegal or unenforceable in any respect in any jurisdiction, the validity, legality or enforceability of such provision shall not in any way be affected or impaired thereby in any other jurisdiction and the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby.
8.6. Successors and Assigns. This Agreement shall enure to the benefit of and be binding upon all parties hereto and their respective heirs, personal representatives, successors and assigns, as the case may be.
8.7. Governing Law. This Agreement shall be governed by and be construed in accordance with the laws of the State of Delaware the Parties hereto agree to submit to the jurisdiction of the courts of Los Angeles, California with respect to any legal proceedings arising herefrom.
8.8. Time. Time is of the essence of this Agreement.
8.9. Headings. The headings are inserted solely for convenience of reference and shall not be deemed to restrict or modify the meaning of the Articles to which they pertain.
8.10. Counterparts. This agreement may be executed in one or more counterparts, each of which so executed shall constitute an original and all of which together shall constitute one and the same agreement.
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IN WITNESS WHEREOF, the parties have duly executed and delivered this Agreement as of the date first written above.
NEXSCIENT, INC.
/s/ Fred E. Tannous
Name: Fred E. Tannous
Title: President & CEO
I2 ANALYTICS, INC.
/s/ Edward Morales
Name: Edward Morales
Title: Managing Director
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EXHIBIT A
DESCRIPTION OF SOFTWARE
AI Media Toolkit is a powerful SaaS platform that allows create users to use sophisticated OpenAI Generative Artificial Intelligence (AI) technology to generate various text content and other media content in more than 53 language using latest GPT-3.5-Turbo, GPT-4 models. Allows to automatically generate blog articles, website copy, landing pages and digital ads for various business applications to boost online traffic and productivity.
Users can also generate AI Images by describing the image via OpenAI DALL-E-2 / DALL-E-3 / DALL-E-3 HD and Stable Diffusion (by Stability.ai) solutions. AI Toolkit has a powerful backend admin panel that allows control the kind of OpenAI Models (GPT4 Turbo, GPT4 Vision, GPT4, GPT3 Turbo) for each user group. With the AI Code feature, users can generate code in any programming language with the help of the AI.
Also includes an AI Chat Bot system which allows users to ask any questions and get any result and comes with 42 AI Chat Bots by default. Users can create unlimited Chat Bots with the help of the new OpenAI Assistant feature. Additionally, users can create transcriptions of audio and video files with the Speech-to-Text feature via the OpenAI Whisper model.
Additional features include the ability to generate AI Voiceovers with more than 1,700 voices and 150 languages and dialects, where one can combine up to 20 voices from different TTS vendors in a single task, and synthesize text up to 100,000 characters. All these features are powered by leading cloud service providers, including ElevenLabs, OpenAI TTS, Microsoft Azure, AWS Polly and Google Cloud Platform. AI Media Toolkit also offers the ability to create granular subscription plans that include precise models and various feature settings.
AI Media Toolkit software application purchase includes the source code, object code, components and tools. AI Media Toolkit also facilities links to multiple payment processors.
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EXHIBIT B
BILL OF SALE
Know all persons by these present:
i2 Analytics, Inc. (the “Seller”), in consideration of one hundred thirty five thousand dollars and no cents ($135,000.00), represented by a combination of cash and shares of Nexscient common stock (OTCQB: NXNT), and other good and valuable consideration, receipt and sufficiency of which are hereby acknowledged, does hereby sell, assign, transfer and set over to Nexscient, Inc., a Delaware corporation, (“Buyer”), all of Seller’s right, title and interest in and to the software and other tangible personal property described on Exhibit A of the Software Purchase Agreement, made a part hereof (all of such personal property is hereinafter collectively referred to as the “Software”) except to the extent that such equipment is specifically excluded therein.
Seller hereby represents and warrants to Buyer that Seller is the absolute owner of the Software; that the Software is free and clear of all liens, charges and encumbrances, and that Seller has full right, power and authority to sell the Software and to make this Bill of Sale.
THE PARTIES AGREE THAT THE SOFTWARE SOLD, CONVEYED, TRANSFERRED AND ASSIGNED HEREBY IS SOLD AND CONVEYED ON AN "AS IS, WHERE IS" BASIS AND THAT THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE AND ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, ARE EXCLUDED FROM THIS TRANSACTION AND SHALL NOT APPLY TO THE GOODS SOLD. BUYER ACKNOWLEDGES THAT SELLER SHALL NOT BE LIABLE FOR ANY INCIDENTAL, SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT LIMITED TO, LOSS OF USE OR LOSS OF PROFITS INCURRED BY BUYER IN CONNECTION WITH OR RELATING TO THE PURCHASE OF THE SOFTWARE PURSUANT TO THIS AGREEMENT OR THE USE OF THE SOFTWARE. THE PARTIES AGREE THAT, TO THE EXTENT REQUIRED BY LAW, THE DISCLAIMERS CONTAINED HEREIN ARE "CONSPICUOUS" DISCLAIMERS FOR THE PURPOSE OF ANY LAW, RULE OR ORDER.
IN WITNESS WHEREOF, Seller has caused this Bill of Sale to be duly executed by its officer thereunto duly authorized this 13th day of February 2025.
I2 ANALYTICS, INC.
/s/ Edward Morales
Name: Edward Morales
Title: Managing Director
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EXHIBIT C
INTELLECTUAL PROPERTY ASSIGNMENT AGREEMENT
This Intellectual Property Assignment Agreement (the “Assignment”), dated as of February 13, 2025, is by and between i2 Analytics, Inc. (the “Assignor”) and Nexscient, Inc. (the “Assignee”). Assignor and Assignee are sometimes referred to herein individually as a “Party” and collectively as the “Parties.”
WHEREAS, Assignor and Assignee are parties to a certain Software Purchase Agreement of even date herewith (the “Purchase Agreement”), pursuant to which, among other things, Assignor agreed to sell and Assignee agreed to purchase certain assets of Assignor;
WHEREAS, it is a condition to the Closing of the Purchase Agreement that Assignor enters into this Assignment; and
WHEREAS, Assignee desires to acquire all Assignor’s right, title and interest in and to the Intellectual Property;
NOW, THEREFORE, in consideration of, among other things, the Consideration provided for in the Purchase Agreement and in further consideration of the mutual covenants and agreements contained in the Purchase Agreement, the receipt and sufficiency of which are hereby acknowledged, Assignor and Assignee agree as follows:
1. Capitalized terms unless otherwise stated are defined in the Purchase Agreement.
2. Assignment of Domain Names. Effective as of the date of Closing provided for in the Purchase Agreement, Assignor sells, transfers, conveys, assigns and delivers to Assignee and Assignee accepts all right, title and interest of Assignor in and to the websites, domain names and registrations held by Assignor related to the Software (the “Assigned Domain Names”).
3. Transfer of Intellectual Property. Effective as of the date of Closing provided for in the Purchase Agreement, Assignor sells, transfers, conveys, assigns and delivers to Assignee and Assignee accepts all Intellectual Property related to the Software.
4. Relationship with the Purchase Agreement. This Assignment is intended to evidence the consummation of the transactions contemplated by the Purchase Agreement. This Assignment is in all respects subject to the provisions of the Purchase Agreement and is not intended in any way to supersede, limit or qualify any provision of the Purchase Agreement.
5. Further Assurances. If a certain number of Assigned Domain Names and Intellectual Property were not duly endorsed in favor of Assignor following the relevant purchase or acquisition by, or transfer or assignment to, the same, Assignor hereby undertakes to give to Assignee all assistance reasonably necessary to the end of finalizing endorsements contemplated by this Assignment in favor of Assignee even, where necessary, by appointing an attorney-in- fact duly empowered to carry out all the actions necessary for such purpose.
6. Successors. This Assignment shall inure to the benefit of and is binding upon the respective successors and assigns of Assignor and Assignee.
7. Governing Law. This Assignment shall be governed by and construed in accordance with (i) the laws of the United States, in respect to intellectual property issues, where applicable, and (ii) in all other respects, including as to validity, interpretation and effect, by the laws of the State of Delaware without giving effect to the conflict of laws rules thereof.
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IN WITNESS WHEREOF, Assignor and Assignee caused this Assignment to be duly executed as of the date first written above.
NEXSCIENT, INC.
/s/ Fred E. Tannous
Name: Fred E. Tannous
Title: President & CEO
I2 ANALYTICS, INC.
/s/ Edward Morales
Name: Edward Morales
Title: Managing Director
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EXHIBIT D
WIRE TRANSFER INSTRUCTIONS
Buyer must make payments pursuant to Software Purchase Agreement to Seller through electronic wire transfer. The following described instructions for payment of funds by wire transfer:
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EXHIBIT 31.1
CERTIFICATION OF
PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO SECTION 302(a) OF THE SARBANES-OXLEY ACT OF 2002
I, Fred E. Tannous, certify that:
| 1. | I have reviewed this Annual Report on Form 10-K of the Registrant for the period ended June 30, 2025; |
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| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
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| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report; |
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| 4. | As the Registrant’s certifying officer, I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have: |
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| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
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| b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
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| c. | Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
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| d. | Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and |
| 5. | As the Registrant’s certifying officer, I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant auditors and the audit committee of the Registrant’s Board of Directors (or persons performing the equivalent functions): |
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| a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and |
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| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting. |
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| Nexscient, Inc. | ||
| Date: September 30, 2025 | By: | /s/ Fred E. Tannous |
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| Name: | Fred E. Tannous |
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| Title: | Chief Executive Officer (Principal Executive Officer) | |
EXHIBIT 31.2
CERTIFICATION OF
PRINCIPAL ACCOUNTING OFFICER
PURSUANT TO SECTION 302(a) OF THE SARBANES-OXLEY ACT OF 2002
I, Michael J. Portera, certify that:
| 1. | I have reviewed this Annual Report on Form 10-K of the Registrant for the period ended June 30, 2025; |
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| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
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| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report; |
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| 4. | As the Registrant’s certifying officer, I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have: |
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| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
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| b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
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| c. | Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
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| d. | Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and |
| 5. | As the Registrant’s certifying officer, I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant auditors and the audit committee of the Registrant’s Board of Directors (or persons performing the equivalent functions): |
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| a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and |
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| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting. |
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| Nexscient, Inc. | ||
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| Date: September 30, 2025 | By: | /s/ Michael J. Portera |
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| Name: | Michael J. Portera |
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| Title: | Chief Financial Officer (Principal Accounting Officer) |
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EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Nexscient, Inc. (the “Company”) on Form 10-K for the annual period ended June 30, 2025, as filed with the Securities and Exchange Commission (the “Report”), the undersigned Fred E. Tannous, Chief Executive Officer (Principal Executive Officer) of the Company, certify, pursuant to 18 U.S.C. §1350, as added by §906 of the Sarbanes-Oxley Act of 2002, that:
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| (1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
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| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period covered by the Report. |
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| Nexscient, Inc. | ||
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| Date: September 30, 2025 | By: | /s/ Fred E. Tannous |
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| Name: | Fred E. Tannous |
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| Title: | Chief Executive Officer (Principal Executive Officer) |
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EXHIBIT 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Nexscient, Inc. (the “Company”) on Form 10-K for the annual period ended June 30, 2025, as filed with the Securities and Exchange Commission (the “Report”), the undersigned Michael J. Portera, Chief Financial Officer (Principal Accounting Officer) of the Company, certify, pursuant to 18 U.S.C. §1350, as added by §906 of the Sarbanes-Oxley Act of 2002, that:
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| (1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
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| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period covered by the Report. |
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| Nexscient, Inc. | ||
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| Date: September 30, 2025 | By: | /s/ Michael J. Portera |
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| Name: | Michael J. Portera |
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| Title: | Chief Financial Officer (Principal Accounting Officer) | |