ONAR 10-K/A
Onar Holding Corp (ONAR)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Amendment No. 1)
(Mark One)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from: _____________to______________
Commission File Number:
(Exact name of registrant as specified in its charter) |
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(State or Other Jurisdiction of Incorporation or Organization) |
| (I.R.S. Employer Identification No.) |
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(Address of Principal Executive Offices) |
| (Zip Code) |
Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act: None.
Securities registered pursuant to Section 12(g) of the Act:
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted 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 files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☐ |
☒ | Smaller reporting company | ||
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
The aggregate market value of the voting and non-voting common stock held by non-affiliates of the registrant as of the last business day of the registrant’s most recently completed second fiscal quarter was approximately $
As of April 8, 2025, there were 111,002,035 shares of common stock issued and outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
None.
EXPLANATORY NOTE
ONAR Holding Corporation (the “Company”) is filing this Amendment No. 1 on Form 10-K/A (this “Amendment”) to amend the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (the “Original Form 10-K”), originally filed with the Securities and Exchange Commission (the “SEC”) on April 15, 2025, solely to correct a typographical error in the Report of Independent Registered Public Accounting Firm ( the “Audit Report”) from WWC, P.C. (“WWC”).
The Audit Report is being amended to revise the last sentence in the Basis for Opinion paragraph of the Audit Report from “Our audits also included evaluating the accounting principles used and significant estimates” to “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.” This Amendment revises the Audit Report to include the full text of the sentence.
Other than as expressly set forth above and herein, this Amendment does not, and does not purport to, amend, update or restate any other items or disclosures included in the Original Form 10-K or reflect any events occurring after April 15, 2025. No other changes have been made to the Original Form 10-K, including the consolidated financial statements, notes thereto, or any other sections of the Original Form 10-K.
In accordance with Rule 12b-15 of the Securities Exchange Act of 1934, as amended, this Amendment also contains new certifications required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002, as amended, dated as of the filing date of this Amendment. These updated certifications are attached as Exhibits 31.1/31.2 and 32.1/32.2 to this Amendment.
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TABLE OF CONTENTS
PART II |
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| Table of Contents |
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA
TABLE OF CONTENTS TO FINANCIAL STATEMENTS
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| F-1 |
| Table of Contents |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To:
The Board of Directors and Stockholders of
Onar Holding Corporation
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheet of Onar Holding Corporation (the “Company”) as of December 31, 2024, and the related consolidated statement of operations, stockholders’ deficit, and cash flows for the year ended December 31, 2024, 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 December 31, 2024, and the results of its operations and its cash flows the year ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.
Substantial Doubt about the Company’s Ability to Continue as a Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has suffered recurring losses from operations and has a working capital deficit that raises substantial doubt about its ability to continue as a going concern. Management's plans with regards to these matters are also described in Note 1. 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 audit 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, audits of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal controls over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal controls 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.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Valuation of Goodwill
Description of the Matter
As disclosed in Note 1 to the consolidated financial statements, the Company reviewed the carrying value of goodwill annually and whenever events or changes in circumstances indicate that impairment may have occurred. The Company’s goodwill totaled $458,335 as of December 31, 2024. We identified the auditing of the valuation of goodwill as a critical audit matter because it represents a significant portion of the Company’s total assets, and it requires complex and a significant amount of judgment to evaluate management’s assumptions, including the method used to allocate the goodwill to a reporting unit (“the reporting unit”), the Company’s assessment over the qualitative factors to determine whether the carrying value of reporting unit exceeded their fair value.
| F-2 |
| Table of Contents |
The primary procedures we performed to address this critical audit matter included the following, among others:
| · | We obtained an understanding of the process utilized by the Company’s management to evaluate the fair value of the reporting unit. |
| · | We tested the Company’s process and evaluated the reasonableness of the qualitative factors that management used in its analysis, including the management’s historical performance at the reporting unit level, and market and industry overall trends. |
/s/
Certified Public Accountants
PCAOB ID:
We have served as the Company’s auditor since 2024.
April 15, 2025
| F-3 |
| Table of Contents |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Member of Integrum Group LLC
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheet of Integrum Group LLC (the Company) as of December 31, 2023 and the related consolidated statement of operations, member’s equity, and cash flows for the year 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 December 31, 2023, and the results of its operations and its cash flows the year then ended, in conformity with accounting principles generally accepted in the United States of America.
Explanatory paragraph – Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 “Going Concern” to the financial statements, the Company has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1 “Going Concern”. 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 consolidated financial statements based on our audit. 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 audit in accordance with the standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit 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 audit, 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 audit 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 audit 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 audit provides a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. We determined that there were no critical audit matters.
Farber Hass Hurley LLP
We have served as the Company’s auditor since 2024. Oxnard, CA
January 31, 2025
| F-4 |
| Table of Contents |
ONAR HOLDING CORPORATION
CONSOLIDATED BALANCE SHEETS
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ASSETS |
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Current assets: |
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Cash |
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Accounts receivable, net |
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Investments in equity securities |
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Investments in equity securities, related party |
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Total current assets |
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Other assets: |
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Intangible Assets, customer relationships, net |
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Goodwill |
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Accounts receivable, related party, net |
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Employee loan receivable, net |
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Advance to affiliated entity |
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Right of use asset |
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Total other assets |
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Total assets |
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LIABILITIES AND EQUITY | ||||||||
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Current liabilities: |
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Accounts payable |
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Accrued expenses and other liabilities |
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Lines of credit |
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Deferred revenue |
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Contract liabilities |
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Accrued expenses and advances, related party |
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Lease liability |
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Notes payable |
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Notes payable, related party |
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Total current liabilities and total liabilities |
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Commitments and contingencies (Note 7) |
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Stockholders’ Equity (Deficit): |
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Accumulated deficit |
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Total stockholders’ deficit |
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Total liabilities and stockholders’ deficit |
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*Shares and per share data are presented on a retroactive basis to give effect to the reverse recapitalization.
The accompanying notes are an integral part of these consolidated financial statements.
| F-5 |
| Table of Contents |
ONAR HOLDING CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023
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Revenue (including $81,955 and $606,000 of related party revenue, respectively, Note 5) |
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Gross profit (loss) |
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Operating expenses: |
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General and administrative |
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Depreciation and amortization |
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Total operating expenses |
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Loss from operations |
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Other (income) expense: |
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Interest expense |
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Change in fair value of investments |
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Net loss per share - basic and diluted |
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The accompanying notes are an integral part of these consolidated financial statements.
| F-6 |
| Table of Contents |
ONAR HOLDING CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023
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Balance December 31, 2022 - Pre reverse merger |
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Effect of reverse merger (Note 2) |
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Balance December 31, 2022 - Post reverse merger |
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Contributions by members of HLDCO |
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Distributions to members of HLDCO |
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Net loss |
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Balance December 31, 2023 |
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Contributions by members of HLDCO |
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| - |
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| - |
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| - |
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| - |
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| - |
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Distributions to members of HLDCO |
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| - |
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| - |
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| - |
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| - |
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| - |
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Consideration transferred for acquisition of HLDCO |
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| - |
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| - |
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| - |
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| - |
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Conversion of preferred shares |
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| - |
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| ( | ) |
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| ( | ) |
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| - |
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Issuance of shares upon issuance of replacement notes payable |
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| - |
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| - |
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| - |
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| - |
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Net loss |
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| - |
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| - |
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| - |
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| - |
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| - |
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Balance December 31, 2024 |
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| $ |
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| $ |
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| $ |
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| - |
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| $ |
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| $ |
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| $ |
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| ( | ) |
| $ |
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| $ | ( | ) | |||||||||||
*Shares and per share data are presented on a retroactive basis to give effect to the reverse recapitalization.
The accompanying notes are an integral part of these consolidated financial statements.
| F-7 |
| Table of Contents |
ONAR HOLDING CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023
|
| 2024 |
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| 2023 |
| ||
Operating Activities |
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Net loss |
| $ | ( | ) |
| $ | ( | ) |
Adjustments to reconcile net loss to net cash used in operating activities: |
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Depreciation and amortization |
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Amortization of employee loan receivable |
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Lease expense |
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Change in fair value of investment in equity securities |
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| ( | ) |
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Expenses paid directly from proceeds of note payable |
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Expenses paid by members |
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Allowance for credit losses |
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Loss on extinguishment of notes payable |
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Changes in operating assets and liabilities: |
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Accounts receivable |
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| ( | ) |
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| ( | ) |
Accounts receivable, related party |
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| ( | ) | ||
Prepaid expenses and other assets |
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| ( | ) |
|
| ( | ) |
Accounts payable |
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| ( | ) | |
Accrued expenses and other liabilities |
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Accrued expenses and advances, related party |
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Deferred revenue |
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| ( | ) | |
Customer contracts |
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Net cash provided by (used in) operating activities |
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Investing Activities |
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Purchase of property and equipment |
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| ( | ) |
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| |
Cash acquired on acquisition of Reliant Holdings, Inc. |
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Loan receivable |
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| ( | ) | |
Advance to affiliate |
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| ( | ) |
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| |
Acquisition of intangible assets |
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| ( | ) | |
Net cash used in investing activities |
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| ( | ) |
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Financing Activities |
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Proceeds from issuance of notes payable |
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Repayment of notes payable |
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| ( | ) |
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| |
Proceeds from issuance of notes payable, related party |
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Repayment of notes payable, related party |
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| ( | ) |
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Repayment of advances, to related party |
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| ( | ) |
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Advances, to related party |
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Advances from member of HLDCO, the legal acquiree |
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Repayment of advances from member of HLDCO, the legal acquiree |
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| ( | ) | |
Repayment of line of credit |
|
| ( | ) |
|
| ( | ) |
Proceeds from line of credit |
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| |||
Distributions to members of HLDCO, the legal acquiree |
|
| ( | ) |
|
| ( | ) |
Contributions from members of HLDCO, the legal acquiree |
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| ||
Net cash provided financing activities |
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Net change in cash |
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| ( | ) | |
Cash - beginning of year |
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Cash - end of year |
| $ |
|
| $ |
| ||
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Supplemental cash flow disclosures | ||||||||
Interest paid |
| $ |
|
| $ |
| ||
Income taxes paid |
| $ |
|
| $ |
| ||
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Supplemental disclosure of non-cash investing and financing activities | ||||||||
Recognition of right of use asset and lease liability |
| $ |
|
| $ |
| ||
Contribution of accrued guaranteed payments to member to capital |
| $ |
|
| $ |
| ||
Intangible assets acquired through accounts payable |
| $ |
|
| $ |
| ||
Cash acquired on acquisition of Reliant Holdings, Inc. |
| $ |
|
| $ |
| ||
Investment in equity securities received in settlement of accounts receivables, related party |
| $ | |
|
| $ | |
|
Investment in equity securities received for services |
| $ | |
|
| $ | |
|
Conversion of preferred stock to common stock |
| $ |
|
| $ |
| ||
The accompanying notes are an integral part of these consolidated financial statements.
| F-8 |
| Table of Contents |
ONAR Holding Corporation
Notes to the Consolidated Financial Statements
Note 1. The Company and Summary of Significant Accounting Policies
The Company
ONAR Holding Corporation (the “Company”) was formed as a Nevada corporation under the name Reliant Holdings, Inc. on May 19, 2014. On May 23, 2014, Reliant Holdings, Inc., along with Reliant Pools, Inc., formerly Reliant Pools, G.P., which was formed in September 2013 (“Reliant Pools”) and the shareholders of Reliant Pools, entered into an Agreement for the Exchange of common stock whereby Reliant Pools, Inc. became a wholly-owned subsidiary of Reliant Holdings, Inc. Reliant Holdings, Inc. designs, and installs swimming pools.
On July 25, 2024, the Company acquired HLDCO, LLC (“HLDCO”) and its subsidiary Integrum Group LLC (“Integrum”) through a reverse merger where the shareholders of HLDCO entered into an Agreement to Contribute the membership interests of HLDCO to the Company in return for common stock of the Company, whereby HLDCO became a wholly-owned subsidiary of Reliant Holdings Inc. Integrum was formed in July 2021 as a Delaware entity and is currently headquartered in Los Angeles, California. Integrum specializes in marketing solutions through a technology-enabled independent marketing agency brand network. Its services span various industries, including performance digital marketing, healthcare industry marketing, and experiential marketing.
On August 23, 2024, the Company filed with the Secretary of State for Nevada a Certificate of Amendment to the Articles of Incorporation, changing its name to ONAR Holding Corporation.
On September 12, 2024, Integrum filed a certificate of amendment to its certificate of formation with the Delaware Secretary of State, pursuant to which it changed its corporate name from Integrum Group, LLC to ONAR, LLC.
On September 17, 2024, the Company filed a Certificate of Cancelation of Limited Liability Company for HLDCO with the Secretary of State of Delaware to dissolve HLDCO, leaving ONAR, LLC as the Company's wholly owned subsidiary.
Going Concern
The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. The Company has incurred losses since inception, has negative working capital and has not generated positive cash flows from operations since inception. The Company generated a loss of $
The Company’s ability to continue in existence is dependent on its ability to develop additional sources of capital, and/or achieve profitable operations and positive cash flows. Management’s plans with respect to operations include aggressive marketing and raising additional capital through sales of equity or debt securities as may be necessary to pursue its business plans and sustain operations until such time as the Company can achieve profitability. Management believes that aggressive marketing combined additional financing, as necessary, will result in improved operations and cash flows in the future. However, there can be no assurance that management will be successful in obtaining additional funding or in attaining profitable operations. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.
| F-9 |
| Table of Contents |
Use of Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from estimates.
Revenue Recognition
The Company accounts for revenue in accordance with Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codifications (“ASC”) 606, ‘Revenue from Contracts with Customers’ (“ASC 606”).
A performance obligation is a promise in a contract to transfer a distinct good or service to the client and is the unit of accounting in ASC 606. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation based on the relative standalone selling price. Determining relative standalone selling price and identifying separate performance obligations requires judgment. Contract modifications may occur in the performance of the Company’s contracts. Contracts may be modified to account for changes in the contract specifications, requirements or duration. If a contract modification results in the addition of performance obligations priced at a standalone selling price or if the post-modification services are distinct from the services provided prior to the modification, the modification is accounted for separately. If the modified services are not distinct, they are accounted for as part of the existing contract.
Pool Sale Revenues
Performance Obligations
The Company’s contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts and, therefore, not distinct.
Performance Obligations Satisfied Over Time
Performance Obligations Satisfied at a Point in Time
Revenue for The Company’s contracts that do not satisfy the criteria for over time recognition is recognized at a point in time. Substantially all of The Company’s revenue recognized at a point in time is for work performed for pool maintenance or repairs. Unlike The Company’s construction contracts that use a cost-to-cost input measure for performance, the pool maintenance or repairs utilize an output measure for performance based on the completion of a unit of work. The typical time frame for completion of these services is less than one month. Upon fulfillment of the performance obligation, the customer is provided with an invoice (or equivalent) demonstrating transfer of control or completion of service to the customer. We believe that point in time recognition remains appropriate for these contracts and will continue to recognize revenues upon completion of the performance obligation and the issuance of an invoice.
Contract modifications are routine in the performance of The Company’s contracts. Contracts are often modified to account for changes in the contract specifications or requirements. In most instances, contract modifications are for goods or services that are not distinct, and, therefore, are accounted for as part of the existing contract.
| F-10 |
| Table of Contents |
Backlog
On December 31, 2024, we had approximately $
Contract Estimates
Accounting for long-term contracts and programs involves the use of various techniques to estimate total contract revenue and costs. For long-term contracts, we estimate the profit on a contract as the difference between the total estimated revenue and expected costs to complete a contract and recognize that profit over the life of the contract.
Contract estimates are based on various assumptions to project the outcome of future events. These assumptions include labor productivity and availability, the complexity of the work to be performed, the cost and availability of materials, and the performance of subcontractors.
Variable Consideration
Transaction price for The Company’s contracts may include variable consideration, which includes increases to transaction price for approved and unapproved change orders, claims and incentives, and reductions to transaction price for liquidated damages. Change orders, claims and incentives are generally not distinct from the existing contract due to the significant integration service provided in the context of the contract and are accounted for as a modification of the existing contract and performance obligation. We estimate variable consideration for a performance obligation at the most likely amount to which we expect to be entitled (or the most likely amount we expect to incur in the case of liquidated damages), utilizing estimation methods that best predict the amount of consideration to which we will be entitled (or will be incurred in the case of liquidated damages). We include variable consideration in the estimated transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur or when the uncertainty associated with the variable consideration is resolved. The Company’s estimates of variable consideration and determination of whether to include estimated amounts in transaction price are based largely on an assessment of The Company’s anticipated performance and all information (historical, current and forecasted) that is reasonably available to us. The effect of variable consideration on the transaction price of a performance obligation is recognized as an adjustment to revenue on a cumulative catch-up basis. To the extent unapproved change orders and claims reflected in transaction price (or excluded from transaction price in the case of liquidated damages) are not resolved in The Company’s favor, or to the extent incentives reflected in transaction price are not earned, there could be reductions in, or reversals of, previously recognized revenue. No adjustments on any one contract was material to The Company’s consolidated financial statements for the years ended December 31, 2024 and 2023.
Contract Balances
The timing of revenue recognition, billings and cash collections results in billed accounts receivable and costs and estimated earnings in excess of billings on uncompleted contracts (contract assets) on the consolidated balance sheet. On The Company’s construction contracts, amounts are billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals (e.g., biweekly or monthly) or upon achievement of contractual milestones. Generally, billing occurs prior to revenue recognition, resulting in contract liabilities. These assets and liabilities are reported on the consolidated balance sheet on a contract-by-contract basis at the end of each reporting period.
Advertising Management Services
The Company enters into Master Services Agreement (“MSA”) and Scope of Work (“SOW”) which govern the terms of the Company’s performance obligation for purposes of revenue recognition.
| F-11 |
| Table of Contents |
The Company’s performance obligation is a single performance obligation, Advertising Management Services which encompasses the following integrated and interdependent services:
| 1. | Strategic Consulting: Development of marketing strategies, including competitive analysis, campaign performance evaluations, and recommendations for campaign execution and optimization in the digital space. |
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|
|
| 2. | Paid Advertising: Execution of digital advertising campaigns leveraging data analytics, machine learning, and artificial intelligence across a range of digital platforms. Ongoing optimization of these campaigns to achieve optimal results for the client is part of the process, as well as iterative creative services to help achieve results. Continuous monitoring and adjustment of the advertising campaigns is achieved through bi-weekly consultations with the client to review performance and implement optimizations. |
|
|
|
| 3. | Web Development: The creation and development of websites, landing pages, ecommerce platforms, and other web assets is often supplemental to the Paid Advertising being executed for clients. This includes optimization of existing web assets with services such as search engine optimization and conversion rate optimization. |
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|
|
| 4. | Creative Services: The creation or redevelopment of creative assets is another service area offered. Typically, the creative services are limited to Web Development or the execution of creative services needed to support Paid Advertising. In some cases, full brand development and brand strategy work is included in the Creative Services offering. |
These services are integrated and interdependent, all contributing to the goal of improving the Client's business performance, revenue, and brand awareness over time. Revenue is recognized over time as the services are provided and the performance obligation is satisfied, consistent with the ongoing optimization efforts. Amounts recognized but not yet invoiced to the customer are included as ‘contract assets’ within the accompanying consolidated balance sheets.
A monthly retainer is charged for ongoing services. Any additional services outside the agreed-upon scope, such as the inclusion of additional services, are subject to prior written approval and will result in additional fees. Retainers received for future services are classified as ‘deferred revenue’ within the accompanying consolidated balance sheets.
Executive Management Services
The Company’s chief executive officer and financial team provide executive management services to certain affiliated entities at a fixed monthly rate. Revenue is recognized over time as the services are provided and the performance obligation is satisfied, consistent with the ongoing benefits the affiliated entities receive as the services are rendered. See Note 5.
Accounts Receivable and Accounts Receivable, Related Party
The Company does not charge interest to its customers and carries its customers’ receivables at their face amounts, less an allowance for doubtful accounts. Included in accounts receivable are balances billed to customers pursuant to retainage provisions in certain contracts that are due upon completion of the contract and acceptance by the customer, or earlier as provided by the contract. Based on the Company’s experience in recent years, the majority of customer balances at each balance sheet date are collected within twelve months. As is common practice in the industry, the Company classifies retainage, as current assets. The contracting cycle for certain long-term contracts may extend beyond one year, and accordingly, collection of retainage on those contracts may extend beyond one year.
the Company adopted ASU 2016-13, “Financial Instruments — Credit Losses (Accounting Standards Codification (“ASC”) Topic 326): Measurement on Credit Losses on Financial Instruments” The Company grants trade credit, on a non-collateralized basis (with the exception of lien rights against the property in certain cases), to its customers and is subject to potential credit risk related to changes in business and overall economic activity. The Company evaluates its accounts receivable for expected credit losses on a regular basis. The Company records an allowance for credit losses to allow for any amounts that may not be recoverable, which is based on an analysis of the Company’s prior collection experience, customer credit worthiness, current economic trends and expected future losses. Accounts are considered delinquent when payments have not been received within 30 days and are written off when management determines that collection is not probable. During the years ended December 31, 2024 and 2023, the Company recognized allowances for future credit losses totaling $
| F-12 |
| Table of Contents |
Classification of Construction Contract-related Assets and Liabilities
Contract assets are presented as a current asset in the accompanying consolidated balance sheets, and contract liabilities are presented as a current liability in the accompanying consolidated balance sheets. The Company’s contracts vary in duration, with the duration of some larger contracts exceeding one year. Consistent with industry practices, the Company includes the amounts realizable and payable under contracts, which may extend beyond one year, in current assets and current liabilities.
Investments in Equity Securities
The Company holds investments in equity securities of publicly listed companies. The Company remeasures any equity securities held at each reporting period and recognizes a gain or losses for any changes in the fair value of those equity securities. The Company determines the fair value of its equity securities using quoted market prices for markets which it can access.
Property and Equipment
The Company accounts for property and equipment such as office furniture and equipment and vehicles at cost. Repairs and maintenance are expensed as incurred and significant replacements and improvements are capitalized. The Company considers the period of future benefit of an asset to determine its appropriate useful life. Depreciation is recorded using the straight-line method over the respective useful lives of the assets. Upon the retirement or other disposition of property and equipment, the related cost and accumulated depreciation are charged to operations. During the year ended December 31, 2024 and 2023, depreciation expense was $
|
| Estimated Useful Life |
|
Office furniture and equipment |
|
| |
Vehicles |
|
|
Leases
ASC 842, “Leases”, requires recognition of leases on the consolidated balance sheets as right-of-use (“ROU”) assets and lease liabilities. ROU assets represent the Company’s right to use underlying assets for the lease terms and lease liabilities represent the Company’s obligation to make lease payments arising from the leases. Operating lease ROU assets and operating lease liabilities are recognized based on the present value and future minimum lease payments over the lease term at commencement date. As the Company’s leases do not provide an implicit rate, the Company used its estimated incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. A number of the lease agreements may contain options to renew and options to terminate the leases early. The lease term used to calculate ROU assets and lease liabilities only includes renewal and termination options that are deemed reasonably certain to be exercised. The Company recognized lease liabilities, with corresponding ROU assets, based on the present value of unpaid lease payments for existing operating leases longer than twelve months. The ROU assets were adjusted per ASC 842 transition guidance for existing lease-related balances of accrued and prepaid rent, and unamortized lease incentives provided by lessors. Operating lease cost is recognized as a single lease cost on a straight-line basis over the lease term and is recorded in selling, general and administrative expenses. Variable lease payments for common area maintenance, property taxes and other operating expenses are recognized as expense in the period when the changes in facts and circumstances on which the variable lease payments are based occur. The Company has elected not to separate lease and non-lease components for all property leases for the purposes of calculating ROU assets and lease liabilities.
Intangible Assets
Intangible assets are amortized over their estimated useful lives. Each period, the Company evaluates the estimated remaining useful life of its intangible assets and whether events or changes in circumstances warrant a revision to the remaining period of amortization. Management tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets but at least annually on December 31st.
Goodwill
Goodwill represents the excess of the consideration paid of an acquisition over the fair value of the net identifiable assets of the acquired subsidiaries at the date of acquisition. Goodwill is not amortized and is tested for impairment on December 31st or when circumstances indicate an impairment may have occurred. Goodwill is carried at cost less accumulated impairment losses. If impairment exists, goodwill is immediately written off to its fair value and the loss is recognized in the consolidated statements of operations. Impairment losses on goodwill are not reversed.
The Company has the option to assess qualitative factors to determine whether it is necessary to perform further impairment testing in accordance. If the Company believes, as a result of the qualitative assessment, that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, the Company performs further analysis by comparing the fair value of each reporting unit to its carrying amount, including goodwill. A reporting unit is an operating segment or sub-segment to which goodwill is assigned when initially recorded. If the fair value of each reporting unit exceeds its carrying amount, goodwill is not considered to be impaired. If the carrying amount of a reporting unit exceeds its fair value, an impairment is recognized for the difference, limited to the amount of goodwill recognized for the reporting unit. The Company has determined that no impairment of its goodwill or indefinite lived intangible assets occurred as of December 31, 2024.
Impairment Assessment
The Company evaluates its intangible assets and goodwill and other long-lived assets for possible impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable and at least annually on December 31st. This includes but is not limited to significant adverse changes in business climate, market conditions or other events that indicate an asset’s carrying amount may not be recoverable. The recoverability of these assets is measured by comparing the carrying amount of each asset to the future cash flows the asset is expected to generate. If the cash flows used in the test for recoverability are less than the carrying amount of these assets, the carrying amount of such assets is reduced to fair value.
| F-13 |
| Table of Contents |
Marketing and Advertising Costs
Marketing and advertising costs are expensed as incurred in accordance with ASC 720-35, Other Expenses – Advertising Costs. These costs primarily include media placements, promotional materials, and digital marketing campaigns. Total marketing and advertising expenses for the years ended December 31, 2024 and 2023, were approximately $
Earnings Per Share
In accordance with accounting guidance now codified as ASC Topic 260, “Earnings (Loss) per Share,” basic earnings per share is computed by dividing net income by weighted average number of shares of common stock outstanding during each period. Diluted earnings per share is computed by dividing net income by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period. There were no dilutive shares outstanding during the years ended December 31, 2024 and 2023.
Income Taxes
The Company accounts for its income taxes in accordance with ASC 740 “Income Taxes”, which requires recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. The Company has a net operating loss carryforward, however, due to the uncertainty of realization, the Company has provided a full valuation allowance for deferred tax assets resulting from this net operating loss carryforward.
Fair Value Measurements
The Company’s financial instruments consist of cash, accounts receivable, investments, accounts payable, notes payable, accrued expenses and advances, related party. The estimated fair value of cash, accounts receivable, accounts payable, notes payable and advances from related parties approximate their carrying amounts due to the short-term nature of these instruments.
Certain non-financial assets are measured at fair value on a nonrecurring basis but are subject to periodic impairment tests. The hierarchy is broken down into three levels based on the reliability of the inputs as follows:
Level 1 - Valuation is based upon unadjusted quoted market prices for identical assets or liabilities in accessible active markets.
Level 2 - Valuation is based upon quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in inactive markets; or valuations based on models where the significant inputs are observable in the market.
Level 3 - Valuation is based on models where significant inputs are not observable. The unobservable inputs reflect a company’s own assumptions about the inputs that market participants would use.
Recent Accounting Pronouncements
In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” which requires a public entity to disclose significant segment expenses and other segment items on an annual and interim basis and to provide in interim periods all disclosures about reportable segment’s profit or loss and assets that are currently required annually. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact this standard will have on its condensed consolidated financial statements.
In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which enhances the transparency and decision usefulness of income tax disclosures by requiring; (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. ASU 2023-09 is effective for fiscal years beginning after December 15, 2025, with early adoption permitted. These amendments are to be applied prospectively, with retrospective application permitted. The Company is currently evaluating the impact this standard will have on its condensed consolidated financial statements.
The Company currently believes there are no other issued and not yet effective accounting standards that are materially relevant to our condensed consolidated financial statements.
Note 2. Acquisition of HLDCO LLC
On June 13, 2024 Claude Zdanow via Mount Olympus Ventures, Inc (“Mount Olympus”), purchased the
On June 17, 2024, the Company entered into the acquisition of
The nature and amount of consideration given or received for the assets was exactly
On July 18, 2024, the Company filed the designations for the Series B, Series C, and Series D preferred shares pursuant the Agreement. On July 25, 2024, the Board of Directors issued those shares of respective preferred stock to the members of HLDCO, LLC, to complete the acquisition (the “Closing”).
Management determined that the acquisition of HLDCO was a reverse acquisition as defined within ASC 805, and that HLDCO was the accounting acquirer or legal acquiree. The Company determined that HLDCO was the accounting acquirer based on the guidance contained within ASC 805-40. The significant factors that led to the Company’s conclusion were (i) the Mr. Zdanow and the members of HLDCO obtained 98% of the voting interest of the Company through the preferred shares held by these parties, (ii) at Closing, the remaining Company shareholders held 2% of the voting interest of the Company, (iii) the composition of executive management and the governing body changed such that the sole director and executive officer of HLDCO became the sole director and shareholder of the Company which provided control over the operations of the Company, and (iv) HLDCO was significantly larger than the Company when considering both total assets and operations. As a result, the Company has applied purchase accounting as of the Closing of the acquisition and reflected the historical financial position and operations of HLDCO as the surviving entity. The assets and liabilities the Company were recognized at fair value as of the Closing and the results of its operations have been included within the consolidated statements of operations from that date forward with all historical activity reflective of the operations of HLDCO.
| F-14 |
| Table of Contents |
The assets acquired and liabilities assumed are recognized provisionally in the accompanying consolidated balance sheets at their estimated fair values as of the acquisition date. The initial accounting for the business combination is not complete as the Company is in the process of obtaining additional information for the valuation of acquired intangible assets and deferred tax liabilities, if any. The provisional amounts are subject to change to the extent that additional information is obtained about the facts and circumstances that existed as of the acquisition date. Under U.S. GAAP, the measurement period shall not exceed one year from the acquisition date and the Company will finalize these amounts no later than July 25, 2025. The estimated fair values as of the acquisition date are based on information that existed as of the acquisition date. During the measurement period the Company may adjust provisional amounts recorded for assets acquired and liabilities assumed to reflect new information that the Company has subsequently obtained regarding facts and circumstances that existed as of the acquisition date.
Shares by the Company shareholders post-Closing |
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| |
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|
|
|
|
stock price on Closing |
| $ |
| |
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|
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Fair value transferred for acquisition |
| $ |
|
The Company determined the fair value of the consideration transferred using the fair value based on the number of shares that would have needed to be issued to provide the Company’s shareholders with an equivalent ownership interest in the combined entities post-Closing. The fair value of the Company’s common shares issued as consideration was based on the closing price of the Company’s common stock as of the Closing.
The consideration transferred was allocated to the assets acquired and liabilities assumed on a preliminary basis as follows:
Cash |
| $ |
| |
Property and equipment |
|
|
| |
Right of use asset |
|
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| |
Accounts payable |
|
| ( | ) |
Accrued expenses |
|
| ( | ) |
Billings in excess of cost |
|
| ( | ) |
Notes payable |
|
| ( | ) |
Operating lease liability |
|
| ( | ) |
|
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| |
Goodwill |
|
|
| |
Assets and liabilities acquired |
| $ |
|
The goodwill recognized as a result of the acquisition of the Company is attributable primarily to expected synergies and the assembled workforce. None of the goodwill is expected to be deductible for income tax purposes.
The amounts of revenue and net loss of Reliant, included in the Company’s consolidated statements of operations for the year ended December 31, 2024 are as follows:
Revenues |
| $ |
| |
Net loss |
| $ | ( | ) |
Consolidated unaudited pro forma information:
The following consolidated pro forma information assumes that the acquisition of HLDCO took place on January 1, 2023, for the statement of operations for the years ended 2024 and 2023. These amounts have been estimated after applying the Company’s accounting policies
|
| 2024 |
|
| 2023 |
| ||
|
|
|
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|
| ||
Revenues |
| $ |
|
| $ |
| ||
Net loss |
| $ | ( | ) |
| $ | ( | ) |
| F-15 |
| Table of Contents |
Note 3. Contracts in Process
The net asset (liability) position for pool construction contracts in process consisted of the following as of December 31, 2024 are:
Costs on uncompleted contracts |
| $ |
| |
Estimated earnings |
|
|
| |
Less: Progress billings |
|
|
| |
Contract liabilities, net |
| $ | ( | ) |
The net asset (liability) position for contracts in process is included in the accompanying consolidated balance sheets as of December 31, 2024 are:
Costs and estimated earnings in excess of billings on uncompleted contracts |
| $ |
| |
Billings in excess of costs and estimated earnings on uncompleted contracts |
|
|
| |
Contract liabilities |
| $ |
|
Note 4. Concentrations of Risk
For the years ended December 31, 2024 and 2023, the Company had the follow customer concentrations:
|
| Revenues |
| |||||
Customer |
| 2024 |
|
| 2023 |
| ||
Customer A |
|
| % |
|
| % | ||
Customer B (related party) |
|
| * |
|
| % | ||
Customer C |
| * |
|
|
| % | ||
Customer D |
|
| % |
| * |
| ||
Customer E (related party) |
|
| * |
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| % | ||
* = Less than 10% |
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|
As of December 31, 2023, one customer accounted for
Note 5. Related Party Transactions
Executive Expense Reimbursements
During the years ended December 31, 2024 and 2023, the Company recognized expense reimbursements in the form of informal, undocumented due on demand advances to the Company made by its CEO using his personal finances. This includes cash infusions as well as paying expenses on behalf of the Company.
| F-16 |
| Table of Contents |
The Company repaid these advances as funds were available and in some instances remitted amounts in excess of the advances made which were applied to future expenses of the Company. The following tables detail the cash loaned, direct expenses paid and cash repayments made by the Company during the years ended December 31, 2024 and 2023.
Year ended December 31, 2024 |
| |||||||||||||
Cash Advances |
|
| Directly Paid Expenses |
|
| Expense Reimbursements |
|
| Cash Repayments |
| ||||
| $ |
|
| $ |
|
| $ |
|
| $ | ( | ) | |||
Year ended December 31, 2023 |
| |||||||||||||
Cash Advances |
|
| Directly Paid Expenses |
|
| Expense Reimbursements |
|
| Cash Repayments |
| ||||
| $ |
|
| $ |
|
| $ |
|
| $ | ( | ) | |||
As of December 31, 2024 and 2023, $
Advance to Affiliated Entity
During the year ended December 31, 2024, the Company advanced an entity controlled by the Company’s CEO $
On March 11, 2025, this advanced was formalized into a promissory note receivable. Under the new terms, the note bears interest at
Accrued Expenses, Related Party
As of December 31, 2024, the Company owed a related party $
Revenues and Accounts Receivable, related party
During the years ended December 2024 and 2023, the Company recognized revenues of approximately $
During the year ended December 31, 2024, as part of a settlement agreement, the Company received publicly listed securities as payment for the balance due from an affiliated entity. The Company recognized approximately $
Notes Payable
The Company has 5 notes payable due to a related party as described in Note 8. As of December 31, 2024 and 2023, accrued interest due under these notes was $-
| F-17 |
| Table of Contents |
Note 6. Equity
Series A Preferred Stock
The Series A Preferred Stock (Series A Stock) consists of
On June 13, 2024 Claude Zdanow purchased
Series B Preferred Stock
The Series B Preferred Stock (Series B Stock) consists of
On December 30, 2024 and December 31, 2024, the holders of the Series B Stock converted
Series C Preferred Stock
| F-18 |
| Table of Contents |
The Series C Preferred Stock (Series C Stock) consists of
Series D Preferred Stock
The Series D Preferred Stock (Series D Preferred Stock) consisted of
On December 23, 2024, all
Common Shares
The Company is authorized to issue
During the year ended December 31, 2024, the Company recognized the issuance of
Note 7. Commitments and Contingencies
Leases
The Company leases approximately
On June 9, 2023, HLDCO entered into a one-year lease arrangement with a third party for apartment space in Los Angeles, California, for the Company’s Chief Executive Officer. This lease requires monthly minimum payments of $
Initially, the Company measured the right of use asset and liability associated with this lease using the following inputs:
Remaining lease term (“in years”) |
|
|
| |
Discount rate |
|
|
| F-19 |
| Table of Contents |
The Company records rent on straight-line basis over the terms of the underlying lease. Estimated future minimum lease payments under the lease as of December 31, 2024 are as follows:
Year Ending December 31, |
| Amount |
| |
2025 |
| $ |
| |
Total remaining lease payments |
|
|
| |
Less: imputed interest |
|
|
| |
Present value of remaining lease payments |
| $ |
| |
Rent expense for the years ended December 31, 2024 and 2023 was approximately $
Payroll tax liabilities
For the year ended December 31, 2023, the Company did not remit federal income tax, social security, Medicare or local and state income taxes which were withheld from the Company’s employees payroll. The Company has estimated and accrued fines and penalties associated with the amounts which have not been remitted and includes this amounts in accrued expenses in the accompanying consolidated balance sheets. As of December 31, 2024 and 2023, the balance due was $
Customer legal dispute
VMed Services, LLC a subsidiary of the Company, is a plaintiff in a lawsuit that was filed on April 22, 2024 against Meridian Diagnostics LLC in State Court of Fulton County, Georgia. The Company is seeking approximately $
Note 8. Debt
Notes payable
|
| December 31, 2024 |
|
| December 31, 2023 |
| ||
Promissory note due to a related party which matured during March 2024, requiring interest only payments monthly, bearing interest at 18% per annum and secured by all HLDCO’s assets. |
| $ |
|
| $ |
| ||
Promissory note due to a related party maturing on December 20, 2024, requiring interest only payments monthly, bearing interest at 18% per annum and secured by all HLDCO’s assets. |
|
|
|
|
|
| ||
Promissory note due to a related party matured on November 21, 2023, requiring interest only payments monthly, bearing interest at 12% per annum and secured by all HLDCO’s assets. This note was past due as of December 31, 2023 and was repaid during 2024. |
|
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| ||
Promissory note due to a related party maturing on August 16, 2025, requiring interest only payments monthly, bearing interest at 18% per annum and secured by all HLDCO’s assets. |
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| ||
Promissory note due to a related party maturing on September 27, 2024, requiring interest only payments monthly, bearing interest at 12% per annum and secured by all HLDCO’s assets. |
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| ||
Promissory note due to a related party maturing on November 10, 2024, requiring interest only payments monthly, bearing interest at 18% per annum and secured by all HLDCO’s assets. |
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| ||
Promissory notes issued between March 2024 and July 2024 due one year from issuance, requiring interest only payments monthly, bearing interest at 18% per annum and are unsecured. These notes mature March 2025 through July 2025. |
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Promissory note due to a related party maturing on December 20, 2025, requiring interest only payments monthly, bearing interest at 18% per annum and secured by all HLDCO’s assets. |
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| ||
Term note with a bank secured by car, payable in monthly installments of $939, including interest at 6.79% through October 4, 2030 |
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| ||
Total notes payable |
| $ |
|
| $ |
| ||
| F-20 |
| Table of Contents |
Replacement Notes
As a result of the acquisition of HLDCO (See Note 2), the Company became obligated to issue shares of common stock and replacement notes payable to holders of Integrum’s notes payable none of which were related parties. The Company was required to issue new notes with itself as borrower with such new notes being convertible six months after the closing of the HLDCO acquisition (the “Replacement Notes”). The Replacement Notes have substantially similar terms as the original notes payable except that six months after the Closing the Replacement Notes will become convertible into the common stock of the Company. The conversion price is determined after the six months has lapsed and is fixed after that date.
Additionally, three months after the closing of the HLDCO acquisition, the Company was required to issue common stock in settlement of accrued interest through the date of issuance plus a bonus equal to 25% of the outstanding principal of the related note payable.
The Company determined that the issuance of the Replacement Notes along with the shares of common stock represented an extinguishment of the original notes payable under US GAAP. Accordingly, the Company recognized a loss on extinguishment of $
Line of Credit
On July 28, 2022, The Company entered into a $
Note 9. Intangible assets
The Company’s intangible assets as of December 31, 2024 are summarized as follows:
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| Historical |
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| Accumulated |
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| |||
Type |
| Useful Life |
| Cost |
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| Amortization |
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| Net |
| |||
Customer relationships |
|
| $ |
|
| $ |
|
| $ |
| ||||
The Company’s intangible assets as of December 31, 2023, are summarized as follows:
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| Historical |
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| Accumulated |
|
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| |||
Type |
| Useful Life |
| Cost |
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| Amortization |
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| Net |
| |||
Customer relationships |
|
| $ |
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| $ |
|
| $ |
| ||||
| F-21 |
| Table of Contents |
Future amortization of the Company’s intangible assets as of December 31, 2024 are as follows:
December 31, |
| Amount |
| |
2025 |
| $ |
| |
2026 |
|
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| |
2027 |
|
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| |
|
| $ |
| |
Note 10. Employee Loans Receivable
Forgivable Loans
In order to attract and retain highly skilled professionals, the Company may issue forgivable loans to employees and non-employee experts. The principal amount of forgivable loans and accrued interest is forgiven by the Company over the term of the loans, so long as the employee or non-employee expert continues employment or affiliation with the Company and complies with certain contractual conditions.
On March 30, 2023, the Company entered into a forgivable loan agreement with an independent contractor in the amount of $
In order to reflect the services received through the issuance of these forgivable loans, the Company amortizes the balance of such loans as a component of ‘salaries and related expenses’ over the requisite service period of the loan. During the years ended December 31, 2024 and 2023, the Company recognized amortization related to forgivable loans of $
Other Loans
On June 20, 2023, the Company entered into a promissory note in the amount of $
Note 11. Segments
As a result of the Reliant acquisition, the Company determined that there are two reportable segments. These segments have different strategic and economic goals and are managed separately because they require different technology and marketing strategies.
Reportable Segment |
| Description |
Advertising and Marketing |
| Providing a single source for all technology enabled digital advertising, experiential marketing, healthcare marketing, and brand development strategies. |
| Pools |
| Providing the installation and maintenance of residual pools within the Dallas/Fort Worth Metroplex in Texas, United States. |
The Company’s Chief Executive Officer is the chief operating decision maker and reviews the internal management reports for each segment at least quarterly. During the years ended December 31, 2024 and 2023, there were no significant inter-company revenues or expenses. The chief operating decision maker assesses performance for each segment and decides how to allocate resources based on segment operating losses that also is reported on the consolidated statement of operations. The measure of segment assets is reported on the balance sheet as total consolidated assets. The accounting policies of each segment are the same as those described in the summary of significant accounting policies.
Information regarding each reportable segment for the year ended December 31, 2024, is as follows:
|
| Pool Services |
|
| Advertising and Marketing |
|
| Total |
| |||
Revenue |
| $ |
|
| $ |
|
| $ |
| |||
Cost of revenues |
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| |||
General and administrative |
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| |||
Depreciation and amortization |
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| |||
Segment operating loss |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| F-22 |
| Table of Contents |
Note 12 – Investment in Equities
The Company holds investments in equity securities of publicly listed companies. The Company remeasures any equity securities held at each reporting period and recognizes a gain or losses for any changes in the fair value of those equity securities. The Company determines the fair value of its equity securities using quoted market prices for markets which it can access. The following tables present the Company’s equity securities by class within the fair value hierarchy established in ASC 820.
As of December 31, 2024 | ||||||||||||
Class |
| Level 1 |
|
| Level 2 |
|
| Level 3 |
| |||
Common stock |
| $ |
|
| $ |
|
| $ |
| |||
Total |
| $ |
|
| $ |
|
| $ |
| |||
As of December 31, 2024,
Note 13 – Income Taxes
The Company accounts for income taxes in accordance with ASC 740, Income Taxes. Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the periods in which those temporary differences are expected to be recovered or settled.
Components of Income Tax Expense:
|
| 2024 |
|
| 2023 |
| ||
Current tax expense |
| $ |
|
| $ |
| ||
Deferred tax expense |
|
|
|
|
|
| ||
Total income tax expense |
| $ |
|
| $ |
| ||
The reconciliation of the U.S. federal statutory income tax rate to the Company’s effective tax rate is as follows:
|
| 2024 |
|
| 2023 |
| ||||||||||
Estimated federal income benefit at U.S. federal statutory tax rate |
| $ | ( | ) |
| ( | %) |
| $ | ( | ) |
| ( | %) | ||
Temporary differences |
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| % |
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| % | ||||
Permanent differences |
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| % |
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| % | ||||
Valuation allowance |
|
|
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| % |
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| % | ||||
Estimated federal income benefit at Effective tax rate |
| $ |
|
|
| % |
| $ |
|
|
| % | ||||
The Company’s effective tax rate was
Components of deferred tax assets and liabilities are as follows:
Description |
| 2024 |
|
| 2023 |
| ||
Deferred tax assets: |
|
|
|
|
|
| ||
Net operating loss carryforwards |
| $ |
|
| $ |
| ||
Change in fair value of equity securities |
|
|
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|
| ||
Total deferred tax assets |
|
|
|
| $ |
| ||
Less: Valuation allowance |
|
| ( | ) |
|
| ( | ) |
Net deferred tax assets |
| $ |
|
| $- |
| ||
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Deferred tax liabilities: |
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Depreciation and amortization |
|
|
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|
| ||
Loss on debt extinguishment |
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| ||
Net deferred tax liabilities |
|
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| ||
Net deferred tax assets and liabilities |
|
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F-23 |
| Table of Contents |
As of December 31, 2024 and 2023, the Company maintained a full valuation allowance against its net deferred tax assets. Based on available evidence, including historical cumulative losses, the Company concluded it is more likely than not that the deferred tax assets will not be realized.
As of December 31, 2024, the Company had estimated federal and state net operating loss carryforwards (NOL) of approximately $
The utilization of NOLs and other tax attributes may be subject to annual limitations under Section 382 of the Internal Revenue Code due to ownership changes that occurred, or may occur in the future, including as a result of the Company’s recent acquisition of Reliant Holdings. If a Section 382 limitation is triggered, the Company’s ability to utilize its NOLs and other deferred tax assets to offset future taxable income may be significantly limited or delayed, and some portion of the tax attributes could expire before being utilized. The Company is currently evaluating the extent to which any such limitations apply.
The Company has evaluated its tax positions in accordance with ASC 740-10, Accounting for Uncertainty in Income Taxes, and concluded that there were no uncertain tax positions requiring recognition or disclosure in the financial statements as of December 31, 2024 or 2023. The Company does not expect any significant changes to its uncertain tax positions within the next 12 months. The Company’s policy is to recognize interest and penalties related to income taxes, if any, in income tax expense. No such amounts were recognized in 2024 or 2023.
Note 14. Subsequent events
Between January 1, 2025 and April 10, 2025, holders of $
The notes payable were previously issued to the holders in reliance on the exemption from registration under the Securities Act of 1933 provided by Section 4(a)(2). As a result of this transaction, the Company's outstanding debt has been reduced by the principal amount of the notes converted, and the equity capital of the Company has been increased by the issuance of the common shares. The conversion of the notes payable to equity is expected to improve the Company’s liquidity position by reducing its debt obligations.
This transaction was completed in accordance with the terms of the relevant debt agreements and does not have a material impact on the Company's financial position or results of operations as of the balance sheet date.
| F-24 |
| Table of Contents |
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENTS AND SCHEDULES
(a) Documents filed as part of this Annual Report:
| (1) | Consolidated Financial Statements |
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| The consolidated financial statements and notes are included herein under “Part II”-“Item 8. Financial Statements and Supplementary Data”. |
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Report of Independent Registered Public Accounting Firms |
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| (2) | Consolidated Financial Statement Schedules |
All schedules are omitted because they are inapplicable or not required or the required information is shown in the consolidated financial statements or notes thereto.
| (3) | Exhibits required by Item 601 of Regulation S-K |
| 4 |
| Table of Contents |
Exhibit |
| Filed/ Furnished | Incorporated By Reference | ||||||||||
Number |
| Description of Exhibit |
| Herewith | Form |
| Exhibit | Filing Date |
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| 8-K |
| 3.1 |
| 2/3/2025 |
| 000-56012 | ||||
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| 8-K |
| 3.1 |
| 6/17/2021 |
| 000-56012 | ||||
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| 8-K/A |
| 4.1 |
| 7/31/2024 |
| 00-56012 |
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| 4.2 |
| 7/31/2024 |
| 00-56012 |
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| 4.3 |
| 7/31/2024 |
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| 351 Contribution Agreement between the Company and the members of HLDCO, LLC |
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| 8-K/A |
| 10.1 |
| 7/31/2024 |
| 000-56012 | |||
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| 10.1 |
| 2/12/2025 |
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Employment Agreement dated as of December 1, 2024 by and between the Company and Tricia Kaelin |
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| Employment Agreement dated as of September 27, 2024 by and between the Company and Claude Zdanow |
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| S-1 |
| 14.1 |
| 10/27/2016 |
| 333-214274 |
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| Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act |
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| Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act |
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| Certification of Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act |
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| Certification of Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act |
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101.INS* |
| Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |
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101.SCH* |
| XBRL Taxonomy Extension Schema Document |
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101.CAL* |
| XBRL Taxonomy Extension Calculation Linkbase Document |
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101.DEF* |
| XBRL Taxonomy Extension Definition Linkbase Document |
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101.LAB* |
| XBRL Taxonomy Extension Label Linkbase Document |
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101.PRE* |
| XBRL Taxonomy Extension Presentation Linkbase Document |
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104* |
| Inline XBRL for the cover page of this Annual Report on Form 10-K included in the Exhibit 101 Inline XBRL Document Set |
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* Filed herewith.
** Furnished Herewith.
# Included in the original filing of this Form 10-K on April 15, 2025
† Exhibit constitutes a management contract or compensatory plan or agreement.
5 |
| Table of Contents |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| ONAR Holding Corp |
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Date: May 5, 2025 | By: | /s/ Claude Zdanow |
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| Claude Zdanow |
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| Chief Executive Officer |
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Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant in the capacities and on the dates indicated.
Name |
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| Date |
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By: /s/ Claude Zdanow |
| Chief Executive Officer (Principal Executive Officer) and Sole Director |
| Date: May 5, 2025 |
Claude Zdanow |
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By: /s/ Patricia Kaelin |
| Chief Financial Officer (Principal Financial/ Accounting Officer) |
| Date: May 5, 2025 |
Patricia Kaelin |
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6 |