ONAR 10-Q
Onar Holding Corp (ONAR)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal quarter ended
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
FOR THE TRANSITION PERIOD FROM _____________ TO _____________
Commission File Number
(Exact name of registrant as specified in its charter) |
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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 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 such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☐ |
☒ | Smaller reporting company | ||
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| Emerging growth |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act. Yes
State the number of shares of the issuer’s common stock outstanding, as of the latest practicable date:
TABLE OF CONTENTS
| 2 |
| Table of Contents |
Cautionary Statement Regarding Forward-Looking Information
This Quarterly Report on Form 10-Q (this “Report”) contains forward-looking statements within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended and the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by the following words: “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “ongoing,” “plan,” “potential,” “predict,” “project,” “should,” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. Forward-looking statements are not a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information available at the time the statements are made and involve known and unknown risks, uncertainties and other factors that may cause our results, levels of activity, performance or achievements to be materially different from the information expressed or implied by the forward-looking statements in this Report. These factors include:
| · | unfavorable economic conditions; |
| · | changes in client demand; |
| · | our ability to maintain our existing clients; |
| · | our ability to develop new product offerings; |
| · | our ability to deploy AI in our business and the development of AI by our competitors; |
| · | seasonal fluctuations in marketing, research, communications and advertising activity; |
| · | the impact of future strategic transactions; |
| · | our lack of a significant operating history; |
| · | the need for additional funding, our ability to raise such funding, and the ultimate terms thereof; |
| · | the level of competition in the industries in which compete; |
| · | the security of our computer systems and our ability to securely store client data; |
| · | the loss of key personnel or failure to attract, integrate and retain additional personnel; |
| · | fluctuations in our operating results; |
| · | corporate governance risks; |
| · | the impacts of global epidemics, pandemics and similar health issues; |
| · | material weaknesses in our internal controls; |
| · | dilution to existing stockholders caused by the issuance of additional shares of our common stock; |
| · | the lack of a significant market for our common stock, and the volatile nature thereof; |
| · | our failure to pay cash dividends; |
| · | the status of our common stock as a “penny stock”; |
| · | lack of liquidity in the market for our stock; |
| · | our blank check preferred stock and ability to issue significant shares of common stock; |
| · | costs and expenses associated with being a public company; and |
| · | other risk factors included under “Risk Factors” below. |
You should read the matters described in “Risk Factors” and the other cautionary statements made in this Report, as being applicable to all related forward-looking statements wherever they appear in this Report. We cannot assure you that the forward-looking statements in this Report will prove to be accurate and therefore prospective investors are encouraged not to place undue reliance on forward-looking statements. Other than as required by law, we undertake no obligation to update or revise these forward-looking statements, even though our situation may change in the future.
| 3 |
| Table of Contents |
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements.
The accompanying financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and in accordance with the instructions for Form 10-Q. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.
In the opinion of management, the financial statements contain all material adjustments, consisting only of normal recurring adjustments necessary to present fairly the financial condition, results of operations, and cash flows of the Company for the interim periods presented.
The results for the period ended March 31, 2026, are not necessarily indicative of the results of operations for the full year. These financial statements and related footnotes should be read in conjunction with the financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, filed with the Securities and Exchange Commission on June 11, 2026.
| 4 |
| Table of Contents |
ONAR HOLDING CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
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| March 31, |
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| December 31, |
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| 2026 |
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| 2025 |
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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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Prepaid expenses and other current assets |
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Note receivable, current |
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Total current assets |
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Other assets: |
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Property and equipment, net |
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Intangible assets, net |
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Goodwill |
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Advance to affiliated entity |
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Note receivable, net of current portion |
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Total other assets |
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Total assets |
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LIABILITIES AND STOCKHOLDERS’ DEFICIT |
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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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Deferred revenue |
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Accrued expenses, related party and advances due to executive |
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Notes payable |
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Notes payable, related party |
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Convertible notes payable, net |
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Total current liabilities |
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Total liabilities |
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Commitments and contingencies (Note 7) |
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Stockholders’ deficit: |
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Preferred stock, |
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| - |
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| - |
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Preferred stock Series A, |
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Preferred stock Series B, |
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Preferred stock Series C, |
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Preferred stock Series E, |
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Common stock, |
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Additional paid-in capital |
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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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| $ |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 5 |
| Table of Contents |
ONAR HOLDING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025
(Unaudited)
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| Three Months Ended March 31, |
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| 2026 |
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| 2025 |
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Revenue |
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| $ |
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Cost of revenues |
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Gross profit |
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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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Other (income) expense |
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Change in fair value of investments |
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Total other (income) expense |
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Provision for income tax |
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Loss from continuing operations |
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Income from discontinued operations, net of tax |
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Net loss |
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| $ | ( | ) |
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Net loss per share - basic and diluted - continuing operations |
| $ | ( | ) |
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Net loss per share - basic and diluted - discontinued operations |
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Net loss per share - basic and diluted |
| $ | ( | ) |
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Weighted average common shares outstanding - basic and diluted |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 6 |
| Table of Contents |
ONAR HOLDING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025
(Unaudited)
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| Preferred Stock |
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| Additional |
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| Series A |
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| Series B |
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| Series C |
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| Series E |
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| Common Stock |
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| Paid-in |
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| Accumulated |
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| Shares |
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| Amount |
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| Shares |
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| Amount |
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| Shares |
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| Amount |
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| Shares |
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| Amount |
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| Shares |
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| Amount |
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| Capital |
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| Deficit |
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| Total |
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Balance, December 31, 2025 |
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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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| $ | ( | ) |
| $ | ( | ) | |||||||||||
Issuance of shares for services |
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| - |
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| - |
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| - |
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| - |
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Conversion of notes payable and accrued interest |
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| - |
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| - |
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| - |
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| - |
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Warrants issued with convertible notes payable |
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| - |
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| - |
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| - |
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| - |
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| - |
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Series E preferred stock issued for acquisition |
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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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Balance, March 31, 2026 |
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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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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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| $ | ( | ) |
| $ | ( | ) | ||||||||||
Issuance of shares for services |
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| - |
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| - |
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| - |
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| - |
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Conversion of notes payable and accrued interest |
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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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Balance, March 31, 2025 |
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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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| $ | ( | ) |
| $ | ( | ) | ||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 7 |
| Table of Contents |
ONAR HOLDING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025
(Unaudited)
|
| Three Months Ended March 31, |
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| 2026 |
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| 2025 |
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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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Amortization of debt discount |
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Lease expense |
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Change in fair value of investment in equity securities |
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Shares and options issued for services |
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Employee loan receivable interest income and extension fee |
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Extension fees added to principal of notes payable, related party |
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Changes in operating assets and liabilities: |
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Accounts receivable |
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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, related party and advances from executive |
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Deferred revenue |
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Customer contracts |
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Net cash used in operating activities - continuing operations |
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Net cash provided by operating activities - discontinued operations |
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Investing Activities |
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Proceeds from disposal of property and equipment |
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Advances to related party |
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Net cash provided by (used in) investing activities - continuing operations |
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Net cash provided by (used in) investing activities - discontinued operations |
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Financing Activities |
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Repayment of notes payable |
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Repayment of notes payable, related party |
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Proceeds from line of credit |
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Repayment of line of credit |
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Proceeds from convertible notes payable |
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Payments on convertible notes payable |
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Net cash provided by financing activities - continuing operations |
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Net cash used in financing activities - discontinued operations |
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Net change in cash |
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Cash - beginning of period |
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Cash - end of period |
| $ |
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| $ |
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Supplemental cash flow disclosures |
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Interest paid |
| $ |
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| $ |
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Income taxes paid |
| $ |
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| $ |
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Supplemental disclosure of non-cash investing and financing activities |
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Notes payable and accrued interest converted to common stock |
| $ |
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| $ |
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Series E Preferred Stock issued as acquisition consideration |
| $ |
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| $ |
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Notes payable issued as acquisition consideration |
| $ |
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| $ |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 8 |
| Table of Contents |
ONAR Holding Corporation
Notes to Unaudited Condensed 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. ONAR serves as the operating entity for the Company’s marketing and technology-enabled agency network. ONAR specializes in marketing solutions through a technology-enabled independent agency brand network, providing services across industries including performance digital marketing, healthcare marketing, and experiential marketing.
Going Concern
The accompanying condensed 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 net 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 has taken a series of concrete actions to address these conditions. During the first quarter of 2026 and through the date of this filing, the Company completed its exit from two non-core legacy businesses, allowing management to concentrate resources on its higher-margin marketing and technology operations; reduced total operating expenses by 66% and net cash used in operating activities by 40% compared to the prior-year period; and restructured a short-term financing obligation into a multi-year note payable with fixed payments; Management’s plans also include continuing to grow revenue through organic client acquisition and selective strategic acquisitions, maintaining disciplined cost management across the agency network, and reducing the Company’s reliance on short-term convertible financing. However, there can be no assurance that management will be successful in obtaining additional funding or in attaining profitable operations. The accompanying condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis of Presentation
The Company prepares its condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for interim financial information. The accompanying financial statements are unaudited. In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at March 31, 2026 and for the periods presented have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on June 11, 2026 (the “2025 Annual Report”). The results of operations for the three months ended March 31, 2026 are not necessarily indicative of the operating results for the full year.
Principles of Consolidation
The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.
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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.
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.
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. |
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| 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. |
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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.
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 condensed consolidated balance sheets.
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
Note 2. Acquisitions and Divestitures
On March 12, 2026, the Company acquired all of the outstanding equity interests of Scale Partners, a provider of technology-enabled marketing and sales solutions tailored specifically for the commercial real estate (CRE) sector, for total consideration of approximately $
The Company accounted for the transaction as a business combination under ASC 805, Business Combinations. The provisional purchase price allocation resulted in the recognition of approximately $
The acquisition was not material to the Company's condensed consolidated financial statements, and the results of Scale Partner’s operations have been included in the Company’s condensed consolidated financial statements from the acquisition date. Accordingly, pro forma financial information and other disclosures required by ASC 805 for material business combinations have not been presented.
Note 3. Discontinued Operations
Through its wholly owned subsidiary Reliant Pools, the Company operated a legacy custom swimming pool construction business in the greater Austin, Texas market.
The pool business was non-core to ONAR’s strategic focus on marketing, technology, and AI-driven growth. On January 19, 2026, the Company entered into a Stock Purchase Agreement to divest
The results of the pool construction business are presented within income from discontinued operations in the condensed consolidated statements of operations, and the related cash flows are presented separately as discontinued operations in the condensed consolidated statements of cash flows, for the three months ended March 31, 2025.
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Results of operation for Reliant Pools the three months ended March 31, 2025,
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Note 4. Related Party Transactions
Advance to Affiliated Entity
During the year ended December 31, 2024 and prior to the acquisition of HLDCO the Company advanced to an entity controlled by the Company’s CEO an aggregate of $
As of March 31, 2026 the balance remains outstanding and is included in ‘Advance to affiliated entity’ on the accompanying condensed consolidated balance sheets.
Advances to related party
During the three months ended March 31, 2026, the Company made certain advances to an entity affiliated with the Company’s Chief Executive Officer totaling $
Note 5. Notes Payable and Convertible Notes Payable
For the terms of debt outstanding at December 31, 2025 that has not changed significantly, refer to the Company’s 2025 Annual Report.
On January 10, 2026, the Company entered into a securities purchase agreement providing for the issuance of a convertible promissory note in the principal amount of $
The holder also received
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On January 23, 2026, the Company entered into a securities purchase agreement providing for the issuance of a convertible promissory note in the principal amount of $
The holder also received
On March 4, 2026, the Company entered into a securities purchase agreement providing for the issuance of a convertible promissory note in the principal amount of $
Note 6. Equity
Common Shares
As of March 31, 2026, the Company was authorized to issue
During the three months ended March 31, 2026, the Company issued approximately
In addition, during the three months ended March 31, 2026, holders of convertible notes payable converted principal and accrued interest of $
Preferred Shares
During the three months ended March 31, 2026, the Company issued
Note 7. Commitments and Contingencies
Except as described below, there have been no material changes during the three months ended March 31, 2026, to the information presented in the audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025.
Litigation
On November 7, 2025, Jeffrey L. Feinberg Personal Trust (“Feinberg”) filed a complaint against ONAR, LLC in the Superior Court of the State of Delaware, Case No. N25C-11-060 SPL. The complaint alleges breach of contract and unjust enrichment related to a Senior Secured Promissory Note originally issued by Integrum Group, LLC (the Company’s predecessor entity) dated March 18, 2024, in the principal amount of $
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The Company has retained counsel and filed its Answer and Affirmative Defenses, vigorously denying the claims asserted and raising multiple affirmative defenses. The Company intends to defend itself vigorously against the claims brought by plaintiff in this matter. At this time, management does not believe the ultimate resolution of this matter will have a material adverse effect on the Company’s financial condition, results of operations, or cash flows
Payroll tax liabilities
During fiscal year 2023, the Company did not remit certain 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 amount in accrued expenses in the accompanying condensed consolidated balance sheets. As of March 31, 2026 and December 31, 2025, the balance due was $
Note 8. Subsequent Events
ADI Funding LLC. On April 6, 2026, the Company received an additional $
On May 5, 2026, the holder of approximately
Labrys Fund II, L.P. On June 9, 2026, the Company issued an unsecured promissory note to Labrys Fund II, L.P. with a principal amount of $
Agile Capital. On July 3, 2026, the Company settled its dispute with Agile Capital concerning $
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Introduction
You should read the matters described in “Risk Factors” and the other cautionary statements made in this Report as being applicable to all related forward-looking statements wherever they appear in this Report. We cannot assure you that the forward-looking statements in this Report will prove to be accurate and therefore prospective investors are encouraged not to place undue reliance on forward-looking statements. Other than as required by law, we undertake no obligation to update or revise these forward-looking statements, even though our situation may change in the future.
This information should be read in conjunction with the interim unaudited financial statements and the notes thereto included in this Quarterly Report on Form 10-Q, and the audited financial statements and notes thereto and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the Securities and Exchange Commission on June 11, 2026 (the “Annual Report”).
Certain capitalized terms used below and otherwise defined below, have the meanings given to such terms in the footnotes to our condensed consolidated financial statements included above under “Part I - Financial Information” – “Item 1. Financial Statements”.
In this Quarterly Report on Form 10-Q, we may rely on and refer to information regarding the industries in which we operate in general from market research reports, analyst reports and other publicly available information. Although we believe that this information is reliable, we cannot guarantee the accuracy and completeness of this information, we have not independently verified any of it, and we have not commissioned any such information.
Unless the context requires otherwise, references to the “Company,” “we,” “us,” “our,” “ONAR”, “ONAR Holding” and “ONAR Holding Corporation” refer specifically to ONAR Holding Corporation and its consolidated subsidiaries.
In addition, unless the context otherwise requires and for the purposes of this Report only:
| · | “Exchange Act” refers to the Securities Exchange Act of 1934, as amended; |
| · | “SEC” or the “Commission” refers to the United States Securities and Exchange Commission; and |
| · | “Securities Act” refers to the Securities Act of 1933, as amended. |
Where You Can Find Other Information
We file annual, quarterly, and current reports, proxy statements and other information with the SEC. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC like us at http://www.sec.gov (our filings can be found at https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001682265). Copies of documents filed by us with the SEC are also available from us without charge, upon oral or written request to our Secretary, who can be contacted at the address and telephone number set forth on the cover page of this Report. Our website address is https://www.onar.com. The information on, or that may be accessed through, our website is not incorporated by reference into this Report and should not be considered a part of this Report.
Summary of The Information Contained in Management’s Discussion and Analysis of Financial Condition and Results of Operations
Our Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is provided in addition to the accompanying condensed consolidated financial statements and notes to assist readers in understanding our results of operations, financial condition, and cash flows. MD&A is organized as follows:
| · | Overview. Summary of our operations. |
| · | Plan of Operations. A description of our plan of operations for the next 12 months including required funding. |
| · | Results of Operations. An analysis of our financial results comparing the three months ended March 31, 2026 and 2025. |
| · | Liquidity and Capital Resources. An analysis of changes in our consolidated balance sheets and cash flows and discussion of our financial condition. |
| · | Critical Accounting Policies and Estimates. Accounting estimates that we believe are important to understanding the assumptions and judgments incorporated in our reported financial results and forecasts. |
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Overview
Corporate Information
Our principal executive offices are located at 990 Biscayne Blvd, 5th Floor Miami, FL 33132, and our telephone number is (213) 437-3081.
Summary Description of Business Operations
ONAR
On July 25, 2024, Reliant Holdings acquired HLDCO, LLC and its wholly owned subsidiary, Integrum Group, LLC, which was subsequently renamed and rebranded as ONAR (“ONAR”). Due to the relative significance of HLDCO, LLC, we account for this acquisition as a reverse acquisition.
ONAR Holding Corporation (“ONAR”) is a technology-enabled marketing platform that acquires and integrates specialist marketing agencies to build a unified, data-driven operating network. The Company focuses on middle-market brands seeking enterprise-grade marketing capabilities without enterprise-level cost or complexity.
Following a year of deliberate portfolio transformation, ONAR today operates through three core business units: JUICE, the Company’s flagship AI-enabled performance marketing agency, formed by uniting the Storia and Juice Labs agencies under a single brand following the September 2025 acquisition of Juice Labs; ONAR Labs, the Company’s technology and innovation division; and Scale Partners, a tech-enabled platform serving the commercial real estate sector, acquired in March 2026. In parallel, the Company exited its non-core legacy operations, divesting the Reliant Pools swimming pool construction business effective December 31, 2025 and completing the sale of substantially all assets of its VMED Services healthcare marketing business, while retaining the Of Kos brand intellectual property. These actions allow ONAR to concentrate its capital and management attention on its higher-margin, AI-enabled marketing and technology businesses.
As part of the Juice Labs acquisition, ONAR also acquired Sour Grapes, a proprietary marketing-technology platform that helps brands manage real-time sentiment across meta and other channels. Sour Grapes serves as a foundational asset within ONAR Labs, the Company’s innovation and technology division, which focuses on developing and integrating artificial-intelligence-driven tools across ONAR’s agency network. ONAR Labs is designed to centralize the Company’s technology development, data architecture, and AI-enabled optimization efforts to drive higher-margin, recurring-revenue opportunities from SaaS and data products. ONAR Labs represents the Company’s long-term initiative to commercialize proprietary data and automation technology across its agency network.
In addition, during September 2025 the Company acquired the assets of Retina AI, a marketing-technology company specializing in maximizing customer lifetime value, further strengthening ONAR’s data and technology capabilities across its agency network.
As a marketing network, ONAR is structured for strategic mergers and acquisitions. The Company’s model leverages declining private-market valuations and rising costs of capital to consolidate specialist agencies at fair multiples and improve their operating performance through shared technology, centralized finance, and data-driven optimization. By utilizing its public-company platform, ONAR enables agency founders to exchange private ownership for liquidity and future upside in a scalable public vehicle.
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ONAR’s agencies collectively serve B2B and B2C clients across diverse sectors, including consumer products, manufacturing, business services, technology, e-commerce, and healthcare. Core services across the network include paid digital advertising, search-engine optimization, conversion-rate optimization, web development, creative production, field marketing, and experiential activations.
Plan of Operations
We are executing a transition plan focused on strengthening our balance sheet, streamlining operations, and positioning ONAR for scalable, sustainable growth. Our near-term priorities include: (1) refinancing or converting near-term debt maturities—most of which were incurred to close the Juice Labs acquisition—into longer-term, lower-cost obligations; (2) tightening expense controls and accelerating collections to improve cash conversion; (3) driving net-new revenue through higher-margin, AI-enabled marketing services; and (4) selectively funding strategic growth initiatives.
We ended the quarter with $178,550 in current assets and $10.6 million in current liabilities, resulting in a working capital deficit of approximately $10.4 million. Current liabilities include approximately $5.7 million of notes and other borrowings due within twelve months.
A portion of this short-term debt was intentionally incurred to fund the closing of the Juice Labs acquisition and related integration activities. Management’s plan from inception of that financing was to refinance or recapitalize these short-term obligations into longer-term, more sustainable debt and/or equity aligned with the Company’s growth profile.
The integration of Juice Labs is delivering measurable operating leverage. Net cash used in operating activities declined approximately 40% year over year, to approximately $205,000 for the three months ended March 31, 2026, and the Company received approximately $211,000 from financing activities in the period. While the Company does not currently have additional committed sources of capital, management believes that the completion of the potential refinancing will materially enhance the Company’s financial flexibility.
Near‑term priorities
| - | Address near‑term maturities and cost of capital. A significant portion of the Company’s short-term debt was incurred to fund the closing of the Juice Labs acquisition, with the intent to refinance that bridge financing into longer-term, lower-cost capital once the acquisition was complete. During the quarter ended March 31, 2026, we had approximately $93,000 of notes payable and accrued interest converted into common stock and repaid approximately $516,000 in principal on convertible notes payable and notes payable, related party. We also refinanced approximately $1 million of related-party debt into a new note maturing in August 2026. In addition, we are in the process of finalizing terms for a replacement facility that will consolidate and extend certain remaining short-term obligations, as well as be expandable for future acquisitions. |
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| - | Accelerate ONAR Labs development. ONAR Labs is integrating the Sour Grapes technology platform and the recently acquired Retina AI analytics assets to create a unified data and AI operating system for ONAR’s network. Management expects this initiative to expand recurring-revenue opportunities through technology licensing, data intelligence, and automation tools for ONAR’s agency clients. |
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| - | Focus on net-new revenue growth, including from new technology initiatives. This includes the relaunching of our Retina AI platform, which is now up and running and being tested with key existing clients. |
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| - | Advance the acquisition pipeline. Management continues to engage in active discussions regarding potential acquisitions which might further expand ONAR’s network of specialized marketing and technology agencies. |
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Collectively, these initiatives are designed to improve liquidity, reduce financing costs, and position ONAR to execute on its acquisition pipeline and organic growth opportunities.
These actions are intended to mitigate the substantial doubt about our ability to continue as a going concern and to support our transition toward a scalable, AI‑enabled marketing platform. Execution of this plan will depend on operating performance and access to capital.
Results of Operations
Highlights: The three months ended March 31, 2026 reflected a 39% year-over-year increase in total revenue, driven primarily by the inclusion of agencies acquired during 2025. Operating expenses declined year-over-year, while interest expense increased in connection with borrowings used to fund operations and acquisitions. We continue to prioritize cost discipline and strategic growth initiatives to improve profitability.
For the Three Months Ended March 31, 2026, compared to the Three Months Ended March 31, 2025
We had revenue of $1,021,085 for the three months ended March 31, 2026, compared to revenue of $734,515 for the three months ended March 31, 2025, an increase of $286,570 or 39% from the prior period. The increase in revenues was primarily due to the inclusion of agencies acquired during 2025 and changes in the customer base and timing of revenue streams.
We had cost of revenues of $964,846 for the three months ended March 31, 2026, compared to cost of revenues of $639,859 for the three months ended March 31, 2025, an increase of $324,987 or 51% from the prior period. This change is primarily due to the mix of revenue from acquired agencies and increased labor costs.
We had operating expenses of $381,882 for the three months ended March 31, 2026, compared to operating expenses of $1,111,882 for the three months ended March 31, 2025, representing a decrease of $730,000 or 66%. This decrease was primarily related to lower stock-based compensation, professional fees, and compliance costs incurred in the prior-year period.
We had interest expense of $802,502 for the three months ended March 31, 2026, compared to interest expense of $192,864 for the three months ended March 31, 2025, an increase of $609,638, due to interest costs and amortization of debt discount in connection with new borrowings during 2025 and 2026 to fund operations and acquisitions as described in greater detail under “Liquidity and Capital Resources” below.
We had no change in the fair value of our investments for the three months ended March 31, 2026, compared to a loss of $182,151 for the three months ended March 31, 2025. The prior-period change was the result of the liquidation of our investments coupled with changes in the underlying market for these securities.
We had income from discontinued operations of $-0- for the three months ended March 31, 2026, compared to $67,300 for the three months ended March 31, 2025, reflecting the Company’s exit from its legacy pool construction business during December 2025 (see Note 3 to the condensed consolidated financial statements).
We had a net loss of $1,128,066 for the three months ended March 31, 2026, compared to a net loss of $1,287,502 for the three months ended March 31, 2025, a decrease of $159,436 or approximately 12%.
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Liquidity and Capital Resources
We had total assets of $4.0 million as of March 31, 2026, consisting of total current assets of $178,550, which included cash of $11,213 and accounts receivable, net, of $55,614.
We had total and current liabilities of $10.6 million as of March 31, 2026, including accounts payable of $1,577,569, accrued expenses and other liabilities of $3,141,300, deferred revenue of $240,915, and notes payable, notes payable — related party, and convertible notes payable maturing within one year of approximately $5.7 million, net of associated debt discounts.
We had a working capital deficit of $10.4 million as of March 31, 2026, compared to a working capital deficit of $9.4 million as of December 31, 2025.
We used $205,094 of net cash in operating activities from continuing operations for the three months ended March 31, 2026, as compared to $344,264 of net cash used in operating activities from continuing operations for the three months ended March 31, 2025. Net cash used in operating activities in both periods was mainly due to our net loss for the period, offset by non-cash charges including amortization of debt discount, depreciation and amortization, and shares issued for services.
We used $88,850 of net cash in investing activities from continuing operations for the three months ended March 31, 2026, consisting of advances to a related party of $99,416, partially offset by $10,566 of net cash received in connection with the disposal of certain property and equipment. Investing activities from continuing operations provided $143,897 of net cash for the three months ended March 31, 2025.
We generated $210,737 of net cash from financing activities from continuing operations for the three months ended March 31, 2026, primarily driven by proceeds from convertible notes payable of $727,200, offset by payments on convertible notes payable of $491,463 and repayments of notes payable, related party, of $25,000. We generated $334,883 of net cash from financing activities from continuing operations for the three months ended March 31, 2025, driven primarily by proceeds from convertible notes payable of $385,000.
While we do not currently have committed additional sources of capital, we are actively evaluating financing options, including potential equity raises, strategic debt facilities, and partnership opportunities. We expect these efforts, combined with ongoing cost discipline and debt restructuring initiatives, to extend our operating runway.
Although there can be no assurance that the Company’s ongoing initiatives will be successful, management believes that the combination of (i) active debt-refinancing and recapitalization efforts, (ii) the significant reduction in operating cash usage following the Juice Labs integration, and (iii) disciplined cost management and expense controls will provide sufficient flexibility to support near-term operating and growth needs. The Company continues to evaluate additional financing options, including potential equity or debt offerings and strategic partnerships, as part of its broader capital-optimization plan.
Any such financing activities are expected to be structured to strengthen the balance sheet and minimize dilution to existing shareholders. If anticipated refinancing transactions or cash-flow improvements are delayed or unavailable, the Company may seek additional financing to ensure adequate liquidity. Management believes that, upon completion of the planned recapitalization and integration initiatives, ONAR will be better positioned to pursue selective strategic acquisitions and expansion opportunities without reliance on short-term funding.
Critical Accounting Policies and Estimates
The preparation of financial statements and related disclosures in conformity with U.S. generally accepted accounting principles and the Company’s discussion and analysis of its financial condition and operating results require the Company’s management to make judgments, assumptions and estimates that affect the amounts reported. Management bases its estimates on historical experience and on various other assumptions it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates, and such differences may be material.
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“Note 1. The Company and Summary of Significant Accounting Policies” in Part I, Item 1 of this Form 10-Q and “Note 1. The Company and Significant Accounting Policies” in the Notes to Consolidated Financial Statements in Part II, Item 8, of the 2025 Annual Report, describe the significant accounting policies and methods used in the preparation of the Company’s consolidated financial statements.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Pursuant to Item 305(e) of Regulation S-K (§ 229.305(e)), the Company is not required to provide the information required by this Item as it is a “smaller reporting company,” as defined by Rule 229.10(f)(1).
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We have established and maintain a system of disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act, that are designed to provide reasonable assurance that information required to be disclosed in our reports filed with the Securities and Exchange Commission pursuant to the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Commission and that such information is accumulated and communicated to our management, including our Chief Executive Officer (CEO), to allow timely decisions regarding required disclosures.
In connection with the preparation of this Quarterly Report on Form 10-Q, our management, with the participation of our Chief Executive Officer (our Principal Executive Officer and Principal Financial Officer), carried out an evaluation of the effectiveness of our disclosure controls and procedures as of March 31, 2026, as required by Rules 13a-15(e) and 15d-15(e) of the Exchange Act. Based on the evaluation described above, our management, including our Principal Executive Officer and Principal Financial Officer, concluded that, as of March 31, 2026, our disclosure controls and procedures were not effective.
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Changes in Internal Control Over Financial Reporting
As disclosed in the 2025 Annual Report, management identified material weaknesses in the Company's internal control over financial reporting that had not been fully remediated as of March 31, 2026. The 2025 Annual Report also described the remediation actions taken during 2025, including the appointment of a Vice President of Finance, the transition of day-to-day accounting functions in-house, the implementation of a two-person approval process for outgoing payments, and the engagement of external accounting advisors.
During the quarter ended March 31, 2026, management continued to implement the remediation plan described in the 2025 Annual Report under the leadership of the Vice President of Finance. Progress during the quarter included the adoption of a formal documentation policy for significant and non-routine transactions, the implementation of a period-end close checklist to standardize close and reconciliation procedures, and the establishment of a monthly financial review cadence, as part of a broader, multi-period control roadmap that management continues to develop and execute. Management has continued to advance these initiatives subsequent to quarter-end.
The material weaknesses described in the 2025 Annual Report will not be considered remediated until the applicable controls have operated for a sufficient period of time and management has concluded, through testing, that they are operating effectively. Except as described above, there were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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Part II – Other Information
Item 1. Legal Proceedings
On November 7, 2025, Jeffrey L. Feinberg Personal Trust (“Feinberg”) filed a complaint against ONAR, LLC in the Superior Court of the State of Delaware, Case No. N25C-11-060 SPL, alleging breach of contract and unjust enrichment related to a Senior Secured Promissory Note originally issued by Integrum Group, LLC (the Company’s predecessor entity) dated March 18, 2024, in the principal amount of $1,500,000. The Company has retained counsel, filed its Answer and Affirmative Defenses, and disputes the claims asserted. The parties are currently engaged in final settlement discussions and are in the process of completing definitive settlement documentation. At this time, management does not believe the ultimate resolution of this matter will have a material adverse effect on the Company’s financial condition, results of operations, or cash flows. See Note 7 to the condensed consolidated financial statements.
Item 1A. Risk Factors
There have been no material changes from the risk factors previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the SEC on June 11, 2026, under the heading “Item 1A. Risk Factors”, and investors should review the risks provided in the Annual Report, and below, prior to making an investment in the Company. The business, financial condition and operating results of the Company can be affected by a number of factors, whether currently known or unknown, including but not limited to those described in the Annual Report, under “Item 1A. Risk Factors”, any one or more of which could, directly or indirectly, cause the Company’s actual financial condition and operating results to vary materially from past, or from anticipated future, financial condition and operating results. Any of these factors, in whole or in part, could materially and adversely affect the Company’s business, financial condition, operating results and stock price.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Unregistered Sales of Equity Securities
None.
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Use of Proceeds From Sale of Registered Securities
None.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
None.
Item 3. Defaults Upon Senior Securities
As described in Part II, Item 1 and Note 7 to the condensed consolidated financial statements, the Jeffrey L. Feinberg Personal Trust has alleged that a Senior Secured Promissory Note issued by Integrum Group, LLC (now ONAR, LLC) in the principal amount of $1,500,000 matured on March 18, 2025 and remains unpaid. The Company disputes these claims and intends to defend itself vigorously in the matter. The principal amount of the note is included within notes payable, and related accrued interest within accrued expenses and other liabilities, on the condensed consolidated balance sheet as of March 31, 2026.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information.
(c) Rule 10b5-1(c) Trading Plans. Our director and executive officer may from time to time enter into plans or other arrangements for the purchase or sale of our shares that are intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or may represent a non-Rule 10b5-1 trading arrangement under the Exchange Act. During the quarter ended March 31, 2026, none of the Company’s directors or officers (as defined in Rule 16a-1(f)) adopted or terminated any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement.”
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| Table of Contents |
Item 6. Exhibits
Exhibit |
| Filed/ Furnished | Incorporated By Reference | ||||||||||
Number |
| Description of Exhibit |
| Herewith | Form |
| Exhibit | Filing Date |
| File Number |
| ||
|
|
|
| 8-K |
| 3.1 |
| June 22, 2026 |
| 000-56012 |
| ||
|
| ☒ |
|
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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 |
| ☒ |
|
|
|
|
|
|
| ||
101.SCH* |
| Inline XBRL Taxonomy Extension Schema Document |
| ☒ |
|
|
|
|
|
|
| ||
101.CAL* |
| Inline XBRL Taxonomy Extension Calculation Linkbase Document |
| ☒ |
|
|
|
|
|
|
| ||
101.DEF* |
| Inline XBRL Taxonomy Extension Definition Linkbase Document |
| ☒ |
|
|
|
|
|
|
| ||
101.LAB* |
| Inline XBRL Taxonomy Extension Label Linkbase Document |
| ☒ |
|
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|
|
|
|
| ||
101.PRE* |
| Inline XBRL Taxonomy Extension Presentation Linkbase Document |
| ☒ |
|
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|
|
|
| ||
104* |
| Inline XBRL for the cover page of this Quarterly Report on Form 10-Q included in the Exhibit 101 Inline XBRL Document Set |
| ☒ |
|
|
|
|
|
|
| ||
* Filed herewith.
** Furnished Herewith.
| 24 |
| Table of Contents |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.
| ONAR HOLDING CORPORATION |
| |
|
|
|
|
July 10, 2026 | By: | /s/ Claude Zdanow |
|
|
| Claude Zdanow |
|
|
| Chief Executive Officer and President |
|
|
| (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer) |
|
| 25 |