TGNT 10-Q
Totaligent, Inc. (TGNT)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the quarterly period 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:
Title of each class |
| Trading symbol |
| Name of exchange on which registered |
N/A |
| N/A |
| N/A |
Securities registered under Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
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 ☐ No ☒
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 and post such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting 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 is a shell company (as defined in Rule 12b-2 of the Act). Yes
Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. As of August 19, 2026, the registrant had
Documents Incorporated by Reference: None.
TOTALIGENT, INC.
FORM 10-Q
TABLE OF CONTENTS
| 2 |
| Table of Contents |
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This document contains certain statements of a forward-looking nature. Such forward-looking statements, including but not limited to statements regarding projected growth, trends and strategies, future operating and financial results, financial expectations and current business indicators are based upon current information and expectations and are subject to change based on factors beyond the control of the Company. Forward-looking statements typically are identified by the use of terms such as “look,” “may,” “should,” “might,” “believe,” “plan,” “expect,” “anticipate,” “estimate” and similar words, although some forward-looking statements are expressed differently. The accuracy of such statements may be impacted by a number of risks and uncertainties that could cause actual results to differ materially from those projected or anticipated, including but not limited to those set forth herein and in our Annual Report on Form 10-K.
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Except as required by the federal securities laws, we undertake no obligation to update forward-looking information. Nonetheless, the Company reserves the right to make such updates from time to time by press release, periodic report or other method of public disclosure without the need for specific reference to this Report. No such update shall be deemed to indicate that other statements not addressed by such update remain correct or create an obligation to provide any other updates.
| 3 |
| Table of Contents |
PART I – FINANCIAL INFORMATION
Item 1. Financial statements
TOTALIGENT, INC.
FOR THE SIX MONTHS ENDED JUNE 30, 2026
INDEX TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
| 4 |
| Table of Contents |
TOTALIGENT, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
|
| June 30, 2026 |
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| December 31, 2025 |
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| (Unaudited) |
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ASSETS |
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Current assets |
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Cash |
| $ |
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| $ |
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Prepaid expenses |
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Total current assets |
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Property and equipment, net |
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Capitalized software |
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Total assets |
| $ |
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| $ |
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LIABILITIES AND STOCKHOLDERS’ DEFICIT |
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Current liabilities |
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Accounts payable |
| $ |
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| $ |
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Accrued compensation |
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Accrued compensation, related parties |
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Accrued interest |
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Due to related party |
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Convertible notes payable, in default |
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Notes payable |
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Derivative liability |
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Total current liabilities |
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Total liabilities |
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Commitments and contingencies (Note 8) |
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Stockholders’ deficit |
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Preferred stock, $ |
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Series D Preferred stock, $ |
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Common stock, $ |
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Shares to be issued |
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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 consolidated financial statements
| F-1 |
| Table of Contents |
TOTALIGENT, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
UNAUDITED
|
| For the Three Months Ended |
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| For the Six Months Ended |
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| June 30, |
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| June 30, |
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| 2026 |
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| 2025 |
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| 2026 |
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| 2025 |
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Revenue |
| $ |
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| $ |
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| $ |
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| $ |
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Cost of revenue |
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Gross profit |
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Operating expenses: |
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Consulting expenses |
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Personnel expenses |
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Professional fees |
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General and administrative |
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Total operating expenses |
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Net operating loss |
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| ( | ) |
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Other income (expense) |
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Interest expense |
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| ( | ) |
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Gain on change in fair value of derivative liability |
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Loss on disposal of assets |
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Total other income (expense), net |
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Loss before income taxes |
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Provision for income tax |
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Net loss |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
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Deemed contribution |
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Net loss available to common shareholders |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
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Loss per share - basic and diluted |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
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Weighted average shares outstanding - basic and diluted |
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The accompanying notes are an integral part of these unaudited consolidated financial statements
| F-2 |
| Table of Contents |
TOTALIGENT, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026 UNAUDITED
|
| Preferred Stock |
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| Common Stock |
|
| Shares to be issued |
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| Additional Paid-in |
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| Accumulated |
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| Total Stockholders’ |
| ||||||||||||||||||
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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 |
|
| Amount |
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| Capital |
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| Deficit |
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| Deficit |
| |||||||||
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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Common stock to be issued for services |
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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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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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Conversion of Series D Preferred Stock into Common Stock |
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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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Common stock to be issued for services |
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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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Balance June 30, 2026 |
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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 consolidated financial statements
| F-3 |
| Table of Contents |
TOTALIGENT, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 UNAUDITED
|
| Preferred Stock |
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| Common Stock |
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| Shares to be issued |
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| Additional Paid-in |
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| Accumulated |
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| Treasury Stock |
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| Total Stockholders’ |
| |||||||||||||||||||||||
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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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| Shares |
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| Amount |
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| Deficit |
| |||||||||||
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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Conversion of Series D Preferred Stock into Common Stock |
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| ( | ) |
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| ( | ) |
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| — |
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| — |
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Cancellation of Series D Preferred Stock |
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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 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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| $ | ( | ) | ||||||||
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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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Balance June 30, 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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| $ | ( | ) | ||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements
| F-4 |
| Table of Contents |
TOTALIGENT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
UNAUDITED
|
| For the Six Months Ended |
| |||||
|
| June 30, |
| |||||
|
| 2026 |
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| 2025 |
| ||
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CASH FLOWS FROM OPERATING ACTIVITIES |
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| ||
Net loss |
| $ | ( | ) |
| $ | ( | ) |
Adjustment to reconcile net loss to net cash used in operating activities: |
|
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|
|
|
Depreciation expense |
|
|
|
|
|
| ||
Stock issued for services |
|
|
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|
| ||
Gain on change in fair value of derivative liabilities |
|
| ( | ) |
|
| ( | ) |
Loss on disposal of assets |
|
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|
|
| ||
Changes in Operating Assets and Liabilities: |
|
|
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|
|
Prepaid expense |
|
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|
|
| ||
Accounts payable |
|
|
|
|
| ( | ) | |
Accrued interest |
|
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|
| ||
Net change in cash due to operating activities |
|
| ( | ) |
|
| ( | ) |
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|
|
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
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|
|
|
|
Expenditures for capitalized software |
|
| ( | ) |
|
| ( | ) |
Net change in cash due to investing activities |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
|
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|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES |
|
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|
Proceeds from issuance of convertible notes payable |
|
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| ||
Proceeds from issuance of notes payable |
|
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|
| ||
Advances received from related parties |
|
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|
| ||
Repayments to related party |
|
| ( | ) |
|
|
| |
Net change in cash due to financing activities |
|
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|
|
|
| ||
|
|
|
|
|
|
|
|
|
Net (Decrease) Increase in Cash |
|
| ( | ) |
|
|
| |
|
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|
|
|
Cash - Beginning of the Period |
|
|
|
|
|
| ||
|
|
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|
|
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|
|
|
Cash - End of the Period |
| $ |
|
| $ |
| ||
|
|
|
|
|
|
|
|
|
Supplemental Disclosures of Cash Flows |
|
|
|
|
|
|
|
|
Cash paid for Interest |
| $ |
|
| $ |
| ||
Cash paid for income taxes |
| $ |
|
| $ |
| ||
|
|
|
|
|
|
|
|
|
Supplemental Disclosures of Non-Cash Investing and Financing Activities: |
|
|
|
|
|
|
|
|
Conversion of Series D Preferred Stock into Common Stock |
| $ |
|
| $ |
| ||
Conversion of convertible notes payable and accrued interest |
| $ |
|
| $ |
| ||
The accompanying notes are an integral part of these unaudited consolidated financial statements
| F-5 |
| Table of Contents |
TOTALIGENT, INC. AND SUBSIDIARY
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2026
1. Nature of operations
The Company was incorporated under the name Digi Messaging & Advertising Inc. (“Digi” or the “Company”) in the State of Wyoming on August 16, 2019, for the purpose of developing and operating multiple digital marketing platforms. On December 3, 2021, Totaligent, a Delaware corporation, Digi and the Shareholders of the Company (the “Digi Shareholders”) executed an Agreement and Plan of Merger (the “Merger Agreement”) that provided for Digi to be merged into Totaligent (the “Merger”) through a share exchange agreement. As a result of the Share Exchange, Totaligent acquired
Immediately following the Merger, Totaligent’s subsidiary, CSES Group, Inc., which owns all rights, title and interest in Totaligent’s refrigerant technology, was spun out in exchange for the cancellation of an aggregate of
On July 21, 2022, the Company changed its name to Totaligent, Inc. (“Totaligent” or the “Company”).
The Company’s activities are subject to significant risks and uncertainties, including the need for additional capital, as described herein. The Company has not yet developed sustainable revenue-generating operations, does not have positive cash flows from operations, and is dependent on periodic infusions of debt and equity capital to fund its operating requirements.
The Company’s common stock was traded under the symbol “LTMP” on the OTCQB through May 20, 2018, on the OTCID marketplace thereafter, and trades under the symbol “TGNT” as of August 1, 2022.
Recently, Totaligent has undergone a strategic shift driven by the accelerated adoption of artificial intelligence (AI) across the digital marketing landscape. While the standalone value of the Company’s platform as a third-party SaaS product has diminished in this AI-saturated environment, its robust data assets and underlying technology remain highly valuable. In response, the Company is evolving its focus to integrate AI capabilities more deeply, targeting acquisitions of AI companies and AI-enabled businesses that can leverage the Company’s platform and data for enhanced synergies—including those outside digital marketing, such as in the AI-enabled biotech space. Additionally, the Company is exploring a re-entry into the cryptocurrency mining space, with a specific emphasis on privacy-focused cryptocurrency, to diversify our operations and capitalize on emerging opportunities in decentralized technologies.
2. Summary of significant accounting policies
Basis of presentation and consolidation:
The accompanying unaudited consolidated financial statements, which include the presentation and accounts of the Company and Digi have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”), and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and reflect all adjustments, consisting of normal recurring adjustments, which management believes are necessary to fairly present the financial position, results of operations and cash flows of the Company for the six months ended June 30, 2026 and 2025. The unaudited consolidated financial statements have been prepared using the accrual basis of accounting in accordance with GAAP and presented in US dollars. They should be read in conjunction with the annual financial statements reported in the latest Form 10-K filed for the year ended December 31, 2025. The results of operations of any interim period are not necessarily indicative of the results for the full year. The year end is December 31. The unaudited consolidated financial statements include the accounts of Totaligent and Digi. Digi is a wholly owned subsidiary of Totaligent. All significant intercompany balances and transactions have been eliminated.
Reclassification of Presentation
Certain prior period amounts have been reclassified to conform with current year presentation. These reclassifications related to reclassifications from general and administrative expenses to professional fees and consulting fees. For the six months ended June 30, 2025, general and administrative expenses changed from $
| F-6 |
Going concern
The accompanying unaudited consolidated financial statements have been prepared on a going concern basis. For the six months ended June 30, 2026, the Company had a net loss of $
As a result, management has concluded that there is substantial doubt about the Company’s ability to continue as a going concern within one year of the date that the accompanying unaudited consolidated financial statements are being issued. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to raise additional funds and implement its business plan, and to ultimately achieve sustainable operating revenues and profitability. The accompanying unaudited consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
As market conditions present uncertainty as to the Company’s ability to secure additional funds, there can be no assurances that the Company will be able to secure additional financing on acceptable terms, or at all, as and when necessary to continue to conduct operations. A debt financing may contain undue restrictions on the Company’s operations and/or liens on the Company’s tangible and intangible assets, and an equity financing may cause substantial dilution to the Company’s common stockholders. If cash resources are insufficient to satisfy the Company’s ongoing cash requirements, the Company would be required to scale back or discontinue its operations, obtain funds, if available, although there can be no certainty, through strategic alliances that may require the Company to relinquish rights to its technology, or to discontinue its operations entirely.
The development and expansion of the Company’s business in 2026 and thereafter will be dependent on the capital resources available to the Company. No assurances can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company or adequate to fund the development and expansion of the Company’s business to a level that is commercially viable and self-sustaining.
Use of estimates
The preparation of financial statements in conformity with GAAP 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. Actual results could differ from those estimates.
Cash and cash equivalents
The Company maintains cash balances in a non-interest-bearing account that currently does not exceed federally insured limits. For the purpose of the unaudited consolidated statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. As of June 30, 2026 and December 31, 2025, the Company’s cash balances totaled $
| F-7 |
| Table of Contents |
Fair value measurements
Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures (“ASC 820”), provides a comprehensive framework for measuring fair value and expands disclosures which are required about fair value measurements. Specifically, ASC 820 sets forth a definition of fair value and establishes a hierarchy prioritizing the inputs to valuation techniques, giving the highest priority to quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable value inputs. ASC 820 defines the hierarchy as follows:
Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reported date. The types of assets and liabilities included in Level 1 are highly liquid and actively traded instruments with quoted prices, such as equities listed on the New York Stock Exchange.
Level 2 – Pricing inputs are other than quoted prices in active markets but are either directly or indirectly observable as of the reported date. The types of assets and liabilities in Level 2 are typically either comparable to actively traded securities or contracts or priced with models using highly observable inputs.
Level 3 – Significant inputs to pricing that are unobservable as of the reporting date. The types of assets and liabilities included in Level 3 are those with inputs requiring significant management judgment or estimation, such as complex and subjective models and forecasts used to determine the fair value of financial transmission rights.
The Company’s financial instruments consist of prepaid expenses, accrued compensation, accrued interest, convertible notes payable, and derivative liabilities. The carrying amounts of prepaid expenses, accrued compensation, accrued interest, and convertible notes payable approximates their fair values because of the short-term maturities of these instruments. The derivative liabilities are measured at fair value on a recurring basis with Level 3 inputs.
Treasury stock
Treasury stock is recognized at acquisition cost and is presented as a deduction from stockholder’s equity. Upon sale of treasury shares, the realized gain or loss is recognized through the unaudited consolidated statements of stockholders’ deficit in additional paid-in capital.
Related party transactions
A related party is generally defined as (i) any person that holds
Convertible Debentures
The Company adheres to the guidance in Accounting Standards Updated (“ASU”) 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. ASU 2020-06 simplifies an issuer’s accounting for convertible instruments and its application of the derivatives scope exception for contracts in its own equity. Additionally, ASU 2020-06 removes the requirements for accounting for beneficial conversion features.
| F-8 |
| Table of Contents |
Derivative Liability
The Company evaluates convertible instruments, options, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under ASC Topic 815, “Derivatives and Hedging”. The result of this accounting treatment is that the fair value of the derivative is marked-to-market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the unaudited consolidated statements of operations as other income (expense). Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. Equity instruments that are initially classified as equity that become subject to reclassification under ASC Topic 815 are reclassified to liabilities at the fair value of the instrument on the reclassification date. As of June 30, 2026 and December 31, 2025, the Company has a derivative liability of $
Property and Equipment
Property and equipment is recorded at cost. Major improvements are capitalized, while maintenance and repairs that do not improve or extend the useful life of the respective assets are charged to expense as incurred. Gains and losses from disposition of property and equipment are included in income and expense when realized. Depreciation of property and equipment is provided using the straight-line method over the following estimated useful lives:
Computer equipment | |
Furniture and fixtures |
Capitalized Software
The Company’s internal software development costs primarily relate to internal-use software. Such costs are capitalized in the application development stage in accordance with ASC 350-40, Internal-use Software (“ASC 350-40”). The Company also capitalizes software development costs upon the establishment of technological feasibility for a product in accordance with ASC 985-20, Software to be Sold, Leased, or Marketed (“ASC 985-20”). Software development costs are amortized on a straight-line basis over three years. As of June 30, 2026, the Company’s software is in public beta stage. Once the software goes live, the Company will begin amortizing the software development costs.
Impairment of Long-Lived Assets
The Company reviews long-lived assets, consisting primarily of property and equipment and capitalized software, for impairment at each fiscal year end or when events or changes in circumstances indicate the carrying value of these assets may exceed their current fair values. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the fair value of the assets. Assets to be disposed of are separately presented in the unaudited consolidated balance sheets and reported at the lower of the carrying amount or fair value less costs to sell and are no longer depreciated. The Company has not historically recorded any impairment to its long-lived assets. In the future, if events or market conditions affect the estimated fair value to the extent that a long-lived asset is impaired, the Company will adjust the carrying value of these long-lived assets in the period in which the impairment occurs. As of June 30, 2026 and December 31, 2025, the Company had not deemed any long-lived assets as impaired, and was not aware of the existence of any indicators of impairment at such dates.
| F-9 |
| Table of Contents |
Income taxes
The provision for income taxes is computed using the asset and liability method, under which deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating losses and tax credit carry-forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates that apply to taxable income in effect for the years in which those tax assets are expected to be realized or settled. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.
Uncertain tax positions
The Company evaluates tax positions in a two-step process. The Company first determines whether it is more likely than not that a tax position will be sustained upon examination, based on the technical merits of the position. If a tax position meets the more-likely-than-not recognition threshold, it is then measured to determine the amount of benefit to recognize in the unaudited consolidated financial statements. The tax position is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. The Company classifies gross interest and penalties and unrecognized tax benefits that are not expected to result in payment or receipt of cash within one year as long-term liabilities in the unaudited consolidated financial statements.
Revenue recognition
The Company’s revenues are generated from managing branding and awareness campaigns to publicly traded companies and political candidates. These campaigns typically consist of writing landing pages, editorials, creating ads, setting up and managing email, SMS, Push, SEO, PPC and programmatic campaigns, as well as social media marketing. The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers (ASC 606). In accordance with ASC 606, revenue is recognized when promised services are transferred to a customer. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these services. To achieve this core principle, the Company applies the following five steps:
Identify the contract with a customer.
A contract with a customer exists when (i) the Company enters into an enforceable contract with a customer that defines each party’s rights regarding the services to be transferred and identifies the payment terms related to these services, (ii) the contract has commercial substance and, (iii) the Company determines that collection of substantially all consideration for services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. The Company applies judgment in determining the customer’s ability and intention to pay, which is based on a variety of factors including the customer’s historical payment experience or, in the case of a new customer, published credit and financial information pertaining to the customer.
Identify the performance obligations in the contract:
A performance obligation is a promise to provide a distinct good or service or a series of distinct goods or services. A good or service that is promised to a customer is distinct if the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer, and a company’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract.
| F-10 |
| Table of Contents |
Determine the transaction price.
The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring services to the customer. To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing either the expected value method or the most likely amount method depending on the nature of the variable consideration. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur.
Allocate the transaction price to performance obligations in the contract.
If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. However, if a series of distinct services that are substantially the same qualifies as a single performance obligation in a contract with variable consideration, the Company must determine if the variable consideration is attributable to the entire contract or to a specific part of the contract. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price basis unless the transaction price is variable and meets the criteria to be allocated entirely to a performance obligation or to a distinct service that forms part of a single performance obligation.
Recognize revenue when or as the Company satisfies a performance obligation.
The Company satisfies performance obligations at a point in time. Revenue is recognized at the time the related performance obligation is satisfied by transferring the promised service to a customer. Under both managed services arrangements and self-service arrangements, the Company’s promised services under the contracts include identification, bidding and purchasing of advertisement opportunities. The Company also generally has discretion in establishing the pricing of the ads. Since the Company is controlling the promise to deliver the contracted services, the Company is considered the principal in all arrangements for revenue recognition purposes. The performance obligations are satisfied, and revenue recognition, primarily upon performing the set up on content creation and monthly for the management fees.
Advertising Costs
The Company expenses advertising costs when advertisements occur. During the three months ended June 30, 2026 and 2025, the Company recorded $
Stock-based compensation
The cost of equity instruments issued to employees and non-employees in return for goods and services is measured by the grant date fair value of the equity instruments issued in accordance with ASC 718, Compensation – Stock Compensation. The related expense is recognized as services are rendered or vesting periods elapse. During the three and six months ended June 30, 2026, the Company recorded $
Net loss per share calculation
Basic earnings (loss) per common share (“EPS”) is computed by dividing net income (loss) available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average shares outstanding, assuming all dilutive potential common shares were issued. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive.
| F-11 |
| Table of Contents |
The following potential common shares were excluded from the calculation of diluted net loss per share available to common stockholders because their effect would have been antidilutive:
|
| Three and six months ended June 30, |
| |||||
|
| 2026 |
|
| 2025 |
| ||
|
|
|
|
|
|
| ||
Convertible notes payable |
|
|
|
|
|
| ||
Preferred stock |
|
|
|
|
|
| ||
Total |
|
|
|
|
|
| ||
As of June 30, 2026 and 2025, the number of outstanding common stock plus common stock equivalents is greater than the authorized shares. However, preferred stock conversions may only take place if the Company has enough authorized and unissued shares available to accommodate the conversion. On August 14, 2026, the Company received approval to increase the authorized shares from
Segment Reporting
The Company has determined that it has one reportable segment, which includes managing branding and awareness campaigns to publicly traded companies and political candidates. The single segment was identified based on how the Chief Operating Decision Maker, who was determined to be the Chief Executive Officer, manages and evaluates performance and allocates resources. The CEO manages and evaluates the measures via the items on the income statement.
Recently issued accounting pronouncements
In November 2024, the FASB (“Financial Accounting Standards Board”) issued ASU 2024-04, Debt with Conversion and Other Options: Induced Conversion of Convertible Debt Instruments (Subtopic 470-20), which clarifies accounting for induced conversions of convertible debt, specifically when issuers offer “sweeteners” to prompt early conversion. It requires that for induced conversion accounting to apply, the instrument must have a substantive conversion feature and the offer must preserve the form and amount of consideration, even if settled in cash or hybrid forms. This standard is effective for annual periods beginning after December 15, 2025, and early adoption permitted. The Company adopted this guidance on January 1, 2026. The Company has not had any induced conversions of debt but if and when the Company has an induced conversion, this standard will impact the way the Company accounts for induced conversions of debt.
In December 2025, the FASB issued ASU 2025-12, Codification Improvements which makes targeted technical corrections, clarifications and other incremental improvements to various topics in the Accounting Standards Codification, including guidance related to earnings per share, credit losses and receivables, treasury stock retirements, income taxes, revenue-related receivables and transfers of financial assets. The amendments are intended to improve the clarity and consistency of existing U.S. GAAP and generally are not expected to significantly change current accounting practice. This standard is effective for annual reporting periods beginning after December 15, 2026, including interim periods within those annual periods. Early adoption is permitted, including adoption on an issue-by-issue basis. Except for the amendments to Topic 260, Earnings Per Share, which must be applied retrospectively, the amendments may be applied prospectively or retrospectively, with the transition method elected on an issue-by-issue basis. The Company expects to adopt ASU 2025-12 on January 1, 2027. The Company is currently evaluating the provisions applicable to its transactions, including the available transition elections, and the impact of adoption on its consolidated financial statements and related disclosures is not yet known or reasonably estimable.
| F-12 |
| Table of Contents |
3. Property and equipment
Property and equipment as of June 30, 2026 and December 31, 2025, are summarized as follows:
|
| June 30, |
|
| December 31, |
| ||
|
| 2026 |
|
| 2025 |
| ||
Computer equipment |
| $ |
|
| $ |
| ||
Computer server |
|
|
|
|
|
| ||
|
|
|
|
|
|
| ||
Less: Accumulated depreciation |
|
| ( | ) |
|
| ( | ) |
Property and equipment - net |
| $ |
|
| $ |
| ||
For the three months ended June 30, 2026 and 2025, the Company recorded $
4. Capitalized software
Capitalized software consisted of the following at June 30, 2026 and December 31, 2025:
|
| June 30, |
|
| December 31, |
| ||
|
| 2026 |
|
| 2025 |
| ||
Software development costs |
| $ |
|
| $ |
| ||
Less: Accumulated amortization |
|
|
|
|
|
| ||
Intangible assets - net |
| $ |
|
| $ |
| ||
As of June 30, 2026, the Company’s software is in public beta stage. Once the software goes live, the Company will begin amortizing the software development costs.
| F-13 |
| Table of Contents |
5. Convertible notes payable
The following table details the Company’s convertible notes payable as of June 30, 2026 and December 31, 2025, respectively:
|
|
|
|
| Original |
|
|
|
|
| Principal Balance as of |
| ||||||||||||
|
|
| Date of Note |
| Principal |
|
|
| Interest |
|
| June 30, |
|
| December 31, |
| ||||||||
Ref No. |
|
|
| Issuance |
| Balance |
|
| Maturity Date |
| Rate % |
|
| 2026 |
|
| 2025 |
| ||||||
| 1 |
|
| */*** |
| 6/16/2021 |
| $ |
|
|
|
|
|
| $ |
|
| $ |
| |||||
| 2 |
|
| */*** |
| 6/17/2021 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
| 3 |
|
| */*** |
| 6/18/2021 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
| 4 |
|
| */*** |
| 7/2/2021 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
| 5 |
|
| */*** |
| 8/4/2021 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
| 6 |
|
| */*** |
| 8/16/2021 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
| 7 |
|
| */*** |
| 9/10/2021 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
| 8 |
|
| */*** |
| 10/18/2021 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
| 9 |
|
| */*** |
| 6/30/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
| 10 |
|
| **/*** |
| 9/28/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
| 11 |
|
| **/*** |
| 9/29/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
| 12 |
|
| **/*** |
| 10/1/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
| 13 |
|
| */*** |
| 10/13/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
| 14 |
|
| **/*** |
| 8/7/2024 |
|
| 30,000 |
|
|
|
|
|
|
|
|
|
|
| ||||
| 15 |
|
| **/*** |
| 8/26/2024 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
| 16 |
|
| **/*** |
| 10/29/2024 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
| 17 |
|
| **/*** |
| 11/27/2024 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
| 18 |
|
| **/*** |
| 12/2/2024 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
| 19 |
|
| **/*** |
| 12/9/2024 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
| 20 |
|
| **/*** |
| 12/18/2024 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
| 21 |
|
| **/*** |
| 2/18/2025 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
| 22 |
|
| **/*** |
| 3/28/2025 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
| 23 |
|
| **/*** |
| 4/1/2025 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
|
|
|
|
| Total |
|
|
|
|
|
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| $ |
|
| $ |
| ||
*
**The conversion price is fixed at $
*** In default as of June 30, 2026.
Holders of these convertible notes payable may not convert a note into common stock if doing so would result in the debt holder (together with its affiliates) beneficially owning more than 4.99% of the Company’s outstanding common stock.
Accounting considerations for notes with variable conversion prices
The Company evaluated the notes under ASC 815 Derivatives and Hedging (“ASC 815”). ASC 815 generally requires the analysis of embedded terms and features that have characteristics of derivatives to be evaluated for bifurcation and separate accounting in instances where their economic risks and characteristics are not clearly and closely related to the risks of the host contract. The material embedded derivative features consisted of the embedded conversion option. The conversion option is not clearly and closely related to the host debt agreement and required bifurcation. Current accounting principles that are also provided in ASC 815 do not permit an issuer to account separately for individual derivative terms and features that require bifurcation and liability classification. Rather, such terms and features must be and were bundled together and fair valued as a single, compound embedded derivative.
| F-14 |
| Table of Contents |
Accounting considerations for notes with fixed conversion prices
The Company evaluated the notes under ASC 815. ASC 815 generally requires the analysis of embedded terms and features that have characteristics of derivatives to be evaluated for bifurcation and separate accounting in instances where their economic risks and characteristics are not clearly and closely related to the risks of the host contract. There were no embedded instruments which required bifurcation.
During the three and six months ended June 30, 2026, the holder converted Note 2 ($
During the three months ended June 30, 2026 and 2025, the Company recorded $
6. Notes payable
The following table details the Company’s notes payable as of June 30, 2026 and December 31, 2025, respectively:
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| Original |
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| Principal Balance as of |
| ||||||||
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| Date of Note |
| Principal |
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| Interest |
|
| June 30, |
|
| December 31, |
| |||||
Ref No. |
|
| Issuance |
| Balance |
|
| Maturity Date |
| Rate % |
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| 2026 |
|
| 2025 |
| |||||
| 1 |
|
| 12/22/2025 |
| $ |
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| $ |
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| $ |
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| 2 |
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| 12/24/2025 |
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| 3 |
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| 01/27/2026 |
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| 4 |
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| 02/24/2026 |
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| 5 |
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| 02/24/2026 |
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| 6 |
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| 03/17/2026 |
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| 7 |
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| 03/24/2026 |
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| 8 |
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| 4/1/2026 |
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| 9 |
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| 4/8/2026 |
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| 10 |
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| 5/6/2026 |
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| 11 |
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| 5/14/2026 |
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| 12 |
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| 5/28/2026 |
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| Total |
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| $ |
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| $ |
| ||
During the three months ended June 30, 2026 and 2025, the Company recorded $
| F-15 |
| Table of Contents |
7. Derivative liabilities
Embedded derivatives
The Company’s convertible promissory notes gave rise to derivative financial instruments. The notes embodied certain terms and conditions that were not clearly and closely related to the host debt agreement in terms of economic risks and characteristics. These terms and features consist of the embedded conversion option.
The following tables summarize the components of the Company’s derivative liabilities and linked common shares as of June 30, 2026 and December 31, 2025 and the amounts that were reflected in income related to derivatives for the period ended:
|
| June 30, 2026 |
| |||||
The financings giving rise to derivative financial instruments |
| Indexed Shares |
|
| Fair Values |
| ||
Embedded derivatives |
|
|
|
| $ |
| ||
Total |
|
|
|
| $ |
| ||
|
| December 31, 2025 |
| |||||
The financings giving rise to derivative financial instruments |
| Indexed Shares |
|
| Fair Values |
| ||
Embedded derivatives |
|
|
|
| $ |
| ||
Total |
|
|
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| $ |
| ||
The following table summarizes the effects on the Company’s gain (loss) associated with changes in the fair values of the derivative financial instruments by type of financing for the three and six months ended June 30, 2026 and 2025:
|
| For the three months ended |
| |||||
|
| June 30, 2026 |
|
| June 30, 2025 |
| ||
Embedded derivatives |
| $ |
|
| $ |
| ||
Loss on issuance of derivative |
|
|
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|
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| ||
Total (gain) loss |
| $ |
|
| $ |
| ||
|
| For the six months ended |
| |||||
|
| June 30, 2026 |
|
| June 30, 2025 |
| ||
Embedded derivatives |
| $ |
|
| $ |
| ||
Loss on issuance of derivative |
|
|
|
|
|
| ||
Total (gain) loss |
| $ |
|
| $ |
| ||
| F-16 |
| Table of Contents |
Current accounting principles that are provided in ASC 815 require derivative financial instruments to be classified in liabilities and carried at fair value with changes recorded in income. The Company has selected the Monte Carlo Simulation Model (“MCS”), valuation technique to fair value the embedded derivative because it believes that this technique is reflective of all significant assumption types, and ranges of assumption inputs, that market participants would likely consider in transactions involving embedded derivatives. Such assumptions include, among other inputs, interest risk assumptions, credit risk assumptions and redemption behaviors in addition to traditional inputs for option models such as market trading volatility and risk-free rates. The MCS technique is a level three valuation technique because it requires the development of significant internal assumptions in addition to observable market indicators. For instruments in which the time to expiration has expired, the Company has utilized the intrinsic value as the fair value. The intrinsic value is the difference between the quoted market price on the valuation date and the applicable conversion price. Significant inputs and results arising from the Monte Carlo Simulation process are as follows for the embedded derivatives that have been bifurcated from the convertible notes and classified in liabilities:
|
| Inception Date |
|
| December 31, 2025 |
|
| June 30, 2026 |
| |||
Quoted market price on valuation date |
| $ |
|
| $ |
|
| $ |
| |||
Effective contractual conversion rates |
| $ |
|
| $ |
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| $ |
| |||
Contractual term to maturity |
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| ||||||
Market volatility: |
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| |
Volatility |
| % |
| % |
| % | ||||||
Risk-adjusted interest rate |
|
| % |
|
| % |
|
| % | |||
The following table reflects the issuances of embedded derivatives, conversions, and changes in fair value inputs and assumptions related to the embedded derivatives as of June 30, 2026 and December 31, 2025:
|
| Six months ended |
|
| Year ended |
| ||
|
| June 30, 2026 |
|
| December 31, 2025 |
| ||
Balances at beginning of period |
| $ |
|
| $ |
| ||
Issuances of embedded derivatives |
|
|
|
|
|
| ||
Conversions/extinguishments |
|
| ( | ) |
|
|
| |
Changes in fair value inputs and assumptions reflected in income |
|
| ( | ) |
|
|
| |
Balances at end of period |
| $ |
|
| $ |
| ||
8. Commitments and contingencies
Legal contingencies
From time to time, the Company may be subject to claims, disputes, demand letters, or other legal matters arising in the ordinary course of business; however, management does not believe that any such matters, whether currently asserted or previously threatened, individually or in the aggregate, would have a material adverse effect on the Company’s business, financial condition, or results of operations. As of June 30, 2026, the Company was not subject to any actual, threatened or pending legal actions or claims.
| F-17 |
| Table of Contents |
Significant agreements and contracts
On September 8, 2025, the Company entered into an Investor Relations/Public Relations Consulting and Services Agreement with a consultant. Under the Agreement, the consultant was to provide investor relations, corporate communications, and public relations services to the Company for a six-month term beginning September 8, 2025 and ending March 6, 2026, with automatic month-to-month renewal thereafter unless terminated.
As consideration for these services, the Company agreed to issue to the Consultant five million (
On April 20, 2026, the Company entered into Accrued Salary Reduction Agreements with three employees, pursuant to which the employees forgave $
On April 10, 2026, the Company entered into a Definitive Agreement (the “Agreement”) with Ivan Klarich for the strategic contribution of certain intangible assets related to the Aetherium Medical platform (the “Aetherium Assets”), consisting primarily of trade secrets, know-how, business relationships, network contacts, operational infrastructure, and related intangibles developed by the Aetherium team. The transactions contemplated by the Agreement include, among other things: (i) the formation by the Company of a wholly owned Delaware limited liability company subsidiary named Aetherium Medical LLC (the “Aetherium Entity”); (ii) the contribution of the Aetherium Assets to the Aetherium Entity; (iii) the appointment of Mr. Klarich as President of the Company (which occurred upon execution of the Agreement) and as a member of the Board of Directors promptly following closing; (iv) execution of an employment agreement with Mr. Klarich; (v) the issuance of Series D Preferred Stock (or Common Stock at the Company’s election) representing an initial approximately
The original Closing Date under the Agreement was approximately 30 days after the Effective Date (subject to mutual agreement), with an Outside Date of 60 days after the Effective Date. On May 18, 2026, holders of a majority of the voting power of the Company’s outstanding capital stock (approximately 56.13%) approved the Agreement and the transactions contemplated thereby by written consent, and the Board of Directors of the Company ratified, affirmed, and approved the Agreement and related actions by unanimous written consent.
As of the date of this Quarterly Report on Form 10-Q, the Closing has not occurred. Under Section 9.7 of the Agreement, the Company agreed to use its commercially reasonable best efforts to provide funding for the operating and development needs of the Aetherium Entity (or any related joint venture). The Parties acknowledged that funding levels would depend on the Company’s financial condition, capital-raising efforts, and operational needs, and that failure to provide such funding would not constitute a breach of the Agreement or give rise to termination, unwind, rescission, or equity forfeiture rights. The Company has been unable to raise sufficient capital to support execution of the Aetherium business plan on the contemplated timeline. As a result, consummation of the transactions remains uncertain and is in jeopardy.
There can be no assurance that the Company will successfully raise the necessary capital, that the Parties will mutually agree to extend the Outside Date or waive remaining conditions, or that the Closing will occur. If the transactions do not close, the Company will not receive the contribution of the Aetherium Assets, will not issue the initial Closing equity or subsequent milestone equity under the Agreement, and Mr. Klarich’s appointment to the Board will not occur under the terms of the Agreement (although he continues to serve as President). The Company continues to evaluate its strategic alternatives, capital-raising efforts, and the status of the Agreement.
The foregoing description is qualified in its entirety by reference to the full text of the Definitive Agreement (including exhibits and schedules), the Board and stockholder written consents, and related documents previously filed or described in the Company’s Current Reports on Form 8-K.
9. Equity
Preferred Stock
The Company has authorized a total of
Common Stock
As of June 30, 2026 and December 31, 2025, respectively, the Company had authorized
As of June 30, 2026, the Company had
| F-18 |
| Table of Contents |
Shares to be issued
As of June 30, 2026 and December 31, 2025, the Company had
|
| June 30, |
|
| December 31, |
| ||
|
| 2026 |
|
| 2025 |
| ||
Sale of common stock |
|
|
|
|
|
| ||
Series D Preferred Stock owed for services |
|
|
|
|
|
| ||
Common stock owed for services |
|
|
|
|
|
| ||
Balances at end of period |
|
|
|
|
|
| ||
10. Income taxes
The Company did not provide any current or deferred US federal income tax provision or benefit for the periods ending June 30, 2026 and December 31, 2025 as they incurred tax losses during both of these periods.
When it is more likely than not, that a tax asset cannot be realized through future income, the Company must record an allowance against any future potential future tax benefit. The Company has provided a full valuation allowance against the net deferred tax asset, consisting of net operating loss carry forwards, because management has determined that it is more likely than not that the Company will not earn income sufficient to realize the deferred tax assets during the carry forward periods. The Company has not taken a tax position that, if challenged, would have a material effect on the unaudited consolidated financial statements for the three and six months ended June 30, 2026 and 2025 as defined under ASC 740, “Accounting for Income Taxes.”
The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate to income before provision for income taxes.
The sources and tax effects of the differences for the periods presented are as follows:
|
| Three and Six months ended |
| |||||
|
| June 30, 2026 |
|
| June 30, 2025 |
| ||
U.S. statutory federal income tax rate |
|
| % |
|
| % | ||
State income taxes, net of federal income tax |
|
| % |
|
| % | ||
Change in valuation allowance |
|
| ( | )% |
|
| ( | )% |
Effective income tax rate |
|
|
|
|
|
| ||
A reconciliation of the income taxes computed at the statutory rate is as follows:
|
| Three months ended |
| |||||
|
| June 30, 2026 |
|
| June 30, 2025 |
| ||
|
|
|
|
|
|
| ||
Tax credit (expense) at statutory rate (26%) |
| $ |
|
| $ |
| ||
Increase in valuation allowance |
|
| ( | ) |
|
| ( | ) |
Net deferred income tax asset |
| $ |
|
| $ |
| ||
| F-19 |
| Table of Contents |
|
| Six months ended |
| |||||
|
| June 30, 2026 |
|
| June 30, 2025 |
| ||
|
|
|
|
|
|
| ||
Tax credit (expense) at statutory rate (26%) |
| $ |
|
| $ |
| ||
Increase in valuation allowance |
|
| ( | ) |
|
| ( | ) |
Net deferred income tax asset |
| $ |
|
| $ |
| ||
At June 30, 2026 and December 31, 2025, the significant components of the deferred tax assets are summarized below:
|
| June 30, |
|
| December 31, |
| ||
|
| 2026 |
|
| 2025 |
| ||
|
|
|
|
|
|
| ||
Net operating loss carry-forward |
| $ |
|
| $ |
| ||
Valuation allowance |
|
| ( | ) |
|
| ( | ) |
Net deferred tax asset (liability) |
| $ |
|
| $ |
| ||
As of June 30, 2026 and December 31, 2025, the Company had a federal net operating loss carryforward of approximately $
11. Related party transactions
During the six months ended June 30, 2026, the Company’s CEO provided advances totaling $
As of June 30, 2026 and December 31, 2025, the Company has an accrued compensation balance to related parties in the amount of $
On April 20, 2026, the Company entered into Accrued Salary Reduction Agreements with two employees, pursuant to which the employees forgave $
12. Accrued compensation
As of June 30, 2026 and December 31, 2025, the Company has an accrued compensation balance of $
13. Subsequent events
On July 7, 2026, the Company issued an unsecured promissory note in the amount of $
On August 6, 2026, a shareholder returned
On August 14, 2026, stockholders having a majority of the voting power of the outstanding shares of the Company’s stock, approved a board resolution to increase the authorized shares of common stock from
| F-20 |
| Table of Contents |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion of our financial condition and results of operations should be read in conjunction with the audited and unaudited consolidated financial statements and the notes to those statements included elsewhere in this Report. This discussion contains forward-looking statements that involve risks and uncertainties. You should specifically consider the various risk factors identified in this Report that could cause actual results to differ materially from those anticipated in these forward-looking statements.
Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements, including without limitation, statements related to our plans, strategies, objectives, expectations, intentions and adequacy of resources. Investors are cautioned that such forward-looking statements involve risks and uncertainties including without limitation the following: (i) our plans, strategies, objectives, expectations and intentions are subject to change at any time at our discretion; (ii) our plans and results of operations will be affected by our ability to manage growth; and (iii) other risks and uncertainties indicated from time to time in our filings with the Securities and Exchange Commission.
In some cases, you can identify forward-looking statements by terminology such as ‘‘may,’’ ‘‘will,’’ ‘‘should,’’ ‘‘could,’’ ‘‘expects,’’ ‘‘plans,’’ ‘‘intends,’’ ‘‘anticipates,’’ ‘‘believes,’’ ‘‘estimates,’’ ‘‘predicts,’’ ‘‘potential,’’ or ‘‘continue’’ or the negative of such terms or other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of such statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. We are under no duty to update any of the forward-looking statements after the date of this Report.
This section of the report should be read together with Footnotes of the Company’s audited consolidated financials for the year ended December 31, 2025. The unaudited consolidated statements of operations for the three and six months ended June 30, 2026 and 2025 are compared in the sections below.
Financial Results
Totaligent, Inc. (“Totaligent” or the “Company”) is a person-based digital marketing platform that allows companies and individuals to use and unlock owned and acquired data to efficiently market their products, services, and brands. The Company’s consumer-facing integrated digital marketing platform, which allows individuals and enterprises to leverage its big data to micro-target customers with disruptive increases in efficiency, public beta launched on March 5, 2025. Totaligent is a Delaware corporation currently trading on the OTCID Market under the stock symbol TGNT, and has executive offices located at 3651 FAU Boulevard Suite 400 Boca Raton, FL 33431 and a technology hub in Houston, TX.
In response to the accelerated adoption of artificial intelligence (AI) across industries, the Company is undergoing a strategic evolution, recognizing that while the standalone value of third-party SaaS products has diminished in an AI-saturated market, its robust platform and data assets remain highly valuable. This shift is guiding Totaligent toward deeper AI integrations, targeted acquisitions of AI companies and AI-enabled businesses—including those outside digital marketing, such as in biotech—and exploration of diversified opportunities like re-entering cryptocurrency mining.
| 5 |
| Table of Contents |
Business Description:
Today, Totaligent offers managed campaigns to publicly traded companies and political candidates and launched the public beta version of its consumer-facing person-based digital marketing platform on March 5, 2025. Totaligent’s managed campaign business will continue to be the main driver of revenue until the public launch of the consumer platform. Amid the rapid rise of AI, which has accelerated industry-wide transformations, Totaligent is adapting its core offerings to leverage AI for enhanced capabilities, while viewing its platform and data as foundational assets for synergies with AI-driven acquisitions and diversification into areas like privacy-focused cryptocurrency mining.
Totaligent’s white-label programmatic ad platform is directly connected to its own custom Database Management Platform (“DMP”), which allows micro-targeting using data matching, which can be site specific, area specific and/or zip code specific. This platform leverages highly efficient display advertising, as opposed to general search engine keyword advertising. The platform is connected to more than 40 network publishers, giving users a deep network of web portals in all verticals.
The Totaligent team is continuously updating the platform to follow the ever-changing advertising rules implemented by Google, Facebook, Twitter and others, regarding advertising crypto, drugs, tobacco, firearms, sex, and political advertising. Our customer outreach tools include email, SMS, and push notification.
| · | Email marketing on the Totaligent platform connects to most of the known email marketing Electronic Services Portals (“ESP”). |
| · | Short Message Service (“SMS”) connects to multiple telecom partners allowing users to choose deliverability and the best price for their messaging needs. We offer long code, short code, and 1-800s. |
| · | Push notification marketing utilizes the Totaligent smart code (cookie), which allows customers to receive push notifications for upcoming news, offers, events, and more, all managed internally on Totaligent’s Push servers. |
Individual Totaligent services are currently operational and used for our managed campaign program. Upon the launch of the consumer-facing platform, the full spectrum of Totaligent’s digital communication tools will operate within the same User Interface XML (“UIX”), negating the need for multiple service providers or Customer Relationship Management (“CRM”) tools to perform various individual tasks. Users will be able to harmonize every facet of a digital campaign from a single panel, allowing multichannel marketing and analytics to maximize communication and ROI from the user’s customer and visitor databases.
Background
To be successful in today’s digital world, companies’ websites need pop up widgets, tracking pixels, push notification services, email services (Constant Contact, Mail Chimp, etc.), text and/or SMS services (Twilio), and other services for Pay per Click (“PPC”) (Google, Oath, Twitter, Facebook, etc.). From platform set up to campaign management, each of these services requires additional layers of effort and focus.
Companies are required to purchase or license software and often need a technical team to set up and integrate APIs and manage each digital platform. Today, most users of these services are typically small to medium sized business owners and don’t have the technical expertise, time or capital to effectively manage digital marketing campaigns successfully. These deficiencies make them susceptible to click and bot fraud, which runs rampant on ad networks.
There is no way to audit clicks and impressions on these ad networks; companies are led to believe that every view and click is a real person when in reality, they’re not. Fake clicks and impressions are a massive revenue generator for the ad networks, so there is no incentive for them to make digital advertising more efficient. Companies are simply told to accept unsustainable conversion rates.
| 6 |
| Table of Contents |
In addition, ad networks hoard an enormous amount of customer data (email, device ID, mobile number, etc.) for their benefit, even though they are being paid by companies to acquire customers on their behalf. Companies are only provided with the alleged number of clicks and the average time spent on their site. This lack of crucial data is a major disadvantage for the companies’ campaign managers when trying to determine how to better engage with their target market. Because they cannot retarget prospects via email, text, or otherwise, they are forced to spend additional money on the ad networks to blindly reengage.
How Totaligent is Different
The Totaligent platform makes every visitor and impression a usable data point. When users run digital campaigns on Totaligent, every prospect that clicks on users’ sites, is immediately matched to the requisite data from the DMP, providing the users with crucial data points. The Totaligent platform stores the users’ data in a closed-circuit environment for use in future digital campaigns. This is the key to the Totaligent marketing platform. Totaligent can match all visitor data immediately upon landing on the users’ websites, like: device IDs, IP address, mobile number, email address, and social network profiles. This type of data allows Totaligent’s users to engage in micro-targeted person-based marketing, as opposed to blindly running ad campaigns and requesting the site visitors’ details. With Totaligent, users will now be able to access one interface to manage their Text, Email, PPC, and Push Notification campaigns to maximize their person-based marketing efforts. In an AI-saturated environment where standalone SaaS value has diminished, Totaligent’s data-rich platform remains a valuable asset, positioning it for integration with AI capabilities and acquisitions in diverse fields to drive enhanced synergies.
Totaligent Programmatic
The use of programmatic marketing is extremely cost effective, when Totaligent users create “like audiences.” Users of the platform can input specific demographics to create “like audiences” for micro-targeting purposes, so they can be most efficient with their ad spend. Totaligent estimates that person-based targeted ads yield a 40% cost savings, while increasing conversion rates from remarketing campaigns. Benefits:
| · | Eliminates bot and fraudulent traffic, as well as wasteful display impressions; now every impression becomes useful data with Totaligent’s ability to match and append based upon IP address and device ID. |
|
|
|
| · | Eliminates the need to target the general population, with the hope that an interested party will click an ad with the intention of converting. |
|
|
|
| · | Eliminates competitors and marketers clicking ads, to get advertising ideas, pushing lower conversion ratios, or simply to waste a user’s money. |
| 7 |
| Table of Contents |
Totaligent currently has vast U.S. audiences of businesses, non-profits, political parties, venture capital, financial markets/investor verticals, and donors. As AI adoption accelerates, these programmatic features are being adapted for AI-driven optimization, while the Company explores re-entry into privacy-focused areas like ZEC mining to leverage its data expertise in new ways.
Totaligent Tools
To get great results, you need the right tools. Unfortunately, the right tools are not available in a single platform, which makes effective digital marketing a cumbersome and costly endeavor. After years of managing millions of dollars in digital campaigns, the Totaligent team built specific tools to overcome systemic marketing problems that continue to force people to needlessly employ “marketing experts” and/or rely on unverifiable platform data. Totaligent’s tools put website owners back in control of their marketing, by connecting the website to specific person-based audiences in our database. This means anyone who knows who their ideal customer is, can create an audience of those people, and micro-target campaigns across all forms of digital communication.
Totaligent Widget acts as a functional central command to connect to our DMP. The Totaligent Widget includes basic digital marketing functionality including a limited number of pop ups, emails, analytics, and push notifications.
Totaligent Link tracks and matches every click delivered via email, SMS, and other campaign mechanisms, to Totaligent’s DMP.
These tools were designed and created over years of analysis and tens of millions of dollars spent on advertising campaigns, custom communication, and marketing platforms.
Currently, for person-based programmatic and micro-targeted advertising, companies must spend thousands of dollars per month to use LiveRamp, a Totaligent competitor, in order to create and market to tailored audiences. This expense can significantly increase the cost per 1,000 impressions (CPI) and cost-per-click (CPC), typically by 400% and even much higher for some verticals.
As the Totaligent network grows, so too will the number of first party cookies. Totaligent’s first-party cookies can be set on browsers, allowing for marketing, data collection and verification in our DMP. Every user that visits any Totaligent enabled web portal, link or ad is placed into the DMP and instantly matched across all channels and data points, continually updating and verifying their information. With the strategic shift toward AI, these tools are evolving to incorporate AI-driven enhancements, supporting acquisitions like the post-period LOI with an AI-enabled biotech company for cross-sector applications.
Totaligent Database Management Platform (DMP)
The Internet is full of information; a quick Google, Facebook, or Twitter query, can typically locate just about everyone. Most people keep the same alter egos online for years and, with the smart phone being connected to web browsers and emails, it’s very easy to collect, store and manage data on everyone in the United States.
Totaligent’s database is constantly being appended, cleaned, and verified from pixel fires, link clicks, PPC, email, and SMS. Our base data sets include voters, donors, investors, consumers, and other publicly sourced information, to verify and update the information as needed. We track and maintain over 400 data points on each record and allow for cross platform marketing. Our DMP utilizes schema mark ups, indexing, public filings, search engines, corporate records, WhoIs, IP addresses, as well as consumer, voter, and business data to match, update, and verify existing records. First and third- party pixels are also employed, in agreement with certain vendors and clients, who gather more millions of monthly impressions.
Totaligent DMP partners with websites to provide functionality for major clients for free in exchange for adding our pixel to their portals, which generate additional impressions to help grow and verify user data running through the system.
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Totaligent Audiences are created and used internally and are MD5 hash encrypted, so they cannot be exported and downloaded by users.
Totaligent ESP is our customizable email system that can connect to any outside API provider or can be used on the Totaligent email network, which runs on the TOTALIGENT PMTA, SMTP (any), Amazon SES API, Mailgun API, SparkPost API, SendGrid API, Mandrill API, Elastic Email API, MailJet API, SendinBlue API)backbone for delivering email. Emails can be obtained from click traffic, created by the uploaded audience in the customer portal, and internally loaded to send permission passes to potential consumers. Site visitors have their emails populated into the user’s list for retargeting purposes, which can then be permission passed into the customer lists for future promotions.
Web forms used to collect subscribers’ emails and permission passes can be sent after the consumer clicks the subscribe button, understanding that there is no need to provide further information or fill out any forms. This should breed much higher conversion rates than forcing target customers to fill out conventional subscription forms.
In addition, the email platform can quickly create unique Totaligent Links to tag each contact in the users’ email lists, which monitoring opens, and then collects data to create additional communication points for the audience. This allows the clients’ sites to monetize impressions from AdSense or other traffic advertising sources.
Totaligent SMS is a robust text platform that connects through API to multiple vendors which can send SMS campaigns for pre-approved users. Users can seamlessly log in and set up their campaign, also tagging each target with a unique Totaligent Link ID. The system can send pre-recorded outgoing messages, SMS, SES, and any other function used over the telephone system, which is especially useful for political and non-profit organizations that need to raise donations in a cost-effective way.
The audiences’ mobile numbers are stored in the DMP and can be used once loaded into the customer portal. They cannot be exported unless the person is a verified subscriber but can be used for internal cross channel marketing programs. When properly used, this system will track SMS users, to ensure proper identification has been obtained, which protects the sender against frivolous or dubious lawsuits from bad actors. As the Company pivots to leverage its data assets in an AI-driven world, the DMP serves as a core foundation for potential integrations with AI-enabled businesses, extending its utility beyond marketing.
Totaligent Append and Data Sales
Because the DMP is so large and constantly updated, Totaligent is able to provide data on a low cost per record basis to a wide array of users by offering specific list types based on Totaligent’s internal data points. Users can search the criteria needed and the DMP will provide the data size and price. This capability remains valuable even as AI diminishes standalone SaaS appeal, positioning the DMP for synergies in diversified acquisitions and ventures like cryptocurrency mining.
Totaligent Email Clean
Our campaigns are constantly using our data, which helps ensure that the data is of the highest quality. In other words, the constant feedback from campaigns allows us to actively identify bad data to be removed from our system.
Totaligent’s cleaning system for marketers is more than just uploading their data for positive or negative system matches. Because our data is scored, the advertiser will have insight as to whether their data is good. We maintain one of the largest blacklists on the market, with scam, or bad data that is constantly passed around, so old, and dead data can be removed. Our cleaning service can be added to any websites’ forms, to keep anyone from entering or using an email on the bad or blacklist to the user’s site for an additional fee. Our service also connects through API to multiple other cleaning services and can be cleaned and compared with any of them for an additional cost to ensure the best deliverability.
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Political operatives have been known to add dirty or unfriendly email addresses to subscriber lists, causing complaints and shutdowns of valuable marketing accounts. Our service can help identify these fake addresses to protect against this dubious activity. In the evolving AI landscape, this cleaning process is being enhanced to incorporate AI-driven fraud detection, further strengthening its role in the Company’s strategic shift.
Stock Sales
None.
Convertible Notes Issued
None.
Litigation
The Company is not currently a party to any legal proceedings. From time to time, the Company may be subject to claims, disputes, demand letters, or other legal matters arising in the ordinary course of business; however, management does not believe that any such matters, whether currently asserted or previously threatened, individually or in the aggregate, would have a material adverse effect on the Company’s business, financial condition, or results of operations.
Six Months Ended June 30, 2026 Results of Operations Compared with Six Months Ended June 30, 2025
For the six months ended June 30, 2026 and 2025, the Company had no revenues. The Company has generated revenue in the past. However, beginning in 2025, the Company took a deliberate shift in operational focus toward the continued development and completion of the Company’s integrated digital marketing platform, including enhancements related to data infrastructure and artificial intelligence capabilities. As a result, the Company allocated substantially more resources to product development and platform optimization, which temporarily reduced its emphasis on revenue-generating managed campaigns.
The Company has not discontinued its core business operations. Rather, this period reflects a strategic transition from early-stage commercialization to platform maturation. Management believes that completing and enhancing the platform—particularly through the integration of AI-driven capabilities—positions the Company to deliver more scalable, efficient, and competitive marketing solutions.
The Company expects to resume revenue-generating activities, including managed campaigns and platform-based services, as development efforts reach completion in mid August. While the methods of delivery and scope of services may evolve, management anticipates that future revenues will be generated from the same foundational business model, leveraging the Company’s existing data assets, customer targeting capabilities, and marketing infrastructure. In addition, the Company is exploring strategic partnerships and acquisitions, as disclosed in recent filings, that are expected to further enhance revenue opportunities by utilizing the Company’s platform as a core asset.
The Company’s operating expenses decreased from $182,528 for the six months ended June 30, 2025 to $145,384 for the six months ended June 30, 2026. Consulting expenses increased by $43,933, primarily due to stock issued for services totaling $54,469. Professional fees decreased by $20,345 due to lower accounting and legal fees. General and administrative expenses decreased by $30,732, primarily due to lower software expenses following the operational shift.
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Other income (expense) improved from an expense of $37,722 for the six months ended June 30, 2025 to income of $23,520 for the six months ended June 30, 2026. The Company recognized gains on changes in the fair value of derivative liabilities of $57,591 and $11,512 for the six months ended June 30, 2026 and 2025, respectively. Interest expense was $34,071 and $30,907 for those respective periods. The Company recorded no loss on disposal of assets in the current period, compared with $18,327 in the prior period.
The Company had a net loss of $121,864 for the six months ended June 30, 2026, compared with a net loss of $220,250 for the six months ended June 30, 2025. The decrease in net loss of $98,386 was primarily attributable to a $37,144 decrease in operating expenses and a $61,242 improvement in other income (expense).
Three Months Ended June 30, 2026 Results of Operations Compared with Three Months Ended June 30, 2025
For the three months ended June 30, 2026 and 2025, the Company had no revenues. The Company has generated revenue in the past. However, beginning in 2025, the Company took a deliberate shift in operational focus toward the continued development and completion of the Company’s integrated digital marketing platform, including enhancements related to data infrastructure and artificial intelligence capabilities. As a result, the Company allocated substantially more resources to product development and platform optimization, which temporarily reduced its emphasis on revenue-generating managed campaigns.
The Company has not discontinued its core business operations. Rather, this period reflects a strategic transition from early-stage commercialization to platform maturation. Management believes that completing and enhancing the platform—particularly through the integration of AI-driven capabilities—positions the Company to deliver more scalable, efficient, and competitive marketing solutions.
The Company expects to resume revenue-generating activities, including managed campaigns and platform-based services, as development efforts reach completion. While the methods of delivery and scope of services may evolve, management anticipates that future revenues will be generated from the same foundational business model, leveraging the Company’s existing data assets, customer targeting capabilities, and marketing infrastructure. In addition, the Company is exploring strategic partnerships and acquisitions, as disclosed in recent filings, that are expected to further enhance revenue opportunities by utilizing the Company’s platform as a core asset.
The Company’s operating expenses decreased from $104,505 for the three months ended June 30, 2025 to $39,271 for the three months ended June 30, 2026. Personnel expenses decreased by $30,000, professional fees decreased by $11,555 and general and administrative expenses decreased by $13,679, primarily due to nonrecurring costs services following the operational shift.
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Other income decreased from $49,733 for the three months ended June 30, 2025 to $25,497 for the three months ended June 30, 2026. Gains on changes in the fair value of derivative liabilities were $42,104 and $66,848 for the current and prior-year periods, respectively. Interest expense was $16,607 and $17,115 for those respective periods. No loss on disposal of assets was recorded in either period.
The Company had a net loss of $13,774 for the three months ended June 30, 2026, compared with a net loss of $54,772 for the three months ended June 30, 2025. The decrease in net loss of $40,998 was attributable to a $65,234 decrease in operating expenses, partially offset by a $24,236 decrease in other income.
Liquidity and Capital Resources
Going Concern
We have had negative working capital and have sustained operating losses since inception. These factors, and the need for additional financing in order for the Company to meet its business plan raises substantial doubt about the Company’s ability to continue as a going concern.
We anticipate that operating losses will continue in the near term. We intend to meet near-term obligations with private placement offerings. We currently have limited revenue, which is not sufficient to cover operational expenses.
Failure to raise adequate capital and generate adequate revenues could result in the Company having to curtail or cease operations. The Company’s ability to raise additional capital through the future issuances of the common stock is unknown. Additionally, even if the Company does raise sufficient capital to support its operating expenses and generate adequate revenues, there can be no assurances that the revenue will be sufficient to enable it to develop to a level where it will generate profits and cash flows from operations. These matters raise substantial doubt about the Company’s ability to continue as a going concern; however, the accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. These consolidated financial statements do not include any adjustments relating to the recovery of the recorded assets or the classifications of the liabilities that might be necessary should the Company be unable to continue as a going concern.
Capital Resources
To date, our operations have been funded primarily through private investors. Some of these investors have verbally committed additional funding for the Company, as needed. The Company has also had discussions with broker-dealers and lenders regarding funding required to execute the Company’s business plan.
Material Cash Requirements
Our material short-term cash requirements include capital, operating expenditures, software development payments and other working capital needs. We believe that material cash requirements for operating expenditures may range from $100,000 per month to $200,000 per month during the twelve months.
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Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition.
Cash Flow
The following table provides detailed information about our net cash flow for the six months ended June 30, 2026 and 2025:
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| Six months ended June 30, |
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| 2026 |
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| 2025 |
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Net cash used in operating activities |
| $ | (77,150 | ) |
| $ | (174,267 | ) |
Net cash used in investing activities |
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| (13,475 | ) |
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| (15,235 | ) |
Net cash provided by financing activities |
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| 86,601 |
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| 230,000 |
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Net change in cash and cash equivalents |
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| (4,024 | ) |
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| 40,498 |
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Cash and cash equivalents at beginning of period |
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| 4,689 |
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| 22,128 |
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Cash and cash equivalents at end of period |
| $ | 665 |
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| $ | 62,626 |
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Net cash used in operating activities for the six months ended June 30, 2026 was $77,150 compared to $174,267 for the six months ended June 30, 2025. This difference was primarily a result of reduced operating expenses, with the exception of consulting fees, which were paid in common stock.
During the six months ended June 30, 2026, net cash used in investing activities was $13,475, compared with $15,235 during the six months ended June 30, 2025. Financing activities provided cash of $86,601 in the current period, compared with $230,000 in the prior period. Current-period financing cash flows included $86,527 of proceeds from notes payable and $3,117 of advances from related parties, partially offset by $3,043 of repayments to related parties. Prior-period financing cash flows consisted of $230,000 of proceeds from convertible notes payable.
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Item 3. Qualitative and Quantitative Discussions about Market Risk
Not applicable.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management is responsible for maintaining disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that the Registrant files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. In addition, the disclosure controls and procedures must ensure that such information is accumulated and communicated to the Registrant’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required financial and other required disclosures.
At June 30, 2026, an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rules 13(a)-15(e) and 15(d)-15(e) of the Exchange Act) was carried out under the supervision and with the participation of Edward C. DeFeudis our Chief Executive Officer and Brian Heckathorne our Director. Based on our evaluation of our disclosure controls and procedures, we concluded that, at June 30, 2026, our disclosure controls and procedures are effective.
Management’s Quarterly Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over our financial reporting. Internal control over financial reporting is a process designed to provide reasonable assurance to our management and board of directors regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP.
Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions; (ii) provide reasonable assurance that transactions are recorded as necessary for preparation of our unaudited consolidated financial statements; (iii) provide reasonable assurance that receipts and expenditures of company assets are made in accordance with management authorization; and (iv) provide reasonable assurance that unauthorized acquisition, use or disposition of Company assets that could have a material effect on our financial statements would be prevented or detected on a timely basis.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because changes in conditions may occur or the degree of compliance with the policies or procedures may deteriorate.
Our management has conducted an evaluation, under the supervision and with the participation of Edward C. DeFeudis, our Chief Executive Officer, and Brian Heckathorne, our Director, of the effectiveness of our internal control over financial reporting as of June 30, 2026. This evaluation was based on criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO, Internal Control-Integrated Framework in Internal Control-Integrated Framework 2013. Based upon such assessment, Edward C. DeFeudis concluded that our internal controls over financial reporting are not effective based upon the Company’s small size, and limited number of personnel. As a result, the Company did not have in place an effective internal control environment with formal processes and procedures, including journal entry processing and review, to allow for a detailed review of accounting transactions that would identify errors in a timely manner. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim unaudited consolidated financial statements will not be prevented or detected on a timely basis.
This interim report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. The rules of the Securities and Exchange Commission do not require an attestation of the Management’s report by our registered public accounting firm in this interim report.
Changes in Internal Controls
There have been no changes in our internal control over financial reporting that occurred during the six months ended June 30, 2026, that have materially affected, or are reasonable likely to materially affect, our internal control over financial reporting.
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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 |
| Inline XBRL Taxonomy Extension Schema |
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101.CAL |
| Inline XBRL Taxonomy Extension Calculation |
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101.DEF |
| Inline XBRL Taxonomy Extension Definition |
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101.LAB |
| Inline XBRL Taxonomy Extension Label |
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101.PRE |
| Inline XBRL Taxonomy Extension Presentation |
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104 |
| Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |
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Part II – Other Information
Item 1. Legal Proceedings
None
Item 1A. Risk Factors
Not applicable.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Default Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not Applicable.
Item 5. Other Information
During the Company’s quarter ended June 30, 2026, no director or officer adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement.
Item 6. Exhibits
The following exhibits are filed herewith
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SIGNATURES
In accordance with the requirements of the Exchange Act, the Company caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| TOTALIGENT, INC. | ||
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Date: August 19, 2026 | By: | /s/ Edward C. DeFeudis | |
| Edward C. DeFeudis Chief Executive Officer (Principal Executive) and Chief Financial Officer & Principal Financial and Accounting Officer | ||
By: | /s/ Edward C. DeFeudis |
| By: | /s/ Brian Heckathorne |
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| Edward C. DeFeudis |
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| Brian Heckathorne |
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| President, Chief Executive Officer, |
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| Director |
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| Chief Financial Officer, Director |
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