UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(Mark One)
For the quarterly period ended
OR
For the transition period from __________ to __________
Commission File Number:
(Exact Name of Registrant as Specified in its Charter)
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
(Address of principal executive offices)
Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| None | None |
Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐
As of August 1, 2025, there were shares of the Registrant’s common stock outstanding.
Table of Contents
i
CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS
Some of the statements contained in this Quarterly Report on Form 10-Q of Unicoin Inc. (hereinafter referred to as “Unicoin Inc.”, “we”, “our”, or the “Company”) discuss future expectations, contain projections of our plan of operation or financial condition or state other forward-looking information. In this Quarterly Report on Form 10-Q, forward-looking statements are generally identified by the words such as “anticipate”, “plan”, “believe”, “expect”, “estimate”, and the like. Forward-looking statements involve future risks and uncertainties. There are factors that could cause actual results or plans to differ materially from those expressed or implied. These statements are subject to known and unknown risks, uncertainties, and other factors that could cause the actual results to differ materially from those contemplated by the statements. The forward-looking information is based on various factors and is derived using numerous assumptions. A reader, whether investing in the Company’s securities or not, should not place undue reliance on these forward-looking statements, which apply only as of the date of this Quarterly Report on Form 10-Q. Important factors that may cause actual results to differ from projections include, for example:
| ● | the success or failure of management’s efforts to implement the Company’s plan of operation; |
| ● | the ability of the Company to fund its operating expenses; |
| ● | the ability of the Company to compete with other companies that have a similar plan of operation; |
| ● | the effect of changing economic conditions impacting our plan of operation; and |
| ● | the ability of the Company to meet the other risks as may be described in future filings with the SEC. |
Readers are cautioned not to place undue reliance on the forward-looking statements contained herein, which speak only as of the date hereof. We believe the information contained in this Quarterly Report on Form 10-Q to be accurate as of the date hereof. Changes may occur after that date. We will not update that information except as required by law in the normal course of our public disclosure practices.
Additionally, the following discussion regarding our financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q.
ii
PART I-FINANCIAL INFORMATION
Item 1. Financial Statements.
UNICOIN INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| ASSETS | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable, net | ||||||||
| Trade receivables payable in cash | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Indemnification asset | ||||||||
| TOTAL CURRENT ASSETS | ||||||||
| Property and equipment, net | ||||||||
| Investment in land | ||||||||
| Mining rights | ||||||||
| Goodwill | ||||||||
| Intangible assets, net | ||||||||
| Investment in privately-held companies | ||||||||
| Other assets | ||||||||
| Operating lease right-of-use assets | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
| Accounts payable | $ | $ | ||||||
| Income tax payable | ||||||||
| Accrued expenses | ||||||||
| Accrued payroll liabilities | ||||||||
| Deferred revenue | ||||||||
| ITSQuest tax liability | ||||||||
| Short-term debt | ||||||||
| Operating lease liabilities, current | ||||||||
| Other current liabilities | ||||||||
| TOTAL CURRENT LIABILITIES | ||||||||
| Deferred income tax liability, net | ||||||||
| Unicoin rights financing obligation | ||||||||
| Operating lease liabilities, noncurrent | ||||||||
| TOTAL LIABILITIES | ||||||||
| STOCKHOLDERS’ DEFICIT | ||||||||
| Common stock, $ par value; authorized; and issued; and outstanding, net of treasury stock as of March 31, 2025 and December 31, 2024, respectively | ||||||||
| Treasury stock, at cost; and shares as of March 31, 2025 and December 31, 2024, respectively | ( |
) | ( |
) | ||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( |
) | ( |
) | ||||
| TOTAL UNICOIN INC. STOCKHOLDERS’ DEFICIT | ( |
) | ( |
) | ||||
| Non-controlling interest | ( |
) | ( |
) | ||||
| TOTAL STOCKHOLDERS’ DEFICIT | ( |
) | ( |
) | ||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | $ | $ | ||||||
See accompanying notes to the unaudited condensed consolidated financial statements.
1
UNICOIN INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(UNAUDITED)
| Three Months Ended March 31, |
||||||||
| 2025 | 2024 | |||||||
| REVENUES | $ | $ | ||||||
| COST OF REVENUES | ||||||||
| GROSS PROFIT | ||||||||
| OPERATING COSTS AND EXPENSES | ||||||||
| General and administrative | ||||||||
| Sales and marketing | ||||||||
| Research and development | ||||||||
| TOTAL OPERATING COSTS AND EXPENSES | ||||||||
| LOSS FROM OPERATIONS | ( |
) | ( |
) | ||||
| Interest expense, net | ( |
) | ( |
) | ||||
| Other expense, net | ( |
) | ( |
) | ||||
| LOSS BEFORE INCOME TAXES | ( |
) | ( |
) | ||||
| Income tax expense (benefit) | ( |
) | ||||||
| NET LOSS AND COMPREHENSIVE LOSS | ( |
) | ( |
) | ||||
| Net (loss) income attributable to the non-controlling interest | ( |
) | ||||||
| NET LOSS ATTRIBUTABLE TO UNICOIN INC. | $ | ( |
) | $ | ( |
) | ||
| Net loss per share attributable to Unicoin Inc., basic and diluted | $ | ) | $ | ) | ||||
| Weighted average common shares outstanding used to compute basic and diluted loss per share | ||||||||
See accompanying notes to the unaudited condensed consolidated financial statements.
2
UNICOIN INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
(UNAUDITED)
| Common Stock | Additional Paid-In |
Treasury Stock | Accumulated | Unicoin Inc. Stockholders’ Equity |
Unicoin Inc. Non-controlling |
Total Stockholders’ Equity |
||||||||||||||||||||||||||||||
| Shares | Amount | Capital | Shares | Amount | Deficit | (Deficit) | Interest | (Deficit) | ||||||||||||||||||||||||||||
| Balance as of December 31, 2023 | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | |||||||||||||||||
| Stock-based compensation expense | - | |||||||||||||||||||||||||||||||||||
| Repurchase of common stock | - | ( |
) | ( |
) | ( |
) | ( |
) | |||||||||||||||||||||||||||
| Ownership interest increase in Unicorns Inc. | - | ( |
) | - | ( |
) | ( |
) | ||||||||||||||||||||||||||||
| Net Income (Loss) | - | - | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||
| Balance as of March 31, 2024 | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | |||||||||||||||||
| Balance as of December 31, 2024 | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | |||||||||||||||||
| Stock-based compensation expense | - | - | ||||||||||||||||||||||||||||||||||
| Issuance of common stock | - | |||||||||||||||||||||||||||||||||||
| Repurchase of common stock | - | ( |
) | ( |
) | ( |
) | ( |
) | |||||||||||||||||||||||||||
| Issuance of common stock upon release of restricted stock units | ( |
) | - | |||||||||||||||||||||||||||||||||
| Net Loss | - | - | ( |
) | ( |
) | ( |
( |
) | |||||||||||||||||||||||||||
| Balance as of March 31, 2025 | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | |||||||||||||||||
See accompanying notes to the unaudited condensed consolidated financial statements.
3
UNICOIN INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| Three Months Ended March 31, |
||||||||
| 2025 | 2024 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss | $ | ( |
) | $ | ( |
) | ||
| Adjustments to reconcile net loss to cash used in operating activities: | ||||||||
| Stock-based compensation expense | ||||||||
| Operating expenses paid with unicoin rights | ||||||||
| Interest expense accrued on the ten-year prepaid plan | ||||||||
| Interest income from the five-year deferred payment plan | ( |
) | ||||||
| Operating expenses paid with digital assets and USD Coin (“USDC”) | ||||||||
| Impairment and write-off of digital assets | ||||||||
| Depreciation and amortization expense | ||||||||
| Credit loss expense | ||||||||
| Non-cash operating lease expense | ||||||||
| Non-cash transaction gain on reacquisition of unicoin rights | ( |
) | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Trade receivables payable in cash | ||||||||
| Prepaid expenses and other current assets | ( |
) | ( |
) | ||||
| Other assets | ||||||||
| Accounts payable | ( |
) | ||||||
| Accrued expenses and accrued payroll liabilities | ( |
) | ( |
) | ||||
| Deferred revenue | ( |
) | ||||||
| ITSQuest tax liability | ( |
) | ||||||
| Operating lease liabilities | ( |
) | ( |
) | ||||
| Other liabilities | ( |
) | ( |
) | ||||
| Net cash used in operating activities | ( |
) | ( |
) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Proceeds from sales of digital assets and USD Coin | ||||||||
| Purchases of digital assets and USD Coin | ( |
) | ||||||
| Net cash (used in) provided by investing activities | ( |
) | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds from issuance of common stock | ||||||||
| Payment of short-term debt | ( |
) | ||||||
| Proceeds from sales of unicoin rights | ||||||||
| Repurchase of common stock | ( |
) | ||||||
| Repayment of related party loan payable | ( |
) | ||||||
| Net cash provided by financing activities | ||||||||
| NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | ( |
) | ||||||
| CASH AND CASH EQUIVALENTS—Beginning of period | ||||||||
| CASH AND CASH EQUIVALENTS—End of period | $ | $ | ||||||
| Supplemental Non-Cash Disclosures: | ||||||||
| Change in non-controlling interest upon increase in ownership of Unicorns, Inc. | $ | $ | ||||||
| Issuance of common stock in exchange of digital assets and USDC | $ | $ | ||||||
| Market value of digital assets received as proceeds from sales of unicoin rights | $ | $ | ||||||
| Investment in land in exchange of unicoin rights | $ | $ | ||||||
| Change in additional paid-in capital upon increase in ownership of Unicorns, Inc. | $ | $ | ||||||
| Expenses paid by related party on behalf of the Company | $ | $ | ||||||
| Repurchase of Unicorns common stock in exchange for unicoin rights | $ | $ | ||||||
See accompanying notes to the unaudited condensed consolidated financial statements.
4
UNICOIN INC. AND SUBSIDIARIES
NOTES TO CONDENSED Consolidated FINANCIAL STATEMENTS
(UNAUDITED)
AS OF MARCH 31, 2025 AND DECEMBER 31, 2024 AND
FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024
NOTE 1 – ORGANIZATION AND OPERATIONS
Description of Business
Unicoin Inc. (“Unicoin” or the “Company”) is a Delaware corporation incorporated in 2015. In addition to a wholly owned operating company running a Software-as-a-Service (“SaaS”) and Talent-as-a-Service (“TaaS”) platform, and a majority-owned staffing agency, the Company is also the majority owners of Unicorns Inc., a media production company producing Unicorn Hunters, a business and investing reality show.
In addition to the businesses it operates through its subsidiaries, the Company tokenized a token called unicoin (“unicoins” or “tokens”). While earlier statements contemplated the potential for unicoins to be supported by reference to certain assets, the Company is currently reassessing this approach in light of evolving regulatory guidance from the U.S. Securities and Exchange Commission. No assurance can be given regarding the adoption of any particular structure or the availability of assets for this purpose.
We have begun exploring possible service providers and exchanges which can assist an eventual launch of the unicoins. As of December 31, 2024 and through the filing date of this Quarterly Report on Form 10-Q, the Company has not issued any unicoins and the tokens have been prepared under UNCN ticker using the ERC-20 standard
On August 28, 2024, the Company notified its existing investors that it had postponed its initial coin offering of unicoins in order to conduct a thorough review of its public statements, offering materials and its business in general. The Company conducted a thorough review of its compliance with applicable regulatory requirements with the assistance of a leading national law firm. The Company cannot assess at this time the exact length of the review and will work with outside legal counsel and the appropriate regulators as expeditiously as possible toward a path to continue its efforts and plans for exchange listings. As of March 31, 2025 and through the subsequent period, the Company has not issued any unicoins and there is no assurance as to whether, or at what amount, or on what terms, unicoins will be available to be issued, if ever.
Subsidiaries Outside of the United States
Outside of the United States, the Company has recently formed subsidiaries for purposes of holding specific parcels of real estate. These “real estate subsidiaries” include Genniwine Inc. (organized in Thailand) and Unicoin LATAM C.A. (organized in Venezuela). Each real estate subsidiary’s sole purpose and business is to hold real estate.
Operations in these entities from formation through the date of the Form 10-Q filing were de minimis.
UH Properties Inc.
Unicoin Inc. does not hold any equity ownership or control over UH Properties Inc., a company organized under the laws of the Philippines. However, pursuant to a partnership agreement, Unicoin Inc. may be entitled to receive an economic interest in certain real estate investments located in the Philippines to be acquired by UH Properties Inc. The agreement contemplates that Unicoin Inc. may be entitled to a portion of returns from such investments, subject to the terms and performance of the assets involved. Notwithstanding this arrangement, UH Properties Inc. remains solely responsible for the management, operation, financing, and risks associated with those investments, and any profits or losses are to be borne exclusively by UH Properties Inc. Importantly, UH Properties Inc. is not currently a signatory to the partnership agreement, and as such, Unicoin Inc.’s rights under the agreement may not be fully enforceable against UH Properties Inc.
5
Unicorns Media Group Ltd.
While the Company does not hold any ownership interest in Unicorns Media Group Ltd (a company organized under the laws of the United Kingdom), the Company’s subsidiary, Unicorns Inc., may be entitled to receive economic benefits pursuant to a licensing agreement between Unicorns Inc. and Unicorns Media Group Ltd. Pursuant to the terms of the licensing agreement, Unicorns Inc. is entitled to seventy percent (70%) of the revenues generated by Unicorns Media Group Ltd in connection with show productions, including revenues from advertisements, sponsorships, ticket sales, merchandising, and distribution. Unicoin Inc. owns 71.88% of the outstanding shares of Unicorns Inc., and may therefore indirectly benefit from the revenues received by Unicorns Inc. under the licensing arrangement.
Unicoin International Inc.
Unicoin Inc. and Unicoin International Inc. (“UII”), a corporation established under the laws of Panama, are affiliated but distinct legal entities, with UII operating as a non-subsidiary affiliate of Unicoin. While Unicoin has been actively engaged in fundraising efforts, brand development, and investor outreach for its token known as “unicoin,” UII is separately planning the launch of a blockchain-based digital asset referred to as the “Unicoin International Token” or “UIT.” In support of UII’s operations and marketing efforts, Unicoin provides various services and operational support—including marketing, advisory, investor relations, IT infrastructure, and the sharing of personnel and office resources—pursuant to a contractual services and support agreement. The agreement provides that UII is to compensate Unicoin for these services and may also, at its discretion and subject to applicable law, provide UIT tokens as further consideration. Although the two entities collaborate closely and share resources, UII maintains operational and legal independence from Unicoin, and the shared personnel remain solely employed or contracted by Unicoin, not by UII. This collaborative arrangement is structured to enhance efficiency while preserving each party’s separate corporate identity and regulatory compliance obligations.
Token Structure
In addition to the businesses it operates through its subsidiaries, the Company tokenized a token called unicoin (“unicoins” or “tokens”). While earlier statements contemplated the potential for unicoins to be supported by reference to certain assets, the Company is currently reassessing this approach in light of evolving regulatory guidance from the U.S. Securities and Exchange Commission. The Company has reviewed and updated its approach to the unicoin token structure in light of evolving regulatory commentary and internal strategic considerations. While prior communications referenced the potential for Unicoins to be “asset-backed” or collateralized, the Company has clarified that it does not intend to collateralize the tokens or tie them to any specific pool of assets. Instead, the Company uses the term “asset-backed” in a general, commercial sense—consistent with its ordinary dictionary meaning—to reflect the Company’s intent to use part of the token-related proceeds to invest in equity and other assets expected to support long-term token value. This characterization is not intended to imply collateralization, guaranteed redemption rights, or that Unicoins represent ownership interests in such assets. The Company plans to further clarify this terminology in future offering documents and marketing materials to ensure transparency and investor understanding.
Going Concern
These condensed consolidated financial statements have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”) assuming the Company will continue as a going concern. The going concern assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business.
6
The Company has incurred net losses of $(
These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s long-term success is dependent upon its ability to successfully raise additional capital, market its existing services, increase revenues, and, ultimately, to achieve profitable operations.
The Company is evaluating strategies to obtain the required additional funding for future operations. These strategies may include, but are not limited to, issuing unicoin rights, obtaining equity financing, issuing debt, or entering other financing arrangements, and restructuring of operations to grow revenues and decrease expenses. However, in view of uncertainties in U.S. and global financial markets, the Company may be unable to access further equity or debt financing when needed. As such, there can be no assurance that the Company will be able to obtain additional liquidity when needed or under acceptable terms, if at all.
The condensed consolidated financial statements do not include any adjustments to the carrying amounts and classification of assets, liabilities, and reported expenses that may be necessary if the Company were unable to continue as a going concern.
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES, BASIS OF PRESENTATION AND OTHER BROAD DISCLOSURES
Significant Accounting Policies
There have been no material changes to our significant accounting policies and effect of recent accounting pronouncements to the Company’s consolidated financial statements from our Annual Report on Form 10-K for the year ended December 31, 2024.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (GAAP) and applicable rules and regulations of the Securities and Exchange Commission regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the information included in this quarterly report on Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2024.
The condensed consolidated balance sheet as of December 31, 2024 included herein was derived from the audited financial statements as of that date, but does not include all disclosures including notes required by GAAP.
The condensed consolidated financial statements include the accounts of Unicoin Inc. and its subsidiaries where we have controlling financial interests, and any variable interest entities for which we are deemed to be the primary beneficiary. All intercompany balances and transactions have been eliminated.
The accompanying condensed consolidated financial statements reflect all normal recurring adjustments that are necessary to present fairly the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year ending December 31, 2025.
Cash in Excess of FDIC Insured Amounts
As of March 31, 2025 and December 31, 2024, the Company had $
7
Concentrations of Revenues and Accounts Receivable
The following table summarizes the Company’s revenues from customers that contributed to at least 10% of total revenues:
| Revenues as a % of Total Revenues |
||||||||
| Three Months Ended March 31, |
||||||||
| Customer Reference | 2025 | 2024 | ||||||
| Customer A | % | % | ||||||
| Customer B | % | % | ||||||
The contract with Customer B, one of our largest clients, expired
on March 31, 2025 and it does not appear we will be able to renew it. Revenues from Customer B for the three months ended
March 31, 2025 and 2024 amounted to $
The following table summarizes the Company’s accounts receivable from customers that contributed to at least 10% of total accounts receivable, net:
|
Accounts Receivable |
||||||||
| Customer Reference | March 31, 2025 |
December 31, 2024 |
||||||
| Customer A | % | % | ||||||
| Customer B | % | % | ||||||
| Customer C | * | % | ||||||
| * |
ITSQuest’s Accounts Receivable Financing Arrangement With a Financial Institution (“Factor”)
As
of March 31, 2025 and December 31, 2024, the Company recorded an asset and liability of $
Digital Assets and USDC
During the three months
ended March 31, 2025 and 2024, the Company identified a gain of digital assets and USDC amounting to $
Advertising Expenses
During the
three months ended March 31, 2025 and 2024, the Company incurred advertising expenses of $
8
Depreciation and Amortization Expense
The Company’s depreciation and amortization expense consisted of the following:
| Three Months Ended | ||||||||
| March 31, 2025 | March 31, 2024 | |||||||
| Amortization expense from acquisition related intangible assets | $ | $ | ||||||
| Depreciation expense from property and equipment | ||||||||
| Total depreciation and amortization expense | $ | $ | ||||||
NOTE 3 – FAIR VALUE MEASUREMENT
The Company’s USDC balance as of March 31, 2025 and December 31, 2024 amounted to $55 thousand and $44 thousand respectively (included within the prepaid and other current assets line item of the condensed consolidated balance sheets).
The following table is a summary of financial assets measured at fair value on a recurring basis and their classification within the fair value hierarchy:
As of March 31, 2025
| Carrying Value |
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
| ASSETS | ||||||||||||||||||||
| Money market funds | $ | $ | $ | $ | $ | |||||||||||||||
As of December 31, 2024
| Carrying Value |
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
| ASSETS | ||||||||||||||||||||
| Money market funds | $ | $ | $ | $ | $ | |||||||||||||||
The obligation to settle the Company’s unicoin rights liability through the exchange of a fixed number of unicoins, when and if all contingencies are resolved and unicoins are delivered and listed for trading, represents an embedded feature that may result in additional charges to the Company’s condensed consolidated statements of operations and comprehensive loss upon settlement. The embedded feature was initially valued at $0 and is not expected to fluctuate until the unicoins are delivered and listing for trading or probable of the delivery and listing for trading.
Assets Measured at Fair Value on a Non-Recurring Basis
Certain items such as goodwill, intangible assets, contingent divestiture and NCI resulting from the ITSQuest acquisition are recognized or disclosed at fair value on a non-recurring basis. The Company determines the fair value of these items using Level 3 inputs. There are inherent limitations when estimating the fair value of financial instruments, and the fair values reported are not necessarily indicative of the amounts that would be realized in current market transactions.
9
NOTE 4 – GOODWILL, INTANGIBLE ASSETS INCLUDING DIGITAL ASSETS AND USDC
The Company’s intangible assets consist of the following:
| March 31, 2025 | December 31, 2024 | |||||||
| Acquisition-related intangible assets | $ | $ | ||||||
| Digital assets | ||||||||
| Total intangible assets, net | $ | $ | ||||||
Goodwill and Acquisition-Related Intangible Assets
As of both March 31, 2025 and December 31, 2024, the Company’s goodwill balance was $
Acquisition-related intangible assets consisted of the following as of March 31, 2025 and December 31, 2024:
| March 31, 2025 | |||||||||||||||
| Useful life |
Gross carrying amount |
Accumulated amortization |
Net carrying amount |
||||||||||||
| Intangible assets with finite lives: | |||||||||||||||
| Customer Relationships | $ | $ | $ | ||||||||||||
| Trade Names | |||||||||||||||
| $ | $ | $ | |||||||||||||
| December 31, 2024 | |||||||||||||||
| Useful life |
Gross carrying amount |
Accumulated amortization |
Net carrying amount |
||||||||||||
| Intangible assets with finite lives: | |||||||||||||||
| Customer Relationships | $ | $ | $ | ||||||||||||
| Trade Names | |||||||||||||||
| $ | $ | $ | |||||||||||||
Amortization expense related to intangible assets was $
| Schedule of amortization expense: | Amortization | |||
| 2025 (since April 1, 2025) | $ | |||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| Thereafter | ||||
| Total | $ | |||
10
Digital Assets
The Company records the initial cost basis of digital assets at their original purchase price or the then-current quoted market prices (e.g., if received in an exchange rather than through purchase) and presents all digital asset holdings as indefinite-lived intangible assets in accordance with ASC 350, Intangibles—Goodwill and Other, except USD Coin. The Company performs an analysis to identify whether events or changes in circumstances, principally decreases in the quoted prices on active exchanges, indicate that it is more likely than not that our digital assets are impaired. In determining if an impairment has occurred, we consider the quoted price of the digital asset. If the then current carrying value of a digital asset exceeds the fair value so determined, an impairment loss has occurred with respect to those digital assets in the amount equal to the difference between their carrying values and the prices determined.
During the three months March 31, 2025 and 2024,
the Company received digital assets as consideration from investors for the purchases of unicoin rights, common stock and private
placement unsecured notes issued by the Company. These digital assets included Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH),
Litecoin (LTC), Tether (USDT) and Wrapped Ethereum (WETH). Unicoin rights are more fully discussed in Note 6. The Company utilized
$
During the three months ended March 31, 2025 and
2024, the Company recorded $
The table below summarizes the carrying values and activity for the Company’s digital asset holdings as of March 31, 2025 and 2024:
| March 31, 2025 |
March 31, 2024 |
|||||||
| Bitcoin (BTC) | $ | $ | ||||||
| Tether | ||||||||
| Ethereum (ETH) and Wrapped Ethereum (WETH) | ||||||||
| Total | $ | $ | ||||||
| Three Months Ended March 31, |
||||||||||||||||||||
| Bitcoin | Ethereum | USD Coin | 2025 | 2024 | ||||||||||||||||
| Beginning balance | $ | $ | $ | $ | $ | |||||||||||||||
| Received as consideration in sales of unicoin rights | ||||||||||||||||||||
| Vendors payments | ( |
) | ( |
) | ( |
) | ||||||||||||||
| Received as consideration in sales of common stock | - | |||||||||||||||||||
| Proceeds from disposal of digital assets | ( |
) | - | |||||||||||||||||
| Payments from customers | ||||||||||||||||||||
| Write-off | ( |
) | ||||||||||||||||||
| Fees and other | ( |
) | ( |
) | ||||||||||||||||
| Ending balance | $ | $ | $ | $ | $ | |||||||||||||||
The market value of the Company’s digital
assets, based on quoted prices on active exchanges, was approximately $
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NOTE 5 – DEBT
As of March 31, 2025 the Company held short-term
debt of $
The unsecured notes generally rank pari-passu relative to other unsecured obligations. As of March 31, 2025, $100 thousand of unsecured notes were outstanding and all are due and payable during the year ended December 31, 2025 to the extent holders do not elect to extend one additional year.
Interest expense on unsecured notes of $
NOTE 6 – UNICOIN RIGHTS FINANCING OBLIGATION
As of March 31, 2025, the Company has not issued any unicoins. However, on July 16, 2025, the Company entered into a settlement agreement under which it granted the counterparty rights to receive 350,000 unicoins, subject to certain restrictions and conditions. The agreement arose in connection with the resolution of a legal dispute. No unicoins have been issued to date under that agreement. There can be no assurance as to when, or on what additional terms, further unicoins will be available to be issued, if at all.
The Company is offering rights (“unicoin rights” or “rights”) to receive unicoins upon tokenization (Unicoin’s definition of tokenization reflects industry usage and is not based on statutory or judicial authority) with terms and conditions set forth in a confidential private placement memorandum initially dated February 2022 and updated periodically thereafter (“the Offering”). The Offering is being conducted pursuant to an exemption from U.S. securities registration requirements provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”) and Rule 506(c) thereunder. Each U.S. domiciled investor in unicoin rights must be an “accredited investor,” as defined in Rule 501 of the Securities Act.
The Company accounts for unicoin rights by recording a liability representing the amount that management believes the Company would be obligated to pay or refund (i.e., the amount holders have a right to claim and would likely be awarded in settlement) for fair value exchanged as consideration for rights to receive unicoins in the future and in the event the unicoin is never launched. The Company concluded that it has a legal or contractual obligation and recorded an amount necessary to refund the amount originally paid by investors if holders’ reasonable expectation to receive unicoins is not achieved.
To date, the Company has issued 5,110,252,573 unicoin rights (excluding those unicoin rights the Company has committed but not issued pursuant to the five-year deferred payment program and the ten-year prepaid plan, and the token rights granted under a settlement agreement executed on July 16, 2025). There are currently 75,932 total holders of unicoin rights listed in the Company’s registry (not accounting for duplication for individuals who invested more than once), including the holders of free coins, and 5,564 purchasers worldwide. Of these, 1,538 are US Citizen investors (27.64% of purchasers), and 4,026 (4.43% of holders) are non-US citizens or were not verified (72.36%). Note that non-accredited holders or those not verified are either non-US Persons who purchased pursuant to Regulation S, or were given unicoin rights for free, and thus were not sold unicoin rights.
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As of March 31, 2025 and December 31, 2024, the Company has issued rights to acquire
During the three months ended March 31, 2025
and 2024, the Company paid operating expenses to employees and service providers by issuing unicoin rights with a fair value of $
The following table summarizes the components of the unicoin rights financing obligation recorded on the Company’s condensed consolidated balance sheet as of March 31, 2025 and December 31, 2024:
| Outstanding Unicoin Rights and Related Financing Obligation |
||||||||||||||||||
| Nature / Category of | March 31, 2025 |
December 31, 2024 |
||||||||||||||||
| Unicoin Right Holder | Form of Consideration | Units | Amount | Units | Amount | |||||||||||||
| Sales to Investors | Cash, Digital Assets and Treasury Stock | $ | $ | |||||||||||||||
| Unicoin Inc. Shareholders | Non-Cash Dividends | |||||||||||||||||
| Employee, Contractors, Directors | Discretionary Compensation | |||||||||||||||||
| Service Providers, Influencers and Employees | Services and Employee Labor | |||||||||||||||||
| Subtotal | ||||||||||||||||||
| ITSQuest Contingent Divestiture Amendment | Contract Amendment | |||||||||||||||||
| Five-Year Deferred Payment Plan | Cash | * | * | |||||||||||||||
| Ten-Year Prepaid Plan | Cash | * | * | |||||||||||||||
| Asset Swap and related commission | Land and mining rights | |||||||||||||||||
| Total | $ | $ | ||||||||||||||||
| * | |
| ** | On July 16, 2025, the Company entered into a binding agreement to grant rights to receive 350,000 unicoins as part of the settlement of a legal matter. These rights have not yet been issued and are not reflected in the table above, as the related obligation is not currently recorded on the Company’s balance sheet. The Company will evaluate the accounting treatment of the grant in future periods based on further developments. |
13
Sales to Investors
As of March 31, 2025 and December 31, 2024, the unicoin rights financing obligation associated with sales to Investors amounted to $
Dividend Issued to Shareholders
The Company declared and issued a non-cash dividend of unicoin rights, on a pro-rata basis, to all shareholders of record as of the dividend declaration date of February 10, 2022. This non-cash dividend was the initial issuance of unicoin rights, prior to finalizing any plan to market and sell rights in connection with any of the Company’s financing rounds, and at the time of the pro-rata distribution, management and the Board had not yet ascribed a value to such rights. As a result, the Company has ascribed de minimis value to all unicoin rights issued to shareholders on February 10, 2022. As of March 31, 2025 and December 31, 2024, the unicoin rights financing obligation associated non-cash dividend of unicoin rights amounted to $ thousand, respectively.
Discretionary Payments to Employees, Contractors and Directors
The Company has issued unicoin rights to certain
employees, Board members and external contractors/consultants as discretionary awards. These unicoin rights were issued on a discretionary
basis and do not indicate that employees, Board members or contractors/consultants are being rewarded with a specific value attributable
to past or future services rendered by such individuals. The unicoin rights were also not issued as a replacement for, or in lieu of,
cash or equity awards due under any type of pre-determined bonus or other incentive plan that quantifies a value that the holders are
entitled to as a result of their services or performance. The Company believes that, because of the nature of these discretionary awards
(i.e., nothing of specific value was exchanged to the Company in return), together with the legal disclaimer of any obligation to launch
the unicoin within the terms of the unicoin rights agreement, on a per unicoin right basis, the amount that holders would be entitled
to if the unicoin is not ultimately launched is de minimis in relation to the actual fair value per unicoin right. As of March 31,
2025 and December 31, 2024, the unicoin rights financing obligation associated with discretionary payments to employees, contractors
and directors amounted to $
Issued to Service Providers, Influencers and Employees
The Company has issued unicoin rights in exchange for services from advertising agencies, marketing firms and other vendors. Also, the Company has issued unicoin rights as part of the compensation package negotiated with certain employees. The related contracts for these third-party providers and employees specify the value provided, as negotiated by these parties, and the number of unicoin rights accepted as compensation for the dollar value of those services.
Similar to investors, service providers exchanged a specified, negotiated value relating to services provided to the Company in exchange for unicoin rights and have the right to receive either 1) the negotiated number of unicoins upon launch, or 2) payment of cash equivalent to the value of services provided. In addition, from time to time the Company engages Influencers to promote unicoins and/or the Unicorn Hunters show in exchange for unicoin rights. The form of Influencer engagement may include promoting Unicoin in a social media post, making brief reference in a speech, posting about Unicoin on a website or any other media form.
14
These contracts do not specify the value of services rendered by the Influencer nor the specific format of engagement required. Because an “engagement” can represent something as simple as brief mention in a speaking engagement, or posting on a social media account, etc. management determined there is very little effort involved by the Influencer in order to perform services in a manner consistent with the contractual terms. As of March 31, 2025, and December 31, 2024, the unicoin rights financing obligation associated with unicoin rights issued to service providers, influencers and employees amounted to $
Five-Year Deferred Payment Plan
In August 2022 the Company began offering a five-year deferred payment plan (the “deferred payment plan”) to investors in its ongoing unicoin rights offering. The deferred payment plan permits investors to purchase unicoin rights immediately and pay for such unicoin rights in five equal annual installments, with the first installment due one year after the date of purchase. Purchases through the deferred payment plan requires that investors provide collateral to the Company having a value of at least 20% of the total purchase price of the purchased unicoin rights. Collateral can be in the form of Company common stock owned by the investor, unicoin rights already owned by the investor, cash, digital assets or other assets with a demonstrable value, at the Company’s discretion, if such assets can be transferred to the Company or a valid lien on such assets can be secured. Pursuant to the terms of the installment payment plan, both the pledged collateral and the unicoin rights being purchased under the installment plan will be forfeited to the Company if the investor fails to make any of the five annual installment payments.
The following table summarizes the pledged collateral pursuant to the deferred payment plan as of March 31, 2025 and December 31, 2024:
| Estimated Fair Value of Collateral Submitted |
||||||||
| Form of Collateral Received | March 31, 2025 |
December 31, 2024 |
||||||
| Cash | $ | $ | ||||||
| Digital Assets | ||||||||
| Non-Unicoin Inc. Stock | ||||||||
| Unicoin Inc. Shares of Common Stock | ||||||||
| Unicoin rights | ||||||||
| Real Estate | ||||||||
| Total | $ | $ | ||||||
The fair value of the collateral received by the Company is determined as follows:
| ○ | Cash – Based on the value of cash received. |
| ○ | Digital Assets – Fair value is determined based on quoted prices on the active exchanges as of the balance sheet date for the reporting period. |
| ○ | Non-Unicoin Inc. Stock – Fair value is determined based on quoted prices on the active exchanges as of the balance sheet date for the reporting period. |
| ○ | Unicoin Inc. Common Stock – Based on fair value of common stock, as of the balance sheet date for the reporting period, determined with the assistance of a third-party valuation firm. |
15
| ○ | Unicoin rights – Based on fair value of unicoin rights, as of the balance sheet date for the reporting period, determined with the assistance of a third-party valuation firm. |
| ○ | Real Estate - Based on third-party appraisal as of the date the asset was accepted as collateral. |
Ten-Year Prepaid Plan
In November 2022 the Company began offering a ten-year prepaid plan (the “prepaid plan”) to investors in its ongoing unicoin rights offering. Under the prepaid plan, the investor remits a cash or digital asset deposit (the “principal”) for a period of up to ten years. After the first year (the “maturity date”), the investor can either withdraw the principal or apply it towards the purchase of unicoins at 20 cents per unit. Amounts recorded within the unicoin rights financing obligation were as follows:
| March 31, 2025 |
December 31, 2024 |
|||||||
| Cash Receipts | $ | |
$ | |||||
| Accrued Interest | ||||||||
| Unicoin rights financing obligation, Ten-Year Prepaid Plan | $ | $ | ||||||
After five years following the deposit (the “interest vesting date”), a portion of these proceeds are entitled to earn cumulative (i.e., non-compounded) interest of 50%, which can either be withdrawn or applied to the purchase of unicoins. The remaining proceeds did not include a contractual interest rate. Proceeds subject to contractual interest are as follows:
| March 31, 2025 |
December 31, 2024 |
|||||||
| Proceeds subject to interest | $ | $ | ||||||
| Exempt from contractual interest | ||||||||
| Total | $ | $ | ||||||
Accrued interest under the prepaid plan has been calculated using the straight-line method, which approximates the effective interest method. The financing obligation did not include present value adjustments to account for lower than market interest rate, in relation to those transactions with no contractual interest, as such adjustments would have been immaterial.
ITSQuest Contingent Divestiture Amendment
The Company has issued 22 million unicoin rights with a fair value of $2,570 thousand, in consideration for various amendments to the Share Exchange Agreement (the “Amended SEA”) to delay the date of the trigger event to, most recently, December 31, 2025. The trigger event provides that the Company would divest itself of the acquired ITSQuest equity by returning the same to the founders of ITSQuest, and such founders shall be entitled to retain the shares of the Company received pursuant to the original and amended SEA upon any of the following two scenarios:
| - | if the Company does not engage in a public offering of its securities at a price of at least $10.00 per share by December 31, 2025; or, | |
| - | if the Company’s proposed tokens are not tokenized and listed on an available Alternative Trading System (“ATS”) or cryptocurrency exchange (whichever is applicable), with a quoted price of at least $1.00 per token by December 31, 2025. |
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Asset Swap Agreement and Related Commission
The Company records assets on the condensed consolidated balance sheets for the fair value (as determined by a third-party specialist) of land and mining rights received in exchange of unicoin rights. The Company recorded investments in land and mining rights assets, and the respective unicoin rights financing obligation from asset swap agreements as of March 31, 2025, as follows:
| Investment in Land/Unicoin Right Financing Obligation |
||||
| Eco Club, Venezuela | $ | |||
| Vacant Land, California City | ||||
| 7R-Ranch, Texas | ||||
| Investments in land | ||||
| Mining rights asset | ||||
| Commissions for asset swap agreements paid with unicoin rights | ||||
| Unicoin rights financing obligation from asset swap agreements | $ | |||
Unicoin Rights Issued to Related Parties
The unicoin rights issuances discussed above include a total of 1,155 million unicoin rights, and the respective unicoin rights financing obligation of $2,701 thousand, which represent the cumulative amounts issued to related parties as of March 31, 2025 and December 31, 2024. The composition of these is summarized in the following table:
| Outstanding Unicoin Rights and Related Financing Obligation |
||||||||||||||||||
| March 31, 2025 |
December 31, 2024 |
|||||||||||||||||
| Nature / Category | Relationship | Units | Amount | Units | Amount | |||||||||||||
| Sales to Investors | Officers and Directors | $ | $ | |||||||||||||||
| Unicoin Inc. Shareholders (Dividends) | Officers and Directors | |||||||||||||||||
| Discretionary Awards | Officers, Directors & their Families | |||||||||||||||||
| Consideration for Services | Officers, Directors & their Families | |||||||||||||||||
| ITSQuest Contingent Divestiture Amendment | Former Owners of ITSQuest | |||||||||||||||||
| Five-Year Deferred Payment Plan | Officers, Directors & their Families | |||||||||||||||||
| Total | $ | $ | ||||||||||||||||
Other Matters
As of March 31, 2025 and December 31, 2024, the Company had $39 thousand and $
17
Transaction Loss on Repurchase of Unicoin Rights
During the three months ended March 31, 2025 and
2024, the Company recorded a transaction gain/(loss) on repurchase of unicoin rights amounting to $
| - | During the three months ended March 31, 2025 and 2024, the transaction gain/(loss) included $7 thousand and $(64) thousand, respectively, due to investors under the five-year deferred payment plan that paid installments using previously acquired unicoin rights as consideration. This component of the transaction loss results from differences between the fair value of the unicoin rights as of the time of installment under the five-year deferred payment plan compared to the initial acquisition cost of such unicoin rights. |
| - | During the three months ended March 31, 2025 and 2024, the transaction loss included $0 thousand and $99 thousand, respectively, from repurchased unicoin rights from investors. This component of the transaction loss represented the excess of cash proceeds over the unicoin rights financing obligation that was previously recorded when the investor initially acquired the unicoin rights. |
NOTE 7 – COMMON STOCK
The Company is authorized to issue shares of common stock with and shares of common stock issued and and outstanding, net of treasury stock, as of March 31, 2025 and December 31, 2024, respectively. Stockholders are entitled to one vote for each share held of record on all matters to be voted on by stockholders. Stockholders have no conversion, pre-emptive, or other subscription rights and there are no sinking fund or redemption provisions applicable to the common stock.
Issuance of Common Stock
During the three months ended March 31, 2025, the Company raised $
| Common Stock Issuances by Round | Shares | Weighted Average Price per Share |
Proceeds | |||||||||
| Round 6 | $ | $ | ||||||||||
| Round 8 | ||||||||||||
| Total stock issued | $ | |||||||||||
All shares were issued from the Company’s pool of authorized common stock, which rights and privileges are discussed above and were the same for all shares issued to date. Each funding round was available for a defined period with a specified price per share and did not overlap with other funding rounds. Investors that subscribed during a specific round, locked the pricing offered for that round and Company had a limited time to close on the issuance of shares. Once a funding round was fully subscribed to and committed, management evaluated capital needs and determined the price for the following round.
Repurchases of Common Stock
During the three months ended March 31, 2025, the Company repurchased common stock shares in exchange for consideration of $
Treasury stock is recorded on the condensed consolidated balance sheets at cost and is reflected as an increase to stockholders’ deficit.
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The following table summarizes the source and classification of the Company’s stock-based compensation expense:
| Three Months Ended March 31, |
||||||||||
| Source of Stock-Based Compensation Expense | Classification in the Condensed Consolidated Statements of Operations |
2025 | 2024 | |||||||
| Unicorns common stock awards | Cost of revenues | $ | $ | |||||||
| Restricted stock units | General and administrative | |||||||||
| Total Stock-based compensation | $ | $ | ||||||||
Unicorns Common Stock Awards
On March 14, 2021, Unicorns, a majority-owned subsidiary
of the Company, granted Unicorns Common Stock Awards to the executive producers of the Unicorn Hunters TV show. These awards have a grant-date
fair value equal to the fair market value of the underlying Unicorns stock on the grant date less present value of expected dividends.
During the three months ended March 31, 2025 and 2024, the Company recorded stock-based compensation expense within the Cost of Revenues
line item of $ thousand and $thousand, respectively, in relation to the vesting of five million Unicorns Common Stock Awards. As of March 31, 2025, five million
Unicorns Common Stock Awards remain outstanding and not vested. The total grant-date fair value of the outstanding Unicorns Common Stock
Awards amount to $
Restricted Stock Units Classified as Equity
The following table summarizes information about RSUs as of and for the three months ended March 31, 2025:
| Equity Classified |
Weighted Average Grant Date Fair Value |
|||||||
| Beginning balance - January 1, 2025 | $ | 0.73 | ||||||
| Granted | ||||||||
| Vested | ( |
) | ||||||
| Ending balance - March 31, 2025 | $ | |||||||
The Company recorded $ thousand and $thousand of stock-based compensation expense relating to equity classified RSU’s during the three months ended March 31, 2025 and 2024, respectively.
19
Stock Options
The following is a summary of stock option activity and related information for the three months ended March 31, 2025:
| Number of Shares |
Weighted |
Weighted Average Grant Date Fair Value |
Weighted Average Remaining Contractual Term (Years) |
Aggregate Intrinsic Value |
||||||||||||||||
| Beginning balance January 1, 2025 | $ | $ | ||||||||||||||||||
| Granted | ||||||||||||||||||||
| Exercised | ||||||||||||||||||||
| Adjustments | ||||||||||||||||||||
| Ending balance March 31, 2025 | $ | $ | ||||||||||||||||||
| Vested and exercisable as of March 31, 2025 | $ | $ | ||||||||||||||||||
As of March 31, 2025 and December 31, 2024, there was unrecognized stock-based compensation for stock options because all outstanding shares were fully vested. For the three months ended March 31, 2025 and 2024, there was stock-based compensation for stock options.
NOTE 9 – WARRANTS
Common stock purchase warrants issued and currently outstanding are recorded at their initial fair value and reported in stockholders’ equity (deficit) as increases to additional paid-in capital. These warrants were reported as equity, rather than liabilities, since (i) the warrants may not be net-cash settled, (ii) the warrant contractually limits the number of shares to be delivered in a net-share settlement, and (iii) the Company has sufficient unissued common stock shares available to settle outstanding warrants. Subsequent changes in fair value from the warrants’ initial fair value are not recognized as long as the warrants continue to be classified as equity.
The following table summarizes information about the warrants as of and for the three months ended March 31, 2025:
| Equity Classified |
Weighted Average Grant Date Fair Value |
|||||||
| Beginning balance - January 1, 2025 | $ | |||||||
| Granted | ||||||||
| Exercises | ||||||||
| Forfeited | ||||||||
| Ending balance - March 31, 2025 | $ | |||||||
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NOTE 10 – LEASES
As discussed in Note 2, the Company adopted ASC 842 effective January 1, 2022 and applied a modified retrospective transition approach. The Company leases its office facilities under operating lease arrangements with varying expiration dates through 2028. Operating lease ROU assets and operating lease liabilities are recognized at the lease commencement date based on the present value of the lease payments over the lease term. ROU assets also include adjustments related to prepaid or deferred lease payments. As the Company’s leases do not provide an implicit rate, it uses the incremental borrowing rate based on the information available at lease commencement date in determining the present value of lease payments. Options to extend a lease are included in the lease term when it is reasonably certain that the Company will exercise such options. As of March 31, 2025, the remaining lease term of the Company’s operating leases ranges from less than one year to five years.
The components of operating lease expense are as follows:
| The Three Months Ended March 31, |
||||||||
| 2025 | 2024 | |||||||
| Operating lease expense in relation to the operating lease liability | $ | $ | ||||||
| Other lease expenses, such as variable expenses and short-term leases not capitalized | ||||||||
| Total operating lease expense | $ | $ | ||||||
As discussed in Note 2, the Company elected to exclude leases with a term of 12 months or less from its condensed consolidated balance sheets. For the three months ended March 31, 2025, the Company recorded operating lease expense of $28 thousand for those short-term leases.
Supplemental balance sheet information related to operating leases was as follows:
| March 31, 2025 |
December 31, 2024 |
|||||||
| Operating leases | ||||||||
| Assets: | ||||||||
| Operating lease right-of-use assets | $ | $ | ||||||
| Liabilities: | ||||||||
| Current portion of operating lease liabilities | $ | $ | ||||||
| Operating lease liabilities, noncurrent | ||||||||
| Total operating lease liabilities | $ | $ | ||||||
| Other information: | ||||||||
| Weighted-average remaining lease term (in years) | ||||||||
| Weighted-average discount rate % | % | % | ||||||
As of March 31, 2025, maturities of operating lease liabilities were as follows:
| Amount | ||||
| 2025 | $ | |||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| Future operating lease payments | ||||
| Imputed interest | ( |
) | ||
| Total operating lease liabilities | $ | |||
The Company did not have any finance leases during the three months ended March 31, 2025.
21
NOTE 11 – COMMITMENTS AND CONTINGENCIES
From time to time, the Company may be subject to legal proceedings and claims in the ordinary course of business. The Company is currently not aware of any legal proceedings or claims that will have, individually or in the aggregate, a material adverse effect on its consolidated financial statements.
The Company has agreed to indemnify its directors and executive officers for costs associated with any fees, expenses, judgments, fines and settlement amounts incurred by any of these persons in any action or proceeding to which any of those persons is, or is threatened to be, made a party by reason of the person’s service as a director or officer, including any action by the Company, arising out of that person’s services as the Company’s director or officer or that person’s services provided to any other company or enterprise at the Company’s request. The Company may also be subject to indemnification obligations by law with respect to the actions of its employees under certain circumstances and in certain jurisdictions.
ITSQuest Contingent Divestiture
As more fully discussed in Note 6, the acquisition
of ITSQuest included a contingent divestiture clause where if certain trigger events are not achieved by December 31, 2025, ITSQuest
would divest back to its founders. If the Company is not able to achieve such trigger events, the Company’s business, financial
condition, results of operations and liquidity will be materially impacted as ITSQuest represented Company assets of $
Asset Swap Agreements
As of March 31, 2025, and through the filing date of this Quarterly Report on Form 10-Q, the Company has signed certain asset swap agreements where consideration consisted of unicoins. Because the unicoin has not been delivered and listed for trading yet, management cannot yet ascertain control over the assets included in such asset swap agreements. Accordingly, management has not recorded these transactions in the consolidated balance sheet. In certain cases, the agreements include project failure or escrow provisions tied to a token launch timeline. Where such conditions have lapsed without fulfillment, the agreements are considered terminated or abandoned in accordance with their terms. Management is currently evaluating next steps, including the legal and accounting implications of such terminations, as well as whether to engage counterparties to renegotiate or revive any of the affected transactions under revised terms. The following represents summaries of each transaction:
| ● | “Restrepo”: On July 29, 2024, the Company entered into an asset swap agreement (as amended) with Grupo Spira S.A.S., a company organized under the laws of Colombia, pursuant to which the seller agreed to transfer 100% ownership of certain real estate assets to the Company in exchange for rights to receive 4,340,000 unicoin tokens. Pursuant to the terms of the asset swap agreement, the seller is required to transfer the asset by deed. While due diligence has been completed, the transfer of title has not yet occurred. Accordingly, management has determined that the criteria for recognition of this transaction on the consolidated balance sheet has not been met. |
| ● | “Buona Vista”: On June 26, 2024, the Company entered into an Asset Swap Agreement (the “Agreement”) pursuant to its 140 Program with Victor Raul Montenegro Criado, an individual citizen of Peru, and Villa Paradiso S.A.C., a company organized under the laws of Peru (collectively referred to in this paragraph only as the “Seller”). Under the Agreement, the Seller agreed to transfer 100% of the ownership interest in Buona Vista – Casas Club & Resort S.A.C., a Peruvian entity holding certain real estate assets, to the Company in exchange for rights to receive 61,795,216 unicoin tokens. The unicoin token rights will be issued in three tranches, contingent upon the achievement of specified construction milestones related to the real estate assets. The initial ICO date was set for September 30, 2024, and was subsequently extended to March 30, 2025, pursuant to an amendment dated October 23, 2024. The Company did not proceed with the ICO by the extended deadline of March 30, 2025. Accordingly, on April 23, 2025, the parties executed a second amendment to revive and amend the original Agreement, extending the ICO deadline to December 31, 2025. The Company has instructed local counsel to initiate steps to move the transaction to escrow. As of the date of this report, the transaction has not yet moved to escrow; title to the assets has not transferred, and no unicoin rights have been issued in connection with the transaction. Accordingly, management has determined that the criteria for recognition of this transaction on the consolidated balance sheet has not been met. |
22
| ● | “Bahamas”: On January 24, 2024, the Company entered into two Asset Swap Agreements pursuant to its 140 Program to acquire the beneficial interest in two Bahamian entities, Long Island Investments Ltd. and Newport Harbour Ltd. (collectively referred to in this paragraph only as the “Landholding Companies”), which collectively own specified real estate parcels in the Bahamas. In exchange, the Company agreed to issue a total of 1,108,863,283 unicoin rights. On March 25, 2024, the parties executed an amendment clarifying certain rights and obligations, including provisions related to the conversion of the beneficial interest into full legal ownership. Under the Agreements, as amended, the Company obtained a beneficial interest in the Landholding Companies through a trust declaration, with the option to convert its beneficial interest into full legal ownership of the entities. The Agreements also included a rescission clause stipulating that if the unicoin tokens are not created and listed on crypto exchanges within six months, the Agreements would terminate, and the assets and unicoin rights would revert to the Investors and Company, respectively. The Company did not proceed with the ICO as anticipated under the original Agreements. Accordingly, on September 27, 2024, the parties executed a second amendment extending the ICO deadline to December 31, 2024, and establishing the following interim obligations: (i) Finalize the technical procedures for transferring unicoins to New World Properties SPV Inc.’s crypto wallet; (ii) Facilitate the Company’s ongoing due diligence on the Investor Company and the Properties; and (iii) Complete the conversion of beneficial ownership of shares into full legal ownership of the Landholding Companies, thereby granting the Company full control over the Properties. The second amendment further provides that if, by January 30, 2025, the parties are unable to agree on a new ICO date and no regulatory delay is in effect, the Agreement shall be deemed null and void ab initio, releasing all parties from any liabilities or obligations. The Company did not proceed with the ICO by the extended deadline of December 31, 2024. On May 21, 2025, counsel for New World Properties SPV Inc. notified the Company of its withdrawal from representation, citing the pending SEC lawsuit against the Company as one of the reasons for his withdrawal. In the notice, counsel stated its belief that the transaction between Unicoin and the SPV could not proceed to closing under the current circumstances. This withdrawal abruptly halted the progress that had been made between the parties’ legal counsel toward finalizing an extension of the transaction deadline and completing the conversion of the Company’s beneficial interest into full legal ownership of the Landholding Companies. As a result, the Company must now reengage directly with the relevant investors to assess the status of the transaction and determine whether a path forward remains feasible. However, there is no assurance that the transaction will be consummated. |
| Due to the existence of the rescission provision in the agreements, and because the Company has not completed the process of converting beneficial ownership into full legal ownership, management has concluded that the criteria for recognition of this transaction in the consolidated balance sheet have not been met. |
| ● | “Greenmall Venezuela”: On November 1, 2023, the Company entered into an asset swap agreement with Shine Investment Corp. a company organized under the laws of Panama (referred to in this paragraph only as the “Seller”), pursuant to which the seller agreed to transfer 100% of the ownership interest in Inversiones Inmobiliarias Petroin CA, a Venezuelan entity owning certain real estate assets, to the Company, in exchange for rights to receive 11,496,800 unicoin rights. Under the terms of the asset swap agreement, all corporate documents related to the transaction were deposited in escrow pending the transfer of the consideration to the designated wallet. As of the date of this report, although the agreement remains in effect, the escrow period has lapsed, the escrow agent has returned the corporate documents to the Seller, and the transaction has not been consummated. Accordingly, management has determined that the criteria for recognition of this transaction in the consolidated balance sheet has not been met. |
| ● | “Colorado”: On October 23, 2023, the Company entered into an Asset Swap Agreement (as amended) with Bart M. Gould and Rozalyn S. Gould, husband and wife residing in the United States (collectively referred to in this paragraph only as the “Sellers”), pursuant to which the Company agreed to acquire certain real estate assets in exchange for 11,564,000 unicoins. On April 23, 2024, the parties amended the Agreement to include a condition requiring that the deed to the assets be released to the Company upon the issuance of the unicoins to the Sellers and their subsequent listing and tradability on a token trading platform or exchange. As of the date of this report, the transaction has not closed, title has not been transferred, and no unicoin rights have been issued in connection with the transaction. Accordingly, management has not met the control criteria for recognition of this transaction in the consolidated balance sheet. |
| ● | “Club 51”: On October 20, 2023, the Company entered into an asset swap agreement with International Mame Industry SAPI de CV, a company organized under the laws of Mexico, pursuant to which the Company agreed to acquire 20% of the equity interest in the Club 51 business, controlled by International Mame Industry SAPI de CV and its subsidiaries. The Club 51 business, which consists of a series of exclusive business clubs, is currently distributed among multiple entities, and is to be reorganized and consolidated prior to closing, such that the Company is to receive a 20% ownership interest in the Club 51 businesses, in exchange for 100,000,000 unicoins. This transaction remains in the due diligence phase, as the corporate consolidation of the Club 51 entities remains incomplete. Accordingly, management has not met control criteria for recognition of this transaction in the consolidated balance sheet. |
| ● | “Antigua”: On October 16, 2023, the Company entered into an asset swap agreement with Five Island Lands Trust (referred to in this paragraph only as the “Investor”) pursuant to the Company’s 140 Program. The agreement provided that the Company, as the issuer of unicoins, warranted that the ICO would be launched on or before November 15, 2023. If the ICO did not occur by the specified date, the Agreement required the parties to negotiate a new ICO date in good faith within 45 days of the original ICO date. The parties were unable to reach an agreement on a new ICO date. While the agreement does not expressly state that the failure to launch by the ICO date would terminate the Agreement, it does provide that “failure to effect the planned ICO” permits the parties to “challenge the agreement.” As of the date of this report, the transaction has not closed, title to the assets has not transferred, no unicoin rights have been issued, and the agreement remains subject to potential challenge. Accordingly, management has not met the control criteria for recognition of this transaction in the consolidated balance sheet. |
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| ● | “Eden Grand Resort”: On August 31, 2023 the Company entered into an asset swap agreement with Mr. Mohammad Al Saeed Adnan and Mr. Chai Trongchitnimit, pursuant to which the Company agreed to acquire certain real estate assets in Chonburri, Thailand in exchange for 671,206,755 unicoins. The assets are to be delivered to Genniwine Inc., a corporation organized under the laws of Thailand, of which the Company controls 49% pursuant to a shareholder agreement in which Alex Konanykhin, acting for the Company, receives the full economic benefits of Genniwine. The assets consist of a development project for a 6-story condominium resort which is under construction, with the unicoins payable in three tranches: (i) 34% deliverable at closing and transfer of title to the Property; (ii) 33% deliverable when construction of the structures proposed to be built on the property is 50% complete; and (iii) 33% deliverable when construction of the structures proposed to be built on the property is 100% complete. Deeds to the assets are currently held in escrow pending delivery of unicoin tokens. The escrow arrangement terminates if tokenized coins not delivered by April 30, 2024, but only with notice from the escrow agent that the transaction is terminated, which notice has not yet been provided. Accordingly, management has not met control criteria for recognition of this transaction in the consolidated balance sheet. |
| ● | “Finca La Esperanza”: On July 27, 2023, the Company entered into an agreement with Eugenio de la Torre (referred to in this paragraph only as the “Investor”), pursuant to which the Company agreed to issue 36,400,000 Unicoin rights in exchange for real estate assets consisting of the agricultural farm known as “Finca La Esperanza,” located in Cumaribo, Vichada, Colombia. The assets were transferred to the Company by deed on October 23, 2023, and recorded with the local registry in February 2024. The agreement includes a project failure clause, which stipulates that if the Unicoin token was not both tokenized and released for trading within 12 months of the agreement date, the transaction would be deemed terminated, requiring each party to return their respective contributions. As the 12-month period has now lapsed without the token being released for trading, the agreement is deemed terminated in accordance with its terms. This triggers reversionary rights: the real estate assets are to be returned to the Investor, and the 36,400,000 Unicoin rights are to be returned to the Company. Management is currently evaluating next steps, including the legal and logistical process for effecting the reversals, the accounting implications of the transaction, and whether it may be appropriate to engage the Investor in discussions regarding the potential modification or removal of the clawback provisions under the agreement. Accordingly, management has not met control criteria for recognition of this transaction in the consolidated balance sheet. |
| ● | “Thai Villas”: On May 5, 2023, the Company entered into an asset swap agreement with M.E. Construction, a company organized under the laws of Thailand, pursuant to which the Company agreed to acquire certain real estate assets in Chonburri, Thailand in exchange for 12,800,000 unicoins. The assets are to be delivered to Genniwine Inc., a corporation organized under the laws of Thailand, of which the Company controls 49% pursuant to a shareholder agreement in which Alex Konanykhin, acting for the Company, receives the full economic benefits of Genniwine. The assets are eight villas under construction, with the unicoins payable in two tranches: (i) 60% payable upon execution of the transaction, and (ii) 40% payable upon completion of construction and delivery of the completed assets to the Company. Deeds to the assets are currently held in escrow pending delivery of unicoin tokens. The escrow arrangement terminates if tokenized coins not delivered by April 30, 2024, but only with notice from the escrow agent that the transaction is terminated, which notice has not yet been provided. Accordingly, management has not met control criteria for recognition of this transaction in the consolidated balance sheet. |
| ● | “Philippine Property Interests”: As of the date of this report, Unicoin Inc. holds contractual rights and certain beneficial interests in various real estate properties located in the Philippines, pursuant to a series of Asset Swap Agreements (“ASAs”) and related instruments entered into with third parties. These agreements contemplate the contribution of real estate assets in exchange for future rights to receive unicoins. However, due to legal restrictions under Philippine law prohibiting foreign entities from holding title to land, Unicoin Inc. is not named as the transferee in any of the Conditional Deeds of Sale associated with these transactions. Legal title is instead expected to be transferred to affiliated Philippine entities. As a result, Unicoin Inc. may not hold direct legal title to, nor a formal, enforceable beneficial interest in, the properties contributed under these ASAs. |
Although a separate agreement referencing one such affiliate, UH Properties Inc., provides for certain coordination with Unicoin Inc., it may not expressly secure Unicoin Inc.’s economic rights in the underlying assets once title is transferred. This arrangement may require amendment or replacement to establish a legally enforceable interest. The Company is therefore actively exploring structural and contractual mechanisms to preserve and realize the economic value of these property contributions. Until such mechanisms are implemented and formalized, the Company cannot guarantee its ability to control, monetize, or otherwise benefit from these real estate assets. These interests form part of Unicoin’s broader asset accumulation strategy but are not currently generating revenue or being utilized in active operations.
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NOTE 12 – RELATED PARTY TRANSACTIONS
Unicoin Rights Issued to Related Parties
As discussed in Note 6, as of March 31, 2025 and
December 31, 2024, outstanding unicoin rights issued to related parties amounted to million unicoin rights valued at $
NOTE 13 – INCOME TAXES
The Company’s annual effective tax rate
was (
Net loss per common share is calculated in accordance with ASC Topic 260, Earnings Per Share. Basic net loss per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during the period. The computation of diluted net loss per share does not include dilutive common stock equivalents in the weighted-average shares outstanding, as the inclusion of common share equivalents would be antidilutive. The common share equivalents consist of stock options, restricted stock units, warrants for common stock, and common stock.
Calculation of net losses per share is as follows for the three months ended March 31, 2025 and 2024:
| Three Month Ended March 31, |
||||||||
| Basic and Diluted: | 2025 | 2024 | ||||||
| Numerator: | ||||||||
| Net loss attributable to Unicoin Inc. per the condensed consolidated statements of operations | $ | ( |
) | $ | ( |
) | ||
| Denominator: | ||||||||
| Weighted average common shares outstanding used to compute basic and diluted loss per share | ||||||||
| Net loss per common share attributable to Unicoin Inc., basic and diluted | $ | ) | $ | ) | ||||
The following table presents the potentially dilutive shares that were excluded from the computation of diluted net loss per share of common stock attributable to common stockholders, because their effect was anti-dilutive:
| Three Month Ended March 31, |
||||||||
| 2025 | 2024 | |||||||
| Stock options outstanding | ||||||||
| Warrants for common stock | ||||||||
| Restricted stock units | ||||||||
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NOTE 15 – SEGMENT INFORMATION
Operating segments are defined as components of an enterprise for which separate financial information is evaluated regularly by the chief operating decision maker, or decision-making group in deciding how to allocate resources and in assessing performance. The Company evaluates operating results based on measures of performance, including revenues, cost of revenue and gross profit. The Company currently operates in the following three reporting segments: SaaS, TaaS and Unicorn Hunters.
Our reportable segments consist of SaaS, TaaS and Unicorn Hunters. We determine our operating segments based on how the chief operating decision maker (“CODM”) manages the business, allocate resources, make operating decisions and evaluate operating performance. The Company’s CODM is the Chief Executive Officer. Our CODM reviews financial information presented on a consolidated basis accompanied by information about revenue and cost of revenue by services type along with gross profit for purposes of allocating resources and evaluating financial performance, as such we have disclosed segment information up to gross profit for each operating segment. Furthermore, our revenues are derived from the United States and foreign countries which includes the South American and European regions (“Foreign countries”).
As discussed in Note 1, the Company operates in three business segments – SaaS, which consists of operations related to the Company’s fully integrated all-in-one cloud-based solution to manage remote workers; TaaS, which consists of operations related to the Company’s staffing service offerings, whereby customers are connected to individuals by the Company who are able to assist them in projects; and Unicorns, which consists of operations relative to production and streaming of the Unicorn Hunters show which provides publicity and exposure to customers through their appearances on the Unicorn Hunters show.
The following tables set forth certain reportable segment information relating to where the Company derived its revenue for the three months ended March 31, 2025, and 2024:
| Three Month Ended March 31, | ||||||||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||||||
| United States |
Foreign countries |
Consolidated | United States |
Foreign countries |
Consolidated | |||||||||||||||||||
| Staffing revenues | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Subscription revenues | ||||||||||||||||||||||||
| Unicorn Hunters | ||||||||||||||||||||||||
| Total revenues | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
The following tables set forth certain reportable segment information relating to the Company’s operations for the three months ended March 31, 2025, and 2024:
| Three Month Ended March 31, 2025 | ||||||||||||||||
| SaaS | TaaS | Unicorn Hunters |
Consolidated | |||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Cost of revenues | ||||||||||||||||
| Gross profit (loss) | $ | $ | $ | ( |
) | $ | ||||||||||
| Three Month Ended March 31, 2024 | ||||||||||||||||
| SaaS | TaaS | Unicorn Hunters |
Consolidated | |||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Cost of revenues | ||||||||||||||||
| Gross profit (loss) | $ | $ | $ | ( |
) | $ | ||||||||||
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The following table includes a reconciliation of Gross Profit allocated to segments to Loss Before Income Taxes:
| March 31, 2025 |
March 31, 2024 |
|||||||
| Gross Profit allocated to segments, net | $ | $ | ||||||
| Expenses not allocated to segments, net* | ( |
) | ( |
) | ||||
| Loss Before Income Taxes | $ | ( |
) | $ | ( |
) | ||
| * |
There were no material transactions between reportable segments during the three months ended March 31, 2025 and 2024.
Assets by reportable segment and operating costs by reportable segment are not presented as the Company does not allocate assets to its reportable segments, nor is such information used by management for purposes of assessing performance or allocating resources.
NOTE 16 – SUBSEQUENT EVENTS
Management has evaluated subsequent events through the date of issuance of these condensed consolidated financial statements and has determined that there are no subsequent events outside the ordinary scope of business that require adjustment to, or disclosure in, the condensed consolidated financial statements other than those described below:
| ● | Issued
12,039 thousand unicoin rights in exchange of aggregate consideration of $ |
| ● | Issued
thousand shares of common stock in exchange of cash consideration of $ |
| ● | On May 19, 2025, the Company notified investors under certain deferred payment plan contracts that the respective unicoins had been prepared in accordance with the ERC-20 Token Standard. Under the terms of these contracts, the first installment payment becomes due within ten business days of such notification. |
As a result, the Company expects to receive payments totaling approximately $195 million or, alternatively, to take possession of the collateral securing those contracts. As of the date of this 10-Q filing, the Company has collected approximately $1.2 million in payments, pursuant to the deferred payment plan, that became due following the tokenization announcement.
If investors fail to make the required payments within the specified period, the Company may take possession of the following collateral:
| Available Form of Collateral | Estimated Fair Value when Collateral was Accepted* | |||
| Cash | $ | |||
| Digital Assets | ||||
| Non-Unicoin Inc. Stock | ||||
| Unicoin Inc. Shares of Common Stock | ||||
| Unicoin rights | ||||
| Real Estate | ||||
| Total | $ | |||
| * |
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As of the issuance date of these financial statements, the Company is evaluating the full financial impact of this event.
| ● |
In May 2025, the Company completed an internal review of its digital asset project involving the UNCN token. For internal purposes, the Company has determined that the smart contract associated with UNCN meets its working definition of “tokenization,” which entails the deployment of a functional and verifiable smart contract capable of minting and transferring tokens in alignment with the Company’s offering framework. The UNCN smart contract has undergone a formal audit under its current name and the identical underlying code, except for a single functional difference, has previously passed a third-party audit under a different naming convention. Specifically, the UNCN smart contract includes a pause feature, whereas the UnicoinX smart contract does not. The Company currently considers tokenization of the UNCN token to be functionally complete; however, no regulatory authority has reviewed or approved this characterization. The Company may consider commissioning an independent audit or issuing a formal certification in the future should it become necessary for regulatory, listing, or disclosure purposes. | |
| ● |
On June 6, 2025, the Company Directors passed a Board Resolution to refine its description of the unicoin tokens in light of internal strategic decisions and evolving regulatory considerations. While earlier materials referenced the possibility of collateralizing Unicoins or directly linking them to specific asset pools, the Company has determined that it will not collateralize the tokens. Furthermore, references to Unicoins as “asset-backed” shall be understood and used in a general commercial sense, consistent with the dictionary definition of “backed” as “supported by.” This reflects the Company’s intention to use part of the proceeds from token-related activities to invest in equity interests and other holdings expected to support the long-term value of the token. Such references will be clearly explained to investors in the Company’s Private Placement Memorandum, SEC filings, and other purchase-related materials to avoid any implication of legal collateralization or ownership rights. | |
| ● | On February 16, 2024, the Company entered into an Asset Swap Agreement with Dan Iacovelli to acquire two real estate-holding entities in exchange for 64,210,342 unicoins. The Investor elected to proceed under an International Coin option, which required the development of an International Coin by September 30, 2024. As this condition was not met and the parties did not agree on a new ICO date within the contractual period, the Agreement automatically terminated. On May 19, 2025, the Investor formally confirmed the termination. As a result, the transaction will not be completed, and no assets or obligations from this agreement are reflected in the financial statements. |
| ● | On December 13, 2023, the Company entered into an Asset Purchase Agreement with German Arochi Barajas and Viviana Arochi Barajas (referred to as the “Sellers”, only in this paragraph), pursuant to which the Seller agreed to transfer 100% ownership of certain real estate assets in Merida, Mexico, to the Company. Following due diligence, the Company identified legal and financial contingencies related to corporate recordkeeping, tax filings, and past deductions, resulting in projected costs to address compliance matters. Furthermore, the agreement includes a project failure provision which states that if unicoin is not tokenized and released for trading within twelve months after the effective date, the agreement shall terminate and the contribution returned to Seller. After further evaluation, the Company elected to terminate the transaction, and the transfer of title did not occur. On June 10, 2025, the Company sent Sellers a formal notice of termination. |
| ● | On November 7, 2023, the Company entered into an asset swap agreement with Green Valley MDM S.A., a company organized under the laws of Panama, pursuant to which the Seller agreed to transfer 100% of the ownership interest in Unicoin Panama S.A.—a Panamanian entity that owns certain real estate assets—to the Company, in exchange for rights to receive 14,784,000 Unicoin tokens. Under the terms of the agreement, the corporate documents effecting the transfer were deposited in escrow, to be released upon confirmation that the consideration (i.e., the Unicoin tokens) had been delivered to the designated wallet. As of the date of this report, the underlying escrow arrangement has expired, and on December 4, 2024, the escrow agent has not provided formal notice regarding the return of the documents. The asset swap agreement also includes a “project failure” clause providing that if Unicoin is not tokenized and released for trading within twelve months of the agreement’s effective date, the agreement shall automatically terminate and the contributed ownership interests must be returned to the Seller. In light of these developments—specifically the expiration of the escrow arrangement and the contingencies under the project failure clause—management has concluded that the criteria for recognition of the transaction in the Company’s consolidated financial statements have not been met and has determined to consider the agreement terminated. On July 28, 2025, the Company sent Seller a formal notice of termination. |
| ● | On June 19, 2025, Unicoin Inc. (the “Company”) entered into a Share Exchange Agreement (the “Exchange Agreement”) with Diamond Lake Minerals, Inc. (“DLMI”) and certain shareholders of DLMI, as previously disclosed in a Form 8-K filed on June 20, 2025. The Exchange Agreement provided for the Company to acquire a majority ownership interest in DLMI, subject to the satisfaction of certain closing conditions. Subsequently, the parties entered into a First Amendment to the Exchange Agreement to extend the closing deadline to July 16, 2025. The transaction did not close by that date. As of the date of this filing, the Company is in the process of finalizing a Second Amendment to the Exchange Agreement, which, if executed, would further extend the closing deadline and expressly reinstate, ratify, and reaffirm the terms and conditions of the Exchange Agreement and the First Amendment. However, the Second Amendment has not yet been executed by DLMI, and there is no assurance that the transaction will close. |
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of our financial condition and results of operations should be read together with our unaudited condensed consolidated financial statements and related notes which are included elsewhere in this Quarterly Report on Form 10-Q. This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors. See “Cautionary Note on Forward-Looking Statements”.
Our Company
Unicoin Inc. was incorporated in Delaware on June 22, 2015, under the name “TransparentBusiness, Inc.” On October 6, 2022, we changed our name to “Unicoin Inc.” Our principal executive offices are located at 228 Park Avenue South 16065, New York, NY 10003 and our phone number is (844) 384-5069.
Unicoin Inc. is an operating and holding company. As an operating company, Unicoin Inc. manages its SaaS software business, which provides for simple and seamless monitoring and management of remote or work-from-home employees. As a holding company, Unicoin Inc. wholly owns one TaaS operating company: SheWorks!. SheWorks! was founded by Silvina Moschini, who transferred her ownership interest to Unicoin Inc. on January 1, 2018. In 2018, KMGi transferred to Unicoin Inc. the intellectual property related to the Unicoin Inc. SaaS platform. In November 2020, Unicoin Inc. acquired a 51% majority ownership interest in ITSQuest, Inc., a regional staffing agency founded on September 21, 1994. In April 2021, Unicoin acquired a 66.67% ownership interest in Unicorns, Inc., a media company showcasing private companies seeking to obtain publicity for their private offerings, and as of April 15, 2025, the Company’s ownership interest in Unicorns Inc. is 71.88%. Unicoin Inc. and its subsidiaries principally operate in North America, South America and Central America.
The organization chart below shows the operating subsidiaries and the interests held in them by the Company:
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Subsidiaries Outside of the United States
Outside of the United States, the Company has recently formed subsidiaries for purposes of holding specific parcels of real estate. These “real estate subsidiaries” include Genniwine Inc. (organized in Thailand) and Unicoin LATAM C.A. (organized in Venezuela). Each real estate subsidiary’s sole purpose and business is to hold real estate.
Operations in these entities from formation through the date of this Form 10-Q were de minimis.
Non-Subsidiary, but Affiliated Entities Outside the United States
UH Properties Inc.
Unicoin Inc. does not hold any equity ownership or control over UH Properties Inc., a company organized under the laws of the Philippines. However, pursuant to a partnership agreement, Unicoin Inc. may be entitled to receive an economic interest in certain real estate investments located in the Philippines to be acquired by UH Properties Inc. The agreement contemplates that Unicoin Inc. may be entitled to a portion of returns from such investments, subject to the terms and performance of the assets involved. Notwithstanding this arrangement, UH Properties Inc. remains solely responsible for the management, operation, financing, and risks associated with those investments, and any profits or losses are to be borne exclusively by UH Properties Inc. Importantly, UH Properties Inc. is not currently a signatory to the partnership agreement, and as such, Unicoin Inc.’s rights under the agreement may not be fully enforceable against UH Properties Inc.
140 R.E. Properties Inc.
140 R.E. Properties Inc. is a company organized under the laws of the Philippines. Unicoin Inc. does not currently hold any equity interest in, or have any binding contractual agreement with, 140 R.E. Properties Inc. At present, there is no formal arrangement granting Unicoin Inc. any economic rights or interests in the assets or operations of 140 R.E. Properties Inc. Unicoin Inc. is currently evaluating opportunities to formalize a relationship with 140 R.E. Properties Inc., similar to the agreement in place with UH Properties Inc., in order to secure a defined economic interest in real estate investments undertaken by 140 R.E. Properties Inc. To better safeguard Unicoin Inc.’s potential rights and strategic objectives in the region, Unicoin Inc., with the assistance of local counsel, is also exploring a potential restructuring of 140 R.E. Properties Inc.
Unicorns Media Group Ltd.
While the Company does not hold any ownership interest in Unicorns Media Group Ltd (a company organized under the laws of the United Kingdom), the Company’s subsidiary, Unicorns Inc., may be entitled to receive economic benefits pursuant to a licensing agreement between Unicorns Inc. and Unicorns Media Group Ltd. Pursuant to the terms of the licensing agreement, Unicorns Inc. is entitled to seventy percent (70%) of the revenues generated by Unicorns Media Group Ltd in connection with show productions, including revenues from advertisements, sponsorships, ticket sales, merchandising, and distribution. Unicoin Inc. owns 71.88% of the outstanding shares of Unicorns Inc., and may therefore indirectly benefit from the revenues received by Unicorns Inc. under the licensing arrangement.
Unicoin International Inc.
Unicoin Inc. and Unicoin International Inc. (“UII”), a corporation established under the laws of Panama, are affiliated but distinct legal entities, with UII operating as a non-subsidiary affiliate of Unicoin. While Unicoin has been actively engaged in fundraising efforts, brand development, and investor outreach for its token known as “unicoin,” UII is separately planning the launch of a blockchain-based digital asset referred to as the “Unicoin International Token” or “UIT.” In support of UII’s operations and marketing efforts, Unicoin provides various services and operational support—including marketing, advisory, investor relations, IT infrastructure, and the sharing of personnel and office resources—pursuant to a contractual services and support agreement. Under the agreement, UII compensates Unicoin for these services and may also, at its discretion and subject to applicable law, provide UIT tokens as further consideration. Although the two entities collaborate closely and share resources, UII maintains operational and legal independence from Unicoin, and the shared personnel remain solely employed or contracted by Unicoin, not by UII. This collaborative arrangement is structured to enhance efficiency while preserving each party’s separate corporate identity and regulatory compliance obligations.
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Token Structure
In addition to the businesses it operates through its subsidiaries, the Company tokenized a token called unicoin (“unicoins” or “tokens”). While earlier statements contemplated the potential for unicoins to be supported by reference to certain assets, the Company is currently reassessing this approach in light of evolving regulatory guidance from the U.S. Securities and Exchange Commission. The Company has reviewed and updated its approach to the unicoin token structure in light of evolving regulatory commentary and internal strategic considerations. While prior communications referenced the potential for Unicoins to be “asset-backed” or collateralized, the Company has clarified that it does not intend to collateralize the tokens or tie them to any specific pool of assets. Instead, the Company uses the term “asset-backed” in a general, commercial sense—consistent with its ordinary dictionary meaning—to reflect the Company’s intent to use token-related proceeds to invest in equity and other assets expected to support long-term token value. This characterization is not intended to imply collateralization, guaranteed redemption rights, or that Unicoins represent ownership interests in such assets. The Company plans to further clarify this terminology in future offering documents and marketing materials to ensure transparency and investor understanding.
Business Overview
SaaS and TaaS Legacy Business
Unicoin was originally a SaaS company engaged in providing workforce management software in order to better monitor and manage a remote workforce. However, the legacy operations of our SaaS business are currently being phased out of our operations through customer attrition, and are no longer the focus of our efforts.
Unicoin’s wholly owned subsidiary SheWorks!, a TaaS platform, is, we believe, a valuable asset that can operate independently or in conjunction with the Company’s SaaS software. SheWorks! is a talent exchange focused on connecting women seeking freelance or employment opportunities with companies looking for freelancers or employees to fill their needs. Our Yandiki platform (now a part of SheWorks!) is also a talent exchange and platform that connects freelance talent with companies looking for leaner, more transparent ways of carrying out remote contractual work. Nevertheless, the legacy SheWorks! and Yandiki businesses are currently not the focus of our operations and are being phased out through customer attrition. Our TaaS business also encompasses ITSQuest, Inc., (“ITSQuest”) a regional staffing agency with twelve locations throughout New Mexico and Texas. ITSQuest has significant contacts with employers throughout the US Southwest.
Unicorns
Unicorns is a Nevada corporation, in which the Company owns a majority stake. Unicorns produces a reality television/streaming show called Unicorn Hunters that showcases private companies seeking to obtain publicity for their private offerings by appearing on the show and attempting to raise capital by advertising their exempt offerings to a wide audience.
Currently, revenue consideration generally consists of the fair value of equity shares, stock options or warrants committed from companies that have appeared on the Unicorn Hunters show. Non-cash consideration is recognized at the estimated fair value at or near the date of contract execution. Additionally, in the future, the Company expects to earn revenue from (i) sales of “memberships” to potential investors who will gain preferred access to the private offerings showcased on the Unicorn Hunters show and (ii) the commercialization of the Unicorn Hunters shows, through syndication, advertising revenue and merchandising. All rights to Unicorn Hunters content, including all recordings and logos, are owned by Unicorns Inc.
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The Company follows the following 10-point criteria when we evaluate companies to be part of the Unicorn Hunters show, and therefore determine which securities will be added to the Fund supporting unicoins:
| 1. | Innovative Idea: A unicorn company typically starts with a unique and disruptive idea that solves a significant problem or meets an unmet need in the market. | |
| 2. | Scalable Business Model: The company must have a business model that can scale rapidly and efficiently, allowing it to grow exponentially. | |
| 3. | Strong Leadership: A unicorn company is led by visionary and capable leaders who can navigate challenges, make strategic decisions, and inspire a high-performing team. | |
| 4. | Market Potential: The company must operate in a large and growing market with significant opportunities for expansion and revenue generation. |
| 5. | Product-Market Fit: The company’s product or service must resonate with customers and offer a compelling value proposition that differentiates it from competitors. | |
| 6. | Rapid Growth: Unicorns experience rapid and sustained growth, often achieving high revenue and user/customer numbers within a short period. | |
| 7. | Funding and Investment: Securing substantial funding from venture capitalists, private equity firms, or other investors is crucial for a company to fuel its growth and reach unicorn status. | |
| 8. | Talent Acquisition: Attracting and retaining top talent is essential for a unicorn company to build a skilled and dedicated workforce that can drive innovation and growth. | |
| 9. | Global Expansion: Successful unicorns often expand their operations beyond their home market, targeting international customers and establishing a global presence. | |
| 10. | Adaptability and Resilience: Unicorns must be adaptable to changing market dynamics, customer preferences, and technological advancements. They should also demonstrate resilience in the face of challenges and setbacks. |
Unicoins
Unicoin Inc. developed a token called unicoin (“unicoins” or “tokens”). We intend to mint a total of 25 billion unicoins. A portion of the minted unicoins will be retained by us; accordingly, the value of these retained unicoins could benefit our stockholders. As of July 14, 2025, we have sold unicoin presale certificates(“Certificates”) to acquire up to approximately 1.8 billion unicoins and raised approximately $45.8 million. We have also agreed to issue Certificates for up to approximately 3.4 billion unicoins through our deferred payment plans (approximately 164 million of which have been issued). Through these deferred payment programs, we are contractually entitled to future installment payments of $195 million (which, if not made, will result in us retaining collateral contributed to us to secure a portion of the payment obligations). Additionally, we have issued Certificates for approximately (i) 726 million unicoins to our stockholders, (ii) 522 million unicoins as discretionary compensation payments to insiders, including employees, (iii) 276 million unicoins to service providers and influencers, (iv) 22 million unicoins to the founders of our affiliate, ITSQuest, and (v) 1.21 billion unicoins through real estate transactions (of which 1.14 billion are cancelable or in an escrow arrangement pending tokenization and title transfer).
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The unicoins will have a utility function in what is referred to as the “Unicorn Hunters Ecosystem,” in that holders may use unicoins to purchase media inventory at our discounted rate. The Company plans to purchase media inventory and resell it to unicoin holders in exchange for unicoins and/or cash, thereby giving such holders preferred access and pricing for media inventory and allowing to retain a portion of the “spread” in pricing for its effort. Exact pricing and spreads will be determined on a case-by-case basis and have not been predetermined.
We may accept certain cryptocurrencies, such as Bitcoin (BTC), Ether (ETH), Litecoin (LTC), USD Coin (USDC), Bitcoin Cash (BCH) and Tether (USDT) among others, as payment for the purchase of unicoins. Upon future liquidity needs, the Company could pay a vendor for goods or services or convert the digital assets to a fiat currency, using the proceeds for general business operational purposes.
On August 28, 2024, we notified our existing investors that we were postponing the initial coin offering (“ICO”) of unicoins to conduct a thorough review of our public statements, offering materials and our business in general. We conducted a thorough review of our compliance with applicable regulatory requirements with the assistance of a leading national law firm. We will engage outside legal counsel, as needed and when possible, to support our continued efforts and plans for the launch of Unicoins.
Real Estate Subsidiaries
Outside of the United States, we have recently formed wholly owned or controlled subsidiaries for purposes of holding specific parcels of real estate. These “real estate subsidiaries” include Genniwine Inc. (organized in Thailand) and Unicoin LATAM C.A. (organized in Venezuela). Each real estate subsidiary’s sole purpose and business is to hold and/or manage real estate. We may create in the future additional wholly owned or controlled subsidiaries for holding specific parcels of real estate in the United States and outside of the United States.
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Key Factors and Measures We Use to Evaluate Our Business
Sources of Revenue
The Company primarily derives its revenues from three revenue streams:
| 1. | Subscription Revenue (Software-as-a-Service or “SaaS”) – which is comprised of fees from customers accessing the Company’s all-in-one cloud-based solution to manage remote workers (“software platform”). |
| 2. | Staffing Revenue (Talent-as-a-Service or “TaaS”) – whereby enterprise customers are connected to individuals who are able to assist them in projects. |
| 3. | Unicorns Revenue – which generally represents the fair value of private company stock options or warrants, committed to be granted to the Company, as consideration for the right to present and promote those private companies on the Unicorn Hunters show. |
SaaS Revenue. For SaaS contracts, the typical subscription term is one year or less and the Company generally invoices its customers at the start of the subscription period when access to the software platform is provided. Amounts that have been invoiced are recorded in accounts receivable and deferred revenue and revenue is recognized over the subscription period.
TaaS Revenue. For TaaS contracts, the Company’s staffing contracts are typically for a duration of less than a year and are either on a fixed hourly rate basis or on a fixed cost basis billed upon satisfaction of respective milestones. The Company typically invoices its customers at the end of each month in cases where the contracts involve billing based on fixed hourly rates and/or once a milestone is reached. An over-time method is used to measure progress because the Company’s obligation is to provide continuous service over the contractual period when fixed hourly rate billing is involved. For time-and-materials contracts, revenue from contracts with customers is recognized in the amount to which the Company has a right to invoice, when the services are rendered by the Company’s remote workers in such cases. For milestone-based contracts, revenue is recognized over time using an output method based upon milestones achieved. Revenue is recognized once a milestone is reached for an amount of the transaction price that is proportionate to the total milestones in the contract. Milestones reached represent work performed and thereby best depicts the transfer of control to the customer.
Unicorns Revenue. For Unicorns contracts, customers are billed when an episode is distributed for broadcast or streaming. The promise to the customer is fulfilled and revenue is recognized for the entire transaction price when an episode is distributed on the Unicorn Hunters website.
Gross Profit
We define gross profit as the difference between total revenue and cost of revenue.
For the SaaS and TaaS segments, cost of revenue includes salaries, and personnel compensation costs, associated with the Company’s website hosting and other costs including providing technical support, materials, and supplies. For Unicorns, cost of revenue includes salaries and personnel compensation costs as noted for SaaS and TaaS but also includes third party costs for production team, celebrity hosts and travel. The Company evaluates if Unicorn Hunters show production costs are expected to be recovered. Costs are capitalized if expected to be recovered and otherwise are expensed as incurred. Any capitalized costs are expensed when the related show is distributed on the Unicorn Hunters website.
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Operating Expenses
Research and development costs are related to maintaining and improving the Company’s software platform and primarily consist of personnel-related costs, including salaries and bonuses, benefits and stock-based compensation expense. Research and development costs related to internal use software are not material and are expensed as they are incurred.
Sales and marketing costs principally consist of third-party marketing, advertising, and branding in addition to compensation and benefits of the Company’s own marketing personnel. Sales, marketing and advertising costs are expensed as incurred.
General and administrative costs primarily consist of compensation, employee benefits, and stock-based compensation related to executive management, finance, administration and human resources, facility costs, professional service fees, and other general overhead costs.
Economic and Labor Trends
Demand for our talent pool, consultants and growth of placement services are dependent upon general economic and labor trends. We believe that the Company is well positioned in the current macroeconomic environment, particularly as economies continue to reopen and demand for services increase. We expect greater geographical work flexibility and the legacy of the coronavirus pandemic to continue and help drive business growth as travel restrictions may be slow to be lifted.
Demand for Diversity and Demographic Changes
Diversity and talent form the bedrock of our company. We believe that female engagement in the workplace will increase and become a major feature of the corporate environment going forward as female workforce participation and higher education opportunities increase.
Dynamic and Evolving Technology
The ability to respond in time to technology trends and new developments is a key determinant of our business and operational performance. We have a clearly focused technology roadmap, combined with the forward-looking outlook of the Unicorn Hunters show, that introduces new functionality and features from our audience, thereby ensuring a dynamic and evolving experience. We believe this will widen our platform’s appeal to new customers, while expanding our potential opportunities for investment, resulting in greater revenue growth.
Business Acquisitions
ITSQuest, Inc.
We acquired ITSQuest as an information technology staffing company, providing staffing services and solutions.
Total consideration paid on closing date was $3,800 thousand. Equity sources of funding included 10,000,000 shares of the Company’s common stock to the Sellers at a value of $1,900 thousand and an estimated contingent divestiture feature at a value of $1,900 thousand. As of the closing date, ITSQuest was responsible for an outstanding tax liability in the amount of $5,038 thousand. As result of the tax liability, under the Share Exchange Agreement (“SEA”), the Company withheld in reserve 2,000,000 of the 10,000,000 shares of common stock until the tax liability has been settled. These shares have been held in reserve and subject to an agreed-upon Escrow Agreement.
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The contingent divestiture clause provided that, in the event that Unicoin Inc. did not conduct a registered public offering of its Common Stock (as defined therein) in which the Unicoin Inc. shares issued to ITSQuest pursuant to the agreement are registered with the SEC and listed for trading on a national securities exchange in the United States, with an initial listing price of at least $10 per share (the “trigger event”), on or before December 31, 2022, Unicoin Inc. shall transfer to ITSQuest all of Unicoin Inc.’s rights, title and interest in ITSQuest, including ITSQuest equity as well as any Unicoin Inc. shares that remain subject to a holdback provision regarding tax liabilities, thus completely divesting itself of all ownership in ITSQuest.
On December 28, 2022, the Company and the sellers of ITSQuest amended the SEA (the “Amended SEA”) to delay the date of the trigger event to December 31, 2024 (i.e., by an additional 24 months). In addition, the Amended SEA incorporated a second trigger event, also required to be achieved on or before December 31, 2024, whereby ITSQuest would not be required to divest its interest in ITSQuest back to the sellers if Unicoin Inc.’s proposed tokens “unicoins” are tokenized and listed on an available ATS or cryptocurrency exchange (whichever is applicable), with a quoted price at or above $1.00 per token.
As consideration for the Amended SEA, 2,000,000 of the Company’s shares previously held in escrow, pending resolution of the ITSQuest tax liability that existed at the time of the acquisition, were released to the sellers of ITSQuest and 20,000,000 unicoin rights (i.e., 10,000,000 to each of the two prior ITSQuest owners) were issued upon its execution.
On December 31, 2024, the Company and the sellers of ITSQuest agreed to delay the trigger events to December 31, 2025 in consideration, 2,000,000 unicoin rights were issued to the sellers of ITSQuest upon execution of the agreement.
The Company originally recorded estimated contingent consideration in the form of the contingent divestiture provision in the amount of $1,900 thousand. The estimate was calculated by applying a probability model using expected values. The most significant assumption utilized in this model is the probability related to achieving the $10 per share trading price, which had a probability of 0%. In addition, the other significant estimate relates to the estimated fair value of the common stock issued in exchange for the 51% interest in ITSQuest.
As of the date hereof, as a result of the extended deadline provided in the Amended SEA, the Company cannot yet assess the likelihood or probability of achieving either of the two trigger events necessary to avoid divestiture of ITSQuest. However, if the Company is not able to achieve such trigger events, the Company’s business, financial condition, results of operations and liquidity will be materially impacted as ITSQuest represented Company assets of $10,185 thousand, revenues of $3,904 thousand, and generated gross margins of $739 thousand as of and for the three months ended March 31, 2025, respectively.
Unicorns, Inc.
The Company owns a majority stake in Unicorns of 71.88%.
Major operations in Unicorns were initiated after the year ended December 31, 2020. Unicorns produces a reality television/streaming show called Unicorn Hunters that showcases private companies seeking to obtain publicity for their private offerings by appearing on the show and attempting to raise capital by advertising their exempt offerings to a wide audience. The revenue consideration from Unicorns customers is fixed at contract inception and has historically been received in one of two forms: 1) either a pre-determined number of stock options, warrants or shares or 2) options or warrants or shares representing a specific percentage of the customer’s common stock outstanding as of a particular point in time. Non-cash consideration is recognized at the estimated fair value at or near the date of contract inception. As of the date hereof, we have collected all securities as payment for Unicorns services.
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Significant Related Party Transactions
A total of 1,155 million unicoin rights valued at $2,701 thousand and 978 million unicoin rights valued at $15,022 thousand were issued to related parties during the three months ended March 31, 2025 and 2024, respectively.
Results of Operations
The following table summarizes key components of our results of operations for the periods indicated, both in dollars and as a percentage of our sales.
We derived the condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2025 and 2024 from our condensed consolidated financial statements, respectively. Our historical results are not necessarily indicative of the results that may be expected in the future.
| Three Months Ended March 31, | ||||||||||||||||
| 2025 | % of Total Revenues |
2024 | % of Total Revenues |
|||||||||||||
| REVENUES: | ||||||||||||||||
| Staffing revenues | $ | 4,543,438 | 100 | % | $ | 4,974,852 | 100 | % | ||||||||
| Subscription revenues | 8,733 | 0 | % | 3,617 | 0 | % | ||||||||||
| Unicorns revenues | 19 | 0 | % | 77 | 0 | % | ||||||||||
| Total Revenues | 4,552,190 | 100 | % | 4,978,546 | 100 | % | ||||||||||
| COST OF REVENUES: | ||||||||||||||||
| Staffing cost of revenues | 3,687,908 | 81 | % | 3,949,255 | 79 | % | ||||||||||
| Subscription cost of revenues | 0 | 0 | % | 0 | 0 | % | ||||||||||
| Unicorns cost of revenues | 5,850 | 0 | % | 105,625 | 2 | % | ||||||||||
| Total Cost of Revenues | 3,693,758 | 81 | % | 4,054,880 | 82 | % | ||||||||||
| GROSS PROFIT | 858,432 | 19 | % | 923,666 | 19 | % | ||||||||||
| OPERATING COSTS AND EXPENSES | ||||||||||||||||
| General and administrative | 2,714,839 | 60 | % | 3,658,039 | 74 | % | ||||||||||
| Sales and marketing | 245,314 | 5 | % | 935,785 | 19 | % | ||||||||||
| Research and development | 0 | 0 | % | 7,113 | 0 | % | ||||||||||
| TOTAL OPERATING COSTS AND EXPENSES | 2,960,153 | 65 | % | 4,600,937 | 92 | % | ||||||||||
| LOSS FROM OPERATIONS | (2,101,721 | ) | (46 | )% | (3,677,271 | ) | (74 | )% | ||||||||
| Interest income (expense), net | (17,829 | ) | 0 | % | (46,862 | ) | (1 | )% | ||||||||
| Other income (expense), net | (1,677 | ) | 0 | % | (5,752 | ) | 0 | % | ||||||||
| LOSS BEFORE INCOME TAXES | (2,121,227 | ) | (47 | )% | (3,729,885 | ) | (75 | )% | ||||||||
| Income tax benefit (expense) | 8,551 | 0 | % | (88,585 | ) | (2 | )% | |||||||||
| NET LOSS AND COMPREHENSIVE LOSS | (2,112,676 | ) | (46 | )% | (3,818,470 | ) | (77 | )% | ||||||||
| Net income (loss) attributable to the non-controlling interest | (74,665 | ) | (2 | )% | 35,903 | 1 | % | |||||||||
| NET LOSS ATTRIBUTABLE TO THE COMPANY | $ | (2,038,011 | ) | (45 | )% | $ | (3,854,373 | ) | (77 | )% | ||||||
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Revenues
The following table presents our revenue for the periods indicated.
| Three Months Ended March 31, | ||||||||||||||||
| 2025 | 2024 | Change ($) |
Change (%) |
|||||||||||||
| TAAS revenues | $ | 4,543,438 | $ | 4,974,852 | $ | (431,414 | ) | (9 | )% | |||||||
| SAAS revenues | 8,733 | 3,617 | 5,116 | 141 | % | |||||||||||
| Unicorns revenues | 19 | 77 | (58 | ) | (75 | )% | ||||||||||
| Total Revenues | $ | 4,552,190 | $ | 4,978,546 | $ | (426,356 | ) | (9 | )% | |||||||
Total revenues decreased by $426 thousand, or (9)%, to 4,552 thousand for the three months ended March 31, 2025, from $4,979 thousand for the three months ended March 31, 2024 and comprised 100% of our total revenues.
TaaS. TAAS revenues decreased by $431 thousand, or (9)%, to $4,543 thousand for the three months ended March 31, 2025, from $4,975 thousand for the three months ended March 31, 2024. The decrease was primarily due to a decrease in ITSQuest related revenues of $426 thousand, or (10)% to 3,904 thousand, for the three months ended March 31, 2025.
SaaS. Our SaaS business is currently being phased out of our operations through customer attrition, and are no longer the focus of our efforts.
Unicorns. Unicorn did not release any episodes of Unicorns during the three months ended March 31, 2025 and 2024, as the Company is currently in the production phase of Season 2.
Cost of Revenues
The following table presents our cost of revenues for the periods indicated.
| Three Months Ended March 31, | ||||||||||||||||
| 2025 | 2024 | Change ($) | Change (%) | |||||||||||||
| TAAS cost of revenues | $ | 3,687,908 | $ | 3,949,255 | $ | (261,347 | ) | (7 | )% | |||||||
| SAAS cost of revenues | - | - | - | - | ||||||||||||
| Unicorns cost of revenues | 5,850 | 105,625 | (99,775 | ) | (94 | )% | ||||||||||
| Total Cost of Revenues | $ | 3,693,758 | $ | 4,054,880 | $ | (361,122 | ) | (9 | )% | |||||||
Total cost of revenues decreased by $361 thousand, or 9%, to $3,694 thousand for the three months ended March 31, 2025, from $4,055 thousand for the three months ended March 31, 2024.
TaaS. TAAS cost of revenues decreased by $261 thousand, or 7%, to $3,688 thousand. The decrease was proportional to the decrease in TAAS revenues.
Unicorns. Unicorns cost of revenues decreased by $100 thousand to $6 thousand for the three months ended March 31, 2025, compared to $106 thousand, for the three months ended March 31, 2024. The increase in Cost of Revenues was mainly to the stock-based compensation expense of $100 thousand in relation to the earning of five million Unicorns Common Stock Awards by executive producers of Unicorn Hunters. No episodes were produced during each of the three months ended March 31, 2025 and 2024.
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General and administrative
General and administrative expenses decreased by $943 thousand, or 26%, to $2,715 thousand for the three months ended March 31, 2025, from $3,658 thousand for the three months ended March 31, 2024. This decrease was primarily driven by a $1,487 thousand reduction in accounting, taxes and professional fees paid with unicoin rights, partially offset by a $554 thousand increase in credit loss expense and legal fees.
Sales and marketing
Sales and marketing expenses decreased by $690 thousand, or 74%, to $245 thousand for the three months ended March 31, 2025. The decreased was primarily due to the decrease in sales & marketing expenses paid with unicoin rights as consideration, which amounted to $189 thousand and a decrease in recurring marketing expenses amounted to $530 thousand.
Interest income (expense), net
Net interest expense decreased by $29 thousand, or 62% to $18 thousand for the three months ended March 31, 2025, from $47 thousand for the three months ended March 31, 2024. The change was primarily due to a net reduction in factoring expense of $18 thousand.
Provision for Income Taxes
| Three Months Ended March 31, | ||||||||||||||||
| 2025 | 2024 | Change ($) | Change (%) | |||||||||||||
| Income tax benefit (expense) | $ | 8,551 | $ | (88,585 | ) | $ | (97,136 | ) | 110 | |||||||
| Effective tax rate | 0.40 | % | (2.38 | )% | ||||||||||||
The Company recorded income tax expense (income) of $(9) thousand and $89 thousand for the three months ended March 31, 2025 and 2024, respectively. The resulting effective tax rate was (0.40)% and 2.38% for the three months ended March 31, 2025 and 2024, respectively. The Company’s estimated effective tax rate differs from the U.S. federal statutory rate of 21%, primarily due to the valuation allowance recorded against the company’s deferred tax assets and the tax expense recorded for ITSQuest’s separate federal income tax return because ITSQuest is not included in the Company’s condensed consolidated U.S. federal income tax return and is not able to utilize Unicoin’s deferred tax assets to offset taxable income. During the three months ended March 31, 2025 and 2024, there were no significant changes to the total amount of unrecognized tax benefits.
Net income (losses) attributable to the non-controlling interest
Net income attributable to the non-controlling interest decreased by $(111) thousand, or (308)%, to a net loss of $(75) thousand for the three months ended March 31, 2025. Our non-controlling interest holders in ITSQuest were allocated income (loss) of $(58) thousand and income of $265 thousand for the three months ended March 31, 2025 and 2024, respectively. Our non-controlling interest holders in Unicorns were allocated a loss of $(164) thousand and $(334) thousand for the three months ended March 31, 2025 and 2024, respectively. Non-controlling interest in ITSQuest and Unicorns represented an ownership interest of 49% and 28.12%, respectively.
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Liquidity and Capital Resources
Our primary future uses of cash will be to fund working capital requirements and expenditures of Unicorns.
We had cash and cash equivalents of $2,773 thousand available as of March 31, 2025. Based on currently available capital resources (cash and cash equivalents on hand as of March 31, 2025), we estimate that at our current cash “burn rate”, we would be able to conduct our planned operations for approximately one month without raising additional equity or debt financing, assuming we do not fail to develop and launch the unicoin during that period or we do not fail to negotiate an extension to avoid a divestiture from ITSQuest. If we do fail to launch unicoins during that period, the Company will need to obtain additional financing to continue its operations. and if we do not launch unicoins at any point in the future, we believe the Company would be required to pay the significant financing obligation that it has incurred with respect to the unicoin rights, which would also require additional financing. For the company to maintain operations for at least twelve months, we would need to receive further equity or debt financing of approximately $11,013 thousand. However, given the impact of the economic downturn on the U.S. and global financial markets, the Company may be unable to access further equity or debt financing when needed. In addition, the Company has recorded a significant financing obligation that we believe the Company would be required to pay in the event the unicoin is not launched and there remains significant uncertainty as to if, and when, this launch may occur. There can be no assurance that the Company will be able to obtain additional liquidity when needed or under acceptable terms, if at all. Our auditors have included an explanatory paragraph in their audit opinion, included as part of our Annual Report on Form 10-K for the year ended December 31, 2024, that our current liquidity position raises substantial doubt about our ability to continue as a going concern for the next twelve months unless we obtain additional capital. The Company anticipates that such conditions will continue to exist until either significant financing has been obtained and/or the uncertainty surrounding the development and launch of the unicoin has been resolved.
From January 1, 2025 through March 31, 2025, the Company issued unicoin rights in exchange of consideration consisting of cash $848 thousand and operating expenses paid with unicoin rights amounting to approximately $79 thousand.
Summary of Cash Flows
The following table sets forth our cash flows for the periods indicated:
| Three Months Ended March 31, |
||||||||
| (In thousand) | 2025 | 2024 | ||||||
| Cash flows provided by (used in) continuing operations: | ||||||||
| Net cash used in operating activities | $ | (2,347 | ) | $ | (3,070 | ) | ||
| Net cash used in by investing activities | (82 | ) | - | |||||
| Net cash provided by financing activities | 2,604 | 953 | ||||||
| Net increase in cash and cash equivalents | $ | 175 | $ | (2,117 | ) | |||
Cash Used in Operating Activities
Cash flows used in operating activities decreased by $723 thousand to $(2,347) thousand for the period ended March 31, 2025, compared to $(3,070) thousand for the period ended March 31, 2024. Net cash used in operating activities for the three months ended March 31, 2025, was due to our net loss of $(2,113) thousand, a decrease in operating assets, net of liabilities of $(607) thousand and non-cash items of $373 thousand. Net cash used in operating activities for the three months ended March 31, 2024, was due to our net loss of $(3,818) thousand, an increase in operating assets and liabilities of $71 thousand and non-cash items of $677 thousand.
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Cash (Used in) Provided by Investing Activities
Net cash flows used in investing activities increased by $82 thousand to $82 thousand for the three months ended March 31, 2025. The increase in net cash used in by investing activities was mainly due to purchases of digital assets and USD Coin, net of proceeds from sales of $82 thousand during the three months ended March 31, 2025.
Cash Provided by Financing Activities
Net cash flows provided by financing activities increased by $1,651 thousand to $2,605 thousand for the three months ended March 31, 2025, compared to $953 thousand for the three months ended March 31, 2024. The increase in net cash provided by financing activities was mainly due to an increase in proceeds from the issuance of common stock of $1,757 thousand, partially offset by a decrease from sales of unicoin rights of $203 thousand.
Cash and Cash Equivalents
We maintain cash with several high credit quality financial institutions. Temporary cash investments with original maturities of 90 days or less are considered cash equivalents. Temporary cash investments consist of money market accounts stated at cost, which approximates fair value. These investments are not subject to significant market risk. We maintain our cash and cash equivalents in bank accounts which, at times, exceed the federally insured limits. We have not experienced any losses in such accounts.
Off-Balance Sheet Arrangements
As of March 31, 2025 we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K promulgated under the Securities Act of 1934.
Critical Accounting Policies and Estimates
Our significant accounting policies are described in Note 2 to the condensed consolidated financial statements presented in the Annual Report on Form 10-K. Our critical accounting policies and estimates are described in “Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Annual Report on Form 10-K. Our significant and critical accounting policies and estimates have not changed significantly since the filing of the Annual Report on Form 10-K, except for as described in Note 2 to the condensed consolidated financial statement included in this Quarterly Report on Form 10-Q.
Recent accounting pronouncements
See “Significant Accounting Policies” in Note 2 of the notes to our condensed consolidated financial statements included in Part 1, Item 1 of this Quarterly Report on Form 10-Q for recent accounting pronouncements.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Interest Rate Risk
We had cash and cash equivalents of $2,773 thousand available as of March 31, 2025, which consists of cash on hand and temporary cash investments with original maturities of three months or less, which are unrestricted as to withdrawal and use. Temporary cash investments consist of money market accounts stated at cost, which approximates fair value. These investments are not subject to significant market risk. The Company maintains its cash and cash equivalents in bank accounts which, at times, exceed the federally insured limits. The Company has not experienced any losses in such accounts.
Foreign Currency Exchange Risk
Our reporting currency is the United States dollar. The functional currency of our foreign subsidiaries is the U.S. dollar. The majority of our sales are currently denominated in U.S. dollars, although we also have sales internationally. Therefore, our revenue is not currently subject to significant foreign currency risk, but that may change in the future. Our operating expenses are denominated in the currencies of the countries in which our operations are located, which is primarily in the United States. Our condensed consolidated results of operations and cash flows are, therefore, subject to fluctuations due to changes in foreign currency exchange rates and may be adversely affected in the future due to changes in foreign exchange rates. To date, we have not entered into any hedging arrangements with respect to foreign currency risk or other derivative financial instruments, although we may choose to do so in the future. We do not believe a 10% increase or decrease in the relative value of the U.S. dollar would have a material impact on our operating results.
Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents and accounts receivable. The Company’s cash and cash equivalents are held in accounts with major financial institutions, and, at times, exceed federally insured limits. We have not experienced any losses on our deposits of cash and cash equivalents, and accounts are monitored by management to mitigate risk. We are exposed to credit risk in the event of default by the financial institutions holding our cash and cash equivalents.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Based on an evaluation under the supervision and with the participation of the Company’s management, and due to the material weakness in internal controls over financial reporting described below, the Company’s principal executive officer and principal financial officer have concluded that the Company’s disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act were not effective for the period ended March 31, 2025 to provide reasonable assurance that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and (ii) accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
Inherent Limitations Over Internal Controls
The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of condensed consolidated financial statements for external purposes in accordance with GAAP. The Company’s 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 the transactions and dispositions of the Company’s assets; |
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| (ii) | provide reasonable assurance that transactions are recorded as necessary to permit preparation of condensed consolidated financial statements in accordance with GAAP, and that the Company’s receipts and expenditures are being made only in accordance with authorizations of the Company’s management and directors; and | |
| (iii) | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the condensed consolidated financial statements. |
Management, including the Company’s Chief Executive Officer and Chief Financial Officer, does not expect that the Company’s internal controls will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of internal controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Also, any evaluation of the effectiveness of controls in future periods are subject to the risk that those internal controls may become inadequate because of changes in business conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as that term is defined in Rules 13a-15(d) or 15d-15(d) of the Exchange Act) identified in connection with management’s evaluation during the quarter ended March 31, 2025 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Remediation Initiatives
In an effort to address the identified material weakness and enhance our internal controls related to our Internal Control Over Financial Reporting, The Company has continued to address the material weaknesses reported our Annual Report on Form 10-K through the following actions:
| - | Engaging third-party consultants with appropriate expertise to assist the finance and accounting department on an interim basis until key roles are filled; | |
| - | Assessing finance and accounting resources to identify the areas and functions that lack sufficient personnel and recruiting for experienced personnel to assume these roles; | |
| - | Developing further training on segregation of duties; and | |
| - | Designing and implementing additional compensating controls where necessary. |
While we are working diligently to remediate these material weaknesses, there is no assurance that these material weaknesses will be fully remediated by December 31, 2025.
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PART II-OTHER INFORMATION
Item 1. Legal Proceedings.
We may from time to time be involved in various claims and legal proceedings of a nature we believe are normal and are incidental to our business. These matters may include product liability, intellectual property, employment, personal injury caused by our employees, and other general claims. Regardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.
On December 10, 2024, we received a “Wells Notice” from the Staff of the SEC stating that it has made a preliminary determination to recommend that the SEC file an enforcement action against us. This proposed action would allege violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder and Sections 5 and 17(a) of the Securities Act of 1933. The Staff further advised us that the potential enforcement action may involve a civil injunctive action or other action allowed by law, and may seek remedies that include an injunction, disgorgement, pre-judgment interest, civil money penalties, and such other relief as may be available.
In addition, on December 10, 2024, Alex Konanykhin, our Chief Executive Officer and Chairman of our board of directors, Silvina Moschini, one of our directors and the Chief Executive Officer of our subsidiary Unicorns, Inc., Alejandro Dominguez, our former Chief Investment Officer, and Richard Devlin, our Senior Vice President and General Counsel, each received a “Wells Notice” from the Staff stating that it has made a preliminary determination to recommend that the SEC file an enforcement action against Messrs. Konanykhin, Dominguez and Devlin and Ms. Moschini. This proposed action would allege violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder and Sections 5 and 17(a) of the Securities Act, as well as, in the case of Mr. Konanykhin and Ms. Moschini, violations of these provisions as a controlling person of us under Section 20(a) of the Exchange Act. The Staff further advised these individuals that the potential enforcement action may involve a civil injunctive action or other action allowed by law, and may seek remedies that include an injunction, disgorgement, pre-judgment interest, civil money penalties, a bar from service as an officer or director and limitations on activities or bars from association and such other relief as may be available.
The Wells Notices are neither formal allegations nor findings of wrongdoing. They allow the recipients the opportunity to address the issues raised by Staff before they make an enforcement recommendation to the SEC or the SEC votes on whether to authorize an enforcement action. See our Current Report on Form 8-K filed on December 16, 2024 regarding our response to the Wells Notices which can be found at https://www.sec.gov/ix?doc=/Archives/edgar/data/1740742/000182912625000028/unicoin_8k.htm.
SEC v. Unicoin Inc., et. al. On May 20, 2025, the U.S. Securities and Exchange Commission (the “SEC”) filed a civil enforcement action against Unicoin Inc. and certain individuals, including its directors Silvina Moschini and Alex Konanykhin, its former General Counsel Richard Devlin, and Alejandro Dominguez, in the United States District Court for the Southern District of New York. The action is captioned Securities and Exchange Commission v. Unicoin Inc. f/k/a TransparentBusiness, Inc., et al., Case No. 1:25-cv-4245 (S.D.N.Y.). The complaint alleges violations of various provisions of the federal securities laws in connection with Unicoin’s offer and sale of digital assets, including Unicoin tokens, as well as alleged material misstatements and omissions in communications with investors. The SEC is seeking injunctive relief, disgorgement of proceeds, civil monetary penalties, officer and director bars, and other equitable relief. We believe the claims are without merit and intend to vigorously defend against the allegations. The litigation may result in financial liability, restrictions on future capital-raising efforts, or reputational harm, and could materially affect Unicoin’s business, operations, and prospects.
Additional Pending Litigation
In addition to the SEC litigation described above, the following legal matters are currently pending:
Christopher DiFonzo v. Unicoin, Inc. and Alex Konanykhin, United States District Court for the Southern District of New York, Case No. 25-cv-2600: Plaintiff alleges that Unicoin and its CEO failed to compensate him for services rendered in connection with cryptocurrency compliance and business development. Claims include breach of contract and failure to reimburse expenses. The defendants dispute the claims. The matter remains pending.
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Jovan Tadic v. Unicoin, Inc. and Alex Konanykhin, Superior Court of California, County of Contra Costa, Case No. C24-02710: Tadic, by assignment from a third party, alleges Unicoin failed to deliver over one million tokens and certain equity interests. The complaint includes claims for breach of contract and alter ego liability and seeks declaratory and monetary relief. The defendants dispute the claims. The matter remains pending. The outcome of this case could result in monetary liability or reputational impact for Unicoin.
Pickholz v. TransparentBusiness, Inc. et al., United States District Court for the District of New Jersey, Civil Action No. 22-2504 (ES)(JBC): Pickholz, a former CFO, alleges retaliation, equity-related claims, and wage violations. On June 26, 2025, the Court dismissed several of Pickholz’s claims with prejudice (including those related to Dodd-Frank retaliation and salary-based claims) but allowed others to proceed. Discovery is ongoing. The defendants dispute the claims, and the matter remains pending. The outcome of this case could result in monetary liability or reputational impact for Unicoin.
BeeFree, LLC v. Unicoin, Inc. and Silvina Moschini, United States District Court for the Southern District of Florida, Case No. 0:24-cv-22408-ALTMAN/LETT: On June 21, 2024, BeeFree, LLC filed a lawsuit against Unicoin, Inc. and Silvina Moschini. The parties subsequently entered into a confidential settlement agreement resolving the dispute. While the terms of the agreement remain confidential, the settlement contemplates dismissal of the case, contingent upon the satisfaction of certain conditions. The Company intends to comply fully with the agreement and expects the matter to be formally dismissed thereafter. The Company does not expect this matter to have a material adverse impact on its business.
We are not presently a party to any other legal proceedings that, in the opinion of our management, are likely to have a material adverse effect on our business. Regardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.
Item 1A. Risk Factors.
In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the factors discussed in Part I, Item 1A Risk Factors in our Annual Report on Form 10-K (the “Risk Factors”). These Risk Factors could materially affect our business, financial condition and future results. These Risk Factors are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be insignificant also may materially and adversely affect our business, financial condition or operating results in the future.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Capital Raising Transactions – Common Stock
| Price | Common Stock Shares Issued | Dates | Exemption | |||||||
| Various | 82,913,692 | * | 5/1/18 to 5/31/20 | Section 4(a)(2) | ||||||
| $ | 0.10 | 44,150,000 | 1/8/19 to 2/3/20 | Rule 506(c); Reg. S | ||||||
| $ | 0.20 | 22,306,525 | 5/1/20 to 8/2/20 | Rule 506(c); Reg. S | ||||||
| $ | 0.30 | 7,398,278 | 8/3/20 to 8/23/20 | Rule 506(c); Reg. S | ||||||
| $ | 0.60 | 7,598,831 | 8/24/20 to 10/5/22 | Rule 506(c); Reg. S | ||||||
| $ | 1.00 | 7,485,660 | 10/6/20 to 6/30/23 | Rule 506(c); Reg. S | ||||||
| $ | 2.00 | 9,158,529 | 12/1/20 to 3/31/23 | Rule 506(c); Reg. S | ||||||
| $ | 3.00 | 1,877,856 | 7/31/21 to 3/31/23 | Rule 506(c); Reg. S | ||||||
| $ | 4.00 | 1,114,607 | 12/1/20 to 3/31/23 | Rule 506(c); Reg. S | ||||||
| $ | 0.40 | 5,278,029 | ** | 5/1/24 to 1/31/25 | Rule 506(c); Reg. S | |||||
| $ | 1.00 | 1,541,965 | 5/22/24 to 10/31/24 | Rule 506(c); Reg. S | ||||||
| $ | 1.00 | 1,853,906 | 2/1/25 to 4/30/25 | Rule 506(c); Reg. S | ||||||
| $ | 2.00 | 2,000 | 4/1/25 to 4/30/25 | Rule 506(c); Reg. S | ||||||
| * | Convertible Notes. All notes have converted. Original total face amount of $2,097,000 and accrued interest of $307,682 into 82,913,691 shares, for an average conversion price of $0.13. | |
| ** | Shareholders as of April 15, 2024 were granted a right to purchase a limited number of common stock shares at $0.40, which approximates the fair value of the common stock. |
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Fundraising Transaction – Offering of Unicoin Rights
On February 7, 2022, we commenced a private placement of rights to receive unicoins, in the form of a Token Purchase Agreement or Unicoin Grant Agreement. Amounts sold to investors or issued to service providers through the day of this quarterly report on Form 10-Q are as follows:
| Price per Unicoin Right* | Total Number of Unicoin Rights Sold** | Accounted Dates*** | Exemption | |||||||
| $ | 0.0014 | 462,000,000 | 9/1/24 to 12/31/24 | Rule 506(c); Reg. S | ||||||
| $ | 0.0074 | 747,600 | 9/1/24 to 9/30/24 | Rule 506(c); Reg. S | ||||||
| $ | 0.01 | 1,368,399,680 | 2/24/22 to 4/4/25 | Rule 506(c); Reg. S | ||||||
| $ | 0.017 | 77,690,886 | 4/1/22 to 3/31/24 | Rule 506(c); Reg. S | ||||||
| $ | 0.02 | 51,071,400 | 8/1/24 to 4/5/25 | Rule 506(c); Reg. S | ||||||
| $ | 0.03 | 713,333 | 3/01/24 to 4/4/25 | Rule 506(c); Reg. S | ||||||
| $ | 0.04 | 49,940,000 | 8/1/24 to 4/5/25 | Rule 506(c); Reg. S | ||||||
| $ | 0.05 | 57,077,533 | 3/12/22 to 4/4/25 | Rule 506(c); Reg. S | ||||||
| $ | 0.05 | 243,626,226 | 5/1/23 to 4/4/25 | Rule 506(c); Reg. S | ||||||
| $ | 0.055 | 29,867,260 | 9/1/22 to 7/31/24 | Rule 506(c); Reg. S | ||||||
| $ | 0.06 | 1,769,167 | 8/1/24 to 4/4/25 | Rule 506(c); Reg. S | ||||||
| $ | 0.07 | 19,200,000 | 4/1/23 to 12/31/24 | Rule 506(c); Reg. S | ||||||
| $ | 0.08 | 5,315,000 | 4/1/23 to 4/4/24 | Rule 506(c); Reg. S | ||||||
| $ | 0.089 | 30,395,447 | 12/1/22 to 12/31/24 | Rule 506(c); Reg. S | ||||||
| $ | 0.09 | 11,860,000 | 8/1/24 to 4/5/25 | Rule 506(c); Reg. S | ||||||
| $ | 0.1 | 129,913,168 | 3/18/22 to 4/4/25 | Rule 506(c); Reg. S | ||||||
| $ | 0.101 | 7,190,181 | 3/1/23 to 4/4/25 | Rule 506(c); Reg. S | ||||||
| $ | 0.11 | 1,365,000 | 4/1/23 to 4/4/25 | Rule 506(c); Reg. S | ||||||
| $ | 0.12 | 234,000 | 5/1/23 to 12/31/24 | Rule 506(c); Reg. S | ||||||
| $ | 0.122 | 6,636,946 | 6/1/23 to 4/4/25 | Rule 506(c); Reg. S | ||||||
| $ | 0.13 | 125,000 | 9/1/24 to 9/30/24 | Rule 506(c); Reg. S | ||||||
| $ | 0.14 | 1,415,000 | 4/1/23 to 9/30/24 | Rule 506(c); Reg. S | ||||||
| $ | 0.15 | 35,000 | 3/01/24 to 4/4/25 | Rule 506(c); Reg. S | ||||||
| $ | 0.16 | 160,000 | 3/1/25 to 4/4/25 | Rule 506(c); Reg. S | ||||||
| $ | 0.18 | 100,000 | 9/1/22 to 9/30/24 | Rule 506(c); Reg. S | ||||||
| $ | 0.19 | 27,500 | 1/12/24 to 12/31/24 | Rule 506(c); Reg. S | ||||||
| $ | 0.2 | 12,305,395 | 9/8/22 to 4/5/25 | Rule 506(c); Reg. S | ||||||
| $ | 0.3 | 1,106,394 | 9/1/22 to 4/4/25 | Rule 506(c); Reg. S | ||||||
| $ | 0.35 | 1,236,314 | 6/1/23 to 4/4/25 | Rule 506(c); Reg. S | ||||||
| $ | 0.3511 | 1,899,741 | 3/01/24 to 12/31/24 | Rule 506(c); Reg. S | ||||||
| $ | 0.373 | 3,813,247 | 9/1/23 to 4/4/25 | Rule 506(c); Reg. S | ||||||
| $ | 0.395 | 5,512,710 | 9/1/24 to 4/4/25 | Rule 506(c); Reg. S | ||||||
| $ | 0.4 | 5,255,821 | 11/2/22 to 4/4/25 | Rule 506(c); Reg. S | ||||||
| $ | 0.493 | 2,548,317 | 4/1/23 to 4/4/25 | Rule 506(c); Reg. S | ||||||
| $ | 0.459 | 1,058,133 | 10/31/23 to 4/4/25 | Rule 506(c); Reg. S | ||||||
| $ | 0.5 | 8,108,731 | 3/1/23 to 4/4/25 | Rule 506(c); Reg. S | ||||||
| $ | 0.52 | 9,334 | 9/1/22 to 9/30/24 | Rule 506(c); Reg. S | ||||||
| $ | 0.75 | 8,815,597 | 4/1/24 to 4/5/25 | Rule 506(c); Reg. S | ||||||
| * | The price per unicoin right was determined by a tiered pricing schedule based on volume. Each transaction on each of these issuances had at least a certain number of unicoin rights issued at the specified price. |
| ** | Unicoin rights issued as a non-cash distribution to shareholders and as discretionary compensation to employees are not included in this table. Refer to Note 6 – Unicoin rights financing obligation of “Notes to Condensed Consolidated Financial Statements”, for details regarding the issuance of those unicoin rights. |
| *** | The date represents when the unicoin right transaction was funded by the investor. The price was agreed at a previous date when the investor subscribed to such price with a commitment to purchase soon after. In the future, there might be additional transactions funded at each of these prices listed. |
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Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
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Item 6. Exhibits
Exhibit Index
| * | Previously filed |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Unicoin Inc. | ||
| Date: August 1, 2025 | By: | /s/ Alex Konanykhin |
| Alex Konanykhin | ||
| Chief Executive Officer | ||
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