DISCONTINUED OPERATIONS

12 Months Ended

Dec. 31, 2025

Discontinued Operations and Disposal Groups [Abstract]

DISCONTINUED OPERATIONS

NOTE 11 – DISCONTINUED OPERATIONS

Upon the expiration of the Share Exchange Agreement (“SEA”) and the Company’s election not to extend the term thereof, the ITSQuest, Inc. (“ITSQuest”) business met the criteria for classification as discontinued operations. In accordance with ASC 205-20, Discontinued Operations, the Company evaluated the divestiture of its staffing and human capital management business as a single plan of a strategic shift that has a major effect on the Company’s operations and financial results.

Accordingly, the historical results of ITSQuest have been classified as discontinued operations in the Consolidated Statements of Operations and Comprehensive Loss for all periods presented, and the related assets and liabilities have been reclassified as discontinued operations in the Consolidated Balance Sheets. As of December 31, 2025, the Company determined that the automatic transfer of equity back to the original sellers resulted in a loss of control, leading to the deconsolidation of the entity.

Financial Results of Discontinued Operations:

The following table summarizes the results of operations for the ITSQuest business for the years ended December 31:

Schedule of financial results of discontinued operations
		2025				2024
Total Revenues		$	14,962,182			$	17,928,288
Cost of Sales			(11,988,488	)			(14,330,686	)
Gross Profit			2,973,694				3,597,602
Operating Expenses			(2,794,811	)			(2,930,300	)
Operating Income (Loss)			178,883				667,302
Interest Income			86,287				37,549
Net Income (Loss) from Discontinued Operations			265,170				704,851
Income Tax			(81,130	)			(160,914	)
Net Income from Discontinued Operations			184,040				543,937
Loss from Divestiture of Discontinued Operations			(4,891,712	)			-
Total Loss Discontinued Operations and Divestiture of Discontinued Operations, net		$	(4,707,672	)		$	543,937

The following is a summary of assets and liabilities attributable to discontinued operations, which were included in our historical Consolidated Balance Sheet at December 31:

		2024
ASSETS
Cash and equivalents		$	1,704,959
Accounts receivable, net			1,876,840
Prepaid and other current assets			66,799
Indemnification asset (*)			5,196,624
Property, Plant and Equipment — Net			2,784
Intangible — Net			2,332,506
Right of Asset			158,513
Goodwill			3,865,695
Total Assets, discontinued operations		$	15,204,720
LIABILITIES
Accounts payable and accrued liabilities		$	193,145
Lease Liability			101,000
Other Liability			511,403
Deferred Tax liability			4,991,620
TOTAL LIABILITY		$	5,797,168

(*)

The Company was previously the primary obligor for certain historical tax liabilities associated with the ITSQuest business. These obligations, along with the related indemnification rights, were transferred to the sellers upon the effective date of the divestiture. As of December 31, 2025, the Company derecognized a Deferred Tax Liability of $4,991,620 related to a New Mexico Gross Receipts Tax assessment and a corresponding Indemnification Asset of $5,196,624. Because these items were components of the ITSQuest disposal group prior to the loss of control, they are included within the major classes of assets and liabilities of discontinued operations in the 2024 Consolidated Balance Sheet presented above.

The Company recorded a loss on divestiture of $4,892 thousand, which corresponded to the derecognition of ITSQuest’s total assets, total liabilities, and noncontrolling interest of $10,217 thousand, $625 thousand, and $4,700 thousand, respectively, as of December 31, 2025, the date of divestiture.

In accordance with ASC 205-20, the Company’s policy is to allocate interest expense to discontinued operations only to the extent that the debt is specifically identifiable to the operations of the discontinued component or is required to be repaid as a result of the disposal transaction. For the years ended December 31, 2025 and 2024, the Company determined that no interest expense was attributable to ITSQuest. All outstanding debt and associated interest expenses during these periods related to corporate-level financing facilities held by the Parent, which were not required to be repaid as a result of the divestiture.