NOTE 3 – ACQUISITIONS AND DISPOSITIONS

The Acquisition Of The Opsec Business

Effective October 15, 2025, the Company, through its Centinela subsidiary, acquired the operating assets of Opsec Specialized Protection, Inc. (“Opsec”) consisting of Opsec’s contractual relationships with its clients, rights to all licenses and/or permits required to operate the business, and other miscellaneous assets associated with the business.

The Company performed an assessment under ASC 805 to determine whether the contracts acquired should be accounted for as a business combination or an asset acquisition. Management applied the relevant screen tests and guidance to evaluate whether the acquired set includes an input and a substantive process that together significantly contribute to the ability to create outputs.

First, the Company noted that the acquired contracts are not limited to a simple portfolio of customer arrangements; they are accompanied by operational processes that are currently in use to deliver the underlying services and generate revenue. These processes include the methods, systems, and workflows necessary to fulfill the contracts and continue generating revenue without significant modification or further development by the Company.

Second, the acquired contracts are already generating revenue from customers and are expected to continue to do so as part of the Company’s ongoing operations. The presence of both inputs (the customer contracts and related customer relationships) and substantive processes (the operational know-how and procedures that are integral to managing and fulfilling those contracts) indicates that the acquired set is capable of producing outputs on a stand‑alone basis.

Therefore, based on this analysis, management concluded that the acquired asset meets the definition of a business under ASC 805 and therefore should be accounted for as a business acquisition.

Consideration for this acquisition totaled $800,000 consisted of cash of $650,000 paid on the closing date and $150,000 paid on April 15, 2026. The acquired assets were valued by management at $1,371,000 and recorded on the balance sheet as Contracts and are being amortized on a straight-line basis over a two-year period. The difference of $571,000 between such value and the amount paid was recorded as a gain on acquisition on the Statement of Operations effective as of the acquisition date.

Additionally and as more fully described in Note 14, Commitments and Contingencies, the Company entered into an agreement with the owner of the Opsec business for a six-month period at the rate of $50,000 per month for consulting services.

The Disposition of USS

On February 28, 2026, the Company sold 100% of its equity interest in USS pursuant to a stock purchase agreement to Top Flight Security Solutions LLC (“Top Flight”), a Nevada limited liability company, and Rodney Miller II, an individual.

Total consideration received by the Company consisted of $1.00 in cash and a 4% non-managing membership interest in Top Flight, a newly formed entity with no assets or operating history, to which the Company assigned no value. No contingent consideration is provided for under the agreement.

As USS had a net deficit of $997,179 as of that date (consisting of assets of $238,929 and liabilities of $1,236,108) and recorded a gain on the transaction of $997,180 in Othe Income (Expense) in the Statement of Operations.