BUSINESS REASSESSMENT AND REPOSITIONING ADJUSTMENTS

3 Months Ended

Mar. 31, 2026

BUSINESS REASSESSMENT AND REPOSITIONING ADJUSTMENTS

BUSINESS REASSESSMENT AND REPOSITIONING ADJUSTMENTS

NOTE 17 – BUSINESS REASSESSMENT AND REPOSITIONING ADJUSTMENTS

In conjunction with the preparation of the Company’s consolidated financial statements as of and for the year ended December 31, 2025, Management considered the following recent events and initiatives:

a)	The September 2025 removal of an individual for the alleged improper issuance of the Company’s securities. This individual was then serving as Treasurer, Secretary, and a member of the Board of Directors and had previously served as President and Chief Executive Officer for almost a decade;

b)	The October 2025 acquisition of the Opsec business;

c)	The February 2026 sale of USS; and

d)	Initiatives discussed elsewhere in this Quarterly Report and in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 filed with the Securities and Exchange Commission (SEC) on June 5, 2026 consisting of:

	i)	The establishment of a new Management Team;
	ii)	The launch of a growth strategy;
	iii)	The ongoing pursuit of additional acquisitions; and
	iv)	The ongoing pursuit of additional financing to fund such growth strategies and acquisitions.

In light of the above, Management reassessed the propriety of certain assets and liabilities carried on its balance sheet and elected to make repositioning adjustments related thereto effective as of December 31, 2025 to more accurately reflect the prospective obligations of the Company. This resulted in a net benefit of $2,205,292 which was recorded in the Other Income/Expense area in the Consolidated Statement of Operations for the year ended December 31, 2025.

The Company accounted for such adjustments in accordance with the provisions of ASC 250, Accounting Changes and Error Corrections, whereby changes in estimates are recorded in the period in which they become known and are accounted for prospectively. The Company based such adjustments on the facts and circumstances described above, historical experience, industry trends, and other relevant factors, incorporating both quantitative and qualitative assessments that it believed were reasonable under the circumstances.

Those adjustments recorded during the year ended December 31, 2025 consisted of the following:

·	Certain payroll and payroll tax liabilities which had accumulated over time, whose origins are uncertain, and Management has deemed to be unnecessary	$	2,109,240
·	Miscellaneous operational related items		96,052
	Total	$	2,205,292

Management continues to assess the propriety of certain assets and liabilities carried on its balance sheet as of March 31, 2026 in light of the circumstances described above and may elect to make further adjustments related thereto in the future.