Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026. These unaudited interim financial statements should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2025, included in the Company’s Annual Report on Form 10-K filed with the SEC.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of SUPA Consolidated Inc. and its wholly-owned operating subsidiary, SUPA FoodSystems LLC, a Washington limited liability company. All material intercompany accounts and transactions have been eliminated in consolidation. 

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities of three months or less when purchased to be cash equivalents. The Company maintains its cash in bank deposit accounts that, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts.

Inventory

Inventory consists of bottled water and related supplies held inside the Company’s commercial water and ice vending machines. Inventory is stated at the lower of cost or net realizable value, with cost determined on a first-in, first-out basis. During the three months ended June 30, 2026, the Company determined that inventory with a carrying amount of $50,500 had no net realizable value because the related vending machine deployments had not generated revenue, and recorded a loss on inventory write-off of $50,500, which is presented in other income (expense) in the accompanying consolidated statements of operations. Inventory was $0 as of June 30, 2026 and December 31, 2025.

Internal Use Software Development

We account for costs incurred to develop or purchase computer software for internal use in accordance with Accounting Standards Codification (“ASC”) 350-40 “Internal-Use Software” or ASC 350-50 “Website Costs”. As required by ASC 350-40, we capitalize the costs incurred during the application development stage, which include costs to design the software configuration and interfaces, coding, installation, and testing.

Costs incurred during the preliminary project stage along with post-implementation stages of internal use computer software are expensed as incurred. Capitalized development costs, once placed into service, are amortized on a straight-line basis over a period of five years, management’s estimate of the economic life. Costs incurred to maintain existing product offerings are expensed as incurred. Our software platform has not yet been placed into service. The capitalization and ongoing assessment of recoverability of development costs requires considerable judgment by management with respect to certain external factors, including, but not limited to, technological and economic feasibility, and estimated economic life.

Intangible Assets

Intangible assets consist primarily of customer contracts and location rights acquired in the SUPA Food Services share exchange transaction. Intangible assets with definite lives are amortized over their estimated useful lives. Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

Equity Investments

In accordance with ASC 321, equity investments without readily determinable fair values are measured at cost minus impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer. The Company’s investment in Boumarang Inc. common stock is accounted for under this measurement alternative.

Fair Value of Financial Instruments

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants as of the measurement date. ASC 820, Fair Value Measurement, establishes a three-tier fair value hierarchy that prioritizes the inputs used to measure fair value:

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The Company has no financial assets or liabilities required to be measured at fair value on a recurring basis as of June 30, 2026 or December 31, 2025. The Company’s investment in Boumarang Inc., as further described in Note 8, is accounted for under the measurement alternative permitted by ASC 321-10-35-2 (cost less impairment, adjusted for observable price changes for the identical or a similar investment of the same issuer) and is therefore not remeasured to fair value at each reporting date.

Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

The Company had no assets or liabilities measured at fair value on a non-recurring basis as of June 30, 2026 or December 31, 2025. No impairment of long-lived assets, intangible assets, or equity investments was recognized during the six months ended June 30, 2026 or the year ended December 31, 2025.

Fair Value of Financial Instruments Not Measured at Fair Value

The Company’s financial instruments not measured at fair value consist of cash, prepaid expenses, accounts payable, accrued expenses, accrued interests, due to related parties, and notes payable. The carrying amounts of cash, prepaid expenses, accounts payable, accrued expenses, and accrued interests approximate their respective fair values due to the short-term nature of these instruments. Amounts due to related parties are non-interest-bearing or accrue interest at de minimis rates and are due on demand; their carrying amounts approximate fair value, and any imputed interest is considered immaterial. With respect to notes payable, all of which are unsecured and past their original contractual maturity dates, the Company has not estimated fair value because such estimation is not practicable in the absence of observable market trading data and current refinancing terms for instruments of comparable credit standing and structure.

Transfers Between Levels

There were no transfers of financial assets or liabilities between Levels 1, 2, or 3 of the fair value hierarchy during the six months ended June 30, 2026 or the year ended December 31, 2025.

Long-lived Assets

We follow ASC 360-10-15-3, Impairment or Disposal of Long-lived Assets, which established a “primary asset” approach to determine the cash flow estimation period for a group of assets and liabilities that represents the unit of accounting for a long-lived asset to be held and used. Long-lived assets to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less cost to sell.

Revenue Recognition

At our inception, we adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606). Under this guidance, operating revenue is recognized at the time a good or service is transferred to a customer and the customer receives the service performed. Our revenue arrangements with customers are predominantly short-term in nature, involving a single performance obligation related to the delivery of the service, and generally provide for transfer of control at the time payment for the service is received.

We exclude from the measurement of the transaction price, if applicable, all taxes imposed on and concurrent with a specific revenue-producing transaction and collected by us from a customer, including sales, use, excise, value-added, and franchise taxes (collectively referred to as sales taxes). Sales taxes, which may be collected, are not recognized as revenue but are included in accounts payable on the balance sheets as they would ultimately be remitted to governmental authorities. No such taxes have been charged or collected yet.

We have elected the practical expedient permitted in ASC 606-10-32-18, which allows an entity to recognize the promised amount of consideration without adjusting for the effects of a significant financing component if the contract has a duration of one year or less. Our revenue arrangements are short-term in nature and do not have significant financing components; therefore, we have not adjusted consideration.

Debt Issued with Common Stock/Warrants

Debt and common stock issued with common stock/detachable warrants is accounted for under the guidelines established by ASC 470-20 – Accounting for Debt with Conversion or Other Options. We record the relative fair value of debt or common stock and warrants related to the issuance of debt as a debt discount or premium in the case of debt and as additional paid-in capital in the case of common stock. Debt discount or premium is subsequently amortized to interest expense over the expected term of the debt.

Common Stock Issued for Services

Our accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions of Emerging Issues Task Force (“EITF”) 96-18, Accounting for Equity Instruments That are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services, codified into ASC 505 Equity. The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor’s performance is complete. In the case of equity instruments issued to consultants, the fair value of the equity instrument is recognized over the term of the consulting agreement at various performance completion dates, and for unvested instruments, at each reporting date. Compensation expense, once recorded, may not be reversed.

Stock option grants are valued using a Black-Scholes option valuation model. The assumptions include the risk-free rate of interest, expected dividend yield, expected volatility, and the expected term of the award. The risk-free rate of interest was based on the U.S. Treasury bond rates appropriate for the expected term of the award. There are no expected dividends as we do not currently plan to pay dividends on our common stock. Expected stock price volatility was based on historical volatility levels of our common stock. The expected term is estimated by using the actual contractual term of the option grants and the expected length of time for the employees to exercise the options.

Stock awards issuable pursuant to employment agreements are valued at the fair market value of our stock at the date on which each award, or portion thereof, vests.

Income Taxes

We account for income taxes in accordance with ASC 740 - Income Taxes, which requires us to provide a net deferred tax asset/liability equal to the expected future tax benefit/expense of temporary reporting differences between book and tax accounting methods and any available operating loss or tax credit carry forwards. Tax law and rate changes are reflected in income in the period such changes are enacted. We record a valuation allowance to reduce the deferred tax assets to the amount that is more likely than not to be realized. We include interest and penalties related to income taxes, including unrecognized tax benefits, within the provision for income taxes.

Net Loss Per Share

We compute net loss per share in accordance with ASC 260, Earnings per Share. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. Diluted EPS excludes all potential dilutive shares if their effect is anti-dilutive. As of June 30, 2026, and 2025, we had no potentially dilutive shares.

New Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which expands segment disclosure requirements, including new requirements for entities with a single reportable segment. The Company adopted ASU 2023-07 effective January 1, 2025, on a retrospective basis.

The Company operates as a single operating and reportable segment consisting of its food technology vending operations. The Company’s Chief Executive Officer is the chief operating decision maker (the “CODM”) and evaluates performance and allocates resources based on net loss as reported in the condensed statements of operations. Significant segment expenses regularly provided to the CODM are consistent with the line items presented on the face of the condensed statements of operations, consisting of general and administrative expenses and professional fees. Segment assets are equal to the Company’s total assets as reported on the condensed balance sheets, and all operations and long-lived assets are located in the United States. The adoption of ASU 2023-07 did not have a material impact on the Company’s financial position, results of operations, or cash flows.

We have reviewed all other accounting pronouncements recently issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the SEC, and have determined that they are either not applicable or are not believed to have a material impact on our present or future financial statements.