MANAGEMENTS PLANS

6 Months Ended

Jun. 30, 2026

NOTE 3. MANAGEMENT’S PLANS

Substantial doubt about the ability to continue as a going concern

The Company has incurred recurring operating losses, negative cash flows from operations, and has not yet generated revenue from contracts with customers. As of June 30, 2026, the Company’s cash resources totaled $118,890, and it had a working capital surplus of $830,691, substantially all of which consisted of prepaid licensing assets rather than cash. These conditions, considered together, continue to raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date the financial statements are issued unless additional financial resources are secured, expenditures are reduced, or operating cash flow is generated.

Under ASC 205-40, management is required, at each annual and interim reporting date, to evaluate whether relevant conditions and events raise substantial doubt about the entity’s ability to continue as a going concern for one year after the financial statement issuance date and, if so, to assess whether management’s plans are probable of being effectively implemented and likely to alleviate the substantial doubt.

Management’s assessment, therefore, has considered the current financial condition, liquidity sources, and the feasibility and timing of mitigation plans.

The accompanying unaudited consolidated financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the ordinary course of business. The Company is a development-stage entity that has incurred recurring losses from operations and negative cash flows from operations and has not yet generated any revenue from contracts with customers. The Company’s key financial-condition indicators are summarized below:

	·	Cash on hand at June 30, 2026 and December 31, 2025: $118,890 and $16,084.

	·	Working capital surplus at June 30, 2026: $830,691, reflecting a decrease of $230,888 from the working capital surplus of $1,061,579 at December 31, 2025. The decrease principally reflects an aggregate increase of $333,694 in current liabilities (accounts payable, accrued expenses and related-party loan), partially offset by a $102,806 increase in cash during the six-month period. Substantially all working capital at June 30, 2026, consisted of prepaid licensing assets rather than cash.

	·	Net loss for the three months ended June 30, 2026 and 2025: $549,864 and $534,342; and for the six months ended June 30, 2026 and 2025: $1,064,222 and $1,057,451.

	·	Accumulated deficit at June 30, 2026 and December 31, 2025: $4,058,542 and $2,994,320.

Considered together, these conditions continue to raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date these unaudited consolidated financial statements are issued. The substantial doubt previously disclosed in Note 3 of the audited consolidated financial statements for the year ended December 31, 2025, has not been alleviated because the Company has not generated revenue from contracts with customers, has limited cash resources, and remains dependent on additional financing and related-party support.

Management’s plans to mitigate substantial doubt

Management is continuing to execute the plans previously described in Note 3 to the audited consolidated financial statements for the year ended December 31, 2025, including:

Ongoing prosecution of the Company’s Registration Statement on Form S-1 (File No. 333-292164), filed December 16, 2025, with the SEC for a registered offering of 125,000 shares of common stock at $2.00 per share for anticipated gross proceeds of $250,000. As of June 30, 2026, the Company had filed Pre-Effective Amendment No. 1 (January 22, 2026), No. 2 (February 12, 2026), No. 3 (March 3, 2026) and No. 4 (May 6, 2026), and No. 5 (June 1, 2026), and had received comment letters from the staff of the SEC’s Division of Corporation Finance on March 16, 2026 and May 28, 2026. The Company responded to each comment letter and filed Pre-Effective Amendment No. 6 to the registration statement on June 16, 2026. The registration statement was declared effective by the SEC on June 29, 2026, prior to the balance sheet date. As of June 30, 2026, no shares had been sold, and no proceeds had been received under the registered offering.

	·	Continued discussions with potential private placement investors. As of June 30, 2026, the Company had received non-binding indications of interest, and no definitive subscription agreements had been executed or funded.

	·	Continued reliance on the Shore House IVF conditional funding commitment of up to $300,000, which remains contingent on (i) the Company’s registration statement being declared effective and (ii) the Company having raised at least $250,000 of capital under the registered offering by June 30, 2026. Condition (i) was satisfied upon effectiveness of the registration statement on June 29, 2026. As of June 30, 2026, condition (ii) had not been satisfied, and no funds have been advanced under the commitment. See Note 7.

	·	Pursuit of registered-offering proceeds. The Company is pursuing the registered offering described in Note 12 and anticipates that the gross proceeds of that offering (and of any follow-on financing) will fund continued WaveDrone development activities, including amounts payable to Ascendant AI LLC under the WaveDrone development General Services Agreement described in Note 8. As of June 30, 2026, the Company has no binding commitments from any third party for additional capital.

	·	Continued reliance on Spark Capital Investments LLC, a related party controlled by Mr. Imran Firoz, for short-term working-capital advances. During the six months ended June 30, 2026, Spark Capital advanced an aggregate $130,000 to the Company, increasing the related-party loan balance from $45,000 at December 31, 2025, to $175,000 at June 30, 2026. See Note 7.

	·	Continued cost discipline. The Company has not commenced material new spending or new hires during the six months ended June 30, 2026; non-amortization operating expenses for the six-month period totaled $230,888 (legal and professional fees, dues and subscriptions, bank charges and rent).

	·	Execution on June 22, 2026, of a General Services Agreement with Ascendant AI LLC, which supersedes the previously negotiated Guinn Partners six-phase, 13-month WaveDrone development program (aggregate contract value approximating $975,000) and provides for aggregate fees of $300,000 payable from August 2026 through January 2027; as of June 30, 2026, no long-form Guinn Partners agreement had been executed and only the Phase 1 unpaid balance of $103,000 (recorded in accounts payable, related parties at December 31, 2025 and June 30, 2026) was a contractual commitment of the Company.

Subsequent to June 30, 2026, on August 5, 2026, the Company executed its first revenue-generating customer contract, providing for aggregate fixed fees of $1,200,000 over twelve months from August 5, 2026 through July 31, 2027, which the agreement states constitutes a firm and non-cancelable commitment, together with a related subcontract to Ascendant AI LLC providing for aggregate fees of $960,000 over the same period. Because the one-year assessment period under ASC 205-40 runs from the date these unaudited consolidated financial statements are issued, management has considered this arrangement in its assessment. See Note 12 — Subsequent Events.

Although management believes the foregoing plans are reasonable and is actively executing on each, management has not concluded that those plans are probable of being effectively implemented within one year after the issuance of these unaudited consolidated financial statements. If management’s plans are not successfully implemented within the relevant assessment period, the Company may be required to curtail operations, defer or cancel planned development activities, divest assets, or seek alternative financing, any of which could result in dilution of existing shareholders, limitations on operational scope, or, in an extreme scenario, cessation of operations. The accompanying unaudited consolidated financial statements do not include any adjustments to the carrying amounts of assets or liabilities, or the classification of liabilities, that might be required if the Company were unable to continue as a going concern.