NOTE 1. BUSINESS DESCRIPTION AND NATURE OF OPERATIONS

OVERVIEW

The Company (“us,” “we,” and “our”) was incorporated on July 26, 2024 (“Inception”), as Boumarang Inc. (“Boumarang”) under the laws of the State of Delaware. The Company is based in Irvine, California, with an additional location in Austin, Texas. The Company aims to revolutionize industry operations with sustainable, long-range, intelligent drones. In October 2024, the Company established Boumarang Pty Ltd. in Australia, through which it conducts its business with the Australian government and the non-government sector. At present, there are no significant operations of Boumarang Pty Ltd.

Boumarang aims to revolutionize industrial operations with sustainable, long-range drones powered by hydrogen fuel cells, targeting sectors like natural resource monitoring, infrastructure analysis, agriculture, and forestry. AI and machine learning enable Boumarang’s drones to deliver real-time, actionable insights, optimizing decision-making and operational efficiency across industries.

Boumarang presents a growth opportunity at the forefront of hydrogen-powered, AI-driven drone technology, addressing large market needs in sustainable monitoring and resource management. Their competitive advantages in clean energy and advanced AI analytics position them for high growth potential in a rapidly evolving industry. Our drones are designed for agriculture, forestry, power infrastructure, and environmental monitoring applications, leveraging hydrogen fuel cells for extended flight times and reduced environmental impact.

Boumarang's hydrogen-powered UAV design demonstrates alignment with market trends toward endurance, eco-friendly propulsion, and AI-driven autonomy. The hydrogen fuel cell technology presents advantages in efficiency and eco-friendliness, but shares industry-wide limitations in storage and infrastructure challenges. While certain competitors achieve higher endurance or range, Boumarang’s targeted balance in VTOL capability, payload flexibility, and hybrid design positions it well for versatile applications across commercial and surveillance sectors.

Boumarang’s drones use hydrogen fuel cells, offering extended flight times, minimal environmental impact, and quick refueling capabilities, which are ideal for long-range operations such as infrastructure inspections and SAR (search and rescue). Boumarang’s AI platform integrates data from multiple sensors and provides real-time analysis for predictive maintenance, resource monitoring, and operational insights. This system supports various industries, from agriculture to energy, delivering alerts and detailed reports directly into existing workflows.

Boumarang operates on a B2B SaaS model with revenue streams from drone hardware leasing, an AI analytics subscription platform, and customized AI solutions for logistics, energy, and natural resources. Additional revenue sources include Data-as-a-Service (DaaS), providing advanced analytics and insights based on drone-collected data.

Boumarang's IP portfolio provides advanced technology assets designed for precision targeting, robust device management, and immediate engagement capabilities, with asset rights structured to ensure the Company's exclusive control over these innovations, except for limited MoonTower applications. This IP suite supports military and commercial applications, offering enhanced efficiency and operational effectiveness across various high-tech environments.

To date, the Company has focused on research and development, technology acquisition, prototype development, and capital formation. The Company has not generated revenue from contracts with customers during the period presented.

ACQUISITION OF INTELLECTUAL PROPERTY

During the year ended December 31, 2024, the Company completed four acquisitions of intellectual property and technology, each accounted for as acquired intangible assets and recorded at cost, consisting of the following:

The aggregate consideration for these four acquisitions was $16.0 million, all of which was satisfied through the issuance of shares of the Company’s common stock. These assets are reflected as acquired intangible assets on the consolidated balance sheets as of June 30, 2026 and December 31, 2025.

Below is a summary of IP or technology acquisitions completed:

In addition, during 2024, the Company entered into a technology licensing agreement with T Stamp Inc. related to biometric identity and authentication technology used in connection with the Company’s airdrone platform. The Company did not acquire ownership of the underlying intellectual property under this arrangement. Accordingly, the consideration paid under the T Stamp licensing agreement is recorded as a prepaid expense and is not included in acquired intangible assets.

The acquired technology assets are in development and have not yet been placed into service. Accordingly, management has not commenced amortization as of June 30, 2026. Management will reassess the useful lives of the acquired technology assets as technical feasibility, patent status, commercial readiness, and expected legal or economic lives become determinable. Finite-lived intangible assets will be amortized over their estimated useful lives when available for their intended use; assets that are determined to have indefinite useful lives will be tested for impairment at least annually or more frequently if indicators arise.

Management periodically evaluates whether events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable in accordance with ASC Topic 360, Property, Plant, and Equipment, and ASC Topic 350, Intangibles—Goodwill and Other.

Board of Directors

As of June 30, 2026, the Company’s Board of Directors consists of three directors: Mr. Craig Nehrkorn (Chief Executive Officer and Director), Ms. Candice Beaumont (Non-Executive Director), and Mr. Imran Firoz (Director, former Interim Chief Financial Officer and former President and Chief Executive Officer).