Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2026

Basis of accounting – The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) as found in the Accounting Standards Codification (“ASC”) of the Financial Accounting Standards Board (“FASB”). The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. The unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the SEC applicable to interim period financial statements and do not include all of the information and disclosures required by GAAP for complete financial statements. In the opinion of management, the unaudited condensed consolidated financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the financial position and the results of operations for the periods presented.

These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements and the notes thereto for the year ended December 31, 2025. Interim results are not necessarily indicative of the results that may be expected for a full year.

Concentrations of credit risk

Concentrations of credit risk – Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents. The Company generally maintains balances in various operating accounts at financial institutions that management believes to be of high credit quality, in amounts that may, at times, exceed federally insured limits. The Company has not experienced any losses related to its cash and cash equivalents and does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. As of June 30, 2026 and December 31, 2025, all the Company’s cash and cash equivalents were held at accredited financial institutions.

Additionally, the Company had the following concentrations in net sales and accounts receivable during the three and six months ended June 30, 2026:

	Three months ended June 30, 2026			Six months ended June 30, 2026
Customer A
Net Sales		12.4	%		13.7	%
Accounts Receivable		16.2	%		16.2	%
Customer B
Net Sales		12.2	%		9.5	%
Accounts Receivable		10.9	%		10.9	%

Fair value measurements

Fair value measurements – Certain assets and liabilities of the Company are carried at fair value under U.S. GAAP. 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 on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:

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Level 1 – Quoted prices in active markets for identical assets or liabilities.

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Level 2 – Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data.

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Level 3 – Unobservable inputs that are supported by little or no market activity that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies, and similar techniques.

Derivative liabilities, SAFEs, investments at fair value, and securities pledged as collateral are measured using Level 3 inputs. The following tables present changes in Level 3 assets and liabilities measured at fair value for the six months ended June 30, 2026. During the three months ended June 30, 2026, the De Soi collateral was released and the investment was reclassified from securities pledged as collateral to investments at fair value (see Notes 6 and 14):

Investments at Fair Value / Securities Pledged as Collateral	Amount
Balance, December 31, 2025 (securities pledged as collateral)		3,347,564
Reclassification upon release of collateral (Q2 2026)		-
Balance, June 30, 2026 (investments at fair value)	$	3,347,564

Derivative Liabilities at Fair Value	Amount
Balance, December 31, 2025		37,962
Issuance of Convertible Notes and Warrants		1,120,527
Issuance of Series C Convertible Preferred Stock — conversion feature		849,236
Change in fair value		(187,753	)
Settlement upon conversion of Convertible Notes at the Direct Listing		(936,805	)
Balance, June 30, 2026	$	883,167

SAFEs at Fair Value	Amount
Balance, December 31, 2025		520,242
Change in fair value		21,062
Balance, June 30, 2026	$	541,304

There were no transfers between Levels 1, 2, or 3 during the six months ended June 30, 2026 nor June 30, 2025.

Valuation techniques and inputs, accounts receivable, property and equipment, intangible assets, impairment of long-lived assets, customer deposits, revenue recognition, cost of net revenues, sales and marketing expenses, net loss per share, and income taxes policies are consistent with those described in the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 and the audited financial statements for the year ended December 31, 2025.

Accounts receivable –

As of June 30, 2026 and December 31, 2025, the Company had a reserve for expected credit losses of $84,093 and $83,389, respectively.

Shipping, handling and advertising costs – Shipping and handling costs amounted

to $206,851 and $144,315 for the three months ended June 30, 2026 and 2025, respectively, and $413,359 and $256,233 for the six months then ended. Advertising costs amounted to $169,994 and $28,989 for the three months ended June 30, 2026 and 2025, respectively, and $324,031 and $59,975 for the six months then ended.

Accounting pronouncements not yet adopted

Accounting pronouncements not yet adopted – In November 2024, the FASB issued a standard requiring disaggregated information about certain income statement expense line items to be disclosed on an annual and interim basis. We are required to adopt these disclosures for our annual period ending December 31, 2028, with early adoption permitted and this standard may be applied retrospectively. We expect this standard to impact our disclosures with no material impacts to our results of operations, cash flows, or financial condition. Management does not believe that any other recently issued, but not yet effective, accounting standards could have a material effect on the accompanying consolidated financial statements. As new accounting pronouncements are issued, the Company will adopt those that are applicable under the circumstances