Note 3 — Summary of Significant Accounting Policies

Cash and Cash Equivalents

The Company considers all highly liquid temporary cash investments with an original maturity of 90 days or less to be cash equivalents. At June 30, 2026 and December 31, 2025, the Company had $117,465 and $358,975, respectively, in cash and cash equivalents.

Use of Estimates

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Estimates may include those pertaining to the fair value of the derivative liability, stock-based compensation, depreciable lives of fixed assets, and deferred tax assets. Actual results could materially differ from those estimates.

Accounts Receivable

The Company provides an allowance for doubtful accounts equal to the estimated uncollectible amounts pursuant to the guidance of Accounting Standards Update (ASU) 2016-13, Financial Instruments – Credit Losses (Topic 326) as codified in Accounting Standards Codification (ASC) 326, Financial Instruments – Credit Losses. Under ASC 326, the Company utilizes a current and expected credit loss (CECL) impairment model. The Company’s estimate is based on historical collection experience and a review of the current status of trade accounts receivable. Accounts receivable are presented net of an allowance for doubtful accounts of $0 and $0 at June 30, 2026 and December 31, 2025, respectively. The unbilled receivable of $32,667 recognized at March 31, 2026 was invoiced during the three months ended June 30, 2026 and collected in full. There was no unbilled receivable and no accounts receivable outstanding at June 30, 2026.

Revenue Recognition

The Company accounts for its revenues under FASB ASC 606, which requires revenue to be recognized in a manner to depict the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. The Company considers revenue realized or realizable and earned when all of the following five criteria are met: (1) Identify the Contract with a Customer; (2) Identify the Performance Obligations in the Contract; (3) Determine the Transaction Price; (4) Allocate the Transaction Price to the Performance Obligations in the Contract; and (5) Recognize Revenue When (or As) the Entity Satisfies a Performance Obligation. The Company recognizes consulting income when the services are performed and performance obligations are satisfied over time or at a point in time.

During the three and six months ended June 30, 2026, the Company recognized $7,333 and $40,000, respectively, of consulting revenue from advisory services provided to an institutional client under a fixed-fee engagement letter pursuant to which the Company furnished strategic guidance on the client’s digital asset adoption, treasury strategy, and related operational and market considerations. The Company identified the engagement as a single performance obligation comprising a series of distinct advisory services that the client simultaneously received and consumed as the Company performed, and revenue was recognized over time on a straight-line basis over the contractual service period. The engagement concluded during the three months ended June 30, 2026, was invoiced in full in April 2026, and was collected in May 2026. The Company did not generate revenue during the three or six months ended June 30, 2025.

For the three and six months ended June 30, 2026, one customer accounted for 100% of the Company’s revenue. The Company had no other customers or revenue arrangements during the periods presented.

Income Taxes

The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of items that have been included or excluded in the financial statements or tax returns. Deferred tax assets and liabilities are determined on the basis of the difference between the tax basis of assets and liabilities and their respective financial reporting amounts (“temporary differences”) at enacted tax rates in effect for the years in which the temporary differences are expected to reverse. The Company adopted the provisions of ASC Topic 740-10, which prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Management has evaluated and concluded that there are no material tax positions requiring recognition in the Company’s unaudited condensed consolidated financial statements as of June 30, 2026. The Company does not expect any significant changes in its unrecognized tax benefits within twelve months of the reporting date. The Company’s 2022, 2023, 2024, and 2025 tax returns remain open for audit for Federal and State taxing authorities. The Company’s policy is to classify assessments, if any, for tax related interest as interest expense and penalties as general and administrative expenses in the statement of operations.

Marketable Securities

The Company accounts for marketable equity securities under ASU 2016-01, Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities. Under this guidance, equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) are measured at fair value, with changes in fair value recognized in net income. NextNRG Inc. is a related party because Michael Farkas, the Company’s Chairman, beneficially owns approximately 48% of its outstanding common stock. The Company accounts for its investment in NextNRG Inc. (formerly known as EZFill Holdings, Inc.) as an equity security measured at fair value. Accordingly, unrealized gains and losses on this investment for the three and six months ended June 30, 2026 and 2025 have been recognized in Other Income (Expense). At June 30, 2026, the Company owned 26,573 shares of NextNRG Inc. with a fair value of $9,306 (approximately $0.35 per share), reported on the balance sheet as Marketable securities — related party. The Company recognized unrealized losses of $1,324 and $29,225 on this investment during the three and six months ended June 30, 2026, respectively.

Investments — Related Parties

When the fair value of an investment is indeterminable, the Company accounts for its investments that are under 20% of the total equity outstanding using the cost method. For investments in which the Company holds between 20–50% equity and is non-controlling, the investments are accounted for using the equity method. For any investments in which the Company holds over 50% of the outstanding stock, the Company consolidates those entities into its consolidated financial statements herein. The Company holds one investment as of June 30, 2026 and one investment as of December 31, 2025.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk primarily consist of cash, cash equivalents and marketable securities. As of June 30, 2026 and December 31, 2025, the carrying value of marketable securities was $9,306 and $38,531, respectively. The securities are included in Marketable securities — related party on the consolidated balance sheets and consist of common shares held in one (1) investment which is listed on the Nasdaq Capital Market under the symbol NXXT.

Principles of Consolidation

The consolidated financial statements include the Company and its wholly owned subsidiary, Balance Labs LLC. All intercompany balances and transactions have been eliminated in consolidation.

Net Loss Per Common Share

Basic loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding plus dilutive common share equivalents during the period. Because the Company reported a net loss for the three and six months ended June 30, 2026, all potentially dilutive securities were anti-dilutive and were excluded from the computation of diluted loss per share, including 157,496 shares issuable under the Chase Mortgage convertible note and all unvested equity awards subject to service-based vesting. For the three and six months ended June 30, 2025, potentially dilutive securities consisted of 4,334,470 shares from convertible notes payable, which were excluded from the computation of diluted loss per share because their effect would have been anti-dilutive. Diluted loss per share equals basic loss per share for all periods presented.

Stock-Based Compensation

The Company measures the cost of services received in exchange for an award of equity instruments based on the fair value of the award. For employees, the fair value of the award is measured on the grant date; for non-employees, the fair value of the award is generally re-measured on vesting dates and financial reporting dates until the service period is complete. The fair value amount is then recognized over the period during which services are required to be provided in exchange for the award, usually the vesting period. Awards granted to directors are treated on the same basis as awards granted to employees.

Derivative Liability

The Company accounts for the anti-dilution provision contained in the Chief Executive Officer’s August 2025 employment agreement as a derivative liability under ASC 815, Derivatives and Hedging. The derivative liability is initially recognized at fair value and is remeasured to fair value at each reporting date, with changes in fair value recorded in earnings as a gain or loss on remeasurement of derivative liability. Fair value is estimated using a Monte Carlo simulation model. As of June 30, 2026 and December 31, 2025, the derivative liability was $962,301 and $1,944,806, respectively, resulting in a gain on remeasurement of $276,449 for the three months ended June 30, 2026 and a net gain on remeasurement of $982,505 for the six months ended June 30, 2026. See Note 9.

Fair Value of Financial Instruments

The Company measures its financial assets and liabilities in accordance with GAAP. For certain of our financial instruments, including cash, accounts payable, and the short-term portion of long-term debt, the carrying amounts approximate fair value due to their short maturities. We adopted accounting guidance for financial and non-financial assets and liabilities (ASC 820). This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. The guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels:

Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use.

The following table presents the assets and liabilities of the Company measured and recorded at fair value on a recurring basis and their level within the fair value hierarchy as of June 30, 2026:

Schedule of Fair Value of Assets and Liabilities on Recurring Basis

The following table presents the assets and liabilities of the Company measured and recorded at fair value on a recurring basis and their level within the fair value hierarchy as of December 31, 2025:

Property and Equipment

Property and equipment as of June 30, 2026 and December 31, 2025 consisted of the following:

Schedule of Property and Equipment

Depreciation expense for the three and six months ended June 30, 2026 and 2025 totaled $0. The fixed assets are fully depreciated.

Business Segments

The Company’s Chief Executive Officer, who serves as the Chief Operating Decision Maker, evaluates the Company’s financial performance and allocates resources based on a consolidated view of the business. Consequently, the Company operates as a single reportable segment under ASC 280, Segment Reporting. The Chief Operating Decision Maker classifies this segment as Consulting. The Company’s operations are managed centrally, and financial performance is assessed using revenue, operating loss and the significant expense categories presented on the face of the Consolidated Statements of Operations, being salaries and wages, professional fees and general and administrative expenses. There was no intersegment activity and the Company had no long-lived assets during the periods presented.

Recently Issued Accounting Pronouncements

The Company has evaluated all new accounting standards that are in effect and may impact its unaudited condensed consolidated financial statements and does not believe that there are any other new accounting standards that have been issued that might have a material impact on its financial position or results of operations.

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 aims to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The Company adopted ASU 2023-07 effective January 1, 2024. The adoption of ASU 2023-07 did not have a material impact on the Company’s consolidated financial statements.