UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
Or
For the transition period from ________ to ________
Commission file number:
(Exact Name of Registrant As Specified In Its Charter)
| (State or other jurisdiction of | (I.R.S. Employer | |
| incorporation or organization) | Identification No.) |
| (Address of Principal Executive Offices) | (ZIP Code) |
(Registrant’s telephone number, including area code)
| N/A |
| (Former name, former address and former fiscal year, if changed since last report) |
Securities to be registered under Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| None |
Indicate by check mark whether the registrant (1) has filed reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the Company is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ |
| Smaller reporting company | |
| Emerging growth company |
If an emerging growth company, indicate by check mark if the Company has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐
Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of August 10, 2026, there were
TABLE OF CONTENTS
i
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
KiNRG, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
| June 30, 2026 (unaudited) |
December 31, 2025 |
|||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Contract receivable | ||||||||
| Retention receivable | ||||||||
| Contract assets | ||||||||
| Prepaid expense and other current assets | ||||||||
| Total current assets | ||||||||
| Property and equipment | ||||||||
| Right of use asset - operating lease | ||||||||
| Goodwill | ||||||||
| Deferred tax assets | ||||||||
| Deposit | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Retention payable | ||||||||
| Accrued payroll | ||||||||
| Accrued interest | ||||||||
| Accrued interest - related party | ||||||||
| Contract liabilities | ||||||||
| Accrued liabilities - related parties | ||||||||
| Operating lease liabilities, current portion | ||||||||
| Notes payable, current portion | ||||||||
| Note payable - related party | ||||||||
| Future receivables obligation | ||||||||
| Accrued income taxes | ||||||||
| Other current liabilities | ||||||||
| Total current liabilities | ||||||||
| Operating lease liabilities, net of current portion | ||||||||
| Notes payable, net of current portion | ||||||||
| Total liabilities | ||||||||
| Commitments and Contingencies (See note 15) | ||||||||
| Stockholders’ equity (deficit) | ||||||||
| Preferred stock, par value $ | ||||||||
| Series A Convertible Preferred stock, par value $ | ||||||||
| Series AA Convertible Preferred stock, par value $ | ||||||||
| Series AAA Convertible Preferred stock, $ | ||||||||
| Series AAAA Convertible Preferred stock, $ | ||||||||
| Common stock, par value $ | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity (deficit) | ( | ) | ||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
See the accompanying notes to the unaudited condensed consolidated financial statements
1
KiNRG, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||
| Contract costs | ||||||||||||||||
| Gross profit | ||||||||||||||||
| Operating expenses: | ||||||||||||||||
| Selling, general, and administrative expenses | $ | $ | $ | $ | ||||||||||||
| Total operating expenses | ||||||||||||||||
| Operating income (loss) | ( | ) | ( | ) | ||||||||||||
| Other income (expenses): | ||||||||||||||||
| Gain on settlement of accounts payable | ||||||||||||||||
| Interest income | ||||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total other expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income (loss) before provision for income taxes | ( | ) | ( | ) | ||||||||||||
| Income tax benefit | ||||||||||||||||
| Net income (loss) from continuing operations | ( | ) | ( | ) | ||||||||||||
| Net loss from discontinued operations | ( | ) | ||||||||||||||
| Net income (loss) | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
| Net income (loss) per common share from continuing operations - basic | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
| Net income (loss) per common share from continuing operations - diluted | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
| Net loss per common share from discontinued operations - basic | $ | $ | $ | $ | ( | ) | ||||||||||
| Net loss per common share from discontinued operations - diluted | $ | $ | $ | $ | ( | ) | ||||||||||
| Net income (loss) per common share - basic | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
| Net income (loss) per common share - diluted | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
| Weighted-average number of common shares outstanding - basic | ||||||||||||||||
| Weighted-average number of common shares outstanding - diluted | ||||||||||||||||
See the accompanying notes to the unaudited condensed consolidated financial statements
2
KiNRG, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)
| Common Stock | To Be Issued | Additional Paid-in | Accumulated | Non- controlling |
||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Interest | Total | |||||||||||||||||||||||||
| Balance, March 31, 2025 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||||||||
| Vesting of compensatory warrants | - | - | ||||||||||||||||||||||||||||||
| Common stock sold for cash | ||||||||||||||||||||||||||||||||
| Common stock issued to directors for conversion of fees | ||||||||||||||||||||||||||||||||
| Common stock issued to officers for conversion of salaries | ||||||||||||||||||||||||||||||||
| Common stock issued for conversion of note payable | ||||||||||||||||||||||||||||||||
| Imputed interest on related party loans | - | - | ||||||||||||||||||||||||||||||
| Net loss for the three months ended June 30, 2025 | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balance, June 30, 2025 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||||||||
| Balance, March 31, 2026 | $ | $ | $ | $ | ( | ) | $ | $ | ||||||||||||||||||||||||
| Vesting of stock options | - | - | ||||||||||||||||||||||||||||||
| Common stock sold for cash | ||||||||||||||||||||||||||||||||
| Net income for the three months ended June 30, 2026 | - | - | ||||||||||||||||||||||||||||||
| Balance, June 30, 2026 | $ | $ | $ | $ | ( | ) | $ | $ | ||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||
| Vesting of compensatory warrants | - | - | ||||||||||||||||||||||||||||||
| Common stock sold for cash | ||||||||||||||||||||||||||||||||
| Common stock issued to directors for conversion of fees | ||||||||||||||||||||||||||||||||
| Common stock issued to officers for conversion of salaries | ||||||||||||||||||||||||||||||||
| Common stock issued for conversion of note payable | ||||||||||||||||||||||||||||||||
| Imputed interest on related party loans | - | - | ||||||||||||||||||||||||||||||
| Derecognition of noncontrolling interest | - | - | ||||||||||||||||||||||||||||||
| Net loss for the six months ended June 30, 2025 | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balance, June 30, 2025 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||||||||
| Balance, December 31, 2025 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||||||||
| Vesting of stock options | - | - | ||||||||||||||||||||||||||||||
| Common stock sold for cash | ||||||||||||||||||||||||||||||||
| Common stock issued to directors for conversion of fees | ||||||||||||||||||||||||||||||||
| Common stock issued upon consummation of acquisition | ||||||||||||||||||||||||||||||||
| Net income for the six months ended June 30, 2026 | - | - | ||||||||||||||||||||||||||||||
| Balance, June 30, 2026 | $ | $ | $ | $ | ( | ) | $ | $ | ||||||||||||||||||||||||
See the accompanying notes to the unaudited condensed consolidated financial statements
3
KiNRG, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| For the | For the | |||||||
| Six Months Ended |
Six Months Ended |
|||||||
| June 30, | June 30, | |||||||
| 2026 | 2025 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net income (loss) | $ | $ | ( | ) | ||||
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||
| Loss on sale of subsidiary | ||||||||
| Stock based compensation | ||||||||
| Imputed interest on loans payable | ||||||||
| Amortization of right of use assets | ||||||||
| Depreciation | ||||||||
| Changes in current assets and liabilities: | ||||||||
| Contract receivable | ( | ) | ||||||
| Retention receivable | ( | ) | ||||||
| Contract assets | ( | ) | ||||||
| Prepaid expense and other current assets | ||||||||
| Deferred tax asset | ( | ) | ||||||
| Accounts payable | ( | ) | ||||||
| Retention payable | ||||||||
| Accrued payroll | ( | ) | ||||||
| Accrued interest | ||||||||
| Accrued interest - related party | ||||||||
| Contract liabilities | ( | ) | ||||||
| Accrued liabilities - related parties | ( | ) | ||||||
| Accrued income tax | ||||||||
| Operating lease liabilities | ( | ) | ( | ) | ||||
| Other current liabilities | ||||||||
| Net cash provided by (used in) operating activities | ( | ) | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Cash received in acquisition of TRINITY | ||||||||
| Cash paid for acquisition of TRINITY | ( | ) | ||||||
| Collections on note receivable from affiliate | ||||||||
| Cash paid for fixed assets | ( | ) | ||||||
| Net cash provided by investing activities | ||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Proceeds from sale of common stock | ||||||||
| Future receivables obligation | ( | ) | ||||||
| Cash used for principal payments on notes payable | ( | ) | ||||||
| Net cash (used in) provided by financing activities | ( | ) | ||||||
| Net increase in cash and cash equivalents | ||||||||
| Cash and cash equivalents at beginning of period | ||||||||
| Cash and cash equivalents at end of period | $ | $ | ||||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||
| Interest paid | $ | $ | ||||||
| Income taxes paid | $ | $ | ||||||
| NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||||||
| Common stock issued upon consummation of acquisition | $ | $ | ||||||
| Note payable issued for acquisition | $ | $ | ||||||
| Common stock issued to directors for conversion of fees | $ | $ | ||||||
| Payment on debt made by related party directly to lender | $ | $ | ||||||
| Common stock issued for conversion of loan payable - related party | $ | $ | ||||||
| Common stock issued to officers for conversion of salaries | $ | $ | ||||||
See the accompanying notes to the unaudited condensed consolidated financial statements
4
KiNRG, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026 and 2025
Unaudited
NOTE 1: NATURE OF ACTIVITIES AND SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited interim consolidated financial statements include those of KiNRG, Inc. and all of its wholly-owned subsidiaries (collectively, the “Company”) and have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) pursuant to Regulation S-X of the Securities and Exchange Commission (the “SEC”) and with the instructions to Form 10-Q. Certain information and footnote disclosures normally included in audited consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. Accordingly, these interim financial statements should be read in conjunction with the Company’s audited financial statements and related notes as contained in its Annual Report on Form 10-K for the year ended December 31, 2025. In the opinion of management, the interim unaudited consolidated financial statements reflect all adjustments, including normal recurring adjustments, necessary for fair presentation of the interim periods presented. The results of the operations for the three and six months ended June 30, 2026 are not necessarily indicative of the results of operations to be expected for the full year.
Description of Business
Our Company’s core objective is to develop and build data centers while commercializing our HTR concept, which is designed to generate electricity without combusting fossil fuels and to support applications that value reliable power.
Effective April 1, 2026, the Company acquired TRINITY Group Construction, Inc.(“TRINITY”), a Virginia S corporation organized in 2002, as a general contractor primarily engaged in construction-related activities in the Washington, DC metropolitan area. TRINITY’s principal location is Herndon, Virginia. See note 2.
Liquidity
The Company had cash in the amount of $
Discontinued Operations
Pursuant to the guidance of Accounts Standards Codification (“ASC”) 205-20, Presentation of Financial Statements – Discontinued Operations, the accounts of our discontinued entity Arizona Green Power (“AGP”) have been included in “Net loss from discontinued operations” in our consolidated statements of operations until such time as the entity is sold. The Company completed the sale of AGP in the first quarter of 2025. See Note 3.
5
Fair Value of Financial Instruments
The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and has adopted paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 of the FASB Accounting Standards Codification establishes a framework for measuring fair value in generally accepted accounting principles (GAAP) and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, paragraph 820-10-35-37 of the FASB Accounting Standards Codification establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by paragraph 820-10-35-37 of the FASB Accounting Standards Codification are described below:
| Level 1 | Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. | |
| Level 2 | Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. | |
| Level 3 | Pricing inputs that are generally observable inputs and not corroborated by market data. |
Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable.
The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.
Our short-term financial instruments, including cash, other assets, and accounts payable and accrued expenses consist primarily of instruments without extended maturities, the fair value of which, based on management’s estimates, reasonably approximate their book value. The fair value of our notes and advances payable is based on management estimates and reasonably approximates their book value based on their current maturity.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include total estimated contract costs and percentage-of-completion revenue, variable consideration and claims, the TRINITY acquisition purchase price allocation, the reserve against the Ox Hill receivables, recoverability and useful lives of long-lived assets, the fair value of the Company’s stock, stock-based compensation, and the valuation allowance related to deferred tax assets. Actual results may differ from these estimates.
Business Combinations
In accordance with ASC 805 “Business Combinations”, the Company accounts for business combinations using the acquisition method of accounting. Under this method, the identifiable assets acquired, liabilities assumed, and any non-controlling interest in the acquired company are recorded at their estimated fair values as of the acquisition date.
6
The excess of the purchase price over the estimated fair value of net identifiable assets acquired is recorded as goodwill. Acquisition-related costs, such as legal, accounting, and advisory fees, are expensed as incurred and reported in operating expenses.
The operating results of acquired businesses are included in the consolidated financial statements from the actual date of acquisition.
Goodwill and Acquired Intangible Assets
Goodwill represents the excess of amounts paid over the fair value of net assets acquired from an acquisition. In order to determine the amount of goodwill resulting from an acquisition, the Company performs an assessment to determine the value of the acquired company’s tangible and identifiable intangible assets and liabilities. In its assessment, the Company determines whether identifiable intangible assets exist, which typically include backlog, customer relationships and intellectual property. Intangible assets are amortized over the period in which the contractual or economic benefits of the intangible assets are expected to be realized.
The Company tests goodwill for impairment annually for each reporting unit in the fourth quarter of the fiscal year and between annual tests, if events occur or circumstances change which suggest that goodwill should be evaluated. Such events or circumstances include significant changes in legal factors and business climate, recent losses at a reporting unit, and industry trends, among other factors. A reporting unit is defined as an operating segment or one level below an operating segment. The Company’s impairment tests are performed at the operating segment level as they represent the Company’s reporting units.
Goodwill is evaluated for impairment either by assessing qualitative factors or by performing a quantitative assessment. Qualitative factors, such as overall financial performance, industry or market considerations, or other relevant events, are assessed to determine if it is more likely than not that the fair value of the reporting units is less than their carrying amounts. During a quantitative impairment test, the Company estimates the fair value of the reporting unit using income and market approaches, and compares that amount to the carrying value of that reporting unit. In the event the fair value of the reporting unit is determined to be less than the carrying value, goodwill is impaired, and an impairment loss is recognized equal to the excess, limited to the total amount of goodwill allocated to the reporting unit. The impairment evaluation process includes, among other things, making assumptions about variable such as revenue growth rates, profitability, discount rates, and industry market multiples, which are subject to a high degree of judgment.
Property and Equipment
Property and equipment is stated at cost and depreciated using the straight-line method over the estimated useful life of the asset, which ranges from
Long-Lived Assets
The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable in accordance with Topic ASC 360, “Property, Plant and Equipment”. Recoverability is measured by comparison of the carrying amount to the future net cash flows which the assets are expected to generate. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the projected discounted future cash flows arising from the asset using a discount rate determined by management to be commensurate with the risk inherent to our current business model.
7
Net Income (Loss) per Common Share
The Company computes net income (loss) per share under Accounting Standards Codification subtopic 260-10, Earnings Per Share (“ASC 260-10”).
Basic net income (loss) per common share is computed by dividing net loss by the weighted average number of shares of common stock. Fully diluted net earnings per share is based on the weighted average number of shares of common stock and potentially dilutive securities assumed to be outstanding during the period using the treasury stock method. Potentially dilutive securities consist of options and warrants to purchase common stock. Basic and diluted net income (loss) per common share is computed based on the weighted average number of shares of common stock outstanding during the period. For the three and six months ended June 30, 2025,
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Numerator: | ||||||||||||||||
| Income (loss) from continuing operations | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
| Loss from discontinued operations | $ | $ | $ | $ | ( | ) | ||||||||||
| Denominator: | ||||||||||||||||
| Weighted average shares outstanding – basic | ||||||||||||||||
| Dilutive effect of stock issuable pursuant to the exercise of warrants | ||||||||||||||||
| Dilutive effect of stock issuable pursuant to the exercise of options | ||||||||||||||||
| Weighted average shares outstanding - diluted | ||||||||||||||||
| Income (loss) per share from continuing operations - basic | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
| Income (loss) per share from continuing operations - diluted | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
| Loss per share from discontinued operations - basic | $ | $ | $ | $ | ( | ) | ||||||||||
| Loss per share from discontinued operations - diluted | $ | $ | $ | $ | ( | ) | ||||||||||
Revenue Recognition
Revenue is recognized in accordance with Financial Accounting Standards Board “FASB” Accounting Standards Codification “ASC” 606. A five-step analysis must be met as outlined in Topic 606: (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations, and (v) recognize revenue when (or as) performance obligations are satisfied. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded.
The Company recognizes contract revenue over time, as performance obligations are satisfied, due to the continuous transfer of control to the customer. The Company recognizes revenue using the percentage-of-completion method, based primarily on contract cost incurred to date compared to total estimated contract cost. The percentage-of-completion method (an input method) is the most faithful depiction of the Company’s performance because it directly measures the value of the services transferred to the customer. Due to the nature of the work required to be performed on the Company’s performance obligations, estimating total revenue and cost at completion is complex, subject to many variables and requires significant judgment. Assumptions as to the occurrence of future events and the likelihood and amount of variable consideration, including the impact of change orders, claims, and the achievement of contractual performance criteria, and award or other incentive fees are made during the contract performance period. The Company estimates variable consideration at the most likely amount it expects to receive. The Company includes estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of anticipated performance and all information (historical, current and forecasted) that is reasonably available to management.
8
Disaggregation of Revenue
The Company recognizes revenue related to Construction Management by geographic location (United States - East and United States - West).
| Construction Management Revenue by Geographic Location | Three Months Ended June 30, 2026 | Six Months Ended June 30, 2026 | ||||||
| United States – East | $ | $ | ||||||
| United States – West | ||||||||
| Total | $ | $ | ||||||
Contract costs include all direct materials, labor, subcontractor costs, equipment costs, and those indirect costs related to contract performance. Other indirect, general, and administrative costs are charged to expense as incurred. Changes to total estimated contract cost are recognized in the period in which they are determined as assessed at the contract level. When such revisions lead to a conclusion that a loss will be recognized on a contract, the full amount of the estimated loss is recognized in the period such conclusion is reached, regardless of the percentage completion of the contract. Customer payments are generally due within
Remaining Unsatisfied Performance Obligation (“RUPO”)
RUPO represents a measure of the value of work to be performed on contracts awarded and in progress. RUPO includes both billed and unbilled amounts. Although RUPO reflects business that is considered to be firm, cancellations, deferrals or scope adjustments may occur. RUPO is adjusted to reflect any known project cancellations, revisions to project scope and cost, foreign currency exchange fluctuations and project deferrals, as appropriate. See Note 6.
Contract Receivables and Retainage
Contract receivables represent unconditional rights to consideration from project owners for billed performance obligations. Retainage receivables represents amounts which have not been billed to customers pursuant to retainage provisions in the construction contracts, which generally become payable upon contract completion and acceptance by the customer. Amounts are generally collected within one year of the completion of the project.
The balances of receivables related to contracts with customers as of June 30, 2026 and December 31, 2025 were as follows:
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Contract receivables | $ | $ | ||||||
| Retention receivables | $ | $ | ||||||
Contract assets include cost and estimated earnings in excess of billings on uncompleted contracts. The Company anticipates that substantially all incurred costs associated with contract assets as of June 30, 2026 will be billed and collected within one year. Contract assets may include amounts the Company seeks to collect from customers or others for (i) errors, (ii) changes in contract specifications or design, (iii) contract change orders in dispute, unapproved as to scope and price, or (iv) other customer-related causes of unanticipated additional contract costs (such as claims). The Company did not recognize any material amounts associated with claims and unapproved change orders during the six months ended June 30, 2026. Contract liabilities include billings in excess of costs and estimated earnings on uncompleted contracts. The Company anticipates that substantially all such amounts will be earned within one year.
The balances of contract assets and contract liabilities as of June 30, 2026 and December 31, 2025 were as follows:
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Contract assets | $ | $ | ||||||
| Contract liabilities | $ | $ | ||||||
9
Allowance for Credit Losses
The Company recognizes an allowance for credit losses for financial assets carried at amortized cost, to present the net amount expected to be collected as of the balance sheet date. Such allowance is based on the credit losses expected to arise over the contractual term of the financial asset (or group thereof), which includes consideration of prepayments, and is based on the Company’s expectations as of the balance sheet date. The Company evaluates certain criteria, including aging and historical write-offs, the current economic condition of specific customers, and expected future economic conditions to determine the appropriate allowance for credit losses on financial assets carried at amortized cost. Such financial assets are written off when the Company determines that they are uncollectible or based on regulatory requirements, whichever is earlier. Write-offs are recognized as a deduction from the allowance for credit losses. Expected recoveries of amounts previously written off, not to exceed the aggregate of the amount previously written off, are included in measuring an allowance for credit losses as of the balance sheet date. At the time of the TRINITY acquisition, the Company recorded a partial reserve in the amount of $
Concentrations of Credit Risk
Accounts receivable and all contract work in progress are from clients in various industries and locations. Most contracts require payments as the projects progress or, in certain cases, advance payments. We generally do not require collateral, but in most cases can place liens against the project assets or terminate the contract, if a material default occurs. We evaluate the counterparty credit risk as part of our bidding process, our project risk review process and in determining the appropriate level of reserves during project execution. We maintain reserves for potential credit losses and generally such losses have been minimal and within management’s estimates.
We have cash and marketable securities on deposit with major banks. Such deposits are placed with high-quality institutions and the amounts invested in any single institution are limited to the extent possible in order to minimize concentration of counterparty credit risk.
We monitor the credit quality of our counterparties and establish reserves for any significant credit risk losses.
Common Control Leasing Arrangements
The Company has elected not to evaluate whether lessor entities in common control leasing arrangements meeting the following criteria are variable interest entities: 1) substantially all activities between the Company and the lessor entities are related to the leasing activities between the two entities (including supporting leasing activities) and 2) the principal amount of any lessor entity obligations related to the leased assets explicitly guaranteed or collateralized by the Company did not exceed the value of the leased assets at the inception of the guaranty or collateralization. As further described in Note 5, the Company has elected not to consolidate the accounts of TG Legacy, LLC.
Equity Method Investments
The Company earns income through transactions that involve the Company acting jointly with one or more additional purchasers or lenders, pursuant to a partnership, joint venture or limited liability company (“LLC”) agreement. For these transactions, in which the Company’s ownership share meets the criteria for the equity method investments under ASC Topic 323, the Company applies the equity method to investments over which the Company has significant influence. See Note 7.
Stock Based Compensation
We recognize the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share-based compensation cost for stock options are estimated at the grant date based on each option’s fair-value as calculated by the Black-Scholes-Merton (“BSM”) option-pricing model. Share-based compensation arrangements may include stock options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant.
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 Accounting Standards Codification (“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.
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Management has evaluated and concluded that there were no material uncertain tax positions requiring recognition in the Company’s consolidated financial statements as of June 30, 2026 and December 31, 2025. The Company does not expect any significant changes in its unrecognized tax benefits within twelve months of the reporting date.
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 consolidated statements of operations.
Advertising Costs
All costs associated with advertising and promotion are expensed as incurred. Total recognized advertising and promotion expenses were $
Research and Development
In accordance with ASC 730, “Research and Development”, the Company expenses all research and development costs as incurred. The Company had incurred $
Cash and Cash Equivalents
For purposes of the statement of cash flows, cash and cash equivalents includes demand deposits, saving accounts and money market accounts. The Company considers all highly liquid debt instruments with maturities of three months or less when purchased to be cash and cash equivalents. The Company utilizes a cash management service to make nightly sweeps of the cash in TRINITY’s bank accounts into FDIC insured accounts with a maximum of $250,000 per account. As of June 30, 2026 and December 31, 2025, the Company had cash in excess of the $
Related Parties
The Company follows the ASC 850-10 Related Party for the identification of related parties and disclosure of related party transactions.
Pursuant to section 850-10-20 the related parties include a) affiliates of the Company; b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of section 825–10–15, to be accounted for by the equity method by the investing entity; c) trusts for the benefit of employees, such as pension and Income-sharing trusts that are managed by or under the trusteeship of management; d) principal owners of the Company; e) management of the Company; f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.
The consolidated financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: a) the nature of the relationship(s) involved; b) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d) amount due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.
Commitments and Contingencies
The Company follows the ASC 450-20 Contingencies to report accounting for contingencies. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.
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If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.
Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time, that these matters will have a material adverse effect on the Company’s financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows.
Leases
The Company accounts for leases in accordance with Financial Accounting Standards Board (“FASB”) ASC 842, Leases. The Company determines if an arrangement is a lease at inception. Operating and Finance lease right-of-use (“ROU”) assets and current and noncurrent lease liabilities are included on the face of the consolidated balance sheet.
ROU assets represent the right of use to an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. For finance leases, the Company recognizes the amortization of the ROU asset over the shorter of the lease term or useful life of the underlying asset. Interest accretion on the finance lease liabilities is recorded as interest expense. As most of the Company’s leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU asset also excludes lease incentives. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are accounted for as a single lease component. For lease agreements with terms less than
Recently Adopted Accounting Pronouncements
In July 2025, the FASB issued 2025-05, Financial Instruments—Credit Losses (Topic 326) Measurement of Credit Losses for Accounts Receivable and Contract Assets, which allows companies to elect a practical expedient to assume that the current conditions as of the balance sheet date will remain unchanged for the remaining life of the asset when developing a reasonable and supportable forecast as part of estimating expected credit losses on these assets. The Company adopted ASU 2025-05 effective January 1, 2026, on a prospective basis. The adoption of this accounting standard did not have a material impact on the Company’s financial condition, results of operations, or cash flows.
Recent Legislation
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as expensing of U.S. research expenditures and eligible capital expenditures, the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The requirements of the OBBBA were applied to the Company’s results for the six months ended June 30, 2026, and there was no impact to its income tax expense or effective income tax rate.
Accounting Standards Issued, Not Adopted
In November 2024, the FASB issued Accounting Standard Update No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”). This standard requires additional disclosures over certain expenses, including purchases of inventory, employee compensation, depreciation, intangible asset amortization, and other specific expense categories. This standard also requires disclosure of the total amount of selling expenses and the Company’s definition of selling expenses. This update is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is evaluating the impact this update will have on our annual disclosures; however, we do not anticipate a material impact to our financial condition, results of operations, or cash flows.
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NOTE 2: TRINITY ACQUISITION
On November 7, 2025, the Company and Millard L. “Flip” Wallen, owner of
The TRINITY Acquisition has been accounted for as a business combination under ASC 805, Business Combinations, using the acquisition method of accounting. Management evaluated the accounting treatment for this transaction under ASC 805 (Business Combinations) to determine whether it constituted a combination of entities under common control. Because the President does not hold a controlling financial interest (defined as a majority voting interest) in the purchasing Company, the pre-acquisition entities were not under the ultimate control of the same individual or corporate parent group. Accordingly, Management concluded that this transaction resulted in a substantive change in control of TRINITY. It has therefore been accounted for as a business combination utilizing the acquisition method under ASC 805-10, with the assets acquired and liabilities assumed recorded at their fair values as of the acquisition date rather than at historical cost carryover basis. TRINITY’s results of operations have been included in the Company’s condensed consolidated financial statements from April 1, 2026.
The purchase price consists of the following: (i) $
The Company evaluated its receivables-financing arrangements and “future receivables obligation” related to TRINITY’s projects and concluded that, as of the Acquisition Date, those arrangements represent financing obligations rather than additional purchase consideration.
| April 1, 2026 | $ | |||
| Payments made | ( | ) | ||
| Interest amortized | ||||
| June 30, 2026 | $ |
Preliminary Purchase Price
The purchase price consideration was measured at acquisition date fair value. The
The purchase consideration is summarized below:
| Cash | $ | |||
| Note payable | ||||
| Common stock ( | ||||
| Total estimated purchase price | $ |
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Preliminary Purchase Price Allocation
The following table sets forth the preliminary allocation of the purchase price. Contract assets and contract liabilities have been recognized and measured in accordance with ASC 606, Revenue from Contracts with Customers, consistent with ASU 2021-08, and other identifiable assets and liabilities have been measured at their estimated acquisition-date amounts. The allocation is preliminary and subject to change during the measurement period as the Company completes its valuations.
| Assets acquired: | ||||
| Cash and cash equivalents | $ | |||
| Contract receivables | ||||
| Retention receivables | ||||
| Contract assets (costs and estimated earnings in excess of billings on uncompleted contracts) | ||||
| Due from affiliate | ||||
| Reserve for amounts due from affiliate | ( | ) | ||
| Due from affiliate, net | ||||
| Prepaid expenses and other current assets | ||||
| Property and equipment, net | ||||
| Operating lease right-of-use assets | ||||
| Deferred tax asset | ||||
| Deposit | ||||
| Customer-related and contract-based intangible assets | ||||
| Total identifiable assets acquired | $ | |||
| Liabilities assumed: | ||||
| Accounts payable | $ | |||
| Retention payable | ||||
| Accrued salaries and other current liabilities | ||||
| Accrued liabilities – related parties | ||||
| Contract liabilities | ||||
| Obligation under future receivables financing, net | ||||
| Current portion of operating lease liabilities | ||||
| Current portion of long-term debt | ||||
| Operating lease liabilities, net of current portion | ||||
| Long-term debt, net of current portion | ||||
| Total liabilities assumed | $ | |||
| Net identifiable liabilities assumed | $ | |||
| Total purchase price | ||||
| Goodwill | $ | |||
The goodwill recognized in connection with the TRINITY Acquisition represents the expected future economic benefits from TRINITY’s assembled workforce, customer relationships, project backlog and anticipated synergies from combining TRINITY’s construction expertise with KiNRG’s HydroThermal Reactor technology. The goodwill is not expected to be deductible for income tax purposes.
The Company intends to combine TRINITY’s expertise in constructing data centers with KiNRG’s HydroThermal Reactor power generation technology to market a data center solution.
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Measurement Period
The purchase price allocation is preliminary. The Company is continuing to evaluate the fair values of certain assets and liabilities, including customer-related and contract-based intangible assets, working capital accounts, contract positions and income tax-related items. In accordance with ASC 805, the Company may record adjustments to the provisional amounts during the measurement period (which will not exceed one year from April 1, 2026), with a corresponding adjustment to goodwill.
Pro forma Information
For the three and six months ended June 30, 2026, TRINITY contributed revenue and net income from continuing operations of approximately $
The following unaudited pro forma information presents the Company’s consolidated results of operations as if the TRINITY Acquisition had occurred on January 1, 2025. The pro forma amounts are presented for informational purposes only and are not necessarily indicative of what the Company’s results of operations would have been had the Acquisition been completed on that date, nor are they indicative of future results.
| – | For the six months ended June 30, 2026, pro forma revenue would have been approximately $ |
| – | For the six months ended June 30, 2025, pro forma revenue would have been approximately $ |
The pro forma results reflect the following material, non-recurring adjustments directly attributable to the TRINITY Acquisition:
| – | Elimination of acquisition-related costs in the amount of $68,130, included in Selling, general and administrative expenses on the Company’s Statement of Operations, incurred during the six months ended June 30, 2026. |
| – | Amortization of acquired intangible assets of $0 due to no identifiable intangibles having been recorded, pending valuation. |
| – | The income tax effects of the pro forma adjustments based on applicable statutory tax rates. |
Pro forma Summary Tables
| FOR THE SIX MONTHS ENDED JUNE 30, 2026 | ||||||||||||||||||||
| KiNRG | TRINITY | Adjustments | Notes | Combined | ||||||||||||||||
| Revenues | $ | $ | $ | |||||||||||||||||
| Net income (loss) from continuing operations | $ | $ | ( | ) | (1) | $ | ||||||||||||||
| FOR THE SIX MONTHS ENDED JUNE 30, 2025 | ||||||||||||||||||||
| KiNRG | TRINITY | Adjustments | Notes | Combined | ||||||||||||||||
| Revenues | $ | $ | $ | |||||||||||||||||
| Net income (loss) from continuing operations | $ | ( | ) | $ | ( | ) | (2) | $ | ||||||||||||
| (1) |
| (2) |
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NOTE 3: DISCONTINUED OPERATIONS
From November 17, 2015 through December 31, 2023, through its subsidiary Arizona Green Power (“AGP”), the Company had entered into an agreement (the “Land Option Agreement”), and a series of amendments to said agreement, to purchase land in Arizona. The Land Option Agreement expired in March 2024. With the expiration of the Land Option Agreement, the Company made the strategic decision to divest itself from AGP.
On February 17, 2025, the Company completed the sale of its majority interest in AGP to Ron Pickett, its CEO, for the amount of $
| Other Liabilities | $ | |||
| Non-controlling interest | ( | |||
| Accounts payable | ||||
| Loss on sale of subsidiary | $ | ( | ) |
The following information presents the major classes of line items constituting the after-tax loss from discontinued operations in the consolidated statements of operations through February 17, 2025:
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | June 30, | June 30, | |||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Selling, general, and administrative expenses | ||||||||||||||||
| Loss on sale of subsidiary | ||||||||||||||||
| Loss from discontinued operations, net of tax | $ | $ | $ | $ | ||||||||||||
The following information presents the significant operating cash flow activities in the consolidated statements of cash flows relating to discontinued operations:
| Six Months Ended | ||||||||
| June 30, | June 30, | |||||||
| 2026 | 2025 | |||||||
| Operating activities of discontinued operations | ||||||||
| Net loss from discontinued operations | $ | $ | ( | ) | ||||
| Loss on sale of subsidiary | ||||||||
| Changes in current assets and liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
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NOTE 4: OX HILL NOTE RECEIVABLE AND FUTURE RECEIVABLES OBLIGATION
Millard L. Wallen, the Company’s President and TRINITY’s CEO, is a member of Ox Hill Realty LLC (“Ox Hill”), a land developer. Mossadaq Chughtai, a board member, is also a member of Ox Hill. Ox Hill has a project under development in Fairfax City, Virginia which requires additional financing. TRINITY believes that a significant opportunity exists in the development of this project, and has agreed to assist Ox Hill in obtaining temporary financing. Beginning in December 2025, TRINITY and Ox Hill jointly entered into a series of receivables financing agreements (the “Future Receivables Obligations”) in order to provide Ox Hill with temporary financing. In December 2025, TRINITY and Ox Hill entered into five Future Receivables Obligations with financing companies under which Ox Hill received the aggregate amount of $
TRINITY has also entered into a Note Receivable agreement with Ox Hill (the “2026 Ox Hill Note Receivable”). The Ox Hill Note Receivable is intended to mirror the structure of the Future Receivables Obligations, and represent the obligation of Ox Hill to repay the amounts loaned to Ox Hill under the Future Receivables Obligations. Pursuant to the Ox Hill Note Receivable, all costs incurred by TRINITY under the Future Receivables Obligations, including interest expense, will be repaid by Ox Hill. TRINITY has a security agreement with
The amounts loaned, repaid, and interest expense incurred under the Future Receivables Financing through June 30, 2026 are summarized in the table below.
| March 31, 2026 | $ | |||
| Interest amortized | ||||
| Amount due | ||||
| Paid to lender by TRINITY | ( | ) | ||
| Paid to lender by Ox Hill | ( | ) | ||
| Balance due to lender | $ |
In 2025, TRINITY also made a direct loan to Ox Hill in the amount of $
The Company did not accrue interest income on the Ox Hill Note Receivable during the three and six months ended June 30, 2026. The interest portion of the Ox Hill $
| Balance due | $ | |||
| Amount reserved | ( | ) | ||
| Amount due net of reserve | ||||
| Repaid by Ox Hill during the period | ( | ) | ||
| Balance, June 30, 2026 | $ |
The Company has determined the 2026 Ox Hill Note Receivable may be an impermissible loan to the executive officer and Director of the Company under Section 402 of the Sarbanes- Oxley Act of 2002.
17
NOTE 5: COMMON CONTROL LEASING ARRANGEMENTS
The Company has elected an accounting alternative available to them and accordingly is not required to evaluate whether lessor entities in common control leasing arrangements meeting the following criteria are variable interest entities: 1) substantially all activities between the Company and the lessor entities are related to leasing activities between the two entities (including supporting leasing activities) and 2) the principal amount of any lessor entity obligations related to the leased assets explicitly guaranteed or collateralized by the Company did not exceed the value of the leased assets at the inception of the guaranty or collateralization.
The Company leases its corporate headquarters from a lessor entity, TG Legacy, LLC, which is a related party through common ownership. Because the Company does not have alternative facilities readily available, the Company has an economic incentive to provide financial support to the lessor entity should the lessor entity default on its obligations. The amount and key terms of the obligations recorded in the lessor entity’s financial statements that could require the Company to provide financial support to the lessor entity consist of a note payable to a financial institution with an outstanding balance of $
NOTE 6: CONTRACT BILLING STATUS
The status of contract billings on uncompleted contracts was as follows at June 30, 2026. These amounts are cumulative from contract inception on contracts in process at the balance sheet date, including periods prior to our April 1, 2026 acquisition of TRINITY. The Company applies ASU 2021-08 in accounting for these contracts.
| Costs incurred | Gross profit | Earned revenue | Margin | |||||||||||||
| Through March 31, 2026 (pre-acquisition) | $ | $ | $ | % | ||||||||||||
| Three months ended June 30, 2026 | % | |||||||||||||||
| Inception to date | $ | $ | $ | % | ||||||||||||
The net amounts are included in the accompanying balance sheets under the following captions:
| Contract assets | Contract liabilities | Net | ||||||||||
| Recognized at acquisition, April 1, 2026 | $ | $ | ( | ) | $ | ( | ) | |||||
| Change, April 1 – June 30, 2026 | ||||||||||||
| Balance, June 30, 2026 | $ | $ | ( | ) | $ | ( | ) | |||||
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We estimate that our RUPO will be satisfied over the following periods:
| June 30, 2026 | ||||
| Within 1 year | $ | |||
| 1 to 2 years | ||||
| Thereafter | ||||
| Total RUPO | $ | |||
NOTE 7: INVESTMENT IN LIMITED LIABILITY COMPANY
The Company owns a
NOTE 8: PROPERTY AND EQUIPMENT
Property and equipment at June 30, 2026 and December 31, 2025 consisted of the following:
June 30, 2026 | December 31, 2025 | |||||||
| Vehicles | $ | $ | ||||||
| Computer equipment | ||||||||
| Furniture and fixtures | ||||||||
| Leasehold improvements | ||||||||
| Less: accumulated depreciation | ( | ) | ||||||
| Net | $ | $ | ||||||
Depreciation expense for the three and six months ended June 30, 2026 totaled $
19
NOTE 9: RIGHT-OF-USE ASSETS AND LEASE LIABILITIES – OPERATING LEASES
The Company has for offices and office equipment. The Company uses weighted-average interest rate of
The Company’s lease expense was entirely comprised of operating leases. Lease expense for the three months ended June 30, 2026 and 2025 amounted to $
The Company’s ROU asset amortization for the three months ended June 30, 2026 and 2025 was $
Right of use assets – operating leases are summarized below:
| June 30, 2026 | December 31, 2025 | |||||||
| Offices | $ | $ | ||||||
| Office equipment | ||||||||
| Right of use assets, net | $ | $ | ||||||
Operating lease liabilities are summarized below:
| June 30, 2026 | December 31, 2025 | |||||||
| Offices | $ | $ | ||||||
| Office equipment | ||||||||
| Lease liability | ||||||||
| Less: current portion | ( | ) | ( | ) | ||||
| Lease liability, non-current | $ | $ | ||||||
Maturity analysis under these lease agreements are as follows:
| For the year ended December 31: | ||||
| 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 and after | ||||
| Less: Present value discount | ( | ) | ||
| Lease liability | $ | |||
20
NOTE 10: ACCRUED LIABILITIES - RELATED PARTIES
Accrued liabilities and expenses as of June 30, 2026 and December 31, 2025 consist of the following:
| June 30, 2026 | December 31, 2025 | |||||||
| Board of Director fees | $ | $ | ||||||
| Tax reimbursement | ||||||||
| Total | $ | $ | ||||||
During the three months ended June 30, 2026 and 2025, the Company accrued fees due to the Board of Directors in the amount of $
On March 31, 2026, the Company issued
On April 1, 2026, the Company recorded a liability in the amount of $
Below is a summary of the accrued liabilities - related party activity during the three months ended June 30, 2026:
| Balance, April 1, 2026 | $ | |||
| Trinity related party liabilities acquired – tax reimbursement | ||||
| KiNRG accrued board of directors fees | ||||
| Trinity payments for related party tax reimbursement | ( | ) | ||
| Balance, June 30, 2026 | $ |
NOTE 11: ACCRUED PAYROLL
Accrued payroll as of June 30, 2026 and December 31, 2025 consists of the following:
| June 30, 2026 | December 31, 2025 | |||||||
| Accrued payroll | $ | $ | ||||||
| Accrued payroll taxes | ||||||||
| Total | $ | $ | ||||||
The Company disputes the amount of $
On June 30, 2025, the Company issued
NOTE 12: LINE OF CREDIT
The Company had a bank line of credit agreement with availability up to $
21
NOTE 13: NOTES PAYABLE – RELATED PARTY
On April 1, 2026, in connection with the TRINITY Acquisition, the Company entered into a promissory note with Millard L. Wallen, a related party, in the principal amount of $
On July 27, 2026, the Company reached an agreement with Millard L. Wallen, its President and holder of the $
NOTE 14: NOTES PAYABLE
Notes payable as of June 30, 2026 and December 31, 2025 consist of the following:
| June 30, 2026 | December 31, 2025 | |||||||
| Note payable issued April 7, 2014 (in default) | $ | | $ | |||||
| Vehicle Note 1 | ||||||||
| Vehicle Note 2 | ||||||||
| Total | | |||||||
| Less current portion | ( | ) | ( | ) | ||||
| Long term portion | $ | $ | ||||||
On April 7, 2014, Arizona Green Power, LLC, a majority owned subsidiary of the Company, issued a note payable for $
During the three and six months ended June 30, 2026, the Company accrued interest in the amount of $
In July 2025, the Company executed a non-interest bearing note payable for a vehicle (Vehicle Note 1). with monthly principal payments of $
In March 2026, the Company executed a note payable for a vehicle (Vehicle Note 2) which bears interest at
As of June 30 2026, future maturities of long-term debt are as follows:
| Year ending December 31, 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| 2031 | ||||
| Total | $ |
22
NOTE 15: COMMITMENTS AND CONTINGENCIES
Lease Obligations
KiNRG leases its office. Rental expenses charged to operations for the three months ended June 30, 2026 and 2025 were $
TRINITY leases
Employment and Consulting Agreements
The Company has employment agreements with certain of its key employees which include non-disclosure and confidentiality provisions for protection of the Company’s proprietary information.
The Company has consulting agreements with outside contractors to provide marketing and financial advisory services. The Agreements are generally for a term of
On December 29, 2010, pursuant to the Merger, Solar Wind Energy, Inc. became a wholly-owned subsidiary of the Company. Solar Wind has employment agreements with its executive officers. Each of the employment agreements was entered into on September 22, 2010 and amended on November 22, 2010. On March 30, 2023, the Board of Directors approved the contracts of its President and of its Chief Operating Officer through December 31, 2023.
| Name | Position(s) | Term | Salary | Bonus | Severance | |||||||
| Ronald W. Pickett | Chief Executive Officer | $ | ||||||||||
| Stephen Sadle | Chief Operating Officer | $ | ||||||||||
| Robert Crabb | Secretary | $ | ||||||||||
Terms to modify the one-year contract extension by mutual consent have been agreed to by the Officers and Directors. Under the modification and extension, the
Litigation
In March 2026, the Company received notification of a lawsuit by the holder of a note payable by AGP, demanding payment of principal in the amount of $
On July 22, 2026, the Company settled the note payable in the amount of $
From time to time, we may become involved in various lawsuits and legal proceedings, which arise, in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are not aware of any such legal proceedings that we believe will have, individually or in the aggregate, a material adverse effect on our business, financial condition or operating results.
23
NOTE 16: STOCKHOLDERS’ EQUITY (DEFICIT)
Preferred stock
The Company has authorized
Series A Convertible Preferred Stock:
On June 2, 2015, the Company designated
There were no Series A Convertible Preferred Stock transactions during the six months ended June 30, 2026 and 2025. At June 30, 2026 and December 31, 2025, there are shares of Series A Convertible Preferred Stock outstanding.
Series AA Convertible Preferred Stock:
On December 17, 2020, the Company designated
There were no Series AA Convertible Preferred Stock transactions during the six months ended June 30, 2026 and 2025. At June 30, 2026 and December 31, 2025, there were shares of Series AA Convertible Preferred Stock outstanding.
Series AAA Convertible Preferred Stock:
On March 31, 2021, the Company designated
There were no Series AAA Convertible Preferred Stock transactions during the six months ended June 30, 2026 and 2025. At June 30, 2026 and December 31, 2025, there were shares of Series AAA Convertible Preferred Stock outstanding.
Series AAAA Convertible Preferred Stock:
On September 30, 2021, the Company designated
There were no Series AAAA Convertible Preferred Stock transactions during the six months ended June 30, 2026 and 2025. At June 30, 2026 and December 31, 2025, there were shares of Series AAAA Convertible Preferred Stock outstanding.
Common Stock
The Company has authorized
24
Common stock transactions during the six months ended June 30, 2026
On March 29, 2026, the Company sold
On March 31, 2026, the Company issued
On March 31, 2026, the Company issued
On March 31, 2026, the Company issued
On March 31, 2026, the Company issued
On May 8, 2026, the Company sold
Common stock transactions during the six months ended June 30, 2025
The Company received $
The Company issued
The Company issued
The Company issued
Common Stock to be Issued
For the six months ended June 30, 2026
None.
For the six months ended June 30, 2025
The Company has committed to issue
25
The Company has committed to issue
The Company has committed to issue
The Company has committed to issue
Options
Option activity for the six months ended June 30, 2026
On March 31, 2026, the Company issued
On March 31, 2026, the Company issued
The options were valued utilizing the Black-Scholes valuation model with the following assumptions:
| Volatility | % | |
| Dividends | % | |
| Risk-free interest rate | % | |
| Term (years) |
Option activity for the six months ended June 30, 2025
None.
The following table summarizes the options outstanding and the related prices for the options to purchase shares of the Company’s common stock issued by the Company as of June 30, 2026:
| Weighted | Weighted | |||||||||||||||||||||
| Weighted | average | average | ||||||||||||||||||||
| average | exercise | exercise | ||||||||||||||||||||
| Range of | Number of | remaining | price of | Number of | price of | |||||||||||||||||
| exercise | options | contractual | outstanding | options | exercisable | |||||||||||||||||
| prices | outstanding | life (years) | options | exercisable | options | |||||||||||||||||
| $ | $ | $ | ||||||||||||||||||||
| $ | ||||||||||||||||||||||
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Transactions involving options are summarized as follows:
| Number of Shares | Weighted Average Exercise Price | |||||||
| Options outstanding at December 31, 2025 | $ | |||||||
| Issued | ||||||||
| Exercised | ||||||||
| Cancelled/Expired | ||||||||
| Options outstanding at June 30, 2026 | $ | |||||||
During the three and six months ended June 30, 2026, the Company charged the amount of $
Warrants
Warrant activity for the six months ended June 30, 2026
None.
Warrant activity for the six months ended June 30, 2025
During the six months ended June 30, 2025, in connection with the $
The following table summarizes the warrants outstanding and the related prices for the warrants to purchase shares of the Company’s common stock issued by the Company as of June 30, 2026:
| Weighted | Weighted | |||||||||||||||||||||
| Weighted | average | average | ||||||||||||||||||||
| average | exercise | exercise | ||||||||||||||||||||
| Range of | Number of | remaining | price of | Number of | price of | |||||||||||||||||
| exercise | warrants | contractual | outstanding | warrants | exercisable | |||||||||||||||||
| prices | outstanding | life (years) | warrants | exercisable | warrants | |||||||||||||||||
| $ | $ | $ | ||||||||||||||||||||
| $ | ||||||||||||||||||||||
Transactions involving warrants are summarized as follows:
| Number of Shares | Weighted Average Exercise Price | |||||||
| Warrants outstanding at December 31, 2025 | $ | |||||||
| Issued | ||||||||
| Exercised | ||||||||
| Cancelled/Expired | ||||||||
| Warrants outstanding at June 30, 2026 | $ | |||||||
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Incentive Stock Plan
On February 18, 2021, the Company’s board of directors approved an incentive stock plan (the “2021 Incentive Stock Plan”) in order to provide additional incentive to employees, directors, and consultants. The 2021 Incentive Stock Plan permits the grant of Incentive Stock Options, Non-statutory Stock Options, Restricted Stock, Restricted Stock Units, Stock Appreciation Rights, Performance Units and Performance Shares. The maximum number of aggregate shares available for issuance under the 2021 Incentive Stock Plan is
NOTE 17: SEGMENT INFORMATION
The Company operates in
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||
| June 30, 2026 | June 30, 2026 | |||||||||||||||||||||||
| Green Energy | Construction Management | Total | Green Energy | Construction Management | Total | |||||||||||||||||||
| Revenue | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Contract costs | ||||||||||||||||||||||||
| Gross profit | ||||||||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||
| Selling, general, and administrative expenses | ||||||||||||||||||||||||
| Total operating expenses | ||||||||||||||||||||||||
| Operating profit (loss) | ( | ) | ( | ) | ||||||||||||||||||||
| Other income (expenses): | ||||||||||||||||||||||||
| Interest income | ||||||||||||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Total other expenses | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Income (loss) before provision for income taxes | $ | ( | ) | $ | $ | $ | ( | ) | $ | $ | ||||||||||||||
| Provision for income taxes | ||||||||||||||||||||||||
| Net income (loss) from continuing operations | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Expenditures for segment assets | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
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| Three Months Ended | Six Months Ended | |||||||||||||||||||||||
| June 30, 2025 | June 30, 2025 | |||||||||||||||||||||||
| Green Energy | Construction Management | Total | Green Energy | Construction Management | Total | |||||||||||||||||||
| Revenue | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Contract costs | ||||||||||||||||||||||||
| Gross profit | ||||||||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||
| Selling, general, and administrative expenses | ||||||||||||||||||||||||
| Total operating expenses | ||||||||||||||||||||||||
| Operating profit (loss) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
| Other income (expenses): | ||||||||||||||||||||||||
| Gain on settlement of accounts payable | ||||||||||||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
| Total other expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
| Income (loss) before provision for income taxes | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | ||||||||||
| Income tax benefit | ||||||||||||||||||||||||
| Net income (loss) from continuing operations | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | ||||||||||
| Expenditures for segment assets | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| June 30, 2026 | December 31, 2025 | |||||||||||||||||||||||
| Green Energy | Construction Management | Total | Green Energy | Construction Management | Total | |||||||||||||||||||
| Segment assets | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
As of December 31, 2025, assets allocated to the construction management segment were $0. This segment was established following the acquisition of Trinity on April 1, 2026. Accordingly, the prior-period consolidated balance sheet reflects no asset allocations for this segment, as it was not part of the Company’s operations or reporting structure during the year ended December 31, 2025.
NOTE 18: INCOME TAXES
The amounts recognized for the deferred tax assets and deferred tax liabilities acquired in the TRINITY Acquisition are provisional. TRINITY was taxed as an S corporation prior to the Acquisition, and its S corporation election terminated on April 1, 2026 in connection with the Acquisition. As a result, the Company is required to recognize deferred taxes for the temporary differences existing between the financial reporting and income tax bases of TRINITY’s assets and liabilities as of that date.
At the date of these financial statements, the Company had not completed its determination of TRINITY’s income tax bases, including TRINITY’s methods of accounting for long-term construction contracts for income tax purposes and any related adjustments arising from the change in tax status. Accordingly, the net deferred tax asset of $
The Company expects to complete its analysis during the measurement period, which will not exceed one year from the acquisition date. Adjustments to these provisional amounts, if any, will be recognized retrospectively with a corresponding adjustment to goodwill in the period in which the adjustments are determined, in accordance with ASC 805-10-25-13 through 25-19. The Company expects that any such adjustment could be material, and that it would not affect the Company’s results of operations for the periods presented. Measurement period adjustments, if any, will be disclosed in the period in which they are recognized.
The provisional amounts described above relate solely to the deferred taxes acquired in the Acquisition. The release of the Company’s valuation allowance described above is not provisional and is not subject to the measurement period.
Furthermore, the Company will evaluate net operating losses for tax purposes and determine whether such NOLs are subject to limitation under the Internal Revenue Code.
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The Company’s provision for income taxes for the three and six months ended June 30, 2026 consists of the following:
| Three Months Ended June 30, 2026 | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 | |||||||||||||
| Current taxes: | ||||||||||||||||
| Federal | $ | $ | $ | $ | ||||||||||||
| State | ||||||||||||||||
| Total current taxes | ||||||||||||||||
| Deferred taxes: | ||||||||||||||||
| Federal | ) | ( | ) | |||||||||||||
| State | ) | ( | ) | |||||||||||||
| Total deferred taxes | ) | ( | ) | |||||||||||||
| Total income tax provision (benefit) | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||
Current and Deferred Tax Provision
Deferred tax assets and liabilities as of June 30, 2026 and December 31, 2025 consist of the following:
| June 30, 2026 | December 31, 2025 | |||||||
| Deferred tax assets: | ||||||||
| Net operating loss carryforwards | $ | $ | ||||||
| Employee compensation and benefits | ||||||||
| Operating lease liabilities | ||||||||
| Stock-based compensation | ||||||||
| Gross deferred tax assets | ||||||||
| Valuation allowance | ( | ) | ||||||
| Total deferred tax assets, net of valuation allowance | ||||||||
| Deferred tax liabilities: | ||||||||
| Book basis of operation lease ROU assets in excess of tax basis | ( | ) | ( | ) | ||||
| Book basis of property and equipment in excess of tax basis | ( | ) | ||||||
| Other | ( | ) | ||||||
| Total deferred tax liabilities | ( | ) | ( | ) | ||||
| Net deferred tax asset | $ | $ | ||||||
Effective Tax Rate Reconciliation
The Company’s effective tax rate for the six months ended June 30, 2026 and 2025 differs from the U.S. federal statutory rate as follows:
| Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 | |||||||
| U.S. federal statutory tax rate | % | % | ||||||
| State income taxes, net of federal benefit | % | % | ||||||
| Transaction costs | % | % | ||||||
| Permanent differences | % | % | ||||||
| Utilization of reserved NOLs | - | % | % | |||||
| Change in valuation allowance | - | % | - | % | ||||
| Other | % | % | ||||||
| Effective tax rate | - | % | % | |||||
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| Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 | |||||||
| Pre-tax book income (loss) | $ | $ | ( | ) | ||||
| Tax provision (benefit) | ( | ) | ||||||
| Effective rate | - | % | % | |||||
Valuation Allowance
The Company evaluates the realizability of its deferred tax assets each reporting period, weighing all available positive and negative evidence in accordance with ASC 740-10-30. Historically, the Company maintained a full valuation allowance against its net deferred tax assets due to a cumulative history of losses, which represents significant negative evidence that is difficult to overcome absent objectively verifiable positive evidence of future taxable income.
During the six months ended June 30, 2026, the Company reassessed the realizability of its deferred tax assets in light of (i) a return to sustained profitability, (ii) the acquisition of TRINITY Group Construction, Inc. on April 1, 2026, and (iii) management’s projections of future taxable income, and concluded that it is more likely than not that $
Net Operating Loss Carryforwards and Section 382
As of June 30, 2026, the Company had federal and state net operating loss carryforwards of approximately $
The Company’s ability to utilize its net operating loss and other tax attribute carryforwards may be subject to annual limitations under Section 382 of the Internal Revenue Code (and comparable state provisions) in the event of one or more “ownership changes,” as defined therein. Management has performed an ownership change analysis considering the Company’s history of equity issuances and the stock-for-stock acquisition of TRINITY Group Construction Inc., and is in the process of evaluating whether an ownership change has occurred that would result in an annual limitation on the Company’s ability to utilize its carryforwards.
Business Combination — Acquired Deferred Taxes
In connection with the acquisition of TRINITY Group Construction, Inc. on April 1, 2026 (see Note 2), the Company recorded deferred tax assets of $
Uncertain Tax Positions
The Company had material unrecognized tax benefits as of June 30, 2026 and December 31, 2025. The Company does not anticipate any significant changes to its unrecognized tax benefits within the next twelve months. The Company’s policy is to recognize interest and penalties related to uncertain tax positions, if any, as interest expense and general and administrative expense, respectively, in the consolidated statements of operations.
Interim Period Methodology
In accordance with ASC 740-270, the Company’s income tax provision for interim periods is generally determined by applying an estimated annual effective tax rate to year-to-date pre-tax income, excluding the effect of significant unusual or infrequently occurring items, which are recognized discretely in the interim period in which they occur. The valuation allowance release described above was treated as a discrete item recognized in the second quarter of 2026 rather than being reflected through the estimated annual effective tax rate for the remainder of the year.
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NOTE 19: MAJOR CUSTOMERS
During the three and six months ended June 30, 2026, the Company had one major customer, NSCALE WARD COUNTY LLC, comprising
NOTE 20: RELATED PARTY TRANSACTIONS
For the six months ended June 30, 2026
TRINITY has a related party receivable from Ox Hill Realty in the aggregate amount of $
The Company accrued salaries due to officers in the amount of $
The Company accrued fees due to the Board of Directors in the amount of $
On March 31, 2026, the Company issued
On March 31, 2026, the Company issued
TRINITY leases office space from an entity controlled by the Company’s President at a monthly rate of $
TRINITY recorded a liability in the amount of $
For the six months ended June 30, 2025
On February 17, 2025, the Company completed the sale of its majority interest in AGP to Ron Pickett, its CEO, for the amount of $
The Company accrued salaries due to officers in the amount of $
32
On June 30, 2025, the Company issued
The Company accrued fees due to the Board of Directors in the amount of $
On June 30, 2025, the Company issued
The Company issued
NOTE 21: RETIREMENT PLAN
The Company sponsors a qualified 401(k) retirement plan covering all employees, who upon meeting eligibility requirements may elect to make tax deferred contributions to the plan. During the three and six months ended June 30, 2026, the Company made employer matching contributions to the plan of $
NOTE 22: SUBSEQUENT EVENTS
On July 22, 2026, the Company settled the note payable in the amount of $
On July 27, 2026, the Company reached an agreement with Millard L. Wallen, its President and holder of the $
On August 7, 2026, the Company filed Form S-1 with the Securities Exchange Commission for the potential sale and registration of approximately
On August 14, 2026, the Company made a payment in the amount of $
Subsequent events were evaluated through the date of this filing.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis summarizes the significant factors affecting our operating results, financial condition, liquidity and cash flows as of and for the periods presented below. The following discussion and analysis should be read in conjunction with our financial statements and related notes included elsewhere in this quarterly report on Form 10-Q. This quarterly report on Form 10-Q includes forward-looking statements. We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other Securities and Exchange Commission filings.
The discussion and analysis of our financial condition and results of operations are based on our financial statements, which we have prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenues and expenses during the reporting periods. On an ongoing basis, we evaluate estimates and judgments, including those described in greater detail below. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Overview
Historically, KiNRG has been an early-stage company developing plans to design, permit, finance and construct our HydroThermal Reactor (“HTR”) projects. Following the acquisition of TRINITY on April 1, 2026, the Company’s primary operation consists of commercial construction and infrastructure services conducted through TRINITY.
On April 1, 2026, the Company acquired 100% of the shares of TRINITY Group Construction, Inc. (“TRINITY”) from Millard L. Wallen, CEO and sole owner of TRINITY. Mr. Wallen is also President of KINRG, Inc. and has served in that capacity for over three years. TRINITY, among other construction projects, has previously constructed or construction managed over 2.5 million square feet of data centers and is currently constructing or construction managing over 500,000 square feet of data centers in three states and Egypt.
TRINITY has been hosting the Company in its headquarters for over four years. The Company and TRINITY have been sharing their skills and expertise to modify and adapt the Company’s large HTR to a much smaller HTR specifically designed to service markets similar to the data center market that must rely on a constant base load of energy supply 24-7-365. The large HTR was designed to produce that maximum amount of energy year around without regard to any minimum baseload. The Company and TRINITY together redesigned the large HTR to a smaller HTR that the Company and TRINITY both believe will be well suited for the data center market. There can be no assurance that the data center market will adopt this solution.
The acquisition by the Company of TRINITY is the result of four years of collaboration between the companies. The combined business plan is to deliver data centers to data center developers as well as the energy to service the tenants of the data centers, independent of the grid. TRINITY will construct both the data centers and the HTRs in-house.
TRINITY plans to continue to construct data centers for the foreseeable future while the combined companies pursue joint data center/HTR projects in furtherance of the overall KiNRG’s long term business plan.
Plan of Operation
Our Company’s core objective is to develop and build data centers while commercializing our HTR concept, which is designed to generate electricity without combusting fossil fuels and to support applications that value reliable power.
34
RESULTS OF OPERATIONS
Comparisons between the current and prior periods are not meaningful due to the TRINITY Acquisition.
THREE MONTHS ENDED JUNE 30, 2026
Revenue
Revenue for the three months ended June 30, 2026 was $369,170,248.
Contract Costs
Contract costs for the three months ended June 30, 2026 were $347,054,830.
Selling, General, and Administrative Expenses
Selling, general, and administrative expenses (“SG&A”) were $4,978,788 for the three months ended June 30, 2026, and consisted primarily of payroll and related costs of $3,730,919, professional fees of $410,959, travel and auto costs of $235,127; insurance of $121,437; consulting fees of $145,753, rent and facilities costs of $87,449, and director compensation of $25,000.
Interest Income
Interest income was $268,216 during the three months ended June 30, 2026.
Interest Expense
Interest expense was $3,637,941 during the three months ended June 30, 2026.
Income Tax Benefit
The company realized a tax benefit in the amount of $2,504,851 during the three months ended June 30, 2026.
Net Income (loss) from Continuing Operations
Net income from continuing operations was $16,271,756 for the three months ended June 30, 2026.
Net Income (loss) from Discontinued Operations
There was no income (loss) from discontinued operations during the period.
Net Income (loss)
For the reasons above, the Company had net income of $16,271,756 for the three months ended June 30, 2026.
SIX MONTHS ENDED JUNE 30, 2026
Revenue
Revenue for the six months ended June 30, 2026 was $369,170,248.
35
Contract Costs
Contract costs for the six months ended June 30, 2026 were $347,054,830.
Selling, General, and Administrative Expenses
Selling, general, and administrative expenses (“SG&A”) were $5,311,176 for the six months ended June 30, 2026, and consisted primarily of payroll and related costs of $3,852,963; professional fees of $417,959, travel and auto costs of $243,372; insurance of $210,177; consulting expenses of $162,759, rent and facilities costs of $91,199; and director compensation of $50,000.
Interest Income
Interest income was $268,216 during the six months ended June 30, 2026.
Interest Expense
Interest expense was $3,640,941 during the six months ended June 30, 2026.
Income Tax Benefit
The company realized a tax benefit in the amount of $2,504,851 during the six months ended June 30, 2026.
Net Income (loss) from Continuing Operations
Net income (loss) from continuing operations was $15,936,368 for the six months ended June 30, 2026.
Net Income (loss) from Discontinued Operations
There was no income (loss) from discontinued operations during the period.
Net Income (loss)
For the reasons above, the Company had net income of $15,936,368 for the six months ended June 30, 2026.
Cash Flows from Operating Activities
Cash flow provided by operating activities was $107,682,405 during the six months ended June 30, 2026.
Cash flows from operating activities are generated by our construction management activities and are affected by our changes in working capital associated with such activities. Working capital levels vary from period to period and are primarily affected by the life cycle and stage of completion of our projects. A typical project will have higher cash balances during the initial phases which then diminish as the project nears completion. As a result, our cash position is reduced as customer advances are utilized, unless they are replaced by advances on other projects.
36
Cash Flows from Investing Activities
For the six months ended June 30, 2026, cash flows provided by investing activities was $17,680,560. Cash flows from investing activities consisted primarily of $13,439,400 cash received in acquisition of TRINITY and collections on note receivable from affiliate of $5,267,276, reduced by $1,000,000 for the cash portion of the cost of the TRINITY acquisition. We also paid cash in the amount of $26,116 for the purchase of fixed assets.
Cash Flows (Used in) Provided by Financing Activities
For the six months ended June 30, 2026, cash used in financing activities was $9,606,290, consisting of payments made under future receivables obligation in the amount of $12,462,502 and principal payments on notes payable in the amount of $7,538, partially offset by proceeds from the sale of common stock in the amount $2,863,750.
Backlog
Backlog consists of projects for which the Company has an executed contract and reflects the expected revenue from the contract, generally the contract amount less earned revenue. There is no guarantee that the revenue projected in our backlog will be realized or profitable or will not be subject to delay or suspension. Project cancellations and scope adjustments or deferrals may occur with respect to contracts reflected in our backlog and could reduce the value of our backlog and the revenue and profits that we actually earn.
The following backlog represents unearned revenue under existing contracts, as of June 30, 2026:
| Backlog, April 1, 2026 | $ | 1,137,419,241 | ||
| New contracts and contract adjustments | 14,512,032 | |||
| Less: contract revenue earned, 3 months ended June 30, 2026 | (369,170,248 | ) | ||
| Backlog, June 30, 2026 | $ | 782,761,025 |
Liquidity and Capital Resources
In April 2026, KiNRG completed the acquisition of TRINITY, an operating business with existing personnel, customer relationships and construction-related operations. The Company believes that TRINITY’s cash flow is sufficient to fund working capital needs for the next twelve months.
Our intention is to raise additional funds in order to fund the development of our HTR system and related technologies. On August 7, 2026, the Company filed Form S-1 with the Securities Exchange Commission for the potential sale and registration of approximately 3,750,000 shares of the Company’s common stock.
37
As of August 11, 2026, the Company had cash on hand of $45,431,409. Management believes this amount is sufficient to meet our operating and working capital needs for the next 12 months. This analysis does not include the operational needs of KiNRG’s HydroThermal Reactors. As of June 30, 2026, TRINITY had a backlog of $782,761,025.
On August 14, 2026, the Company made a payment in the amount of $2,000,000 to Millard L. Wallen, its President, under his $3,000,000 related party note payable. See Note 22.
The Company incurred additional obligations in connection with the Acquisition, including a $3.0 million Promissory Note, that matures on the earlier of the closing of the Company’s public offering or December 31, 2026, as extended on July 27, 2026 (See Note 22). KiNRG expects that a portion of the proceeds from the Company’s public offering, if completed, may be used for working capital purposes, repayment of acquisition-related obligations, integration costs and general corporate purposes. In addition, the Company recorded additional liabilities of TRINITY upon consolidation (balances as of June 30, 2026):
| - | Accrued liability to a related party in the amount of $6,314,423 representing a payment to Mr. Wallen, the Company’s President and seller of TRINITY, for an income tax liability incurred prior to the Acquisition when TRINITY was an S-Corporation). $500,000 of this amount was paid in April 2026 and an additional $300,000 was paid in June 2026. |
| - | A liability payable to finance companies in the amount of $3,650,726 for the balance due on loans made to Ox Hill Realty, a land development firm in which Mr. Wallen has a 22.5% interest and Mr. Chughtai has a 12.5% interest. |
The Company also has a related party receivable from Ox Hill Realty in the aggregate amount of $29,917,458 representing the amount due to the Company from Ox Hill for payments made to the financing companies and for loans made directly to Ox Hill by the Company. This amount was fully reserved as of June 30, 2026. TRINITY has a security agreement with Ox Hill whereby Ox Hill has committed to paying TRINITY the amount of $29,088,485 before December 31, 2026 or $9,088,485 by December 31, 2026 with a note for the balance convertible to up to 19.9% of the equity of Ox Hill depending upon the appraised value of the Ox Hill properties. There can be no assurance that this amount will be received.
TRINITY has a current project with a contract value of approximately $1.25 billion to construct a data center in Ward County, Texas. TRINITY’s business volume is expected to continue to remain strong, with additional projects in Virginia, Maryland and in Cairo, Egypt. None of these projects can be guaranteed to continue; if the demand for data center construction were to diminish, TRINITY’s growth would be at risk.
Capital Expenditures
TRINITY’s historical capital expenditures have also not been material, as subcontractors are utilized perform the construction activity and TRINITY does not own any substantial heavy equipment. We expect to continue to utilize that business model in the future.
Historically, KiNRG’s capital expenditures have not been material, as KiNRG’s activities primarily consisted of corporate development activities, technology development efforts, project planning and operational expansion initiatives. The Company expects that capital expenditures may increase in future periods as the Company pursues infrastructure and energy-related project opportunities, expands operations, integrates the TRINITY business and advances development activities relating to HTR systems and related technologies. The timing and amount of future capital expenditures will depend on numerous factors, including financing availability, permitting activities, project development progress, strategic relationships and market conditions.
Contractual Obligations
KiNRG’s contractual obligations primarily consisted of operating lease obligations, notes payable, related party obligations and other accrued liabilities reflected in KiNRG’s consolidated financial statements. In addition, in connection with the acquisition of TRINITY completed in April 2026, KiNRG issued a $3.0 million Promissory Note bearing interest at 6.0% per annum that matures on the earlier of the closing of the Company’s public offering or December 31, 2026, as extended on July 27, 2026 (See Note 22). KiNRG may also enter into additional contractual commitments and obligations in the future in connection with financing activities, project development efforts, infrastructure expansion activities and strategic business initiatives.
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TRINITY has contractual obligations primarily consisting of operating lease obligations, notes payable, related party obligations and other accrued liabilities reflected in TRINITY’s consolidated financial statements. This includes an obligation under a receivables financing agreement of $3.6 million as of June 30, 2026.
Inflation
We do not believe that inflation has had a material effect on our business, financial condition or results of operations. However, inflation may have a significant impact on the future cost of HTR’s. If our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could adversely affect our business, financial condition and results of operations.
Off-Balance Sheet Arrangements
KiNRG does not maintain off-balance sheet arrangements, nor does KiNRG participate in any non-exchange traded contracts requiring fair value accounting treatment other than the operating leases as disclosed in Notes to Consolidated Financial Statements
TRINITY leases its corporate headquarters from a lessor entity, TG Legacy, LLC, which is a related party through common ownership. Due to the common control of the entities and the fact that TRINITY does not have alternative facilities readily available, TRINITY has an economic incentive to provide financial support to the lessor entity should the lessor entity default on its obligations. The amount and key terms of the obligations recorded in the lessor entity’s financial statements that could require TRINITY to provide financial support to the lessor entity consist of a note payable to a financial institution with an outstanding balance of $2,414,399 and $2,468,600 at June 30, 2026 and December 31, 2025, respectively. The note bears interest at 4.04% through maturity on March 7, 2032 and is payable in monthly installments of principal and interest totaling $17,360. A balloon payment is also due at maturity. The note is collateralized by substantially all assets of TRINITY and the corporate headquarters leased to TRINITY by the lessor entity. The note is secured by the real estate and personally guaranteed by TRINITY’s stockholder. As of June 30, 2026, TRINITY does not believe it is exposed to any significant risk related to the lessor’s note payable.
Critical Accounting Policies and Estimates
Financial Reporting Release No. 60, published by the SEC, recommends that all companies include a discussion of critical accounting policies used in the preparation of their financial statements. While all these significant accounting policies impact our consolidated financial condition and results of operations, we view certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on our consolidated financial statements and require management to use a greater degree of judgment and estimates. Actual results may differ from those estimates.
We believe that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause a material effect on our consolidated results of operations, financial position or liquidity for the periods presented in this report.
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General
The Company’s Consolidated Financial Statements are prepared in accordance with U.S. generally accepted accounting principles, which require management to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, net revenue, if any, and expenses, and the disclosure of contingent assets and liabilities.
Management bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Senior management has discussed the development, selection and disclosure of these estimates with the Board of Directors. Management believes that the accounting estimates employed and the resulting balances are reasonable; however, actual results may differ from these estimates under different assumptions or conditions. An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, if different estimates reasonably could have been used, or if changes in the estimate that are reasonably possible could materially impact the consolidated financial statements. Management believes the following critical accounting policies reflect the significant estimates and assumptions used in the preparation of the Consolidated Financial Statements.
Basic and Diluted Net Income (Loss) Per Share
The Company utilizes ASC 260, “Earnings Per Share” for calculating the basic and diluted loss per share. In accordance with ASC 260, the basic and diluted income (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding. Diluted net income (loss per) share is computed similar to basic net income (loss) per share except that the denominator is adjusted for the potential dilution that could occur if stock options, warrants, and other convertible securities were exercised or converted into common stock. Potentially dilutive securities were not included in the calculation of the diluted net loss per share as their effect would be anti-dilutive.
Income Taxes
The Company utilizes ASC 740 “Income Taxes” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each year-end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Temporary difference between taxable income reported for financial reporting purposes primarily relate to the recognition of debt costs and stock based compensation expenses. The adoption of ASC 740 “Income Taxes” did not have a material impact on the Company’s consolidated results of operations or financial condition.
Business Combinations
The Company utilizes ASC 805 “Business Combinations”, which accounts for business combinations using the acquisition method of accounting. Under this method, the identifiable assets acquired, liabilities assumed, and any non-controlling interest in the acquired company are recorded at their estimated fair values as of the acquisition date.
The excess of the purchase price over the estimated fair value of net identifiable assets acquired is recorded as goodwill. Acquisition-related costs, such as legal, accounting, and advisory fees, are expensed as incurred and reported in operating expenses.
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Revenue Recognition
The Company’s policy that revenue is recognized pursuant to the guidance of ASC 606 Revenue from Contracts with Customers (“ASC 606). ASC 606 establishes a comprehensive principle-based approach for determining revenue recognition. The core principle of the guidance is that an entity must recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for providing those goods or services. ASC 606 sets forth a five-step revenue recognition model to be applied consistently to all contracts with customers, except those that are within the scope of other topics in the ASC: (i) identify the contract with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The update also provides guidance regarding the recognition of costs related to obtaining and fulfilling customer contracts. This update also requires quantitative and qualitative disclosures sufficient to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including disclosures on significant judgments made when applying the guidance. The FASB subsequently amended ASC 606 on multiple occasions to, among other things, delay its effective date and clarify certain implementation guidance.
Contract Receivables and Retainage
Contract receivables represent unconditional rights to consideration from project owners for billed performance obligations. Retainage receivables represents amounts which have not been billed to customers pursuant to retainage provisions in the construction contracts, which generally become payable upon contract completion and acceptance by the customer. Amounts are generally collected within one year of the completion of the project.
Contract assets include cost and estimated earnings in excess of billings on uncompleted contracts. The Company anticipates that substantially all incurred costs associated with contract assets as of June 30, 2026 will be billed and collected within one year. Contract assets may include amounts the Company seeks to collect from customers or others for (i) errors, (ii) changes in contract specifications or design, (iii) contract change orders in dispute, unapproved as to scope and price, or (iv) other customer-related causes of unanticipated additional contract costs (such as claims). The Company did not recognize any material amounts associated with claims and unapproved change orders during the six months ended June 30, 2026. Contract liabilities include billings in excess of costs and estimated earnings on uncompleted contracts. The Company anticipates that substantially all such amounts will be earned within one year.
Allowance for Credit Losses
The Company recognizes an allowance for credit losses for financial assets carried at amortized cost, to present the net amount expected to be collected as of the balance sheet date. Such allowance is based on the credit losses expected to arise over the contractual term of the financial asset (or group thereof), which includes consideration of prepayments, and is based on the Company’s expectations as of the balance sheet date. The Company evaluates certain criteria, including aging and historical write-offs, the current economic condition of specific customers, and expected future economic conditions to determine the appropriate allowance for credit losses on financial assets carried at amortized cost. Such financial assets are written off when the Company determines that they are uncollectible or based on regulatory requirements, whichever is earlier. Write-offs are recognized as a deduction from the allowance for credit losses. Expected recoveries of amounts previously written off, not to exceed the aggregate of the amount previously written off, are included in measuring an allowance for credit losses as of the balance sheet date. At the time of the TRINITY acquisition, the Company recorded a partial reserve in the amount of $29,917,458 on related party receivables. See Note 2. There was no allowance for credit losses deemed necessary as of December 31, 2025.
Leases
The Company accounts for leases in accordance with Financial Accounting Standards Board (“FASB”) ASC 842, Leases. The Company determines if an arrangement is a lease at inception. Operating and Finance lease right-of-use (“ROU”) assets and current and noncurrent lease liabilities are included on the face of the consolidated balance sheet.
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ROU assets represent the right of use to an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. For finance leases, the Company recognizes the amortization of the ROU asset over the shorter of the lease term or useful life of the underlying asset. Interest accretion on the finance lease liabilities is recorded as interest expense. As most of the Company’s leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU asset also excludes lease incentives. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are accounted for as a single lease component. For lease agreements with terms less than 12 months, the Company has elected the short-term lease measurement and recognition exemption, and it recognizes such lease payments on a straight-line basis over the lease term.
Fair Value of Financial Instruments
The Company adopted the provisions under FASB for Fair Value Measurements, which define fair value for accounting purposes, establishes a framework for measuring fair value and expands disclosure requirements regarding fair value measurements. The Company’s adoption of these provisions did not have a material impact on its consolidated financial statements. Fair value is defined as an exit price, which is the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date. The degree of judgment utilized in measuring the fair value of assets and liabilities generally correlates to the level of pricing observability. Financial assets and liabilities with readily available, actively quoted prices or for which fair value can be measured from actively quoted prices in active markets generally have more pricing observability and require less judgment in measuring fair value. Conversely, financial assets and liabilities that are rarely traded or not quoted have less price observability and are generally measured at fair value using valuation models that require more judgment. These valuation techniques involve some level of management estimation and judgment, the degree of which is dependent on the price transparency of the asset, liability or market and the nature of the asset or liability. The Company has categorized its financial assets and liabilities measured at fair value into a three-level hierarchy in accordance with these provisions.
In January 2010 the FASB issued Update No. 2010-05 “Compensation—Stock Compensation—Escrowed Share Arrangements and Presumption of Compensation” (“2010-05”). 2010-05 re-asserts that the Staff of the Securities Exchange Commission (the “SEC Staff”) has stated the presumption that for certain shareholders escrowed share represent a compensatory arrangement. 2010-05 further clarifies the criteria required to be met to establish a position different from the SEC Staff’s position. The Company does not believe this pronouncement to have any material impact on its financial position, results of operations or cash flows.
New Accounting Pronouncements
In November 2024, the FASB issued ASU 2024-03, “Disaggregation of Income Statement Expenses (DISE)” which requires disaggregated disclosure of income statement expenses for public business entities. The ASU does not change the expense captions an entity presents on the face of the income statement; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company does not believe the adoption of this guidance will have a material effect on its Consolidated Financial Statements and segment disclosures.
In July 2025, the FASB issued ASU 2025-05, which provides a practical expedient for estimating expected credit losses on short term receivables and contract assets from revenue transactions. The guidance permits a simplified loss rate approach based on historical write-off experience and current conditions. The Company adopted ASU 2025-05 effective January 1, 2026, on a prospective basis. The adoption of this accounting standard did not have a material impact on the Company’s financial condition, results of operations, or cash flows.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk.
The Company is not required to provide the information required by this Item 3 as it is a “smaller reporting company,” as defined in Rule 12b-2 of the Exchange Act.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Our disclosure controls and procedures are designed to ensure that information required to be disclosed in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. We, including our Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of our disclosure controls and procedures (as defined in the Exchange Act Rules 13(a)-15(e) and 15(d)-15(e)) as of June 30, 2026 (the end of the period covered by this Quarterly Report on Form 10-Q) and have concluded that our disclosure controls and procedures are not effective to ensure that material information relating to the Company is recorded, processed, summarized, and reported in a timely manner. This material weakness is the result of inadequate staffing levels and segregation of duties. Management is working to remedy this material weakness by hiring additional staff. In evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of such possible controls and procedures.
Changes in Internal Control Over Financial Reporting
The TRINITY Acquisition now constitutes substantially all of the Company’s operations, assets, and revenue; this constitutes a change to our internal control over financial reporting.
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PART II—OTHER INFORMATION
Item 1. Legal Proceedings.
In March 2026, the Company received notification of a lawsuit by the holder of a note payable by AGP, demanding payment of principal in the amount of $80,000 and accrued interest in the amount $121,883. The Company’s legal counsel is currently reviewing this case. The company believes this lawsuit is without merit, and plans to vigorously defend its position. The entire amount of principal and interest appears on the Company’s balance sheet, and no additional liability has been recorded.
On July 22, 2026, the Company settled the note payable in the amount of $80,000 and accrued interest of $139,883 for cash in the amount of $176,000. A gain on settlement in the amount of $43,883 will be recorded.
In addition to commitments and obligations in the ordinary course of business, we are subject to various claims, pending and potential legal actions for damages, investigations relating to governmental laws and regulations and other matters arising out of the normal conduct of our business. It is possible that cash flows or results of operations could be materially affected in any particular period by the unfavorable resolution of one or more of these contingencies.
Item 1A. Risk Factors.
Except as set forth below, there have been no material changes to the risk factors previously disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
Risks Related to the Acquisition of TRINITY Group Construction
The Company may not realize the anticipated benefits of its acquisition of TRINITY Group Construction.
On April 1, 2026, the Company acquired TRINITY Group Construction. The Company’s ability to realize the anticipated benefits of the acquisition will depend, in part, on its ability to integrate TRINITY’s operations, personnel, systems, customer relationships, contracts and business processes into the Company’s existing business. The integration process may be complex, costly and time-consuming and may divert management’s attention from other business matters. The Company may not successfully integrate TRINITY’s business or realize the anticipated strategic, operational or financial benefits of the acquisition within the expected timeframe or at all.
TRINITY’s business may expose the Company to risks associated with the construction industry.
As a result of the acquisition of TRINITY Group Construction, the Company is subject to risks associated with the construction industry, including risks related to project delays, cost overruns, labor availability, subcontractor performance, supply chain disruptions, materials costs, bonding requirements, customer concentration, contract disputes, payment delays, warranty obligations, safety matters, insurance coverage, regulatory compliance and general economic conditions affecting construction activity. Any of these risks could have a material adverse effect on the Company’s business, financial condition and results of operations.
The Company may assume liabilities in connection with the acquisition of TRINITY Group Construction.
In connection with the acquisition of TRINITY Group Construction, the Company may be exposed to known and unknown liabilities relating to TRINITY’s business, including liabilities arising from prior contracts, employment matters, tax matters, litigation, regulatory compliance, customer claims, vendor disputes, warranty obligations and other matters. The Company may have limited recourse against the sellers for certain liabilities, and any such liabilities could be material or could adversely affect the Company’s business, financial condition and results of operations.
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The issuance of shares in connection with the acquisition of TRINITY Group Construction resulted in dilution to existing stockholders.
In connection with the acquisition of TRINITY Group Construction, the Company issued an aggregate of 4,200,000 shares of common stock, consisting of 4,000,000 shares issued to the Company’s President and 200,000 shares issued to a nominee of the Company’s President. The issuance of these shares resulted in dilution to the Company’s existing stockholders and may increase the number of shares eligible for resale in the market, which could adversely affect the market price of the Company’s common stock.
The acquisition involved an issuance of shares to the Company’s President and a nominee of the Company’s President, which may create actual or perceived conflicts of interest.
In connection with the acquisition of TRINITY Group Construction, the Company issued shares of common stock to the Company’s President and to a nominee of the Company’s President. These relationships may create actual or perceived conflicts of interest, including with respect to the negotiation, approval and valuation of the acquisition and the related share issuance. Although the Company believes the transaction was approved in accordance with applicable corporate governance requirements, any actual or perceived conflicts of interest could result in stockholder concerns, regulatory scrutiny or claims challenging the transaction.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Unregistered Sales of Equity Securities
During the three months ended June 30, 2026, the Company issued the following shares of common stock in transactions that were not registered under the Securities Act of 1933, as amended (the “Securities Act”):
On May 8, 2026, the Company sold 710,000 shares of common stock, at a price of $2.00 per share, for gross proceeds of $1,420,000 pursuant to a private placement offering. The issuance was exempt from registration under the Securities Act pursuant to Section 4(a)(2) thereof and/or Rule 506 of Regulation D promulgated thereunder as a transaction by an issuer not involving a public offering.
No underwriters were involved in the foregoing issuances, and the Company did not engage in any general solicitation or general advertising in connection with the issuances.
Issuer Purchases of Equity Securities
There were no common stock repurchases during the quarter ended June 30, 2026.
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Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
Item 6. Exhibits.
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| KiNRG, Inc. | ||
| By: | /s/ Ronald W. Pickett | |
| Name: | Ronald W. Pickett | |
| Title: | Chief Executive Officer | |
| (Principal Financial and Accounting Officer) | ||
| Date: August 19, 2026 | ||
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