NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America (“US GAAP”). Effective for the Transition Period, the Company’s fiscal year end is December 31.

Risks and uncertainties

The Company has a limited operating history and has not generated revenue from its intended operations. The Company’s business and operations are sensitive to general business and economic conditions in the United States and worldwide, along with local, state, and federal governmental policy decisions. A host of factors beyond the Company’s control could cause fluctuations in these conditions, including increased inflation and interest rates; the effects of increased competition and innovation by new and existing competitors; the Company’s ability to attract new clients and generate revenue; its ability to attract and retain highly skilled professionals at cost-effective rates; its ability to penetrate new industry verticals and geographies; and its ability to identify acquisition targets, consummate acquisitions and successfully integrate acquired businesses and personnel. Adverse developments in these conditions could have a material adverse effect on the Company’s financial condition and results of operations.

Use of estimates

In preparing financial statements in conformity with US GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made. However, actual results could differ materially from those estimates. Significant estimates include the fair value of common stock issued in non-cash transactions and the incremental borrowing rate used to measure lease liabilities.

Revenue recognition

The Company recognizes revenue under ASC 606, Revenue from Contracts with Customers. Revenue is recognized when control of the promised services is transferred to the customer in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. The Company applies the five-step model: identification of the contract, identification of the performance obligations, determination of the transaction price, allocation of the transaction price to the performance obligations, and recognition of revenue as the performance obligations are satisfied.

The Company did not generate revenue from its intended operations during the Transition Period or during the years ended June 30, 2025 and 2024, and accordingly no revenue was recognized in the periods presented. Following the acquisition of Flipside AI on April 1, 2026, substantially all revenue is generated by Flipside AI from data engineering and content services. Services are provided under arrangements that represent a single performance obligation satisfied over time as the services are rendered, and revenue is recognized as the work is performed. Payment terms are generally 30 to 60 days from invoice and contracts do not contain significant financing components, variable consideration or rights of return. See Note 10.

Concentrations of credit risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash. As of December 31, 2025, June 30, 2025 and June 30, 2024, substantially all of the Company’s cash was held by major financial institutions located in the United States, which at times may exceed federally insured limits.

Cash

The Company considers all highly liquid investments with original or remaining maturities of three months or less on the purchase date to be cash equivalents. As of December 31, 2025, June 30, 2025 and June 30, 2024, the Company did not have any cash equivalents.

Fair value of financial instruments

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are classified and disclosed in one of the following three levels of the fair value hierarchy:

For cash and accounts payable, it is management’s opinion that the carrying values are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization.

Software

Software is stated at cost less accumulated amortization and is amortized using the straight-line method over the estimated useful life of the asset. The estimated useful life of the Company’s software asset is three years; however, amortization will not commence until the software has been placed in service. As of December 31, 2025 and June 30, 2025, the software had not been placed in service and no amortization had been recorded. See Note 4.

Impairment of long-lived assets

The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. There were no impairments recorded during the Transition Period or the years ended June 30, 2025 and 2024. See Note 10 regarding the impairment of the Company’s software recognized in the quarter ended June 30, 2026.

Leases

The Company determines if an arrangement is a lease at inception. Operating right-of-use assets and lease liabilities are included on the balance sheet. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Right-of-use assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. The Company uses its incremental borrowing rate, based on information available at the commencement date, in determining the present value of future lease payments. Operating lease expense is recognized on a straight-line basis over the term of the lease.

Convertible instruments

The Company evaluates convertible debt instruments under ASC 470-20, Debt with Conversion and Other Options, to determine whether the instrument includes embedded features that must be separately accounted for as a derivative. The Company assesses whether an embedded conversion feature requires bifurcation under ASC 815-15, Embedded Derivatives, and ASC 815-40, Contracts in Entity’s Own Equity. Based on its evaluation, the Company concluded that the conversion features embedded in its convertible debentures do not require bifurcation.

Research and development

Research and development costs include costs to develop and refine technological processes used to carry out business operations, and are expensed as incurred. The Company enters into agreements with third-party developers for development services. During the preliminary project stage and prior to the application development stage of a product, the Company records any costs incurred by third-party developers as research and development expense. Research and development costs were $21,000 for the six months ended December 31, 2025, $79,864 for the six months ended December 31, 2024 (unaudited), $97,364 for the year ended June 30, 2025, and $205,286 for the year ended June 30, 2024.

Deferred offering costs

The Company complies with the requirements of ASC 340-10-S99-1 with regard to offering costs. Prior to the completion of an offering, offering costs are capitalized. Deferred offering costs are charged to additional paid-in capital or recorded as a discount to debt, as applicable, upon completion of an offering, or expensed if the offering is not completed.

Stock-based compensation

The Company accounts for stock-based compensation in accordance with ASC 718, Compensation — Stock Compensation. The Company measures all stock-based awards granted to employees, directors and non-employee consultants based on the fair value on the date of grant and recognizes compensation expense for those awards over the requisite service period, which is generally the vesting or service period of the respective award. Shares issued in advance of services being rendered are recorded as prepaid expense and amortized to expense over the service period. The Company classifies stock-based compensation expense in its statement of operations in the same manner in which the award recipient’s costs are classified. The Company has elected to account for forfeitures as they occur.

Income taxes

The Company uses the asset and liability method of accounting for income taxes pursuant to ASC 740, Income Taxes. Deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Valuation allowances are provided for deferred tax assets if it is more likely than not that these items will either expire before the Company is able to realize their benefits or that future deductibility is uncertain.

Net loss per share

Basic net loss per share is computed by dividing the net loss available to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted net loss per share is computed similarly except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and were dilutive. Potentially dilutive securities are excluded from the computation of diluted net loss per share if their inclusion would be anti-dilutive. The following potentially dilutive securities were excluded from the computation of diluted net loss per share because their effect would have been anti-dilutive:

Shares issuable upon conversion are computed using the $0.50 per share floor conversion price applicable to the debentures.

Segments

In accordance with ASC 280, Segment Reporting, the Company’s chief operating decision maker (“CODM”) has been identified as the Chief Executive Officer. The CODM reviews results to assess performance, make decisions, and allocate operating and capital resources of the Company as a whole; therefore, there is only one reportable segment. The CODM does not distinguish the Company’s principal business activities for the purpose of internal reporting and uses net loss to allocate resources in the budgeting and forecasting process, along with using that measure as a basis for evaluating financial performance. Significant segment expenses provided to the CODM on a regular basis and included within the reported measure of segment loss are research and development and general and administrative expenses. Other segment items consist of interest expense. The measure of segment assets reported to the CODM is total assets. The statements of operations for each period presented reflect the significant segment expenses and other segment items, and the balance sheets presented reflect the assets and liabilities, of the one reportable segment.

Recently issued accounting pronouncements

The Company adopted ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, for the fiscal year ended June 30, 2025; adoption affected disclosure only. ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, is effective for the Company, as an emerging growth company that has elected the extended transition period, for the annual period ending December 31, 2026 and is expected to affect disclosure only. ASU 2024-03, Income Statement — Reporting Comprehensive Income (Subtopic 220-40): Disaggregation of Income Statement Expenses, is effective for the Company for annual periods beginning after December 15, 2027. Management does not believe that any other recently issued but not yet effective accounting standards would have a material effect on the accompanying financial statements.