NOTE 10 — SUBSEQUENT EVENTS

The Company has evaluated subsequent events through the date these financial statements were issued. Because this Transition Report is being filed approximately nine months after the balance sheet date, the following events occurring between January 1, 2026 and the date of issuance are disclosed. The Company’s consolidated financial statements as of and for the three and six months ended June 30, 2026, which reflect the acquisition described below, are included in the Company’s Quarterly Report on Form 10-Q filed on August 14, 2026.

Acquisition of TaskAlpha and Flipside AI

On January 13, 2026, the Company entered into a Stock Purchase Agreement, subsequently amended on March 30, 2026, with Arcadia Data Pte. Ltd. (“Arcadia”), Crestview BPO Pte. Ltd., Flipside Digital Content Company, Inc. (“Flipside AI”) and the selling shareholders named therein. On April 1, 2026, the Company completed the acquisition of 100% of the equity interests of Crestview BPO Pte. Ltd., a Singapore company renamed TaskAlpha Pte. Ltd. in July 2026 (“TaskAlpha”), which owns 100% of Flipside AI, a Philippine corporation engaged in providing data curation, annotation and validation services for artificial intelligence systems. The transaction was accounted for as a business combination under ASC 805 with the Company as the accounting acquirer.

The consideration transferred consisted of $600,000 in cash, a $450,000 seller convertible note recorded at its present value of $379,694, and 6,520,000 shares of common stock valued at $1,630,000, for total consideration of $2,609,694. An additional 326,000 shares valued at $81,500 were issued to the business broker and recorded as a transaction cost. Shares issued in the acquisition were measured at $0.25 per share, the price at which the Company sold shares for cash in contemporaneous private placements, because the Company’s common stock does not trade in an active market. The provisional allocation of the consideration transferred is as follows:

Identifiable intangible assets consist of customer relationships of $90,000 (seven-year life), a trade name of $60,000 (five-year life) and a non-compete agreement of $50,000 (five-year life). The allocation is provisional pending completion of the Company’s valuation procedures and may be revised during the measurement period, which ends April 1, 2027. Goodwill is attributable principally to the assembled workforce and expected synergies and is not expected to be deductible for income tax purposes.

The seller convertible note issued to Arcadia bears no interest, increasing to 8% upon an event of default, is payable in three equal annual installments of $150,000 on April 1, 2027, 2028 and 2029, is convertible at the holder’s option into common stock at $0.75 per share, and contains a cross-default to the Stock Purchase Agreement. Because the note is non-interest-bearing, it was recorded at present value using an imputed interest rate of 9%, and the resulting discount of $70,306 is being amortized to interest expense using the effective interest method.

Due from related parties acquired in the acquisition consists of an Advance Payable Note in the principal amount of $840,000 delivered by Anthony De Luna, the founder and Chief Executive Officer of Flipside AI, which formalizes personal advances made to him by Flipside AI before the acquisition. The note is non-interest-bearing and is payable in eight quarterly installments of $105,000 commencing April 1, 2026, with any remaining balance due March 31, 2028. At the issuer’s option each installment may be settled in cash or by the release of shares of the Company’s common stock held in escrow, with the number of shares determined using the greater of the trailing ten-day volume weighted average price or $0.75 per share; 1,120,000 shares are held in escrow, corresponding to eight installments at the $0.75 floor. The note was recorded at its acquisition-date fair value of $354,996, determined by probability-weighting cash settlement (20%) and share settlement (80%), and is subsequently measured at amortized cost without accretion of the discount. The installments due April 1, 2026 and July 1, 2026 were not settled in cash, and no shares had been released from escrow as of the date of this report. The Company has not arranged, extended, maintained or renewed any personal loan to Mr. De Luna.

Loans payable of Flipside AI assumed in the acquisition consist of borrowings from Philippine financial institutions and from individual lenders, including certain of the selling shareholders and a member of the Company’s Board of Directors, bearing interest at rates from 9% to 17% per annum and, with one exception, maturing within twelve months of June 30, 2026. Flipside AI maintains an unfunded defined benefit retirement plan for its employees as required by Philippine law, the obligation under which was $301,266 at the acquisition date.

Loan from Arcadia

On April 6, 2026, Arcadia advanced $200,000 to TaskAlpha under an unsecured loan bearing interest at 12% per annum, with default interest of 2% per month, governed by Singapore law. The loan matured on July 6, 2026 and has been extended by agreement with Arcadia to October 6, 2026 on its existing terms. No principal or interest was repaid at the original maturity date.

Equity issuances

During the six months ended June 30, 2026, in addition to the acquisition shares, the Company issued 3,000,000 shares of common stock in private placements in the first quarter for gross proceeds of $750,000 and 1,800,000 shares in private placements in the second quarter for gross proceeds of $450,000, each at $0.25 per share; 439,000 shares for services valued at $109,750; and 816,000 shares valued at $204,000 to two of its officers in settlement of deferred wages, as described below. In total, 12,901,000 shares were issued during the period, and 34,564,312 shares were issued and outstanding at June 30, 2026.

Deferred officer compensation

Deferred wages payable of $145,500 at December 31, 2025 represented compensation deferred by two officers of the Company. An additional $102,000 was accrued during the six months ended June 30, 2026, of which $43,500 was paid in cash in June 2026. The remaining $204,000, representing compensation deferred from July 1, 2025 to June 30, 2026, was settled on June 30, 2026 through the issuance of 816,000 shares of common stock to those officers at $0.25 per share (456,000 shares to the Chief Executive Officer and 360,000 shares to the Chief Operating Officer). No gain or loss was recognized on the settlement.

Impairment of software

During the quarter ended June 30, 2026, the Company recorded an impairment charge of $135,000, writing off in full the carrying amount of the software described in Note 4. Following the acquisition of Flipside AI the Company is no longer pursuing commercialization of that software, and no future cash flows are expected from its use or disposition. The decision not to pursue commercialization was made after December 31, 2025 and did not provide evidence of conditions existing at the balance sheet date.

Management and board changes

Effective April 1, 2026, Anthony De Luna was appointed Chief Technology Officer of the Company and a member of its Board of Directors. Under his employment agreement he receives an annual base salary of $175,000, an annual incentive bonus equal to 3% of the Company’s net after-tax income, and a commission equal to 3% of revenues generated by Flipside AI from customers he introduced, and he is entitled to a grant of 500,000 performance stock units that vest based on specified market capitalization milestones. The Company concluded that a grant date under ASC 718 has not been established for certain tranches of those units because the vesting conditions do not sufficiently define the measurement methodology or period. Also effective April 1, 2026, Eric Sherb was appointed Chief Financial Officer under a consulting agreement between the Company and EMS Consulting Services, Inc., an entity controlled by Mr. Sherb, providing for a monthly retainer of $5,000 and a grant of 36,000 shares of common stock vesting in equal installments over six months; the agreement may be terminated by either party at any time. Effective June 30, 2026, Tarek N. Shoufani resigned as Chief Operating Officer and continues to serve as a non-employee director, and effective July 1, 2026, Jaime Fanlo was appointed to the Board of Directors.

Director compensation

On July 1, 2026, the Company entered into director agreements with its three non-employee directors, Shoufani, Manlunas and Fanlo, and granted each of them 250,000 performance restricted stock units, or 750,000 units in the aggregate, as standalone inducement grants outside any equity incentive plan and constituting the directors’ sole compensation for board service. The units vest in five tranches upon the Company’s market capitalization equaling or exceeding thresholds ranging from $15 million to $75 million on each of twenty consecutive trading days, subject to continuous board service through the date of achievement, and any units for which the applicable threshold has not been achieved within ten years of the grant date are forfeited. Because vesting is based on market capitalization, the awards contain market conditions as defined in ASC 718, and the Company will measure their grant-date fair value and recognize the resulting cost over the derived requisite service period whether or not the thresholds are achieved.

Change in fiscal year

On June 25, 2026, the Board of Directors approved the change in the Company’s fiscal year end from June 30 to December 31 described in Note 1.

Bridge financing

On August 31, 2026, the Board of Directors approved a bridge financing with two accredited investors, none of whom is an officer, director or affiliate of the Company. The financing consists of senior promissory notes in an aggregate principal amount of up to $300,000 and warrants to purchase up to 300,000 shares of common stock. The notes mature 365 days after issuance and bear interest at 12% per annum through the ninetieth day after issuance and 20% per annum thereafter, with default interest at 20% compounded monthly. The notes may be prepaid at any time without penalty and are not convertible into equity securities. They are secured by a security interest in the Company’s primary operating account, which remains unperfected unless a deposit account control agreement is obtained following an event of default. The Company has also agreed to a negative pledge and a sweep of financing proceeds. Under an escrow agreement, $300,000 of subscription proceeds committed under private placement are to be remitted to an escrow account and applied first to repay the notes. The warrants are exercisable at $0.375 per share for five years from issuance and are issued as additional consideration for the purchase of the notes.

Financial advisory agreement

Effective September 1, 2026, the Company entered into an Advisory and Investment Banking Fee Agreement with Revere Securities LLC (“Revere”), a registered broker-dealer. Under the agreement, Revere will introduce potential investors and strategic counterparties to the Company for a term of twelve months, and either party may terminate on 30 days’ notice. The Company pays Revere an advisory fee of $10,000 per month, which is creditable against any success fees. For financings and strategic transactions resulting from introductions accepted by the Company, Revere is entitled to three types of fees. For debt financings, the fee is 3% of gross proceeds in cash. For equity-linked financings, the fee is 8% of gross proceeds in cash, together with a seven-year warrant to purchase 8% of the securities sold in the financing at the offering price. For strategic transactions, the cash fee ranges from 5% of the first $5,000,000 of transaction consideration down to 1% of amounts above $20,000,000, or is 1% where the Company is the acquirer. These fees also apply to accepted introductions that close within twelve months after the agreement expires or is terminated.

Warrants issued for services

On September 21, 2026, the Board of Directors approved the issuance of two five-year warrants, each to purchase 150,000 shares of common stock at an exercise price of $0.375 per share for corporate legal services and advisory services. Of these warrants, 150,000 can be exercise in cash, or as an offset for legal service fees owed.

Restricted stock award

On September 22, 2026, the Board of Directors approved a standalone award of 120,000 restricted shares of common stock, outside any equity incentive plan, to a non-executive employee in payment of the employee’s annual salary. The shares vest in twelve monthly installments of 10,000 shares from September 15, 2026 through August 31, 2027, subject to continued employment. Any unvested shares are forfeited when employment ends.

The Company has not yet determined the fair values of the warrants and restricted shares described above, or the allocation of the bridge financing proceeds between the notes and the warrants.