FAST CASUAL CONCEPTS, INC. 10-K

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Management’s discussion and analysis (“MD&A”) should be read in conjunction with the consolidated financial statements and accompanying notes included in Item 8 of this Annual Report on Form 10-K (annual report), which include additional information about our accounting policies, practices, and the transactions underlying our financial results. The preparation of our consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) requires us to make estimates and assumptions that affect the reported amounts in our consolidated financial statements and the accompanying notes, including various claims and contingencies related to lawsuits, taxes, environmental and other matters arising during the normal course of business. We apply our best judgment, our knowledge of existing facts, circumstances, and actions that we may undertake in the future in determining the estimates that affect our consolidated financial statements. We evaluate our estimates on an ongoing basis using our historical experience, as well as other factors we believe appropriate under the circumstances, such as current economic conditions, and adjust or revise our estimates as circumstances change. As future events and their effects cannot be determined with precision, actual results may differ from these estimates. Our MD&A contains forward-looking statements that discuss, among other things, future expectations and projections regarding future developments, operations, and financial condition. All forward-looking statements are based on management’s existing beliefs about present and future events outside of management’s control and on assumptions that may prove to be incorrect. If any underlying assumptions prove incorrect, our actual results may vary materially from those anticipated, estimated, projected, or intended. We undertake no obligation to publicly update or revise any forward-looking statements to reflect actual results, changes in expectations, events or circumstances after the date of this Report is filed. Fast Casual Concepts, Inc. and its subsidiaries are referred to collectively as “Fast Casual” “the Company,” “we, “us” or “our” in the following discussion and analysis. Going Concern At December 31, 2025, we had $10,127 in assets, $164,946 in liabilities and a $2,047,198 accumulated deficit. Our current liquidity resources are not sufficient to fund anticipated level of operations for at least the next 12 months from the date these consolidated financial statements were issued. As a result, there is substantial doubt regarding the Company’ ability to continue as a going concern. The ability to continue Fast Casual’s operations depends on its ability to generate and grow revenue and results of operations as well as our ability to access capital markets when necessary to accomplish strategic objectives. We expect to continue to incur losses for the immediate future and will need additional equity or debt financing until we can achieve profitability and positive cash flows from operating activities. Our future capital requirements for operations will depend on many factors, including the ability to generate revenues and obtain capital. There is no assurance that we will ever be profitable or that debt or equity financing will be available to us. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should we be unable to continue as a going concern. There is no assurance we will be successful in any of these goals. Results of Operations For The Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024 Revenues We had $65,700 and $0 in revenues from digital marketing consulting during the year ended December 31, 2025 and 2024, respectively. Operating Expenses Operating expenses were $96,546 and $43,098 for the years ended December 31, 2025 and 2024, respectively. The $53,448, or approximately 124% increase in operating expenses is mainly a result of the $27,219 increase in contract labor and $33,156 increase in professional fees, partially offset by a $6,927 decrease in general and administrative expenses during the year ended December 31, 2025 compared to the prior year. Loss from Operations We had operating losses of $30,846 and $43,054 for the years ended December 31, 2025 and 2024, respectively. The $12,252 decrease in loss is mainly due to the $53,448 decrease in operating expenses, partially offset by a $65,700 increase in revenues during the year ended December 31, 2025 compared to the prior year. 10 Other Income and Expenses We recognized total other income of $90,477 for the year ended December 31, 2025 compared to $119,884 for the year ended December 31, 2024. The $29,407 decrease is mainly due to a $124,685 decrease in gain on extinguishment of debt during the year ended December 31, 2025, partially offset by a $94,854 increase in gain on disposal of subsidiary and a $424 decrease in interest expense for the year ended December 31, 2025 compared to the prior year. Net Income from Continuing Operations Net income from continuing operations totaled $59,631 for the year ended December 31, 2025, compared to net income of $76,786 for the year ended December 31, 2024, a decrease of $17,155, or approximately 22%. The decrease in net income from continuing operations is mainly due to the $29,407 decrease in other income during the year ended December 31, 2025 compared to the prior year, partially offset by the $12,252 decrease in loss from operations, as discussed above. Net Loss from Discontinued Operations Net loss from discontinued operations totaled $58,839 and $6,599 for the years ended December 31, 2025 and 2024, respectively, and represents activities from the specialty beverage and restaurant franchising businesses until their cessation in 2025 and 2024, respectively. Net Income Net income was $792 for the year ended December 31, 2025, compared to net income of $70,187 for the year ended December 31, 2024. Net income for the year ended December 31, 2025 is mainly the result of $59,631 in income from discontinued operations, as partially offset by the $58,839 in loss from discontinued operations. Net income for the year ended December 31, 2024 consisted of $76,786 net income from continuing operations and $6,599 in losses from discontinued operations. Liquidity and Capital Resources Assets Total assets were $10,127 and $130,978 as of December 31, 2025 and 2024, respectively and consisted of current assets of $10,127 and $742 and other non-current assets of $0 and $130,236, respectively. Current assets consisted of cash of $202 and $247, accounts receivable of $9,300 and $0 and $625 and $495 in prepaid assets as of December 31, 2025 and 2024, respectively. Other non-current assets at December 31, 2024 totaled $130,236, all liabilities from discontinued operations. Liabilities Total liabilities were $164,946 and $292,589 as of December 31, 2025 and 2024, respectively, and consisted of current liabilities of $50,462 and $75,103, respectively. Current liabilities at December 31, 2025 consisted of $30,981 in accounts payable and accrued expenses and $19,481 in notes and advances payable, related party. Current liabilities at December 31, 2024 consisted of $12,356 in accounts payable and accrued expenses and $17,329 in notes payable, related party. Long term liabilities at December 31, 2025 and 2024 were $114,484 and $217,486, respectively and consisted of $114,484 and $114,400 in notes payable, $0 and $62,000 in notes payable, related party and $0 and $41,086 in liabilities from discontinued operations, respectively. Net Cash Used in Operating Activities During the year ended December 31, 2025, our operating activities used $62,254 in cash, compared to $60,704 used during the year ended December 31, 2024, a slight increase of $1,550. The increase is mainly due to a $69,395 decrease in net income and a $385 decrease in one-time non-cash net adjustments, as offset by $68,230 in net cash flow positive changes in operating assets and liabilities. During the year ended December 31, 2025 investing operations used $273, compared to $1,401 in cash provided during the year ended December 31, 2024. Cash used of $273 and cash provided of $1,401 a result of the disposition and acquisition of a subsidiaries during the years ended December 31, 2025 and 2024, respectively. 11 Financing activities provided $62,482 in cash during the year ended December 31, 2025, compared to $28,808 in net cash used in financing activities during the year ended December 31, 2024. During the years ended December 31, 2025 and 2024, we received $6,000 and $0 in cash from common stock, respectively. We received $56,565 and $90,588 in proceeds and repaid $83 and $61,780 in notes payable principal to related parties during the years ended December 31, 2025 and 2024, respectively. The Company had a working capital deficit of $40,335 at December 31, 2025, as compared to $74,361 at December 31, 2024. Off-Balance Sheet Arrangements We had no off-balance sheet arrangements of any kind for the years ended December 31, 2025 or 2024. Critical Accounting Policies Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. We continuously evaluate our critical accounting policies and estimates. We base our estimates on historical experience and on various assumptions that we believe 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. Actual results may differ materially from these estimates under different assumptions or conditions. We believe the following critical accounting policies are important to the portrayal of our financial condition and results of operations and require our management’s subjective or complex judgment because of the sensitivity of the methods, assumptions and estimates used in the preparation of our financial statements. Accounts Receivable Trade accounts receivable are recorded at invoiced amounts. Fast Casual does not provide any unusual contractual trade terms, sales incentive programs or discounts. Allowances for doubtful accounts are established for estimated losses resulting from the inability of customers to make required payments. Allowances are determined based on a review of specific customer accounts where collection is doubtful, as well as an assessment of the collectability of total receivables. Receivables are written off against the allowance when it is determined that the amounts will not be recovered. Revenue Recognition We recognize revenue in accordance with the provisions of Financial Accounting Standards Board (“FASB”) Accounting Series Codification (“ASC”) 606, Revenue From Contracts With Customers (“ASC 606”), which provides guidance on the recognition, presentation, and disclosure of revenue in financial statements. ASC 606 outlines the basic criteria that must be met to recognize revenue and provides guidance for disclosure related to revenue recognition policies. Accordingly, we recognize revenue based on the allocation of the transaction price to each performance obligation as each performance obligation in a contract is satisfied. We generated revenue from continuing operations from the sale of digital marketing services during the year ended December 31, 2025. Revenue from discontinued operations is from the specialty drink mix sales revenue and franchising rights sales during the years ended December 31, 2025 and 2024. Leases Operating lease liabilities represented the present value of lease payments not yet paid. Operating lease assets represented rights to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs, lease incentives, and impairment of operating lease assets. To determine the present value of lease payments not yet paid, incremental borrowing rates corresponding to the reasonably certain lease term were estimated. If the estimate of our incremental borrowing rate was changed, operating lease assets and liabilities could differ materially. 12 Long Lived Assets Long-lived assets to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Fast Casual evaluates the recoverability of long-lived assets based upon forecasted undiscounted cash flows. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. Should impairment in value be indicated, the carrying value of long-lived assets will be adjusted, based on estimates of future discounted cash flows resulting from the use and ultimate disposition of the asset. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell. Stock Based Compensation We record stock-based compensation using the fair value method. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued. All transactions with non-employees in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Income Tax We account for income taxes under the asset and liability method, 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. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Item 7A. Quantitative and Qualitative Disclosures About Market Risk Not required for a smaller reporting Company.