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Item 9A. Controls and Procedures

2026-03-31 compared with 2025-06-24 · 334 added, 210 removed, 69 unchanged (89% of the section changed)

CONTROLS AND PROCEDURES.

Jenifer Osterwalder, our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2024 and 2023.

The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, mean controls and other procedures of a company that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

Disclosure controls include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company on the reports that it files or submits under the Exchange Act is accumulated and communicated to management, including our principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure.

Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgement in evaluating the cost-benefit relationship of possible controls and procedures.

Based on the evaluation of our disclosure controls and procedures as of December 31, 2024 and 2023, our Chief Executive Officer and Chief Financial Officer concluded that, as a result of a material weakness identified in our internal control over financial reporting, our disclosure controls and procedures were not effective as of December 31, 2024 and 2023.

In the course of preparing the financial statements that are included in this Form 10-K, management has determined that a material weakness exists within the internal controls over financial reporting.

The material weakness identified relates to the lack of a sufficient complement of personnel within the finance and accounting function with an appropriate degree of knowledge, experience and training.

We also noted a material weakness related to logical security and privileged access in the area of information technology.

We concluded that the material weaknesses in our internal control over financial reporting information technology occurred because we did not have the necessary business processes, systems, personnel, and related internal controls necessary to satisfy the accounting and financial reporting requirements of a public company.

In order to remediate the material weaknesses, we expect to hire additional accounting, finance and information technology resources or consultants with public company experience upon receiving sufficient capital.

We may not be able to fully remediate the identified material weakness until the steps described above have been completed and our internal controls have been operating effectively for a sufficient period of time.

We cannot assure you that we will be able to fully remediate the material weakness in 2025.

If the steps we take do not correct the material weakness in a timely manner, we will be unable to conclude that we maintain effective internal control over financial reporting.

Accordingly, there could continue to be a reasonable possibility that a material misstatement of our financial statements would not be prevented or detected on a timely basis.

We also may incur significant costs to execute various aspects of our remediation plan but cannot provide a reasonable estimate of such costs at this time.

Management’s Annual Report on Internal Controls Over Financial Reporting

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.

As of December 31, 2025, our management, including our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures.

Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of December 31, 2025, due to the material weaknesses in internal control over financial reporting described below.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act.

Our internal control system was designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes, in accordance with generally accepted accounting principles in the United States.

Due to inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness of the internal control over financial reporting to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies and procedures may deteriorate.

Our management, under the supervision and with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our internal control over financial reporting as of the end of the period covered by this Annual Report on Form 10-K based on the framework in Internal Control—Integrated Framework (2013 framework) issued by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO.

Based on such evaluation, our management concluded that our internal control over financial reporting was effective as of the end of the period covered by this Annual Report on Form 10-K.

This Annual Report on Form 10-K does not include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm.

Our auditors will not be required to opine on the effectiveness of our internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002 until we are no longer an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012.

Under the supervision and with the participation of our management, including our Chief Executive Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2025, based on criteria established in the framework in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Based on management’s evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2025, our internal control over financial reporting was not effective due to the following material weaknesses:

• We did not maintain a sufficient complement of accounting and financial reporting personnel with the requisite knowledge and experience in the application of U.S.

GAAP and SEC reporting requirements commensurate with our financial reporting requirements.

• We did not maintain effective controls over the financial close and reporting process, including controls related to journal entries, account reconciliations, and the preparation and review of financial statements and related disclosures.

• We did not maintain effective controls related to the accounting for complex transactions, including business combinations, intangible assets, and related party transactions.

Remediation Efforts

To address the material weaknesses described above, during and subsequent to the year ended December 31, 2025, we have taken the following remediation steps:

• Appointed Daniel Gilcher as Chief Financial Officer and Principal Accounting Officer, effective January 3, 2026, bringing extensive international public-company financial leadership experience.

• Engaged additional accounting and financial reporting resources, including external consultants with expertise in U.S.

GAAP and SEC reporting.

• Implemented enhanced review procedures for complex accounting matters, including business combinations and related party transactions.

We believe these actions will be effective in remediating the material weaknesses.

We will continue to monitor the effectiveness of these measures and will make any changes management determines appropriate.

However, a material weakness cannot be considered remediated until the applicable remedial controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during our most recent fiscal quarter that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Other than the remediation efforts described above, there were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal year ended December 31, 2025 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

OTHER INFORMATION

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND CORPORATE GOVERNANCE;

Not applicable.

DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS AND CORPORATE GOVERNANCE;

COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

The following table sets forth our executive officers and directors, their ages and the positions held by them:

Our Board of Directors was elected and will serve until their successor is duly elected and qualified or until their earlier resignation.

The following table sets forth our directors and executive officers and their ages as of the year ended December 31, 2024:

The following table sets forth our directors and executive officers and their ages as of March 31, 2026.

Jenifer Osterwalder

Chief Executive Officer, President, Chief Financial and Accounting Officer and Director

Sean Michael Brehm

Chairman of the Board, Director

Chief Technology Officer

Aaron Christensen

Chief Revenue Officer

Aby Alexander

Paul Breitenbach

Chad McLeaming

Jenifer Osterwalder - Chief Executive Officer, President, Chief Accounting and Financial Officer and Director

Chief Executive Officer, President and Director

Daniel Gilcher

Chief Financial Officer and Principal Accounting Officer

Michael Turner

Gottfried Werner

Olga Nezerenko

Jenifer Osterwalder - Chief Executive Officer, President, and Director

Jenifer Osterwalder has served as our Chief Executive Officer, Principal Accounting Officer, President, Treasurer, Secretary and as a director since March 7, 2005.

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Osterwalder received her Bachelor of Science in Business Administration in marketing and logistics from Ohio State University.

Sean Michael Brehm – Chairman of the Board, Director

Sean Michael Brehm’s career encompasses Chairman and CEO of Crowd Point Technologies and the Chairman of Node Nexus Network and previous roles as the Founder and CEO of Cyber Security, and Big Data Analytic and AI.

In these roles he has worked with the U.S.

Department of Defense and other commercial customers developing and enhancing cyber security measures and AI and big data platforms.

Moshik Cohen, PhD – Chief Technology Officer

Cohen is a technology and business leader, specializing in applied research, deep technology and business strategy.

Experienced in Automotive RADAR, Antennas and Phased Arrays, Semiconductor, RFCMOS, Algorithms, Hardware, Nano Photonics and Artificial Intelligence.

He has vast experience in building best-in-class multidisciplinary teams and developing HW & SW products, from inception to deployment.

Strong scientific background with numerous high-impact publications, including 10 papers in Nature & Science Journals.

Aaron Christensen – Chief Revenue Officer

Skilled in Intelligence Analysis, Operations Management, Government, Operational Planning, and Team Building.

Strong business development professional.

FAMILY RELATIONSHIPS

There are no family relationships, by blood or marriage, among any of our directors or executive officers.

Daniel Gilcher – Chief Financial Officer and Principal Accounting Officer

Daniel Gilcher was appointed Chief Financial Officer, Principal Financial Officer and Principal Accounting Officer of Spectral Capital Corporation, effective January 3, 2026.

Gilcher brings extensive international public-company financial leadership experience across technology, telecommunications and capital markets.

Prior to joining Spectral, he served as Chief Financial Officer and a Director of Mexedia, an Italian listed technology and communications company, and previously served as Interim Chief Financial Officer and a Director of Nuvo, an Israel-based healthcare company.

In these and other roles, he has worked closely with management teams, boards of directors and auditors in multiple jurisdictions on financial reporting, public-market governance, mergers and acquisitions, due diligence, negotiation and post-merger integration.

Earlier in his career, Mr.

Gilcher worked in investment analysis and portfolio management at Shareholder Value Management AG.

He holds a Ph.D.

in Empirical Finance from EBS Business School, an MBA from the Indian Institute of Management Ahmedabad, an M.Sc.

in Finance from EBS Business School and an M.A.

from Johannes Gutenberg University Mainz.

His academic research has been published in peer-reviewed journals.

In connection with the previously disclosed acquisitions of 42 Telecom Ltd.

and Telvantis Voice Services Inc., Mr.

Gilcher received 400,000 shares and 175,000 shares of Spectral common stock respectively as acquisition consideration on August 1, 2025 and December 31, 2025, prior to his appointment as an executive officer.

These issuances were made under the terms of the acquisition and was not compensation for services.

As Chief Financial Officer, Mr.

Gilcher oversees Spectral’s finance, accounting, reporting and capital markets functions as the Company advances its preparation for a planned listing on The Nasdaq Capital Market.

Jeffrey Chong-Director

Jeffrey Chong has been employed as an economist, capital markets expert and Chief Investment Officer for more than 20 years.

Since November 2024, Mr.

Chong has been employed as an independent capital markets consultant to Spectral.

Previously, he served as the Chief Investment officer of Turicum Asset Management AG (Zurich, Switzerland) from March of 2021 to September of 2023.

Chong has a bachelor’s degree in Economics from the University of Victoria.

Turner, Director

Turner has over 20 years of leadership and operational experience across the energy and advanced technology sectors.

He has held senior executive roles including President of Operations and Vice President, where he led the implementation of advanced ultrasonic and hydrocarbon technologies, process optimization initiatives, and environmentally focused systems.

Turner has extensive experience in facility commissioning, regulatory compliance, technology commercialization, and operational scaling.

His background includes oversight of complex projects, collaboration on patent development, and executive leadership in both public and private organizations in Canada and internationally.

Gottfried Werner, Director

Werner began his career in tax consultancy before becoming Director of an international, Swiss-based leasing company.

He later founded his own investment and consulting firm with a focus on Impact, IT, Telecommunications, Media, Entertainment, and Human Resources.

Today, he operates the largest independent telecommunications retail network in Germany and serves on the boards of several companies.

In addition, he owns a consulting firm specializing in lobbying and facilitating business relations between the German and English-speaking markets.

Olga Nezerenko-Director

Nezerenko holds a PhD in Economics and Business Administration from Tallinn University of Technology and is a senior expert recognized for her strategic oversight of complex systems, quality assurance, and long-term program management.

She has served since 2004 as Head of the Logistics Study Programme at the Estonian Entrepreneurship University of Applied Sciences, where she has led curriculum development, supervised applied research, and managed industry partnerships.

Nezerenko is actively involved in professional and sectoral organizations, including long-standing membership in the Estonian Logistics and Freight Forwarding Association and representation within the Transport and Logistics Professional Chamber.

Involvement In Certain Legal Proceedings

During the past ten years, none of our directors, executive officers and control persons have been involved in any of the following events:

any bankruptcy petition filed by or against any business of which such person was an executive officer either at the time of the bankruptcy or within two years prior to that time;

any bankruptcy petition filed by or against any business of which such person was an executive officer either at the time of the bankruptcy or within two

years prior to that time;

any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities;

being found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.

BOARD OF DIRECTORS COMMITTEES

As of the date of this annual report on Form 10-K for the year ended December 31, 2024, we have no standing committees, however, we intend to appoint an audit, a compensation and a nominating committee of our board of directors in the coming months.

As of the date of this annual report on Form 10-K for the year ended December 31, 2024, there have been no material changes to the procedures by which our security holders may recommend nominees to our board of directors.

CODE OF ETHICS

We currently do not have a Code of Ethics, but we plan to adopt one as we develop our business.

and being found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.

Family Relationships

There are no family relationships among any of our officers or directors.

Corporate Governance

Corporate governance refers to the policies and structure of the Board of Directors of a corporation, whose members are elected by and are accountable to the shareholders of the company.

Corporate governance encourages establishing a reasonable degree of independence of the board from executive management and the adoption of policies to ensure the board recognizes the principles of good management.

Our Board is committed to sound corporate governance practices, as such practices are both in the interests of shareholders and help to contribute to effective and efficient decision-making.

Board of Directors

Our Board is responsible for the stewardship of the Company, overseeing management and the enhancement of shareholder value.

The Board is responsible for:

(a) adopting a strategic plan for the Company and reviewing the plan in light of management’s assessment of emerging trends, the competitive environment, the opportunities for the business of the Company, risk issues, and significant business practices and products;

(b) ensuring that the risk management of the Company is prudently addressed;

(d) reviewing the Company’s approach to corporate governance, including an evaluation of the adequacy of the mandate of the Board, director independence standards and

(e) compliance with the Company’s Code of Business Conduct and Ethics;

(f) upholding a comprehensive policy for communications with shareholders and the public at large.

The frequency of meetings of the Board and the nature of agenda items may change from year to year depending upon the activities of Spectral.

Our Board of Directors intend to meet at least quarterly and at each meeting there is a review of the business of Spectral.

Our Board facilitates its exercise of independent supervision over the Company’s management through meetings of the board held for the purposes of obtaining an update on significant corporate activities and plans, both with and without members of the Company’s management being in attendance.

Board Composition;

The NASDAQ listing standards require that a majority of our Board of Directors must be composed of “independent directors,” which is defined generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship, which, in the opinion of the company’s Board of Directors would interfere with the director’s exercise of independent judgment in carrying out the responsibilities of a director.

The Board has determined that Olga Nezerenko, Michael Turner and Gottfried Werner, are considered to be independent.

Our Board currently consists of five directors, three of whom are independent.

Board Committees

Our Board directs the management of our business and affairs and conducts its business through meetings of the Board and its standing committees.

As of the date hereof, the Board has established an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee.

In addition, from time to time, special committees may be established under the direction of the Board of Directors when necessary to address specific issues.

Audit Committee

Our audit committee consists of Ms.

Nezerenko, Messrs.

Turner, and Werner, the latter serving as the chairman.

Our Board has determined that Gottfried Werner is an “audit committee financial expert” within the meaning of the SEC regulations.

Our Board has also determined that each member of our audit committee can read and understand fundamental financial statements in accordance with applicable requirements.

In arriving at these determinations, the Board has examined each audit committee member’s scope of experience and the nature of their employment in the corporate finance sector.

The functions of this committee include:

● selecting a qualified firm to serve as the independent registered public accounting firm to audit our financial statements;

● helping to ensure the independence and performance of the independent registered public accounting firm;

● discussing the scope and results of the audit with the independent registered public accounting firm, and reviewing, with management and the independent accountants, our interim and year-end operating results;

● developing procedures for employees to submit concerns anonymously about questionable accounting or audit matters;

● reviewing our policies on risk assessment and risk management;

● reviewing related party transactions;

● obtaining and reviewing a report by the independent registered public accounting firm at least annually, that describes our internal quality-control procedures, any material issues with such procedures, and any steps taken to deal with such issues when required by applicable law;

● approving (or, as permitted, pre-approving) all audit and all permissible non-audit services, other than de minimis non-audit services, to be performed by the independent registered public accounting firm

Compensation Committee

Our compensation committee consists of Mr.

Turner, and Ms.

The functions of the compensation committee will include:

● reviewing and approving, or recommending that our Board approve, the compensation of our executive officers;

● reviewing and recommending that our Board approve the compensation of our directors;

● reviewing and approving, or recommending that our Board approve, the terms of compensatory arrangements with our executive officers;

● administering our stock and equity incentive plans;

● selecting independent compensation consultants and assessing conflict of interest compensation advisers;

● reviewing and approving, or recommending that our Board approve, incentive compensation and equity plans;

● reviewing and establishing general policies relating to compensation and benefits of our employees and reviewing our overall compensation philosophy.

Nominating and Corporate Governance Committee

Our nominating and corporate governance committee consists of Mr.

Turner and Ms.

The functions of the nominating and governance committee will include:

● identifying and recommending candidates for membership on our Board;

● including nominees recommended by stockholders;

● reviewing and recommending the composition of our committees;

● overseeing our code of business conduct and ethics, corporate governance guidelines and reporting;

● making recommendations to our Board concerning governance matters.

The nominating and corporate governance committee also annually reviews the nominating and corporate governance committee charter and the committee’s performance.

Board Leadership Structure and Role in Risk Oversight

Our Board is primarily responsible for overseeing our risk management processes.

Our Board receives and reviews periodic reports from management, auditors, legal counsel, and others, as considered appropriate regarding our assessment of risks.

Our Board focuses on the most significant risks we face our general risk management strategy, and also ensures that risks we undertake are consistent with our Board’s appetite for risk.

While our Board oversees our risk management, management is responsible for day-to-day risk management processes.

We believe this division of responsibilities is the most effective approach for addressing the risks we face and that our Board leadership structure supports this approach.

Our bylaws provide our Board with flexibility in its discretion to combine or separate the positions of Chairman of the Board and Chief Executive Officer.

The Board currently separates the roles of Chief Executive Officer and Chairman of the Board in recognition of the differences between the two roles.

Our Chief Executive Officer, who is also a member of our Board, is responsible for setting the strategic direction of the Company and the day-to-day leadership and performance of the Company, while the Chairman of the Board provides guidance to the Chief Executive Officer, sets the agenda for the Board meetings, presides over meetings of the Board and tries to reach a consensus on Board decisions.

Although these roles are currently separate, the Board believes it should be able to freely select the Chairman of the Board based on criteria that it deems to be in the best interest of the Company and its stockholders, and therefore one person may, in the future, serve as both the Chief Executive Officer and Chairman of the Board.

Code of Business Conduct and Ethics

We have adopted a code of business conduct and ethics, applicable to all of our directors, officers, employees and all persons performing similar functions.

A copy of the code is filed as Exhibit 14.1 to this Annual Report on Form 10-K.

We expect that any amendments to the code, or any waivers of its requirements, will be disclosed in our public filings with the Commission.

Corporate Governance Guidelines

We have adopted a corporate governance guidelines that serve as a flexible framework within which our Board and its committees operate.

These guidelines cover a number of areas including the size and composition of the Board, Board membership criteria and director qualifications, director responsibilities, Board agenda, roles of the chairman of the Board and Chief Executive Officer and Chief Financial Officer, meetings of independent directors, committee responsibilities and assignments, Board member access to management and independent advisors, director communications with third parties, director compensation, director orientation and continuing education, evaluation of senior management and management succession planning.

A copy of our corporate governance guidelines is filed as Exhibit 14.2 to this Annual Report on Form 10-K.

Family Relationships

None of our directors or executive officers has a family relationship as defined in Item 401 of Regulation S-K.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires our directors and executive officers, and persons who own more than 10% of a registered class of our equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership of our common stock and other equity securities.

To our knowledge, based solely on a review of the copies of such reports furnished to us and written representations that no other reports were required, during the fiscal year ended December 31, 2025, all Section 16(a) filing requirements applicable to our officers, directors and greater than 10% beneficial owners were complied with, except that certain initial Forms 3 and Forms 4 may not have been timely filed due to the timing of director appointments and the transition of the Company’s board during 2025.

EXECUTIVE COMPENSATION

The following table sets forth the total compensation awarded to, earned by, or paid to our Chief Executive Officer during each of the last two completed years.

No other individuals are employed by us or have earned a total annual salary and bonus in excess of $100,000 during any of the last two completed years.

Summary Compensation Table

The following table sets forth information concerning the compensation paid to or accrued by our named executive officers for the fiscal years ended December 31, 2025 and 2024.

As a smaller reporting company, our named executive officers consist of our principal executive officer and our two most highly compensated executive officers other than our principal executive officer who were serving as executive officers at the end of the last completed fiscal year.

Name and principal position

Option Awards

Non-Equity Incentive Plan Compensation

Nonqualified Deferred Compensation Earnings

All other compensation

Jenifer Osterwalder

President and Chief Executive Officer

Stephen Spalding,

Interim Chief Financial and Accounting Officer and Director (former)

Jenifer Osterwalder, Chief Executive Officer and President (1)

Daniel Gilcher, Chief Financial and Accounting Officer (2)

* Amounts reflect the aggregate grant date fair value of stock option awards computed in accordance with ASC 718, Compensation — Stock Compensation.

Osterwalder's salary of $144,000 per year ($12,000 per month) was accrued for services rendered as Chief Executive Officer.

The full amount was accrued but remained unpaid as of December 31, 2025.

(2) Daniel Gilcher was appointed Chief Financial Officer, Principal Financial Officer and Principal Accounting Officer of the Company effective January 3, 2026.

Gilcher has not entered into an employment agreement with the Company and has not received any cash or equity compensation for his services as of the date of this Annual Report on Form 10-K.

Employment Agreements

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Osterwalder, does not currently have an employment agreement;

however, we pay Ms.

Osterwalder $12,000 a month beginning January 1, 2020 for services rendered.

however, the Company pays Ms.

Osterwalder $12,000 per month beginning January 1, 2020 for services rendered.

As of December 31, 2025 and 2024, amounts due to the CEO related to accrued salaries were $576,000 and $432,000, respectively.

As of the date of this annual report on Form 10-K for the year ended December 31, 2024, we have no other employment agreements in place with any of our other executive officers, directors or employees.

OUTSTANDING EQUITY AWARDS AT YEAR END

There were no outstanding option equity awards at our year end.

Daniel Gilcher, Spectral CFO and Principal Accounting Officer, does not yet have an employment agreement and is in the process of negotiating an employment package.

As of the date of this filing, we have no other employment agreements in place with any of our other executive officers, directors or employees.

Outstanding Equity Awards at Fiscal Year End

The following table sets forth the outstanding equity awards held by our named executive officers as of December 31, 2025.

There were no outstanding equity awards held by our named executive officers as of December 31, 2024 except as listed below.

Number of Securities Underlying Unexercised Options (#) Exercisable

Number of Securities Underlying Unexercised Options (#) Unexercisable

Option Exercise Price ($)

Option Expiration Date

Jenifer Osterwalder (1)

June 12, 2034

Daniel Gilcher

(1) Represents stock options granted to Ms.

Osterwalder on June 12, 2024, with an exercise price of $0.43 per share.

The options vest in equal monthly installments over 24 months and expire on June 12, 2034.

Stock Option Activity

As of December 31, 2025, the Company had outstanding stock options to purchase 3,646,875 shares of common stock with a weighted-average exercise price of $0.43 per share and a weighted-average remaining life of 8.45 years.

During the year ended December 31, 2025, 3,163,125 options were forfeited in connection with the resignation of five former directors.

No new options were granted or exercised during the year ended December 31, 2025.

As of December 31, 2025, 2,746,875 options were vested.

During the year ended December 31, 2025, the Company recognized $1,077,319 in stock-based compensation expense related to stock options, compared to $1,165,151 for the year ended December 31, 2024.

As of December 31, 2025, total unrecognized compensation expense from stock options was $367,500 and is expected to be expensed over 0.5 years.

Compensation of Directors

Pursuant to authority granted under Article II, Section 2.16 of our bylaws, directors are entitled to such compensation as our Board of Directors shall, from time to time, determine.

The following table sets forth the compensation of our directors for the year ended December 31, 2024 and for December 31, 2023

DIRECTOR COMPENSATION

As of December 31, 2024

Fees Earned or Paid in Cash

Option Awards

Non-Equity Incentive

Plan Compensation

Non-Qualified Deferred Compensation Earnings

All Other Compensation

Jenifer Osterwalder

Stephen Spalding

Aby Alexander*

Paul Breitenbach

Chad McLeaming

* These options were promised by the Company but have not yet been approved by the board of directors and no option agreements have been entered into between the directors and the Company.

As the directors resigned before the board issued these options, these options will not be issued by the Company.

These directors didn’t serve in 2023.

There was no compensation paid to the Directors during the year 2023.

The following table sets forth the compensation of our directors for the year ended December 31, 2025.

The following table includes all individuals who served as directors during the year ended December 31, 2025.

Osterwalder’s compensation is also reflected in the Summary Compensation Table above, as she serves as both a director and the Company’s principal executive officer.

Director Compensation Table - Year Ended December 31, 2025

Cash Compensation

Options Awards

Total Compensation

Jeffery Chong

Michael Turner (2)

Gottfried Werner (2)

Olga Nezerenko

Jonathon Walton (1)

* Amounts reflect the aggregate grant date fair value of stock option awards computed in accordance with ASC 718, Compensation — Stock Compensation.

Walton served as a director of the Company and resigned in 2025.

During 2024, Mr.

Walton was granted options to purchase 75,000 shares of common stock at an exercise price of $0.43 per share, of which 59,375 shares were forfeited upon his resignation.

As of December 31, 2025, Mr.

Walton held vested and exercisable options to purchase 15,625 shares of common stock.

(2) In January 2026 (subsequent to the fiscal year end), Mr.

Turner and Mr.

Werner were each granted options to purchase 100,000 shares of common stock at an exercise price of $3.99 per share, vesting monthly at 4,166 shares per month.

These grants are not reflected in the table above as they occurred after December 31, 2025.

There was no cash compensation paid to the independent directors during the years ended December 31, 2025 or 2024.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

The following table sets forth information with respect to compensation plans under which our equity securities are authorized for issuance as of the end of the year ended December 31, 2024:

EQUITY COMPENSATION PLAN INFORMATION

Number of securities to be issued upon exercise of outstanding options, warrants and rights

Weighted-average exercise price of outstanding options, warrants and rights

Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))

Equity compensation plans approved by security holders

Equity compensation plans not approved by security holders

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information regarding the beneficial ownership of our common stock as of June 23, 2025.

The information in these tables provides ownership information for:

each person known by us to be the beneficial owner of more than 5% of our common stock;

each of our directors and executive officers;

and all of our directors and executive officers as a group.

Beneficial ownership has been determined in accordance with the rules and regulations of the SEC and includes voting or investment power with respect to our common stock and those rights to acquire additional shares within sixty days.

Unless otherwise indicated, the persons named in the table below have sole voting and investment power with respect to the number of shares of common stock indicated as beneficially owned by them, except to the extent such power may be shared with a spouse.

In computing the number of shares beneficially owned by a person and the percentage of ownership of that person, shares of common stock subject to options and/or warrants held by that person that are currently exercisable, as appropriate, or will become exercisable within sixty (60) days of the reporting date are deemed outstanding, even if they have not actually been exercised.

Those shares, however, are not deemed outstanding for the purpose of computing the percentage ownership of any other person.

The address of each person listed is care of Spectral Capital Corporation., 701 Fifth Avenue, Suite 4200, Seattle, Washington, 98104.

Nature of Ownership

Percent of Class

The following tables set forth certain information with respect to the beneficial ownership of our shares of common stock for:

● each shareholder known by us to be the beneficial owner of more than 5% of our outstanding shares of Common Stock,

● each of our directors,

● each of our named executive officers, and

● all of our directors and executive officers as a group.

We have determined beneficial ownership in accordance with the rules of the SEC.

Under such rules, beneficial ownership includes any shares of Common Stock over which the individual has sole or shared voting power or investment power as well as any shares of common stock that the individual has the right to subscribe for within 60 days of the date of this filing, through the exercise of any warrants or other rights.

Except as indicated by the footnotes below, we believe, based on the information furnished to us, that the persons and entities named in the table below have sole voting and investment power or the power to receive the economic benefit with respect to all shares of common stock that they beneficially own, subject to applicable community property laws.

None of the shareholders listed in the table are a broker-dealer or an affiliate of a broker dealer.

Applicable percentage ownership is based on 89,354,216 shares of Common Stock outstanding as of March 31, 2026.

Unless otherwise indicated, the address of each beneficial owner listed in the table below is c/o Spectral Capital Corporation, 701 Fifth Avenue, Suite 4200, Seattle, WA 98104.

Shares Beneficially Owned

Directors and Named Executive Officers

Jenifer Osterwalder (1)

Sean Michael Brehm

Chad McLeaming

All officers, directors, and 5% or greater shareholders as a group

*Includes options to purchase 3,000,000 shares.

Daniel Gilcher (2)

Michael Turner (3)

Jeffrey Chong

Gottfried Werner (4)

Olga Nezerenko

5% Stockholders

Decus Pro OU (5)

All Directors and Officers as a group (6 persons)

*Less than 1% of the outstanding shares of common stock of the Company as of the date hereof.

(1) Consists of 69,371 shares owned directly and immediately exercisable options to purchase 3,000,000 shares of common stock at an exercise price of $0.43 per share that are subject to vesting requirements of which 2,625,000 are exercisable as of March 12, 2026, and which vest 125,000 shares per month thereafter at $0.43 per share.

(2) Consists of 400,000 common shares beneficially owned and held by Adama GmbH and 175,000 shares directly owned.

(3) Consists of 100,000 options to acquire common stock at $3.99 per share that vest monthly at 4166 per month.

(4) Consists of 100,000 options to acquire common stock at $3.99 per share that vest monthly at 4166 per month.

(5) The beneficial owner of DecusPro is Boriss Aleksandrov.

Their address is DecusPro, OU.

Sutiste tee 19a-200, 13419 Tallinn ESTONIA .

Equity Compensation Plan Information

The following table provides information as of December 31, 2025 about our equity compensation plans under which shares of our common stock are authorized for issuance.

There were no outstanding equity awards held by our named executive officers as of December 31, 2024.

Plan Category

Securities to be Issued Upon Exercise of Outstanding Options (a)

Weighted-Average Exercise Price (b)

Securities Remaining Available for Future Issuance (c)

Plans approved by security holders

Plans not approved by security holders

The Company has adopted a stock option and award plan providing for the issuance of up to 15,000,000 common shares.

As of December 31, 2025, 3,646,875 options were outstanding and 11,353,125 shares remained available for future issuance.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

The following is a description of transactions or series of transactions since our incorporation, to which we were or are to be a participant and in which the amount involved exceeds the lesser of $120,000 or 1% of the average of the total assets at December 31, 2025 and 2024, and in which any of our directors, executive officers or persons who we know hold more than five percent of any class of our capital stock, including their immediate family members, had or will have a direct or indirect material interest, other than compensation arrangements with our directors and executive officers.

Related Party Transactions

4 unchanged sentences

As of December 31, 2025 and 2024, amounts due to the CEO related to accrued salaries were $576,000and $432,000 respectively.

Related Party Transactions (Cont’d)

Daniel Gilcher, the Company’s Chief Financial Officer, Principal Financial Officer and Principal Accounting Officer

Daniel Gilcher holds shares of the Company’s common stock that were issued prior to his appointment as an executive officer.

Specifically, on August 1, 2025, the Company issued 575,000 shares of its common stock to Mr.

Gilcher and an entity he controls in connection with the acquisition of 42 Telecom Ltd., pursuant to the terms of the definitive acquisition agreement.

Gilcher received such shares solely in his capacity as a shareholder of 42 Telecom Ltd.

and not as compensation for services to the Company.

Gilcher was appointed Chief Financial Officer effective January 3, 2026.

No shares of common stock or other equity securities have been issued to Mr.

Gilcher as compensation for services, and he has not entered into any employment agreement or equity incentive arrangement with the Company providing for the issuance of equity securities as of the date of these financial statements.

Other than the foregoing, there were no related party transactions between the Company and Mr.

Gilcher during the periods presented that required disclosure under applicable accounting standards.

Spectral Capital Corporation engages in transactions with certain related parties, including directors, officers, significant shareholders, and affiliates.

1 unchanged sentence

Below are the related party transactions that occurred during the fiscal year ended December 31, 2025.

Acquisition of Node Nexus Network Co.

· Transaction Date:

August 29, 2024

· Related Party:

Sean Michael Brehm , Chairman of the Board

· Transaction Description:

o On August 29, 2024, Spectral completed the acquisition of 100% of Node Nexus Network Co.

LLC (“Node Nexus”) from Sean Michael Brehm , the sole owner of Node Nexus and now Spectral’s Chairman.

o Spectral issued 1,000,000 shares of Series Quantum Preferred Stock in exchange for all of the outstanding membership interests of Node Nexus.

Each preferred share is convertible into 40 common shares after a 12-month holding period, subject to the availability of authorized shares.

o Concurrently, Mr.

Brehm invested $1,010,000 in Spectral through a private placement, purchasing 5,050,000 common shares at $0.20 per share .

o As a result of this transaction, Mr.

Brehm became Spectral’s controlling shareholder and now holds a substantial voting interest in the Company.

· Conflict Mitigation:

o Given that Mr.

Brehm was both the seller and a newly appointed director, the transaction was reviewed and approved by Spectral’s independent directors to ensure that the terms were fair and in the best interest of the Company and its shareholders .

o The Share Exchange Agreement and related documents were filed with the SEC and disclosed in the Company’s Form 8-K filed on August 30, 2024.

Licensing Agreement with Crwdunit, Inc.

· Transaction Date:

June 23, 2024

· Related Party:

Crwdunit, Inc.

, controlled by Sean Michael Brehm

· Transaction Description:

o In connection with the acquisition of Node Nexus, Spectral entered into a Licensing Agreement with Crwdunit, Inc.

to license the Distributed Quantum Ledger Database (DQLDB) technology that powers the Vogon Cloud.

o Crwdunit, Inc.

is a Delaware corporation controlled by Mr.

Brehm , who was appointed as Spectral’s Chairman in June 2024.

o This technology is critical to Spectral’s business, as it underpins its quantum-secured cloud infrastructure and decentralized computing model.

· Potential Conflict and Oversight:

o The licensing arrangement was structured on arms-length terms and reviewed by independent directors to ensure fairness.

o As part of the transaction, Spectral also secured an option to acquire 100% of Crwdunit, Inc.

for $10 million in cash or stock at a future date.

o If Spectral does not exercise this option, the Company will remain reliant on Crwdunit’s technology under the terms of the licensing agreement.

Stock Issuance to CEO for Expense Reimbursement

· Transaction Date:

April 22, 2024

· Related Party:

Jenifer Osterwalder, Chief Executive Officer

· Transaction Description:

o On April 22, 2024, Spectral issued 68,311 restricted common shares to CEO Jenifer Osterwalder in exchange for $6,148 in reimbursable business expenses she had personally funded.

o The shares were valued at approximately $0.09 per share , based on the closing price of the Company’s stock at the time of issuance.

· Purpose and Justification:

o This issuance was approved by the Board of Directors as a reimbursement mechanism due to Spectral’s limited cash resources at the time.

o No interest or additional compensation was granted in connection with this transaction.

Director and Officer Stock Option Grants

· Transaction Date:

June 12, 2024

· Related Parties:

o Sean Michael Brehm (Chairman) – 3,000,000 options

o Jenifer Osterwalder (CEO) – 3,000,000 options

o Independent Directors – Smaller option grants

· Transaction Description:

o On June 12, 2024, Spectral granted stock options to directors and executive officers as part of its equity incentive program.

o The options have an exercise price based on the then-current 409(a) valuation , with vesting schedules aligned to long-term service and performance .

· Board Approval & Fairness Considerations:

o The grants were reviewed and approved by the Board to ensure that they aligned with market standards for executive and director compensation.

o The options provide an equity-based incentive for leadership to focus on increasing shareholder value.

Debt Settlement with Sky Data PLL OU

· Transaction Date:

· Related Party:

Sky Data PLL OU , a significant shareholder

· Transaction Description:

o In April 2024, Spectral settled a $81,950 liability owed to Sky Data PLL OU by issuing 3,563,043 shares of common stock .

o The shares were valued at approximately $0.09 per share , based on the fair market value at the time.

· Purpose and Justification:

o This transaction allowed Spectral to eliminate debt without using cash resources , supporting its financial stability.

o Sky Data was a major creditor and investor in Spectral’s previous telecommunications operations.

· Potential Conflict and Oversight:

o While Sky Data is a significant shareholder, it does not have board representation or executive control over Spectral.

o The transaction was approved by independent directors and was structured to be mutually beneficial .

On February 5, 2025, the Company entered into a loan agreement with B Holdings OU, which is associated with the beneficial owner of DecusPro, Boriss Aleksandrov, a shareholder of the Company.

During the year ended December 31, 2025, the Company received total proceeds of $204,590 under this agreement and repaid the full amount during the same year.

The loan bore interest at 10% per annum repayable on demand and matured in 12 months.

As of December 31, 2025, no balance was outstanding under this agreement.

In June 2025, the Company entered into a loan agreement with SKY PLL OU, a shareholder of the Company, whereby the Company may borrow up to a total principal amount of $500,000.

During the year ended December 31, 2025, the Company received a total of $10,000 under this agreement.

The loan bears no interest and matured on December 31, 2025.

As of December 31, 2025, the total amount due under this agreement was $10,000.

On June 2, 2025, the Company entered into a promissory note with Michael Turner, a member of the Board of Directors, for a principal amount of $10,000.

The note bears interest at 5% per annum, unless repaid in full within 60 days of issuance, in which case no interest is due.

The principal and any accrued interest are payable on demand.

As of December 31, 2025, the total amount due under this note was $10,000.

Director Independence

3 unchanged sentences

These independent directors have no material relationships with the Company outside of their board service and stock ownership.

The Board intends to continue strengthening its governance practices and may expand its independent oversight in the future.

The Board intends to

continue strengthening its governance practices and may expand its independent oversight in the future.

Policy on Related Party Transactions

7 unchanged sentences

These advances bear no interest and are due on demand.

As of December 31, 2024 and 2023, Ms.

Osterwalder was due $0 and $6,150 in connection with these advances, respectively.

Independent Directors

1 unchanged sentence

The following Directors are considered independent directors:

Aby Alexander, Paul Breitenbach, Samson Lee and Chad McLeaming.

Review, Approval or Ratification of Transactions with Related Persons

Olga Nezerenko, Gottfried Werner, and Michael Turner.

The Board of Directors may ratify a “Related Transaction” by a majority vote of the disinterested directors that are voting at any Special or Regularly scheduled board meeting.

2 unchanged sentences

PRINCIPAL ACCOUNTANT FEES AND SERVICES

The following table sets forth the aggregate amount of various professional fees billed by our principal accountants with respect to our last two years:

The following table sets forth the fees billed by our principal independent accountants, RBSM LLP, for each of the last two fiscal years for the categories of services indicated.

Audit-Related Fees

All other fees

Description of Exhibit

Articles of Incorporation of Spectral Capital Corporation, dated September 13, 2000, incorporated by reference to Exhibit 3(a) on Form 10-SB filed May 1, 2003.

Certificate of Amendment to Articles of Incorporation of Spectral Capital Corporation, dated June 17, 2007, incorporated by reference to Exhibit 2.1 on Form 8-K filed July 7, 2004.

By-laws of Spectral Capital Corporation, dated September 14, 2000, incorporated by reference to Exhibit 3(b) on Form 10-SB filed May 1, 2003.

Certificate of Amendment to Articles of Incorporation of Spectral Capital Corporation, dated November 22, 2022 filed with the secretary of state of Nevada and effective on December 2, 2022.

Telecommunications services agreement with Sky Data PLL OU (Estonia) dated January 3, 2022.

Reciprocal Carrier Services Agreement entered into between EZ Mobile, LLC and Spectral Capital Corp.

dated February 15, 2022.

List of Subsidiaries of the Registrant

Certification of Chief Executive Officer pursuant to Section 302 of Sarbanes -Oxley Act of 2002 .

Certification of Chief Financial and Principal Accounting Officer pursuant to Section 302 of Sarbanes -Oxley Act of 2002.

Certification of Chief Executive Officer required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C.

Certification of Chief Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C.

* Represents fees billed by the predecessor independent accountant

Audit Fees consist of fees for the audit of our annual financial statements, the review of our quarterly financial statements, and other services provided in connection with statutory and regulatory filings.

Pre-Approval Policy

Our Audit Committee pre-approves all auditing services and non-audit services permitted by law to be provided by our independent public accountants before the accountant is engaged.

The following exhibits are filed as part of this Annual Report on Form 10-K:

EXHIBIT INDEX

Annual Report on Form 10-K

Incorporated by Reference

Exhibit Number

Filed Herewith

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

June 23, 2025

Asset Purchase Agreement by and between the Company and Eliznikcomp dated October 15, 2025, between Spectral Capital Corporation and Eliznikcomp and incorporated by reference to the Company’s Current Report on Form 8K filed October 16, 2025.

Share Exchange Agreement with 42 Telecom dated August 1, 2025, between Spectral Capital Corporation and 42 Telecom incorporated by reference to the Company’s Current Report on Form 8K filed August 4, 2025.

Stock Purchase Agreement with Telvantis Voice Services dated December 31, 2025 between Spectral Capital Corporation and Telvantis Voice Services incorporated by reference to the Company’s Current Report on Form 8K filed August 5, 2025.

Binding Term Sheet with Snack Prompt dated October 3, 2025 between Spectral Capital Corporation and Snack Prompt incorporated by reference to the Company’s Current Report on form 8K filed October 8, 2025.

Lock-Up and Trickle-Out Agreement, dated December 29, 2025, between Spectral Capital Corporation and Telvantis, Inc.

(incorporated by reference to Exhibit A to Exhibit 2.1 to the Company's Current Report on Form 8-K filed August 5, 2025).

Code of Business Conduct and Ethics

Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certification of Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Certification of Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized.

SPECTRAL CAPITAL CORPORATION

March 31, 2026

/s/ Jenifer Osterwalder

Jenifer Osterwalder

President and Chief Executive Officer

Chief Executive Officer,

President and Director

(Principal Executive Officer)

/s/ Daniel Gilcher

Daniel Gilcher

Chief Financial Officer

(Principal Financial Officer and

Principal Accounting Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/ Jenifer Osterwalder

Chief Executive Officer, President and Director

March 31, 2026

Jenifer Osterwalder

Chief Financial and Accounting Officer

(Principal Executive Officer)

/s/ Daniel Gilcher

Chief Financial Officer (Principal Financial

March 31, 2026

Daniel Gilcher

Officer and Principal Accounting Officer)

/s/ Jeff Chong

March 31, 2026

/s/ Michael Turner

March 31, 2026

Michael Turner

/s/ Gottfried Werner

March 31, 2026

Gottfried Werner

/s/ Olga Nezerenko

March 31, 2026

Olga Nezerenko

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures