Mitesco, Inc. 10-K

ITEM 5. MARKET FOR REGISTRANT ’ S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Trading Market Our Common Stock is quoted on the OTC Pink Market with the symbol “MITI.” On April 14, 2026, the price of our Common Stock as reported on the OTC was $0.10 and we have approximately 2,000 holders of record of our Common Stock, and approximately 5,000 shareholders including smaller holders and those with restricted shares not currently in the market. DESCRIPTION OF OUR CAPITAL STOCK General The total number of shares of all classes of shares which we have authority to issue is 600,000,000 of which 500,000,000 shares are designated as “Common Stock” with a par value of $0.01 per share, and 100,000,000 shares are designated as “preferred stock.” As of December 31, 2025, we had 15,093,055 issued and outstanding shares of Common Stock, 533,340 shares of Series A Preferred Stock issued or outstanding, no shares of Series D Preferred Stock issued and outstanding, no shares of Series F Preferred Stock issued or outstanding, and 42,103 shares of Series X Preferred Stock issued and outstanding. DIVIDEND POLICY We have never declared or paid any cash dividends on our Common Stock. Under the Nevada law, we may declare and pay dividends on our capital stock either out of our surplus, as defined in the relevant Nevada statutes, or if there is no such surplus, out of our net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year. If, however, the capital of our company, computed in accordance with the relevant Nevada statutes, has been diminished by depreciation in the value of our property, or by losses, or otherwise, to an amount less than the aggregate amount of the capital represented by the issued and outstanding stock of all classes having a preference upon the distribution of assets, we are prohibited from declaring and paying out of such net profits and dividends upon any shares of our capital stock until the deficiency in the amount of capital represented by the issued and outstanding stock of all classes having a preference upon the distribution of assets shall have been repaired. The Company does not intend to declare or pay any cash dividends on its Common Stock in the foreseeable future. The holders of our Common Stock are entitled to receive only such dividends (cash or otherwise) as may be declared by our Board of Directors. Series A Preferred Stock During the year ended December 31, 2025, the Company issued 5,000 shares of Series A Preferred Stock in exchange for $125,000 cash, and there were no changes to the authorized shares of this class during the year. During the year ended December 31, 2025, we redeemed 34,658 shares of this class in exchange for 3,794,802 shares of common stock. During FY2024 we authorized the creation of up to 3,000,000 shares of a new Series A Preferred stock which has no voting rights, and pays no dividends, but ranks superior to all other securities, except for the Series X Preferred stock which is pari parsu with the Series A Preferred stock with regard to any liquidation of assets. As of the date of this filing there are 533,340 shares of Series A Preferred stock issued and outstanding. 17 Table of Contents Series X Preferred Stock The Series X Preferred shares have a liquidation preference of $25.00 per share and will pay a 10% per year dividend based upon the liquidation value. The dividend may be paid in cash or in the issuance of restricted Common Stock. If the Company chooses to pay the dividend in restricted Common Stock the number of shares issued to fulfill the dividend payment shall be determined based on the stock price on the date of the 15 th of the month, or the following trading day if it falls on a weekend. The Series X Preferred shares have 400 votes per share and votes with our Common Stock. From July 2023 through September 2024, with consent of the holders, the Company used an $.80 share price in computing the number of shares to be issued to satisfy the dividend requirements, even though the actual market price was substantially lower. Starting in October 2024 the Company returned to a policy of using the actual market price in determining the number of shares to be issued in satisfaction of the dividends. During the year ended December 31, 2025, the Company issued 2,400 shares of Series X Preferred Stock to the newly elected director of the Company for compensation in lieu of services in the amount of $60,000. During the year ended December 31, 2025, the Company issued 20,000 shares of Series X Preferred Stock to an institutional investor and consultant for compensation in lieu of services in the amount of $500,000. As of December 31, 2025, a total of 42,103 shares of Series X Preferred Stock were issued and outstanding. Series D Preferred Stock Each share of Series D Preferred Stock accrues dividends on a quarterly basis in arrears, at the rate of 6% per annum of the Stated Value and to be paid within 15 days after the end of each of our fiscal quarters. The Series D Preferred Stock shares rank senior to all other preferred stock of the Company except in relation to the Company’s Series X Preferred Stock with respect to the preferences as to dividends, distributions and payments upon the liquidation, dissolution and winding up of the Company. During the financial year ended December 31, 2025, the Company and the holder of the Series D Preferred Stock entered into an Obligation Exchange Agreement whereby the outstanding Series D Preferred Stock and all accrued dividends were exchanged the shares for common shares. Equity Compensation Plans For information on the Company’s equity compensation plans, see “Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.” Recent Sales of Unregistered Shares Common Stock Issuances in 2025 Restricted Common Stock Issuances A) During FY2025 the Company issued a total of 161,042 shares of restricted common stock for the payment of the Series X Preferred stock dividends. The issuances were as follows: a. Holder Leath, a member of the Board of Directors, received a total of 16,304 shares for dividend payments; b. Holder Balencic, a member of the Board of Directors, received a total of 16,304 shares for dividend payments; c. Holder Mitchell, a former member of the Board of Directors, received a total of 16,304 shares for dividend payments; d. Holder Clifton, a member of the Board of Directors, received a total of 2,941 shares for dividend payments; e. Holder Anglo Irish Management LLC received a total of 109,189 shares for dividend payments. 18 Table of Contents B) During FY2025 the Company issued the following shares to the Directors in consideration for their contributions outside of their roles as a Director; a. For efforts through June 30, 2025, Clifton was issued 175,000 shares of restricted stock upon his election to the board; C) A consultant, A. Colvin, upon her appointment as CTO, received a total of 200,000 shares of restricted stock as consideration for her efforts; D) As part of its efforts to retain individuals and organization to assist in the Robo Agent software development, the Company issued shares of restricted common stock to the following; a. S. Downey, 125,000 shares as consideration for their contributions; b. M. Bowen, 50,000 shares as consideration for their contributions; c. K. Hughes, 150,000 shares as consideration for their contributions; d. F. Panunto, 200,000 shares as consideration for their contributions; e. S. Smith, 100,000 shares as consideration for their contributions. f. J. Caplan, 100,000 shares as consideration for their contributions. g. G. Kupsch, 125,000 shares as consideration for their contributions. E) During FY2025 the Company issued a total of 3,794,755 shares of restricted common stock for the redemptions of the Series A Preferred stock. The issuances were as follows: a. Holder Jefferson, received a total of 178,409 shares for redemption of 1,544 Series A shares; b. Holder Cavalry, received a total of 769,919 shares for redemption of 6,642 Series A shares; c. Holder AJB Capital, received a total of 1,309,280 shares for redemption of 12,131 Series A shares; d. Holder GS Capital, received a total of 719,800 shares for redemption of 6,463 Series A shares; e. Holder Mercer, received a total of 531,635 shares for redemption of 5,399 Series A shares. f. Holder Pinz, received a total of 278,034 shares for redemption of 2,385 Series A shares. g. Holder C/M Capital, received a total of 7,725 shares for redemption of 94 Series A shares. F) During FY2025 the following issuances of restricted stock were made to certain holders of obligations of the Company: a. I. Lindstrom received 75,000 shares in exchange for the cancellation of their accrued obligations, notes payable and related accrued interest, and exchange of their Series D shares and related accrued dividends along with the cancellation of all other obligations and all outstanding warrants; b. J. Finnegan received 75,000 shares in exchange for the cancellation of their accrued obligations, notes payable and related accrued interest, along with the cancellation of all other obligations and all outstanding warrants; 19 Table of Contents Common Stock Issuances in 2024 Restricted Common Stock Issuances A) During FY2024 the Company issued a total of 99,403 shares of restricted common stock for the payment of the Series X Preferred stock dividends to the nine (9) holders. Amounts noted include shares issued for five (5) holders who subsequently cancelled their Series X Preferred shares. The issuances were as follows: a. Holder Crone received a total of 5,625 shares. Crone exchanged his Preferred X shares as of September 28, 2024, for common stock using a $4.00 per share valuation; b. Holder DeLuca received a total of 6,759 shares. DeLuca exchanged his Preferred X shares as of September 28, 2024, for common stock using a $4.00 per share valuation; c. Holder Diamond, former CEO, received a total of 5,148 shares. Diamond exchanged his Preferred X shares as of September 28, 2024, for common stock using a $4.00 per share valuation; d. Holder Riewold received a total of 2,813 shares. Riewold exchanged his Preferred X shares as of September 28, 2024, for common stock using a $4.00 per share valuation; e. Holder Lightmas received a total of 7,594 shares. Lightmas exchanged his Preferred X shares as of September 28, 2024, for common stock using a $4.00 per share valuation; f. Holder Mitchell, a member of the Board of Directors, received a total of 8,661 shares for dividend payments; g. Holder Balencic, a member of the Board of Directors, received a total of 8,661 shares for dividend payments; h. Holder Leath, a member of the Board of Directors, received a total of 8,661 shares for dividend payments; i. Holder Anglo Irish Management LLC received a total of 45,122 shares for dividend payments. B) During FY2024 the Company issued the following shares to the Directors in consideration for their contributions outside of their roles as a Director; a. For efforts through June 30, 2024, each of Leath, Balencic and Mitchell issued 100,000 shares of restricted stock each, a total of 300,000 shares in aggregate; b. For efforts from July through December 31, 2024, each of Leath, Balencic and Mitchell issued 150,000 shares of restricted stock each, a total of 450,000 shares in aggregate. C) The members of the Advisory Board each received 75,000 shares of restricted stock for their contribution over a 12-month period, a total of 525,000 shares, as follows: a. Advisor Wade received 75,000 shares; Advisor Plybon received 75,000 shares; Advisor McLoughlin received 75,000 shares; Advisor Simon received 75,000 shares; Advisor Crawford received 75,000 shares; Advisor Clifton received 75,000 shares; Advisor M. Valania received 75,000 shares; D) A consultant, B. Valania, who is handling sales and marketing for the Company’s Centcore subsidiary, received a total of 200,000 shares of restricted stock as consideration for his efforts; E) A. Lance, wife of the CEO Leath, received a total of 100,000 shares of restricted stock as a part of the consideration for her web site business acquired in FY2024; F) As a part of the FY2024 restructuring the following issuances of restricted stock were made to former executives of the Company, effective September 28, 2024: a. L. Diamond, former CEO, received 12,500 shares in exchange for the cancellation of his Series X Preferred shares, and 137,375 shares in exchange for cancellation of all other obligations and all outstanding warrants; b. M. Diamond, daughter of the former CEO, received 20,966 shares in exchange for cancellation of all obligations and any and all outstanding warrants; c. T. Brodmerkel, a former Director of the Company, received 5,212 shares in exchange for the cancellation of all obligations and any and all outstanding warrants; d. M. Howe, former CEO of the clinic subsidiary closed in FY2022, received 172,497 shares in exchange for cancellation of all other obligations and any and all outstanding warrants; e. F. Navqi, a former Director of the Company, received 4,500 in exchange for cancellation of all other obligations and any and all outstanding warrants; 20 Table of Contents f. J. Inturregi, a former Director of the Company, received 13,864 shares in exchange for the cancellation of all other obligations and any and all outstanding warrants; g. A. Dobberlin, husband of a former officer of the Company, received 6,449 shares in exchange for cancellation of all other obligations and any and all outstanding warrants h. B. Case, a former officer of the clinic subsidiary closed in FY2022, received 30,802 shares in exchange for cancellation of all other obligations and any and all outstanding warrants G) As a part of the FY2024 restructuring the following issuances of restricted stock were made to current executives of the Company: a. J. Mitchell, a current Director of the Company, received 27,040 shares in consideration of the cancellation of all obligations to him prior to December 2023, including the cancellation of all warrants; b. M. Leath, a current Director of the Company, received 17,767 shares in consideration of the cancellation of all obligations to him prior to December 2023, including the cancellation of all warrants H) As a part of the FY2024 restructuring the following issuances of restricted stock were made to certain holders of obligations of the Company, effective September 28, 2024: a. R. Riewold received 12,500 shares in exchange for the cancellation of his Series X Preferred shares and cancellation of all other obligations and all outstanding warrants; b. F. Lightmas received 56,613 shares in exchange for the cancellation of his Series X Preferred shares and cancellation of all other obligations and all outstanding warrants; c. J. Crone received 18,025 shares in exchange for the cancellation of his Series X Preferred shares and cancellation of all other obligations and all outstanding warrants; d. Anson Investments received 617,020 shares in exchange for the cancellation of all obligations and all outstanding warrants; e. Anson East received 210,787 shares in exchange for the cancellation of all obligations and all outstanding warrants; f. Dragon Investments received 335,061 shares in exchange for the cancellation of all obligations and all outstanding warrants; g. Mackay Investments received 176,560 shares in exchange for the cancellation of all obligations, including that of its principal, and all outstanding warrants; h. Darling Investments received 111,075 shares in exchange for the cancellation of all obligations and all outstanding warrants; i. Anglo Irish Management LLC received 58,718 shares in exchange for the cancellation of all obligations and all outstanding warrants of one of its shareholders; j. The principals of Intereum, a vendor of the clinic operations, received 135,345 shares in exchange for the cancellation of all obligations and all outstanding warrants; k. J. Enright received 68,625 shares in exchange for the cancellation of all obligations and all outstanding warrants; l. C. Hagan received 617,020 shares in exchange for the cancellation of all obligations and all outstanding warrants; m. J. Caplan received 37,238 shares in exchange for the cancellation of all obligations and all outstanding warrants; n. S. Bridges received 36,646 shares in exchange for the cancellation of all obligations and all outstanding warrants; o. E. Nommsen received 22,565 shares in exchange for the cancellation of all obligations and all outstanding warrants; 21 Table of Contents p. R. Eisenberg, and his advisors, received 18,000 shares in exchange for the cancellation of all obligations and all outstanding warrants; q. S. Goff received 12,409 shares in exchange for the cancellation of all obligations and all outstanding warrants; r. L. Lewis received 12,409 shares in exchange for the cancellation of all obligations and all outstanding warrants; s. Carter, Terry & Company received 11,573 shares in exchange for the cancellation of all obligations and all outstanding warrants; t. C. Schrier received 8,615 shares in exchange for the cancellation of all obligations and all outstanding warrants; u. J. Ramsdell received 6,500 shares in exchange for the cancellation of all obligations and all outstanding warrants; v. C. Schuler received 5,113 shares in exchange for the cancellation of all obligations and all outstanding warrants; w. Imeson Consulting received 2,500 shares in exchange for the cancellation of all obligations and all outstanding warrants; x. Exchange Listing, LLC 750 shares in exchange for the cancellation of all obligations and all outstanding warrants; ITEM 6. SELECTED FINANCIAL DATA Implications of Being a Smaller Reporting Company We are a “smaller reporting company” as defined in the Exchange Act. We may take advantage of certain of the scaled disclosures available to smaller reporting companies so long as the market value of our voting and non-voting Common Stock held by non-affiliates is less than $250.0 million measured on the last business day of our most recently completed second fiscal quarter, or our annual revenue is less than $100.0 million during the most recently completed fiscal year and the market value of our Common Stock held by non-affiliates is less than $700.0 million measured on the last business day of our most recently completed second fiscal quarter. To the extent we take advantage of such reduced disclosure obligations, it may also make comparisons of our financial statements with other public companies difficult or impossible. ITEM 7. MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis should be read in conjunction with and is qualified in its entirety by and should be read together with our financial statements and the related notes thereto appearing elsewhere in this filing. This discussion contains certain forward-looking statements that involve risks and uncertainties, as described under the heading “Cautionary Note Regarding Forward-Looking Statements .” Actual results could differ materially from those projected in the forward-looking statements. Company Overview Mitesco was formed in the state of Delaware on January 18, 2012. On December 9, 2015, we restructured our operations and acquired Newco4pharmacy, LLC, a development stage company which sought to acquire compounding pharmacy businesses. As a part of the restructuring, we shut down our former business line. On April 24, 2020, we changed our name to Mitesco, Inc. In October 2023, the Company changed its domicile from Delaware to Nevada in order to effect reduced costs. From 2020 through 2022, our operations were focused on establishing general practice medical clinics utilizing nurse practitioners under The Good Clinic name and development and acquisition of telemedicine technology. We opened our first The Good Clinic in Minneapolis, Minnesota in the first quarter of 2021 and had six operating clinics during the year ended December 31, 2022, with two additional sites under contract. In the fourth quarter of fiscal 2022, we made the strategic decision to close the entire clinic operation and release our staff due to a lack of profitability. The financial results and obligations are now accounted for as “discontinued operations”. Current Business Operations We are a holding company seeking to provide products, services and technology. In June 2024 we announced the formation of two (2) new wholly owned business units, Centcore, LLC (“Centcore”) that is providing data center services including cloud computing and application hosting, and Vero Technology Ventures, LLC (“VTV”), whose aim is to seek investment and acquisition opportunities, generally in the areas of cloud computing and data center related applications. 22 Table of Contents Centcore has two (2) areas of focus. The first, generic data center services, is aimed at hosting applications for a specific user, sometimes referred to as “managed services offerings” or MSO, where the client moves the software licensed from various vendors, or internally developed, into our data center where we maintain the computing, communications and backup environment. Over time we expect to create similar situations with other data centers worldwide based on our clients’ specific needs. We are also evaluating the development of a network of smaller format (5,000 to 10,000 square foot) data centers inside of existing facilities. We believe that this approach may allow us to expand capacity with a minimal capital expenditure. The existing facilities we are targeting generally have sufficient power, often with a substation nearby. These types of buildings usually have backup generators, HVAC, water and security in a form that would support a data center environment. We have retained experienced professionals in the data center, cyber security and infrastructure services areas to support our needs on a per hour basis, which we believe will allow us to control our costs relative to business activity, without significant staffing internally. The Vero Technology Ventures (VTV) subsidiary is actively reviewing potential early-stage cloud computing solution vendors and is developing its own artificial intelligence (A.I.) based application set. VTV is currently involved with the formation of a new software development project aimed at applying artificial intelligence (A.I.) to the sales process for various businesses including residential real estate, using cloud computing based software. This initial effort dubbed “Robo Agent”, is expected to be available for initial users in Q3 of FY2026. Later versions may include similar functionality focused on other markets, generally in a “business to consumer” (B2C) selling situation. In August 2025 we retained a highly qualified executive to begin development of our Robo Agent product set on a consulting basis at a rate of $10,000 per month. We have also recruited three (3) additional contract programmers to accelerate the overall process. In September 2025 we received a contract for development of a new application intended to effect the listing and sale of properties and products specifically related to sports, and the pickleball arena initially. We expect this project to be executed using both internal and external resources and to be completed in late FY2026. There are several other projects in evaluation, generally aimed at software that would operate on a cloud computing platform such as that which the Company has in its Centcore Data Center. Results of Operations The following period-to-period comparisons of our financial results are not necessarily indicative of results for the current period or any future periods. Further, as a result of any acquisitions of other businesses, and any additional pharmacy acquisitions or other such transactions we may pursue, we may experience large expenditures specific to the transactions that are not incident to our operations. Comparison of the Twelve Months ending December 31, 2025, and 2024. Revenues We had revenues of $38,700 for the twelve months ended December 31, 2025, compared to $43,700 in the comparable period. The revenues were related to our subsidiary Centcore, LLC, and include sale of remote backup, general business applications, engineering analysis software and digital marketing related to our residential real estate software development effort. Operating Expenses Our total operating expenses for twelve months ended December 31, 2025, were $1,916,733. For the comparable period in 2024, the operating expenses were $1,207,241. The increase is the result of the Company’s focus on establishing the operations of its newly formed subsidiaries as well as development of a software platform in addition to stock-based compensation expense of $824,650 for the year ended December 31, 2025 compared to $702,016 for the comparable period. In addition, we recorded a loss on the impairment of our intangible assets in the amount of $113,021 for the year ended December 31, 2025. Other Income and Expenses Interest expense was $1,470,101 for the twelve months ended December 31, 2025, compared to $409,745 for the twelve months ended December 31, 2024. The increase was a result of increased debt balances in the current period. Interest expense – related parties was $5,797 for the twelve months ended December 31, 2025, compared to $28,474 in the prior period. The decrease was a result of reduced debt balances in the current period as a result of the obligation exchange agreements. During the twelve months ended December 31, 2025, we recorded a gain on settlement of accounts payable of $562,793 compared to $2,289,283 for the twelve months ended December 31, 2024 as a result of more obligations being settled in in the prior period as compared to the current period. 23 Table of Contents During the twelve months ended December 31, 2025, we recorded a loss on legal settlement of $500,000. There were no comparable transactions in the prior period. During the twelve months ended December 31, 2025, we recorded a loss on the redemption of preferred shares of $646,653. There were no comparable transactions in the prior period. During the twelve months ended December 31, 2025, we recorded a gain on the change in fair value of contingent consideration of $150,000. There were no comparable transactions in the prior period. During the twelve months ended December 31, 2024, we recorded a Gain on termination of operating lease of $869,690. There were no comparable transactions in the current period. During the twelve months ended December 31, 2024, we recorded a Gain on settlement of notes payable of $515,964. There were no comparable transactions in the current period. During the twelve months ended December 31, 2025, we recorded a gain of $4,286,515 on the revaluation of derivative liabilities under the default provision of certain securities compare to a loss on the revaluation of derivative liabilities of $4,585,124 in the prior period. For the twelve months ended December 31, 2025, we had an overall net income available to common shareholders of $145,566, compared to a net loss available to common shareholders of $2,842,256 for the twelve months ended December 31, 2024. Liquidity and Capital Resources To date, we have not generated sufficient revenue from operations to support our operations. We have financed our operations through the sale of equity securities and short-term borrowings. As of December 31, 2025, we had cash of approximately $100,857 compared to cash of approximately $3,402 as of December 31, 2024. Our Company’s recurring losses from operations and negative cash flows from operations and our need to raise additional funding to finance our operations raise substantial doubt about our ability to continue as a going concern. Net cash used in operating activities was $701,585 for the twelve months ended December 31, 2025 compared to cash used in operations for the twelve months ended December 31, 2024, was $514,409. This is the result of establishing the operations of the Company’s newly formed subsidiaries. During the twelve months ended December 31, 2025, the Company had no investing activities. During the twelve months ended December 31, 2024, the Company paid $5,000 for the acquisition of a business. Net cash provided by financing activities for the twelve months ended December 31, 2025, was $799,040, compared to $519,973 for the twelve months ended December 31, 2024. Cash provided by financing activities was the result of cash proceeds from sale of series A preferred stock of $125,000, convertible notes payable of $500,000 and notes payable of $200,000, offset by the repayment of principal on the SBA loan in the amount of $25,960. At December 31, 2025, we had the following current liabilities which are payable in cash: Accounts payable and accrued liabilities of approximately $4 million; notes payable of $.6 million; SBA Loan Payable of approximately $0.4 million; property-related settlements of $3.4 million; accrued interest payable of $0.4 million; and other current liabilities of $0.2 million. We also have the following liabilities which are payable in stock: derivative liabilities of $0.4 million, Series A Preferred Stock liability of approx. $9.4 million, and preferred stock dividends payable of $0.03 million. SBA Loan During March 2020, in response to the COVID-19 crisis, the federal government announced plans to offer loans to small businesses in various forms, including the Payroll Protection Program, or “PPP”, established as part of the Corona Virus Aid, Relief and Economic Security Act (“CARES Act”) and administered by the U.S. Small Business Administration (the “SBA”). On April 25, 2020, the Company entered an unsecured Promissory Note with Bank of America for a loan in the original principal amount of $460,400, and the Company received the full amount of the loan proceeds on May 4, 2020 (the “PPP Loan”). The PPP Loan bears interest at the rate of 1% per year. On July 12, 2023, the Company received confirmation of a payment plan arrangement from the SBA. Pursuant to this payment plan, the Company agreed to pay a minimum of $2,595 each month until the loan is paid in full in July 2028. The SBA confirmed the balance due on the loan, including principal and interest, was $467,117. The Company will amortize the balance due on the loan including interest at the original PPP loan rate of 1% per annum; a gain on the restructure of debt in the amount of $40,622 was recorded on this transaction during the twelve months ended December 31, 2023, and the balance of the loan was recorded at the amount of $421,788 representing the net cash flows discounted at 1%. During the twelve months ended December 31, 2025 and 2024, the Company made principal payments of $25,960 and $28,027 on this loan; during the twelve months ended December 31, 2025 and 2024, the Company recorded interest in the amount of $3,845 and $4,128 on this loan. 24 Table of Contents Bridge Financing On October 31, 2025, the Company entered into a Senior Secured 10% Original Issue Discount Convertible Promissory Note (the “October 2025 Bridge Note”) with C/M Capital Master Fund, L.P. with the executed documentation providing for up to a potential total funding of $1 million, with an initial funding of $250,000. Under the terms of the 18-month note, the Company is obligated to repay a total of $275,000 as the note includes a 10% original issue discount. The note bears no interest unless in default and may be converted into common stock of the Company at $0.15 per share, subject to certain adjustments. The obligations under the October 2025 Bridge Note are guaranteed by the subsidiaries of the Company and include a pledge of the securities the Company’s subsidiaries and a first priority senior security interest in all the Company’s assets. On December 19, 2025 the “Company entered into a second Senior Secured 10% Original Issue Discount Convertible Promissory Note (the “December 2025 Bridge Note”) with C/M Capital Master Fund, L.P. under the previously executed $1 million funding arrangement. Under the terms of the 18-month note, the Company is obligated to repay a total of $275,000 as the note includes a 10% original issue discount. The note bears no interest unless in default and may be converted into common stock of the Company at $0.15 per share, subject to certain adjustments. The obligations under the December 2025 Bridge Note are guaranteed by the subsidiaries of the Company and include a pledge of the securities of the Company’s subsidiaries and a first priority senior security interest in all the Company’s assets. On February 23, 2026, the Company entered into a third Senior Secured 10% Original Issue Discount Convertible Promissory Note (the “February 2026 Bridge Note”) with C/M Capital Master Fund, L.P. and WVP Emerging Manager Onshore Fund, under the previously executed $1 million funding arrangement. Under the terms of the 18-month note, the Company is obligated to repay a total of $137,500 as the note includes a 10% original issue discount. The note bears no interest unless in default and may be converted into common stock of the Company at $0.15 per share, subject to certain adjustments. The obligations under the February 2026 Bridge Note are guaranteed by the subsidiaries of the Company and include a pledge of the securities the Company’s subsidiaries and a first priority senior security interest in all the Company’s assets. See Subsequent Events. On April 10, 2026, the Company entered into a 10% Original Issue Discount Convertible Promissory Note (the “April 2026 Bridge Note”) with Pinz Capital with a $50,000 purchase price. The note bears interest of 10%, and has a maturity date 12 months from the date of the note. Under the terms of the note, the Company is obligated to repay a total of $55,000 as the note includes a 10% original issue discount. The note may be converted into common stock of the Company at the lessor of $0.15 or 65% of the lowest trading price of the 10 prior trading days per share, subject to certain adjustments. See Subsequent Events. Our financial statements as of December 31, 2025, reflect total liabilities of over $24.5 million, including certain reserves for potential liabilities related to ceased operations related largely to long term lease obligations and costs related to the construction of our facilities. A substantial amount of these liabilities may be reversed on negotiations, and it is our goal to settle the remaining amounts with non-cash consideration as noted above. There can be no assurance that all of these vendors will be willing to settle their obligations with the Company on the proposed terms, or in amounts acceptable to the Company. We remain undercapitalized and until we have resolved most of these obligations it is unlikely that we will be able to attract sufficient capital on reasonable terms to execute our business strategy. We remain committed to the resolution of these outstanding items in a fair and timely manner. Critical Accounting Policies We believe that the accounting policies described below are critical to understanding our business, results of operations and financial condition because they involve the use of more significant judgments and estimates in the preparation of our consolidated financial statements. An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and any changes in the assumptions used in making the accounting estimates that are likely to occur could materially impact our consolidated financial statements. Revenue Recognition The Company follows the guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers (the “new revenue standard”) to all contracts using the modified retrospective method. Revenue is recognized based on the following five step model: - Identification of the contract with a customer - Identification of the performance obligations in the contract - Determination of the transaction price - Allocation of the transaction price to the performance obligations in the contract - Recognition of revenue when, or as, the Company satisfies a performance obligation 25 Table of Contents The Company primarily earns revenue by providing generic data center services, which is aimed at hosting applications for a specific user, sometimes referred to as “managed services offerings” or MSO, where the client moves the software licensed from various vendors, or internally developed, into our data center where we maintain the computing, communications and backup environment. Data center service revenue is recognized on a monthly basis as the services are provided. Stock-Based Compensation We recognize compensation costs to employees under FASB ASC Topic 718, Compensation – Stock Compensation (“ASC 718”). Under FASB ASC 718, companies are required to measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which performance is required. Share-based compensation cost for stock options is estimated at the grant date based on each option’s fair-value as calculated by the Black-Scholes-Merton (“BSM”) option-pricing model. Share-based compensation arrangements may include stock options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant. Off-Balance Sheet Arrangements We have no off-balance sheet arrangements that have or are likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.