NovelStem International Corp. 10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2026 ☐ TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________________ to _________________ Commission file number: 001-14332 NOVELSTEM INTERNATIONAL CORP. (Exact name of registrant as specified in its charter) Florida 65-0385686 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 7740 Cavern Lane Suite 100 , Parkland FL 33067 (Address of principal executive offices) (Zip Code) Registrant’s telephone number, including area code (410) 598-9024 Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered None Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer  ☒ Smaller reporting company   ☒ Emerging growth company   ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. Class Outstanding at August 14, 2026 Common Stock, $ 0.01 par value per share 49,332,455 NOVELSTEM INTERNATIONAL CORP. Quarterly Report on Form 10-Q for the Quarterly Period Ended June 30, 2026 TABLE OF CONTENTS PAGE Part I Financial Information Item 1. Unaudited Condensed Financial Statements: Unaudited Condensed Balance Sheets as of June 30, 2026 and December 31, 2025 3 Unaudited Condensed Statements of Operations for the six and three months ended June 30, 2026 and 2025 4 Unaudited Condensed Statements of Changes in Shareholders’ Deficit for the six months ended June 30, 2026 and 2025 5 Unaudited Condensed Statements of Cash Flows for the six months ended June 30, 2026 and 2025 6 Notes to Unaudited Condensed Financial Statements 7 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 15 Item 3. Quantitative and Qualitative Disclosures About Market Risk 18 Item 4. Controls and Procedures 18 Part II Other Information Item 1. Legal Proceedings 19 Item 1A. Risk Factors 19 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 19 Item 3. Defaults Upon Senior Securities 19 Item 4. Mine Safety Disclosures 19 Item 5. Other Information 19 Item 6. Exhibits 19 Signatures 20 2 PART I ITEM 1. UNAUDITED CONDENSED FINANCIAL STATEMENTS NOVELSTEM INTERNATIONAL CORP. CONDENSED BALANCE SHEETS June 30 December 31, As of June 30 December 31, 2026 2025 (Unaudited) ASSETS Current assets: Cash $ 56,235 $ 333 Prepaid expenses 8,452 15,453 Total current assets 64,687 15,786 Total assets $ 64,687 $ 15,786 LIABILITIES AND SHAREHOLDERS’ DEFICIT Current liabilities: Accounts payable $ 77,700 $ 215,958 Accrued expenses 37,673 37,673 Notes payable, including accrued interest 337,084 317,734 Notes payable related parties, including accrued interest 1,361,540 1,295,405 Bridge loan payable, related party, including accrued interest 158,281 171,857 Convertible debt, including accrued interest 124,880 118,814 Total current liabilities 2,097,158 2,157,441 Total liabilities 2,097,158 2,157,441 Commitments and contingencies (See Note 7) - - Shareholders’ deficit: Common stock, $ .01 par value, 100,000,000 shares authorized, 52,767,652 and 50,316,672 shares issued at June 30, 2026 and December 31, 2025, respectively, and 49,332,455 and 46,881,475 shares outstanding at June 30, 2026 and December 31, 2025, respectively 493,325 468,815 Additional paid-in capital 291,795,745 291,570,255 Accumulated deficit ( 294,121,787 ) ( 293,980,971 ) Treasury stock, at cost, 3,435,197 shares at June 30, 2026 and December 31, 2025 ( 199,754 ) ( 199,754 ) Total shareholders’ deficit ( 2,032,471 ) ( 2,141,655 ) Total liabilities and shareholders’ deficit $ 64,687 $ 15,786 The accompanying notes are an integral part of these unaudited condensed financial statements. 3 NOVELSTEM INTERNATIONAL CORP. CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED) 2026 2025 2026 2025 Six Months Ended Three Months Ended June 30, June 30, 2026 2025 2026 2025 Operating expenses: General and administrative expenses 39,888 158,537 34,935 63,964 Total operating expenses 39,888 158,537 34,935 63,964 Loss from operations ( 39,888 ) ( 158,537 ) ( 34,935 ) ( 63,964 ) Other (income) expenses: Gain on disposal of equity method investment - ( 1,171,760 ) - ( 1,171,760 ) Relief of indebtedness income - ( 1,697,024 ) - ( 1,697,024 ) Interest expense 100,928 163,962 50,860 51,319 Total other (income) expenses 100,928 ( 2,704,822 ) 50,860 ( 2,817,465 ) Income (loss) before income taxes ( 140,816 ) 2,546,285 ( 85,795 ) 2,753,501 Provision for income tax - - - - Income (loss) before equity in net income (loss) of equity method investees ( 140,816 ) 2,546,285 ( 85,795 ) 2,753,501 Equity in net income (loss) of equity method investees - 340 - 340 Net income (loss) $ ( 140,816 ) $ 2,546,625 $ ( 85,795 ) $ 2,753,841 Basic and diluted net income (loss) per share: Net income (loss) per share - basic $ ( 0.00 ) $ 0.05 $ ( 0.00 ) $ 0.06 Weighted average number of shares outstanding - basic 48,371,021 46,881,475 49,332,455 46,881,475 Net income (loss) per share - diluted $ ( 0.00 ) $ 0.05 $ ( 0.00 ) $ 0.06 Weighted average number of shares outstanding - diluted 48,371,021 47,762,983 49,332,455 47,765,983 The accompanying notes are an integral part of these unaudited condensed financial statements. 4 NOVELSTEM INTERNATIONAL CORP. CONDENSED STATEMENTS OF SHAREHOLDERS’ DEFICIT (UNAUDITED) For the Six Months Ended June 30, 2026: Additional Number of Total Number of Common Paid-In Accumulated Treasury Treasury Shareholders’ Shares Stock Capital Deficit Shares Stock Deficit Balance, January 1, 2026 46,881,475 $ 468,815 $ 291,570,255 $ ( 293,980,971 ) 3,435,197 $ ( 199,754 ) $ ( 2,141,655 ) Net loss - - - ( 55,021 ) - - ( 55,021 ) Stock issued 2,450,980 24,510 225,490 - - - 250,000 Balance, March 31, 2026 49,332,455 $ 493,325 $ 291,795,745 $ ( 294,035,992 ) 3,435,197 $ ( 199,754 ) $ ( 1,946,676 ) Net loss - - - ( 85,795 ) - - ( 85,795 ) Balance, June 30, 2026 49,332,455 $ 493,325 $ 291,795,745 $ ( 294,121,787 ) 3,435,197 $ ( 199,754 ) $ ( 2,032,471 ) For the Six Months Ended June 30, 2025: Additional Number of Total Number of Common Paid-In Accumulated Treasury Treasury Shareholders’ Shares Stock Capital Deficit Shares Stock Deficit Balance, January 1, 2025 46,881,475 $ 468,815 $ 290,947,417 $ ( 296,360,853 ) 3,435,197 $ ( 199,754 ) $ ( 5,144,375 ) Net loss - - - ( 207,216 ) - - ( 207,216 ) Stock-based compensation - - 8,741 - - - 8,741 Balance, March 31, 2025 46,881,475 $ 468,815 $ 290,956,158 $ ( 296,568,069 ) 3,435,197 $ ( 199,754 ) $ ( 5,342,850 ) Net income - - - 2,753,841 - - 2,753,841 Net income (loss) - - - 2,753,841 - - 2,753,841 Debt restructuring 614,000 614,000 Stock-based compensation - - 97 - - - 97 Balance, June 30, 2025 46,881,475 $ 468,815 $ 291,570,255 $ ( 293,814,228 ) 3,435,197 $ ( 199,754 ) $ ( 1,974,912 ) The accompanying notes are an integral part of these unaudited condensed financial statements. 5 NOVELSTEM INTERNATIONAL CORP. CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) 2026 2025 Six Months Ended June 30, 2026 2025 Cash flows from operating activities: Net income (loss) $ ( 140,816 ) $ 2,546,625 Accretion of discount on note payable - 60,417 Gain on disposal of equity method investment - ( 1,171,760 ) Relief of indebtedness income - ( 1,697,024 ) Accrued interest added to notes payable and convertible debt 99,727 102,451 Noncash settlement of accounts payable ( 67,500 ) - Stock-based compensation - 8,838 Change in operating assets and liabilities: Accounts receivable, administrative fees - 10,500 Prepaid expenses 7,001 1,086 Accounts payable ( 70,758 ) 28,374 Net cash used in operating activities ( 172,346 ) ( 110,493 ) Cash flows from financing activities: Proceeds from issuances of short term notes payable $ 28,248 $ 105,500 Principal reductions, short term notes payable ( 50,000 ) - Proceeds from sale of common stock 250,000 - Net cash provided by financing activities 228,248 105,500 Net change in cash 55,902 ( 4,993 ) Cash at the beginning of the period 333 6,099 Cash at the end of the period $ 56,235 $ 1,106 Supplemental cash flow information: Cash paid during the period for: Interest $ 1,202 $ 1,094 Income taxes $ - $ - Supplemental Non-Cash Investing and Financing Activities: Interest capitalized to notes payable $ - $ 36,000 Settlement of long term notes payable $ - $ 2,997,025 Settlement of derivative liability, net of interest $ - $ 614,000 The accompanying notes are an integral part of these unaudited condensed financial statements. 6 NOVELSTEM INTERNATIONAL CORP. NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited) NOTE 1— NATURE OF OPERATIONS Description of Business NovelStem International Corp. (“NovelStem” or the “Company”) is a holding company whose principal assets consisted of an approximate 31 % equity interest in NewStem Ltd, an Israeli biotech company (“NewStem”) and its developed technology, and a 50 % equity interest in NetCo Partners (“NetCo”). The interest in NetCo was sold in May 2025 in a noncash transaction which settled significant debt of the Company in the form of a litigation funding agreement. NovelStem was formerly known as Hollywood Media Corp. The Company was incorporated in the State of Florida on January 22, 1993 and changed its name to NovelStem International Corp. in September 2018. NewStem focused on the development and commercialization of diagnostic technology that can predict patients’ anti-cancer drug resistance, allowing for targeted cancer treatments and the potential to reduce resistance to chemotherapy. NewStem was liquidated in August 2025 at which time its intangible assets, primarily in the form of licensing agreements, reverted to the original license holder. The Company retains a right to income from these license agreements. NetCo is a legacy media business interest which owns “Net Force”, a book publishing franchise. Going Concern, Liquidity and Management’s Plans Since inception, the Company has accumulated a deficit of approximately $ 294,000,000 . The accumulated deficit of the Company subsequent to its business focus shift and name change in September 2018 is approximately $ 7,441,000 which is comprised primarily of allocated losses from equity method investments and general and administrative costs incurred by the Company. The Company will need to obtain additional funds to continue its operations. Management’s plans with regard to these matters include additional financing and fundraising as well as monetization of the right to intangible assets held from NewStem as well as potential merger or buyout transactions. Specifically, the Company sold its interest in NetCo to its joint venture partner in a transaction that satisfied the related debt (litigation funding agreement). Also, the Company is working with former NewStem management to monetize the technology of NewStem and has an agreement in place to receive up to $ 3,750,000 of any monetization of these licenses and related intangible assets. Although management continues to pursue these plans, there is no assurance that the Company will be successful in obtaining sufficient cash from financing on terms acceptable to the Company, or that the Company will realize any value from the retained interest in intangible assets or technology of NewStem, which was liquidated in August 2025 (see Note 3). The Company has in place a finance agreement with two individuals who are shareholders and directors under which it borrowed $ 750,000 and an additional finance agreement with a shareholder under which it borrowed $ 300,000 for working capital needs (see Note 4). Additionally, the Company entered into additional finance agreements with unrelated parties in December 2023 and April 2024 under which it borrowed an additional $ 350,000 for working capital needs and to fund NewStem (see Note 4). All funds available pursuant to these agreements have been received. During the six months ended June 30, 2026 and the year ended December 31, 2025, the Company’s Executive Chairman advanced a cumulative net amount of approximately $ 140,000 to the Company as an interim bridge loan to fund ongoing expenses. The Company will need to obtain additional funds to continue operations for the next 12 months. On May 9, 2025, the Company entered into a Settlement Agreement and Release whereby the investment in NetCo was monetized to settle the litigation funding liability to Omni Bridgeway in full. See Note 4. On March 13, 2026, the Company received $ 250,000 in exchange for 2,450,980 shares of common stock from an individual accredited investor. As of the date of this filing, the Company is in negotiations with all debt holders to convert their debt to equity in the Company. In view of the matters described above, the Company’s ability to meet financing requirements is dependent upon the ability to complete additional fundraising or obtain additional financing, and/or monetize the rights to intangible assets from NewStem. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence. 7 NOTE 2— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the unaudited condensed financial statements reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the balances and results for the periods presented. Certain information and footnote disclosures normally included in the Company’s annual financial statements prepared in accordance with GAAP have been condensed or omitted. These condensed financial statement results are not necessarily indicative of results to be expected for the full fiscal year or any future period. The accompanying unaudited condensed financial statements and related disclosures have been prepared with the presumption that users of the unaudited condensed financial statements have read or have access to the audited financial statements for the preceding fiscal year. Accordingly, these unaudited condensed financial statements should be read in conjunction with the Company’s Form 10-K, which was filed with the United States Securities and Exchange Commission (“SEC”) on March 26, 2026, from which the Company derived the balance sheet data at December 31, 2025. Certain information and footnote disclosures normally included in condensed financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations for interim reporting. The Company believes that the disclosures contained herein are adequate to make the information presented not misleading. These condensed financial statements should be read in conjunction with the Company’s Form 10K, filed with the Securities and Exchange Commission on March 26, 2026, for the years ended December 31, 2025 and 2024. Equity Investments Investee companies that are not consolidated, but over which the Company exercises significant influence, are accounted for under the equity method of accounting. Whether or not the Company exercises significant influence with respect to an Investee depends on an evaluation of several factors, including, among others, representation on the investee company’s board of directors and ownership level, which is generally a 20% to 50% interest in the voting securities of the Investee company. Under the equity method of accounting, an investee company’s accounts are not reflected within the Company’s balance sheets or statements of operations; however, the Company’s share of the earnings or losses of the investee company would be reflected in the caption “Equity in net income (loss) of investee company” in the statements of operations. The Company’s carrying value in an equity method investee company is reflected in the caption “Investment in Investee company” in the Company’s Balance Sheets. The Company reviewed equity investments for impairment on an annual basis, or earlier if events or changes in circumstances indicate that the carrying amounts might not be recoverable. The Company held a minority investment in an entity, NewStem, which was accounted for pursuant to the equity method of accounting. NewStem was liquidated in August 2025. Additionally, until May 9, 2025 the Company was a 50 % joint venture partner in NetCo which was accounted for pursuant to the equity method of accounting. See Note 3. 8 Basic and Diluted Net Income (Loss) Per Share Basic net income (loss) per share is computed by dividing the net income (loss) by the weighted average number of shares outstanding during the period, excluding treasury stock. Diluted net loss per share is computed by dividing the net loss by the weighted average number of shares outstanding plus the dilutive potential of common shares which would result from the exercise of stock options and warrants or the conversion of debt. The dilutive effects of stock options and warrants are excluded from the computation of diluted net income (loss) per share if the effect of doing so would be antidilutive. The following data represents the amounts used in computing earnings per share and the effect on loss and the weighted average number of shares of dilutive potential common stock (unaudited): SCHEDULE OF AMOUNTS USED IN COMPUTING EARNINGS PER SHARE AND EFFECT ON LOSS AND WEIGHTED AVERAGE NUMBER OF SHARES 2026 2025 Six Months Ended June 30, 2026 2025 Net income (loss) attributable to common shareholders $ ( 140,816 ) $ 2,546,625 Weighted average shares outstanding: -Basic 48,371,021 46,881,475 Basic net income (loss) per share $ ( 0.00 ) $ 0.05 Net income (loss) attributable to common shareholders $ ( 140,816 ) $ 2,546,625 Effect of dilutive securities: Convertible debt, interest - 5,950 Net income (loss) attributable to common shareholders $ ( 140,816 ) $ 2,552,575 Weighted average shares outstanding: -Basic 48,371,021 46,881,475 Add: Convertible Debt - 881,508 Add: Stock options - - -Diluted 48,371,021 47,762,983 Diluted net income (loss) per share $ ( 0.00 ) $ 0.05 2026 2025 Three Months Ended June 30, 2026 2025 Net income (loss) attributable to common shareholders $ ( 85,795 ) $ 2,753,841 Weighted average shares outstanding: -Basic 49,332,455 46,881,475 Basic net income (loss) per share $ ( 0.00 ) $ 0.06 Net income (loss) attributable to common shareholders $ ( 85,795 ) $ 2,753,841 Effect of dilutive securities: Convertible debt, interest - 2,780 Net income (loss) attributable to common shareholders $ ( 85,795 ) $ 2,756,621 Weighted average shares outstanding: -Basic 49,332,455 46,881,475 Add: Convertible Debt - 884,508 Add: Stock options - - -Diluted 49,332,455 47,765,983 Diluted net income (loss) per share $ ( 0.00 ) $ 0.06 Options and convertible debt excluded from the computation of earnings per share (unaudited): SCHEDULE OF OPTIONS AND WARRANTS EXCLUDED FROM COMPUTATION OF EARNINGS PER SHARE 2026 2025 Six Months Ended June 30, 2026 2025 Convertible debt 960,616 - Stock options 6,060,000 6,360,000 2026 2025 Three Months Ended June 30, 2026 2025 Convertible debt 960,616 - Stock options 6,060,000 6,360,000 Anti-dilutive securities 6,060,000 6,360,000 9 NOTE 3— EQUITY METHOD INVESTMENTS Investment in NewStem The Company held a 31 % interest in NewStem until its liquidation in August 2025. The Company accounted for its investment in NewStem under the equity method. NewStem was a development stage company which incurred losses from inception and generated only minimal revenues under a licensing agreement. The Company assessed its investment in NewStem for impairment on an annual basis or more frequently if indicators of impairment existed. During the year ended December 31, 2024, indicators of impairment became evident due to the inability of NewStem to raise funds. Due to the inability to raise funds, NewStem was unable to continue operations and was liquidated. The intangible assets of NewStem, including license agreements (the “License”), have reverted to the licensor, Yissum (the commercial division of Hebrew University). The Company has reached an agreement with Yissum regarding the potential monetization of these intangible assets which provides for funds to be received by the Company in the event of re-licensing or monetizing the licenses or related technology developed by NewStem. Due to the current uncertainty of the recovery of any value from these intangible assets and the liquidation status of NewStem, the Company fully impaired the investment in NewStem during the year ended December 31, 2024. On August 14, 2025, the Company received $ 5,432 from NewStem upon the final closing of their accounts and in October 2025, the Company wrote off all asset accounts and the related impairment and ceased accounting for NewStem. Investment in NetCo Until May 2025, NovelStem owned a 50 % interest in NetCo, a joint venture that owns the Net Force publishing franchise. On May 9, 2025, the Company entered into a Settlement Agreement and Release whereby the investment in NetCo was sold to the Company’s JV partner, C. P. Group, Inc. (“CP Group”), for $ 1,300,000 to settle the related litigation funding liability to Omni Bridgeway in full. This transaction was fully consummated as funds were received by Omni Bridgeway from CP Group pursuant to the terms of the agreement. The following table represents the Company’s investment in NetCo: SCHEDULE OF INVESTMENTS Six Months Ended June 30, 2026 Year Ended December 31, 2025 (Unaudited) Investment in NetCo, beginning $ - $ 128,240 Allocation of net income (loss) from NetCo - 640 Distribution from NetCo - ( 640 ) Sale of ownership interest in NetCo - ( 128,240 ) Investment in NetCo, ending $ - $ - The results of operations of the Company’s investment in NetCo is summarized below (unaudited): SCHEDULE OF OPERATIONS AND FINANCIAL POSITION INVESTMENT 2026 2025 2026 2025 Six Months Ended June 30, Three Months Ended June 30, 2026 2025 2026 2025 Condensed income statement information: Net sales $ - $ - $ - $ - Gross margin $ - $ ( 79 ) $ - $ ( 79 ) Net income $ - $ 680 $ - $ 680 Company’s allocation of net income from NetCo $ - $ 340 $ - $ 340 10 NOTE 4— NOTES PAYABLE In December 2023, the Company entered into two notes payable with unrelated parties, Hewlett Fund and AIGH Investment Partners, LLC. The notes are for $ 125,000 each, for a total of $ 250,000 in borrowings utilized for the funding of NewStem. The notes bear interest at 12 % per annum prior to an event of default and at 24 % per annum following an event of default and originally matured on December 21, 2024 . The maturity date of both notes has been extended by successive loan extension agreements entered into with each holder on March 25, 2025, February 17, 2026 and August 3, 2026, most recently to March 30, 2027, at which time all principal and accrued interest are due and payable. Each extension agreement provides that all other terms and conditions of the notes remain in full force and effect. The notes provide that principal and accrued interest become due and payable upon the earlier of the stated maturity date or the closing of a capital raise, which the notes define as any transaction, whether debt, equity or any combination thereof, to raise capital for the Company. The notes further provide that, in the event of a capital raise, each holder is entitled to participate in that transaction and to tender its note, valued at 133% of the amounts owed under the note on the closing date of the transaction, as payment for any securities issued to that holder in the transaction. The Company completed a capital raise on March 13, 2026 through the issuance of common stock for cash proceeds of $ 250,000 (see Note 5) and has entered into other financing transactions since the notes were issued. Neither holder elected to participate in, or tendered its note in connection with, any such transaction, and neither holder demanded repayment nor accelerated its note. The Company has accrued interest on the notes at 12 % per annum in all periods presented. Subsequent to June 30, 2026 and prior to the issuance of these financial statements, the Company entered into waiver and confirmation agreements with both holders under which each holder confirmed that interest has accrued and continues to accrue at 12 % per annum, confirmed the maturity date of March 30, 2027, and waived any right it may have had, arising from any financing transaction completed on or prior to the date of those agreements, to accelerate its note, to participate in or tender its note, or to assert an event of default (see Note 8). Accordingly, no interest has been accrued at the default rate in any period presented, and no liability has been recorded in respect of these provisions. Interest expense related to these notes was $ 19,350 and $ 14,876 , respectively, for the six months ended June 30, 2026 and 2025. Interest expense related to these notes was $ 9,818 and $ 7,479 , respectively, for the three months ended June 30, 2026 and 2025. Notes payable related parties are summarized as follows: SCHEDULE OF LONG TERM NOTES PAYABLE As of June 30, December 31, 2026 2025 (Unaudited) Notes payable related parties: Notes payable director and Executive Chairman $ 821,766 $ 821,766 Accrued interest added to note balance 177,758 129,208 Total notes payable director and Executive Chairman 999,524 950,974 Note payable shareholder, principal amount 336,000 336,000 Accrued interest added to note balance 26,016 8,431 Total note payable shareholder 362,016 344,431 Total notes payable 1,361,540 1,295,405 Less current portion ( 1,361,540 ) ( 1,295,405 ) Long-term notes payable $ - $ - The notes payable summarized above were originally issued with maturities greater than one year. Since their original maturity dates, the notes have been extended from time to time, in each case for a period of less than one year from the date of extension. Accordingly, all amounts are due within one year of each balance sheet date presented and are classified as current liabilities, and no amounts have been classified as long-term. The weighted average interest rate on the Company’s notes payable, all of which are classified as current, was approximately 10.3 % at June 30, 2026 and December 31, 2025. In May 2022, the Company entered into note agreements with Jan Loeb, our Executive Chairman and Jerry Wolasky, a shareholder and member of the Board, to borrow up to an aggregate of $ 600,000 for working capital needs. The note agreements were amended in March 2024 to increase the total borrowing to $ 650,000 and extend the maturity date. The note agreements were refinanced in August 2024 providing for total borrowings of $ 750,000 . The agreements provide for interest at a rate of 10 % per annum and matured December 31, 2025. As of the date of these financial statements, the full amount of $ 750,000 has been funded pursuant to these agreements and the maturity dates have been previously extended to June 30, 2026, and subsequently to March 30, 2027 . Interest expense related to these agreements was $ 48,550 and $ 42,774 for the six months ended June 30, 2026 and 2025, respectively. Interest expense related to these agreements was $ 24,577 and $ 22,511 for the three months ended June 30, 2026 and 2025, respectively. The Company has in place a note payable with a shareholder for $ 336,000 . The note bore no interest included a guarantee which was identified as an embedded derivative. This note agreement was amended in May 2025 to provide for a fixed amount of interest of $ 36,000 in lieu of the guarantee. This interest was added to note principal. This amendment, which was determined to be accounted for pursuant to the provisions of ASC 470 for troubled debt restructurings with related parties, ended the discounting of the note from the zero interest rate and the separate recording of an embedded derivative, as the note now bears interest and contains no identifiable embedded derivative. As such, the relief of the guarantee was recorded as an adjustment to equity and interest expense of $ 36,000 was accrued and treated as a reduction to equity. Beginning October 1, 2025, the note began to bear interest at a rate of 10 % per annum. The note matures on December 31, 2026 . Interest expense related to this note was $ 17,585 and $ 8,901 , respectively, for the six and three months ended June 30, 2026. Note Payable Litigation Funding Agreement On February 11, 2022, the Company entered into a nonrecourse litigation funding agreement (the “Agreement”) with Omni Bridgeway (Fund 4) Invt. 3 L.P. (“Omni”) related to a previously settled arbitration. The Agreement provided for Omni to fund all costs related to the arbitration up to $ 1,000,000 in exchange for an assignment of a certain portion of rights to and interest in claims related to this arbitration. The agreement provided for specific calculations of the portion of any claims collected to be received by Omni with the remainder collectible by the Company. Additionally, the agreement provided for repayment of funded costs pursuant to the same multiple calculations in the event of a favorable outcome that does not include the collection of claims. 11 During July 2023, the arbitration was settled. As a result of the ruling, the liability became probable and reasonably estimable, and the Company recorded the full liability due to Omni as of December 31, 2023. This liability consisted of expenses funded by Omni of $ 933,065 , including $ 310,000 advanced for working capital, and related fees or investment return to Omni calculated as contractual multiples of funding totaling $ 1,886,131 for a total liability at inception of $ 2,819,196 . This agreement bore interest at 5 % per annum beginning January 2024 and was payable in full on January 10, 2025. Prior to settlement of the Agreement, the Company accrued interest of $ 37,400 during the six and three months ended June 30, 2025. The Company began negotiations for settlement of this Agreement during 2024 and on May 9, 2025, the Company entered into a Settlement Agreement and Release with our JV partner in NetCo, C. P. Group, and Omni whereby our interest in NetCo was sold in exchange for funds of $ 1,300,000 which were paid directly to Omni by CP Group in full settlement and release of all liabilities related to the Litigation Funding Agreement. This resulted in the noncash settlement in full of $ 2,997,025 including accrued and unpaid interest. Bridge Loan In February 2025, Jan Loeb, Executive Chairman, began advancing funds to the Company for operating expenses in the form of an interim bridge loan until alternate funding sources can be found. The bridge loan matured on December 31, 2025 and has been extended to March 30, 2027 . The Company is accruing interest at 10 % per annum for these advances. The net principal balance outstanding at June 30, 2026 is $ 140,115 . The total advanced during the six months ended June 30, 2026 was $ 28,248 . Additionally, $ 50,000 was repaid during the six months ended June 30, 2026. The total advanced during the year ended December 31, 2025 was $ 161,867 . Interest expense related to these advances was $ 8,176 and $ 3,892 , respectively, during the six and three months ended June 30, 2026. Interest expense related to these advances was $ 1,452 and $ 1,022 , respectively, during the six and three months ended June 30, 2025. Convertible Debt In April 2024, the Company borrowed $ 100,000 from unrelated parties pursuant to convertible debt agreements accounted for as debt. These agreements bear interest at 10 % per annum and matured on December 30, 2025 . The maturity dates have been extended to March 30, 2027 . The unpaid principal balance of these notes and any accrued interest may be converted into shares of the Company’s common stock at a conversion price of $ 0.13 per share. Interest accrued related to these agreements was $ 6,066 and $ 5,950 respectively, during the six months ended June 30, 2026 and 2025. Interest accrued related to these agreements was $ 3,071 and $ 2,992 , respectively, during the three months ended June 30, 2026 and 2025. NOTE 5— EQUITY (a) General At June 30, 2026, the Company had issued 52,767,652 shares and had 49,332,455 shares of its stock outstanding with a par value of $ 0.01 per share. At December 31, 2025, the Company had issued 50,316,672 shares and had 46,881,475 shares of its common stock outstanding with a par value of $ 0.01 per share. In March 2026, the Company issued 2,450,980 shares of its common stock to an individual accredited investor in a privately negotiated transaction for cash proceeds of $ 250,000 , or $ 0.102 per share. The proceeds were recorded as $ 24,510 of common stock at par value and $ 225,490 of additional paid-in capital and were used for working capital and general corporate purposes. The shares issued rank equally with, and carry the same rights and privileges as all other outstanding shares of the Company’s common stock. No warrants, options, registration rights, board designation rights, anti-dilution or price protection, or similar rights were granted in connection with the transaction, and the purchaser holds less than 5% of the Company’s outstanding common stock. The shares were not registered under the Securities Act of 1933 and were issued in reliance on the exemption from registration provided by Section 4(a)(2) thereof and Rule 506(b) of Regulation D promulgated thereunder. Holders of outstanding common stock are entitled to receive dividends when, and if declared by the Board, and to share ratably in the assets of the Company legally available for distribution in the event of liquidation, dissolution or winding up of the Company. 12 (b) Summary Employee Option Information The Company’s stock option plan provides for the grant to officers, directors, third party contractors and other future key employees of options to purchase shares of common stock. The purchase price may be paid in cash or, if the option is “in-the-money”, it is automatically exercised “net”. In a net exercise of an option, the Company does not require a payment of the exercise price of the option from the optionee but reduces the number of shares of common stock issued upon the exercise of the option by the smallest number of whole shares that has an aggregate fair market value equal to or in excess of the aggregate exercise price for the option shares covered by the option exercised. Each option is exercisable to one share of the Company’s common stock. Most options expire within six years from the date of the grant and generally vest on the first anniversary date of their issuance. Pursuant to the Equity Incentive Plan the Company’s board of directors approved on November 12, 2018, an aggregate of 6,360,000 options have been issued to directors and investor relations professionals of which 300,000 have expired and 6,060,000 remain outstanding. No options were issued during the six months ended June 30, 2026 and 2025. The expected term of the options represents an estimate of the length of time until the expected date of exercising the options. Options granted have a maximum life of 7 years. With respect to determining expected exercise behavior, the Company has grouped its option grants into certain groups to track exercise behavior and establish historical rates. The Company estimated volatility by considering historical stock volatility over the expected term of the option. The risk-free interest rates are based on the U.S. Treasury yields for a period consistent with the expected term. The dividend yield of 0 % is based on the Company’s history and expectation of dividend payout. The Company has not paid and does not anticipate paying dividends in the near future. (c) Summary Option Information A summary of the Company’s option plans for the six months ended June 30, 2026, is presented below (unaudited): SCHEDULE OF STOCK OPTION ACTIVITIES Number Weighted of Average Options Exercise (in shares) Price Outstanding, December 31, 2025 6,060,000 $ 0.137 Granted - - Outstanding, June 30, 2026 6,060,000 $ 0.137 Exercisable, June 30, 2026 6,060,000 $ 0.137 Stock-based compensation expense was $ 8,838 and $ 97 in the six and three months ended June 30, 2025, respectively. There was no such stock-based compensation expense during the six and three months ended June 30, 2026. (d) Warrants The Company had issued warrants at exercise prices equal to or greater than the market value of the Company’s common stock at the date of issuance. All warrants expired on June 28, 2025. 13 NOTE 6— INCOME TAXES The Company’s income tax expense and effective tax rates for the six and three months ended June 30, 2026 and 2025 were as follows: SCHEDULE OF INCOME TAX EXPENSE AND EFFECTIVE TAX RATES 2026 2025 2026 2025 Six Months Ended June 30, Three Months Ended June 30, 2026 2025 2026 2025 Income (loss) before income taxes $ ( 140,816 ) 2,546,285 $ ( 85,795 ) $ 2,753,501 Income tax expense - - - - Effective tax rate 0.00 % 0.00 % 0.00 % 0.00 % The Company’s income tax provision differs from the expense that would result from applying statutory rates to income (loss) before taxes. A reconciliation of the provision (benefit) for income taxes with amounts determined by applying the statutory U.S. federal income tax rate to income before income taxes is as follows (unaudited): SCHEDULE OF INCOME BEFORE INCOME TAXES Amount Tax Rate Amount Tax Rate Six Months Ended June 30, 2026 2025 Amount Tax Rate Amount Tax Rate Computed tax at the federal statutory rate of 21 % $ ( 29,571 ) 21.00 % $ 534,720 21.00 % Increase (decrease) in income tax rate resulting from: Nondeductible/nontaxable items Interest- related party, note discount and limitation 21,195 ( 15.05 )% 34,432 1.35 % Other ( 14,482 ) 10.28 % ( 108,295 ) ( 4.25 )% State income taxes, net of federal income tax benefit ( 6,125 ) 4.35 % 110,763 4.35 % Permanent difference - relief of indebtedness income - 0.00 % ( 356,375 ) ( 14.00 )% Change in federal valuation allowance 28,983 ( 20.58 )% ( 215,245 ) ( 8.45 )% Total provision for income tax $ - 0.00 % $ - 0.00 % Amount Tax Rate Amount Tax Rate Three Months Ended June 30, 2026 2025 Amount Tax Rate Amount Tax Rate Computed tax at the federal statutory rate of 21 % $ ( 18,017 ) 21.00 % $ 578,235 21.00 % Increase (decrease) in income tax rate resulting from: Nondeductible/nontaxable items Interest- related party, note discount and limitation 10,681 ( 12.45 )% 10,777 0.39 % Other ( 14,483 ) 16.88 % ( 84,640 ) ( 3.07 )% State income taxes, net of federal income tax benefit ( 3,733 ) 4.35 % 119,777 4.35 % Permanent difference - relief of indebtedness income - 0.00 % ( 356,375 ) ( 12.94 )% Change in federal valuation allowance 25,552 ( 29.78 )% ( 267,774 ) ( 9.72 )% Total provision for income tax $ - 0.00 % $ - 0.00 % NOTE 7— COMMITMENTS AND CONTINGENCIES In July 2026, the Company entered into a contractual obligation related to our directors’ and officers’ insurance providing for a down payment of $ 8,690 followed by 10 monthly installments of $ 3,436 beginning in September 2026. NOTE 8— SUBSEQUENT EVENTS The Company evaluated subsequent events through the date these financial statements were available to be issued and filed with the SEC. Loan Extension Agreements Subsequent to June 30, 2026, the Company entered into loan extension agreements extending the maturity date, of all of its then-outstanding notes payable which had previously been extended to June 30, 2026, to March 30, 2027. During August 2026, the Company entered into a loan extension agreement with Jan Loeb, the Company’s Executive Chairman, extending the maturity of the bridge loan payable to Mr. Loeb, with net principal advances of $ 140,115 through the date of the extension, to March 30, 2027 . Also during August 2026, the Company entered into a loan extension agreement with Mr. Loeb extending the maturity of a related-party note payable to Mr. Loeb, with an original principal amount of $ 226,358 , to March 30, 2027 , and a loan extension agreement with Jerry Wolasky, a shareholder and member of the Board of Directors, extending the maturity of a related-party note payable to Mr. Wolasky, with an original principal amount of $ 595,408 , to March 30, 2027 . The Company also entered into loan extension agreements extending the maturity date to March 30, 2027 for its short-term notes payable to Hewlett Fund and AIGH Investment Partners, LLC and for its convertible debt agreements with unrelated parties. All other terms of the original notes, including the applicable interest rates, remain unchanged. See Note 4 and Exhibits 10.18, 10.19 and 10.20. Waiver and Confirmation Agreements Subsequent to June 30, 2026, the Company entered into waiver and confirmation agreements with Hewlett Fund and AIGH Investment Partners, LLC, the holders of the Company’s notes payable to unrelated parties described in Note 4. Under these agreements each holder confirmed the amount owed under its note as of June 30, 2026; confirmed that interest has accrued and continues to accrue at 12 % per annum and that no interest is or will become payable at the 24 % default rate specified in the notes in respect of any period through the date of the agreements; confirmed that the maturity date of the notes is March 30, 2027; and waived any right it may have had, arising from any financing transaction completed on or prior to the date of the agreements, to accelerate its note, to participate in or tender its note in connection with any such transaction, or to assert an event of default. All other terms of the notes remain unchanged, including the provisions described in Note 4 relating to future capital raise transactions, which the agreements made subject to a notice and election procedure. 14 NOVELSTEM INTERNATIONAL CORP. ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Statements in the following discussion and throughout this Form 10-Q that are not historical in nature are “forward-looking statements.” You can identify forward-looking statements by the use of words such as “expect,” “anticipate,” “estimate,” “may,” “will,” “should,” “intend,” “believe,” and similar expressions. Although we believe the expectations reflected in these forward-looking statements are reasonable, such statements are inherently subject to risk and we can give no assurances that our expectations will prove to be correct. Actual results could differ from those described in this Form 10-Q because of numerous factors, many of which are beyond our control. We undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date of this Form 10-Q or to reflect actual outcomes. Overview We are a holding company with limited operations and reported net income (losses) of approximately $(141,000) and $2,547,000 for the six months ended June 30, 2026 and 2025, respectively, and $(86,000) and $2,754,000, for the three months ended June 30, 2026 and 2025. We had current assets of approximately $65,000 and current liabilities of $2,097,000 as of June 30, 2026. As of December 31, 2025, our current assets and current liabilities were approximately $16,000 and $2,157,000, respectively. The increase in current assets is due to the sale of equity securities during the six months ended June 30, 2026. The decrease in current liabilities is primarily due to the reduction of accounts payable and the repayment of $50,000 on short-term borrowings as offset by interest accrued on debt and advances on short-term borrowings to fund operating expenses. We have prepared our financial statements for the six months ended June 30, 2026, assuming that we will continue as a going concern. Our continuation as a going concern is dependent upon improving our profitability and the continuing financial support from our shareholders as well as Yissum’s ability to successfully commercialize the License. Our sources of capital in the past have included the sale of equity securities, which include common stock sold in private transactions, and related party debt as well as debt from unrelated parties. During 2025 we entered into a bridge loan agreement with our Executive Chairman to obtain funding for current operating expenses and in March 2026 we issued common stock in exchange for $250,000 in a private transaction. RESULTS OF OPERATIONS The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes thereto and other financial information appearing elsewhere in this Form 10-Q. In the discussion below, general and administrative expenses are referred to as “G&A expenses”. Six Months Ended June 30, Three Months Ended June 30, 2026 2025 Change 2026 2025 Change Operating expenses: General and administrative expenses 39,888 158,537 (118,649 ) 34,935 63,964 (29,029 ) Total operating expenses 39,888 158,537 (118,649 ) 34,935 63,964 (29,029 ) Loss from operations (39,888 ) (158,537 ) 118,649 (34,935 ) (63,964 ) 29,029 Other (income) expenses: Gain on disposal of equity method investment - (1,171,760 ) 1,171,760 - (1,171,760 ) 1,171,760 Relief of indebtedness income - (1,697,024 ) 1,697,024 - (1,697,024 ) 1,697,024 Interest expense 100,928 163,962 (63,034 ) 50,860 51,319 (459 ) Total other (income) expenses 100,928 (2,704,822 ) 2,805,750 50,860 (2,817,465 ) 2,868,325 Income (loss) before income taxes (140,816 ) 2,546,285 (2,687,101 ) (85,795 ) 2,753,501 (2,839,296 ) Provision for income tax - - - - - - Income (loss) before equity in net income (loss) of equity method investees (140,816 ) 2,546,285 (2,687,101 ) (85,795 ) 2,753,501 (2,839,296 ) Equity in net income (loss) of equity method investees - 340 (340 ) - 340 (340 ) Net income (loss) (140,816 ) 2,546,625 (2,687,441 ) $ (85,795 ) $ 2,753,841 $ (2,839,636 ) We are a holding company whose primary asset currently is our right to the monetization of the former NewStem license now held by Yissum. We currently conduct no other business and as a result, we have no operating revenue or cost of revenue. The Company incurs general and administrative (“G&A”) expenses primarily related to professional fees, insurance and stock-based compensation. We incurred G&A expenses of approximately $40,000 and $159,000 for the six months ended June 30, 2026 and 2025, respectively. Specifically, professional fees decreased by approximately $95,000 in the six months ended June 30, 2026 as compared to the six months ended June 30, 2025, primarily due to a decrease in accounting and audit fees of approximately $27,500 and the write off of approximately $67,500 in prior years legal fees due to the settlement of outstanding fees at a discount. We incurred a bad debt expense during the six months ended June 30, 2025 of approximately $9,500 for the write off of uncollectible administrative fees. We had reductions in stock compensation of approximately $8,800 as no options were issued during 2025 and previously issued stock options were fully expensed during 2025. Other miscellaneous G&A expenses decreased by approximately $5,700. The Company incurs G&A expenses primarily related to professional fees, insurance and stock-based compensation. We incurred G&A expenses of approximately $35,000 and $64,000 for the three months ended June 30, 2026 and 2025, respectively. Specifically, professional fees decreased by approximately $26,000 in the three months ended June 30, 2026 as compared to the three months ended June 30, 2025, primarily due to a decrease in legal fees and audit fees for NewStem. We also had reductions in stock compensation and investor costs of approximately $3,000. 15 Interest expense decreased by approximately $63,000 in the six months ended June 30, 2026 as compared to the six months ended June 30, 2025 primarily due to the settlement of the litigation funding agreement on May 9, 2025. The Company has recorded no income tax expense as we have incurred operating losses and all deferred tax assets are fully offset by an income tax valuation allowance. Liquidity and Capital Resources We have not paid dividends on our common stock since our name change and business focus shift in 2018. Our present policy is to apply cash to debt service, acquisitions or expansion; consequently, we do not expect to pay dividends on common stock in the foreseeable future. The Company will need to obtain additional funds to continue its operations. Management’s plans with regard to these matters include fundraising until our interest in NewStem’s technology via monetization of the License is profitable. Although management continues to pursue these plans, there is no assurance that the Company will be successful in obtaining sufficient cash from financing on terms acceptable to the Company, or that NewStem’s technology will be monetized and become profitable. The Company has in place note agreements entered into during 2022 with Jan Loeb, our Executive Chairman and Jerry Wolasky, a member of the Board, to borrow up to an aggregate of $750,000 for working capital needs. The agreements provide for interest at a rate of 10% per annum and mature March 30, 2027. As of the date of this Quarterly Report, the full amount of $750,000 has been funded pursuant to these agreements. During the year ended December 31, 2023, the Company entered into a note agreement with a shareholder to borrow $300,000 for continued working capital. This note bore interest at zero percent (0%) and matured on May 5, 2025. The note included a guarantee which was identified as an embedded derivative. This note was amended in May 2025 to provide for fixed interest from inception of $36,000 to be added to the principal balance, remove the guarantee and extend the maturity date to September 30, 2025. This note was amended for a second time in October 2025 to extend the maturity date to December 31, 2026. In December 2023, the Company entered into two notes payable with unrelated parties for a total of $250,000 in borrowings utilized for the funding of NewStem. The notes bear interest at 12% per annum prior to an event of default and mature March 30, 2027, at which time all principal and accrued interest are due and payable. The notes provide that principal and accrued interest become due and payable upon the earlier of the stated maturity date or the closing of a capital raise, and that in the event of a capital raise each holder is entitled to participate in that transaction and to tender its note, valued at 133% of the amounts owed on the closing date, as payment for securities issued to that holder. Subsequent to June 30, 2026, the Company entered into waiver and confirmation agreements with both holders with respect to financing transactions completed on or prior to the date of those agreements, including the March 13, 2026 issuance of common stock. In April 2024, the Company borrowed $100,000 from unrelated parties pursuant to convertible debt agreements accounted for as debt. The notes bear interest at 10% per annum and mature March 30, 2027. In February 2025, the Company entered into a bridge loan agreement with the Executive Chairman to fund working capital until such time as additional funding can be obtained. Advances from this note were approximately $28,000 and $106,000 during the six months ended June 30, 2026 and 2025, respectively. The Company repaid $50,000 on this note during the six months ended June 30, 2026. The note bears interest at 10% per annum and matures March 30, 2027. On May 9, 2025 the Company sold its interest in NetCo to its JV partner for $1,300,000 which was paid directly to Omni Bridgeway in full settlement of all liabilities related to the litigation funding agreement totaling $2,959,625 including all accrued and unpaid interest. On March 13, 2026, the Company received $250,000 in exchange for 2,450,980 shares of common stock from an unrelated party. 16 Net Cash Used In Operating Activities. For the six months ended June 30, 2026, net cash used in operating activities was approximately $172,000, which consisted primarily of a net loss of approximately $141,000 and the noncash settlement of accounts payable of $67,500, offset by interest added to notes payable of approximately $100,000. Additionally, cash was used in operations related to a decrease in accounts payable of approximately $71,000, offset by a decrease in prepaid expenses of approximately $7,000. For the six months ended June 30, 2025, net cash used in operating activities was approximately $110,000, which consisted primarily of net income of approximately $2,547,000, offset by noncash disposal of equity method investment of approximately $1,172,000, relief of indebtedness income of approximately $1,697,000, stock-based compensation of approximately $9,000 and interest added to notes payable of approximately $103,000 and accretion of interest on notes payable of approximately $60,000. Additionally, cash was used in operations related to decrease in current assets of approximately $12,000 and a net increase in total accrued liabilities and accounts payable of approximately $28,000. Net Cash Used In Investing Activities. No net cash was used in investing activities during the six months ended June 30, 2026 and 2025. Net Cash Provided By Financing Activities. For the six months ended June 30, 2026, net cash provided by financing activities was $228,000, consisting of short-term borrowings from the Executive Chairman of approximately $28,000, proceeds from the issuance of common stock of $250,000 offset by repayment of $50,000 in short-term borrowings from the Executive Chairman. For the six months ended June 30, 2025, net cash provided by financing activities was $105,500, consisting of short-term borrowings from the Executive Chairman. 17 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK This section is not applicable. ITEM 4. CONTROLS AND PROCEDURES Our Principal Executive Officer and Chief Financial Officer conducted an evaluation of our controls and procedures. We have identified material weaknesses in our internal control and procedures and internal control over financial reporting. If not remediated, our failure to establish and maintain effective disclosure controls and procedures and internal control over financial reporting could result in material misstatements in our financial statements and a failure to meet our reporting and financial obligations, each of which could have a material adverse effect on our financial condition and the trading price of our common stock. Maintaining effective internal control over financial reporting and effective disclosure controls and procedures are necessary for us to produce reliable financial statements. We have re-evaluated our internal control over financial reporting and our disclosure controls and procedures and concluded that they were not effective as of June 30, 2026 and we concluded there was a material weakness in the design of our internal control over financial reporting as it relates to insufficient resources to employ proper segregation of duties over the processing of transactions and financial reporting. A material weakness is defined as a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. Changes in Internal Control Over Financial Reporting There was no change in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. 18 PART II ITEM 1. LEGAL PROCEEDINGS The Company had no legal proceedings during the reporting period. ITEM 1A. RISK FACTORS We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item. ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS (a) Not applicable. (b) Not applicable. (c) Not applicable. ITEM 3. DEFAULTS UPON SENIOR SECURITIES Not applicable. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. ITEM 5. OTHER INFORMATION None. ITEM 6. EXHIBITS #10.18 Loan Extension Bridge Note to Jan Loeb #10.19 Loan Extension Related Party Note to Jan Loeb #10.20 Loan Extension Related Party Note to Jerry Wolasky #31.1 Certification of Principal Executive Officer and Executive Chairman pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. #31.2 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. #32.1 Certification of Principal Executive Officer and Executive Chairman pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. #32.2 Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 104 Cover Page Interactive Data File (embedded within the Inline XBRL document). # This exhibit is filed or furnished herewith. 19 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. NOVELSTEM INTERNATIONAL CORP. Date: August 14, 2026 By: /s/ Jan Loeb Name: Jan Loeb Title: Executive Chairman By: /s/ Christine T. Jenkins Name: Christine T. Jenkins Title: Chief Financial Officer 20