OLB GROUP, INC. 10-Q

Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations Forward-Looking Statements The information in this report contains forward-looking statements. All statements other than statements of historical fact made in this report are forward-looking. In particular, the statements herein regarding industry prospects and future results of operations or financial position are forward-looking statements. These forward-looking statements can be identified by the use of words such as “believes,” “estimates,” “could,” “possibly,” “probably,” anticipates,” “projects,” “expects,” “may,” “will,” or “should” or other variations or similar words. No assurances can be given that the future results anticipated by the forward-looking statements will be achieved. Forward-looking statements reflect management’s current expectations and are inherently uncertain. If underlying assumptions prove inaccurate or unknown risks or uncertainties materialize, our actual results may differ significantly from management’s expectations. These risks and uncertainties include those factors described in greater detail in the risk factors disclosed in our Form 10-K for the fiscal year ended December 31, 2025 filed with the Securities and Exchange Commission. Our forward-looking statements include, among others, statements regarding our deployment of artificial intelligence and agentic AI across our applications and operating functions, the expansion of our engineering team and our adoption of “Agentic Coding” methodologies, the anticipated benefits, costs and timing of those initiatives, the anticipated timing and completion of the DMINT spin-off, the sufficiency of our capital resources and our ability to raise additional capital. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those anticipated in these forward-looking statements. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q or, in the case of documents referred to or incorporated by reference, the date of those documents. The following discussion and analysis should be read in conjunction with our unaudited financial statements, included herewith. This discussion should not be construed to imply that the results discussed herein will necessarily continue into the future, or that any conclusion reached herein will necessarily be indicative of actual operating results in the future. Such discussion represents only the best present assessment of our management. Company Overview and Description of Business Overview We are a FinTech company that focuses on a suite of products in the merchant services marketplace that seeks to provide integrated business solutions to merchants throughout the United States. We seek to accomplish this by providing merchants with a wide range of products and services through our various online platforms, including financial and transaction processing services. We also have products that provide support for crowdfunding and other capital-raising initiatives. We supplement our online platforms with certain hardware solutions that are integrated with our online platforms. We generate revenue through two business segments, Fintech Services and Bitcoin Mining. Our business functions through our wholly-owned subsidiaries, eVance, Inc., a Delaware corporation (“eVance”), OmniSoft.io, Inc., a Delaware corporation (“OmniSoft”), CrowdPay.Us, Inc., a New York corporation (“CrowdPay”), Crowd Ignition, Inc. (“Crowd Ignition”), OLBit, Inc. (“OLBit”), Moola Cloud, LLC (“Moola Cloud”) and DMINT, Inc. (“DMINT”), though substantially all of our revenue has been generated from our eVance business. We expect to build out our OmniSoft software business and to rely more on individualized merchant services offerings for revenue so that we are not dependent on our revenue from our eVance business but there is no guarantee that we will be able to do so. 26 Table of Contents Our Fintech Services span credit and debit card acceptance, ACH payments, real-time payments, digital wallets, PayPal integration and payment terminal and hardware rentals, and are delivered principally through SecurePay™, our proprietary payment gateway, through which card, ACH and real-time payment transactions are routed and authorized and which supports 3-D Secure authentication on card-not-present transactions. We market our AI-enabled merchant applications under the iStores AI and ShopFast AI brands. We also provide eCommerce development and consulting services on a project-by-project basis, including custom artificial intelligence-based development projects for merchants and other clients that are related to transaction processing and other transaction-driven activities. We have integrated all the applications for OmniSoft and the ShopFast Omnicommerce solution with the eVance mobile payment gateway, SecurePay.comTM.. In July 2019, we launched a new merchant and ISO boarding system that will be able to onboard merchants instantly. This provides the merchant with an automated approval and ISOs will have the ability to see all their merchants and their residuals as they load to the system. On May 22, 2020, the Company purchased certain assets from POSaBIT Inc. (“POSaBIT”), including its contracts and arrangements with the Doublebeam merchant payment processing platform (the “POSaBIT Asset Acquisition”). The assets included, but were not limited to, software source codes, customer lists, customer contracts, hardware and website domains. On May 14, 2021, the Company formed OLBit, Inc., a wholly owned subsidiary (“OLBit”). The purpose of OLBit is to hold the Company’s assets and operate its business related to its emerging money transmission and transactional business. OLBit was previously in the process of applying for money transmission licenses in all 50 states. In June 2023, it was decided to delay the process of applying for such licenses in order to have a greater focus of financial and management resources on the Company’s payment processing business and Bitcoin mining business. The Company has since resumed that process and is preparing and submitting money transmission license applications in the states in which it intends to conduct OLBit’s lending and transactional business, while continuing to plan the scope and sequencing of those filings. Issuance of these licenses is subject to review and approval by state regulators, and there is no assurance that the Company will obtain any such license, or that it will do so on the timeline it currently anticipates. On July 23, 2021, we formed DMINT, Inc., a wholly owned subsidiary (“DMINT”) to operate in the Bitcoin mining industry, specifically the mining of Bitcoin. DMINT initiated the first phase of the Bitcoin mining operation by placing data centers and ASIC-based Antminer S19J Pro mining computers specifically configured to mine Bitcoin in Pennsylvania. As of December 31, 2022, DMINT had purchased 1,000 computers. DMINT has a data center located in Selmer, Tennessee. In February 2023, DMINT redeployed its mining computers from its Pennsylvania location and focused the mining efforts at the Selmer, Tennessee location because of the lower cost of operations in the location. As of December 31, 2025, DMINT had 1,000 computers and had 400 computers online and mining for Bitcoin. At June 30, 2026, DMINT had mined 61.73 Bitcoin. On October 21, 2024, DMINT filed a Registration Statement on Form S-1 with the Securities and Exchange Commission (the “SEC”), relating to the proposed spinoff from the Company and resulting issuance of equity of DMINT to OLB shareholders. On August 16, 2022, DMINT Real Estate Holdings, Inc. (“DREH”), a wholly owned subsidiary of DMINT, purchased 4.73 acres of land and a building located at 565 Industrial Park Drive, Selmer, McNairy County, Tennessee for a purchase price of $408,000. DMINT established a Bitcoin mining data center powered on the local power grid. The location is expected to have capacity for up to 5,000 mining machines. The Company plans to complete the buildout of the building to be fully operational with 5,000 machines in 2027 following a spin-off of DMINT into a standalone entity, which is currently in process and has not yet been consummated. As stated above, we are currently in the process of spinning off DMINT into a stand-alone entity. Our planned DMINT spin-off distribution (the “Spin-Off Distribution”) will occur upon DMINT’s Form S-1 Registration Statement filing being declared effective by the Securities and Exchange Commission, and the approval by the Nasdaq Capital Market (“NASDAQ”) of the listing of DMINT’s common shares on the NASDAQ. Following the consummation of the Spin-Off Distribution, of which there is no guarantee, (i) DMINT will no longer be a wholly owned subsidiary of the Company and will be a stand-alone entity, (ii) all of DMINT’s outstanding shares of common stock will be owned by the existing stockholders of the Company, and (iii) DMINT Real Estate Holdings, Inc. (“DREH”) will remain a wholly owned subsidiary of DMINT 27 Table of Contents CrowdPay.us™ operates a white label capital raising platform that targets small and midsized businesses seeking to raise capital and registered broker-dealers seeking to host capital raising campaigns for such businesses by integrating the platform onto such company’s or broker-dealer’s website. Our CrowdPay platform is tailored for companies seeking to raise money through a crowdfunding offering of between $1 million and $50 million pursuant to Regulation CF under Title III of the Jumpstart Our Business Startups (the “JOBS Act”), offerings pursuant to Rule 506(b) and Rule 506(c) under Regulation D of the Securities Act of 1933, as amended (the “Securities Act”), and offerings pursuant to Regulation A+ of the Securities Act. Our platform, which can be used for multiple offerings at once, provides companies and broker-dealers with an easy-to-use, turnkey solution to support company offerings, allowing companies and broker-dealers to easily present online to potential investors relevant marketing and offering materials and by aiding in the accreditation and background check processes to ensure investors meets the applicable requirements under the rules and regulations of the Securities Exchange Commission (the “SEC”). CrowdPay charges a fee to each company and broker-dealer for the use of its platform under a fee structure that is agreed to between CrowdPay and the Company and/or broker-dealer prior to the initiation of the offering. CrowdPay also generates revenues by providing ancillary services to the companies and broker-dealers utilizing our platform, including running background checks and providing anti-money laundering and know-your-customer compliance. CrowdPay is not a registered funding portal or a registered broker-dealer. On January 3, 2022, the Company entered into a share exchange agreement with all of the shareholders of Crowd Ignition, Inc. (“Crowd Ignition”) whereby the Company purchased 100% of the equity of Crowd Ignition in exchange for 1,318,408 shares of the common stock, par value $0.0001 of the Company (the “CI Issued Shares”). The value of the CI Issued Shares was, for purposes of the Agreement, based on the closing trading price of the Company on October 1, 2021 (the date on which a third-party fairness opinion was issued), resulting in an aggregate purchase price for Crowd Ignition of $5.3 million. The share exchange transaction closed on January 3, 2022. Prior to the closing of the share exchange transaction, Ronny Yakov, Chairman and CEO of the Company and John Herzog, a shareholder of the Company, owned 100% of the equity of Crowd Ignition. Crowd Ignition is a web-based crowdfunding software system. The software provides broker-dealer, merchant banks and law firms a platform to market crowdfunding offerings, collect payments and issue securities. The software has been developed in response to, and to comply with, recent changes in investment regulations including Regulation D 506(b) and 506(v), Regulation A+ and Title III of the Jobs Act (Regulation CF), including raising the crowdfunding limit from $1.07 million to $5.0 million. Crowd Ignition is one of only about 50 companies registered with the SEC to provide the services permitted under Regulation CF. On June 15, 2023, the Company entered into a Membership Interest Purchase Agreement (the “Agreement”) with SDI Black 001, LLC (“Seller”) whereby it acquired 80.01% of the membership interests of Moola Cloud, LLC, a Florida limited liability company (formerly Cuentas SDI, LLC, the “LLC”). The LLC will enable the Company to focus on marketing to the underbanked communities utilizing the LLC’s debit and calling card platform’s ability for users to reload cash to their account and provide instant access to digital products to their customers’ Mobile App and digital wallet into its electronic portal. The Company plans to market to the LLC’s merchant network, which currently includes approximately 31,600 bodega convenience stores in and around New York and New Jersey, the ability of having one POS system that will allow the retail customer to purchase products using OLB’s payment processing solutions along with the ability to reload payment cards and their mobile phone minutes. On May 20, 2024, the Company entered into a Membership Interest Purchase Agreement (the “Agreement”) dated as of May 20, 2024 with the minority member of the LLC whereby it acquired the remaining 19.99% of the membership interests of the LLC for a purchase price of $215,500. As a result, effective May 20, 2024, the Company owns 100% of the LLC. On August 14, 2024, the LLC changed its name to Moola Cloud, LLC. The Agreement contains a restrictive covenant whereby for a period of three (3) years from the closing, none of Seller, including its any of its principals, executives, officers, directors, managers, employees, salespersons, or entities in which such principal has any interest, will directly or indirectly (i) induce, attempt to induce, interfere with, disrupt or attempt to disrupt any past, present or prospective business relationship, solicit, market to, endeavor to obtain as a customer, or contract with any merchant in order to provide services to such Merchant in competition with the Company; or (ii) solicit or interfere with, disrupt or attempt to disrupt any past, present or prospective business relationship, contractual or otherwise any person or entity that is a party to any contract assigned to the Company to terminate its contractual or business relationship with the Company. 28 Table of Contents Artificial Intelligence and Agentic AI Initiatives During the six months ended June 30, 2026 and continuing through the date of this Quarterly Report, we have been re-engineering our operations around artificial intelligence (“AI”), including agentic AI — autonomous software agents that are designed to plan, decide and execute tasks with limited human intervention. Our objective is to operate as an AI-native financial technology company. Our AI strategy is organized around three principal initiatives, each of which is described below, and includes the implementation of agentic commerce and automation services across our Fintech Services platforms. These initiatives are in varying stages of design, development and implementation, and there is no assurance that any of them will be completed on the timelines we currently anticipate, or at all, or that they will produce the operational or financial benefits we expect. AI Embedded in Our Applications. We are working to add AI capabilities to our customer-facing and internal applications, including our SecurePay™ payment gateway, our ShopFast AI eCommerce platform, iStores AI and the Moola Cloud merchant network. The capabilities we are developing or evaluating include real-time fraud detection, intelligent transaction routing, automated chargeback management, dynamic risk scoring and conversational AI interfaces for merchants and consumers. We are also developing an application that will enable issuers using our CrowdPay platform to generate tokenized offerings, provide investors with additional payment options and access live AI chatbot support, for which we expect to release an initial update during the fourth quarter of 2026 and to complete a full launch in early 2027, including support for stablecoin payment options provided through licensed or otherwise authorized third-party providers; a new point-of-sale solution for the Moola Cloud merchant network that will combine payment acceptance with a self-service website builder, enabling merchants to create and maintain their own eCommerce storefronts alongside their in-store operations, and that has been upgraded with our recent services and is ready for implementation at merchant locations; and custom AI-based development projects for merchants and other clients that are related to transaction processing and other transaction-driven activities. Certain of these capabilities remain in development and have not yet been deployed to merchants. See Note 1 to our condensed consolidated financial statements and Item 1A, “Risk Factors.” Agentic AI Across Operating Functions. We are deploying, or intend to deploy, agentic AI across our operating functions. In customer support, we are using AI agents to assist with merchant onboarding inquiries, ticket triage, transaction disputes and first-line support, with escalation of exceptions to our personnel. In risk and compliance, we are using AI agents to monitor merchant transaction patterns, merchant category code classification, MATCH list exposure and know-your-customer and anti-money laundering signals in order to surface anomalies for review. In underwriting and merchant boarding, we are developing AI-driven boarding workflows intended to support same-day merchant approval through SecurePay, including background checks, sanctions screening and PCI compliance verification. In accounting and finance, we are developing AI agents intended to automate invoice processing, reconciliation, residual calculations, expense categorization and routine financial close activities. In sales and independent sales organization (“ISO”) operations, we are developing AI assistants intended to help ISOs track merchant residuals, model pricing scenarios and identify potential upsell opportunities. Human review and oversight remain in place for underwriting, risk, compliance and financial reporting activities, and our internal control over financial reporting is not dependent on these tools. Expanded Engineering Team and “Agentic Coding.” Beginning in 2026, we transitioned our entire software development team to an artificial intelligence-assisted model for developing and maintaining our applications, commonly referred to as “Agentic Coding” or “vibe coding,” a software development methodology in which engineers direct and review code generated by large language model tools rather than authoring code directly. The transition applies across both of our business segments. We are also adding engineering personnel focused on agentic AI development, and we are training our existing developers to work in this manner, with AI coding agents supporting scaffolding, refactoring, testing and documentation, and we are recruiting new engineers based in part on their ability to build and orchestrate agentic AI systems. We expect that these methods may compress development cycles, reduce engineering cost per feature delivered and accelerate our ability to deliver merchant-specific solutions, although we have limited operating history with these methods and cannot assure you that these expected benefits will be realized. 29 Table of Contents Our AI initiatives are in the early stages of implementation and did not have a material effect on our results of operations for the six months ended June 30, 2026. Costs incurred in connection with these initiatives to date have consisted primarily of personnel and third-party software and services costs and are included within salaries and wages and general and administrative expenses in our condensed consolidated statements of operations. We expect these costs to increase as we hire additional engineering personnel and expand our use of third-party AI models and tools. To date, we have not recognized revenue that is separately attributable to these initiatives. The use of AI and agentic AI in a regulated payments business presents risks, including the risk of inaccurate or unreliable model outputs, algorithmic bias, data privacy and data security exposure, dependence on third-party model providers, and evolving federal and state regulation and card network rules governing the use of automated decision-making in underwriting, risk and compliance functions. Any failure of these systems, or any determination by a regulator, card network or sponsor bank that our use of them is non-compliant, could require us to modify or discontinue these initiatives and could adversely affect our business, results of operations and financial condition. Results of Operations Management’s discussion and analysis of financial condition and results of operations (“MD&A”) includes a discussion of the consolidated results from operations of The OLB Group, Inc. and its subsidiaries for the three and six months ended June 30, 2026. Three Months Ended June 30, 2026 Compared to the Three Months Ended June 30, 2025 For the three months ended June 30, 2026, we had total revenue of $1,279,251 compared to $2,267,191 of revenue for the three months ended June 30, 2025, a decrease of $987,940 or 43.6%. In the current period we earned $1,169,910 in transaction and processing fees, $22,791 in other revenue from monthly recurring subscriptions, $73,241 of revenue from the Cryptocurrency Mining segment and $13,309 of revenue from the sale of digital products. For the three months ended June 30, 2025, we earned $2,096,342 in transaction and processing fees, $4,563 in merchant equipment rental and sales, $70,359 in other revenue from monthly recurring subscriptions, $60,190 of revenue from the Cryptocurrency Mining segment and $35,737 of revenue from the sale of digital products. We had a decrease in revenue primarily due to a decrease in revenue related to Moola Cloud, LLC, as the Company transitions to new vendors to obtain better pricing and is working to acquire new vendors to replace others that have gone out of business. In addition, we had a decrease of revenue from the Cryptocurrency Mining, due to the decline in the value of Bitcoin. For the three months ended June 30, 2026, we had processing and servicing costs of $1,063,595 compared to $1,964,314 of processing and servicing costs for the three months ended June 30, 2025, a decrease of $900,719 or 45.9%. Processing and servicing costs decreased in conjunction with the decreased revenue and merchant attrition. Amortization and depreciation expense for the three months ended June 30, 2026 was $3,412 compared to $0 for the three months ended June 30, 2025, an increase of $3,412. We recorded amortization expense on our merchant portfolio, trademarks and natural gas purchase rights. The decrease in the current period is due to most of the assets being fully amortized in 2024 and the remainder in Q1 2025. Depreciation expense for our Bitcoin Mining Segment was $0 for the three months ended June 30, 2026, compared to $120,967, for the three months ended June 30, 2025, a decrease of $120,967. The decrease in the current period is due to assets being impaired and/or fully depreciated in prior periods. Salary and wage expense for the three months ended June 30, 2026, was $812,600 compared to $1,052,614 for the three months ended June 30, 2025, a decrease of $240,014 or 22.8%. In the current period, we granted shares of common stock to our CEO for total non-cash expense of $96,200 in accordance with his new employment agreement. This increase to wage expense was offset with fewer employees, and therefore lower wage expense in 2026. The decrease in employees will not have an effect on future earnings. If the Company feels the employees/positions need to be replaced, then the Company will hire for the position. Professional fees for the three months ended June 30, 2026, were $126,264 compared to $334,566 for the three months ended June 30, 2025, a decrease of $208,302 or 62.3%. Professional fees consist mainly of audit and legal fees. The decrease in the current period is due to a decrease in legal fees. 30 Table of Contents General and administrative expenses for the three months ended June 30, 2026, was $533,248 compared to $491,476 for the three months ended June 30, 2025, an increase of $41,772 or 8.5%. The increase was mainly due to an increase of utility expense and insurance expense. For the three months ended June 30, 2026, the Company recognized total other income of $205,062, consisting of $75,902 of interest expense and an unrealized loss in the fair value of cryptocurrency of $20,648. This was offset by a $301,612 gain on the settlement of accounts payable through the issuance of common stock. For the three months ended June 30, 2025, we had total other expenses of $427,568. We incurred interest expense for related parties of $169,805 and other expense of $30,000. We also recognized a loss on the extinguishment of debt of $52,000 and a loss on conversion of accrued salaries and loans payable of $175,763. Our net loss for the three months ended June 30, 2026, was $1,054,806 compared to $2,124,314 for the three months ended June 30, 2025. This was a decrease in our net loss of $1,069,508. Six Months Ended June 30, 2026 Compared to the Six Months Ended June 30, 2025 For the six months ended June 30, 2026, we had total revenue of $2,935,595 compared to $4,588,727 of revenue for the six months ended June 30, 2025, a decrease of $1,653,132 or 36%. In the current period we earned $2,687,681 in transaction and processing fees, $48,727 in other revenue from monthly recurring subscriptions, $121,461 of revenue from the Cryptocurrency Mining segment and $77,726 of revenue from the sale of digital products. For the six months ended June 30, 2025, we earned $4,154,619 in transaction and processing fees, $16,687 in merchant equipment rental and sales, $142,996 in other revenue from monthly recurring subscriptions, $145,672 of revenue from the Cryptocurrency Mining segment and $128,753 of revenue from the sale of digital products. We had a decrease in revenue primarily due to a decrease in revenue related to Moola Cloud, LLC, as the Company transitions to new vendors to obtain better pricing and is working to acquire new vendors to replace others that have gone out of business. In addition, we had a decrease of revenue from the Cryptocurrency Mining, due to the decline in the value of Bitcoin. For the six months ended June 30, 2026, we had processing and servicing costs of $2,544,846 compared to $3,773,128 of processing and servicing costs for the six months ended June 30, 2025, a decrease of $1,228,282 or 32.6%. Processing and servicing costs decreased in conjunction with the decreased revenue and merchant attrition. Amortization and depreciation expense for the six months ended June 30, 2026 was $6,822 compared to $3,972 for the six months ended June 30, 2025, an increase of $2,850. We recorded amortization expense on our merchant portfolio, trademarks and natural gas purchase rights. The increase in the current period is due to all of those assets being fully amortized in 2024 and the remainder in Q1 2025. Depreciation expense for our Bitcoin Mining Segment was $0 for the six months ended June 30, 2026, compared to $379,316, for the six months ended June 30, 2025, a decrease of $379,316. The decrease in the current period is due to assets being impaired and/or fully depreciated in prior periods. Salary and wage expense for the six months ended June 30, 2026, was $1,482,037 compared to $1,583,970 for the six months ended June 30, 2025, a decrease of $101,933 or 6.4%. In the current period, we granted shares of common stock to our CEO for total non-cash expense of $226,320 in accordance with his new employment agreement. This increase to wage expense was offset with fewer employees, and therefore lower wage expense in 2026. Professional fees for the six months ended June 30, 2026, were $268,669 compared to $412,139 for the six months ended June 30, 2025, a decrease of $143,470 or 34.8%. Professional fees consist mainly of audit and legal fees. The decrease in the current period is due to a decrease in legal fees. General and administrative expenses for the six months ended June 30, 2026, was $1,162,977 compared to $981,627 for the six months ended June 30, 2025, an increase of $181,350 or 18.5%. The increase was mainly due to an increase of utility expense and insurance expense. For the six months ended June 30, 2026, the Company recognized total other income of $397,368, consisting of $76,002 of interest expense for related parties and an unrealized loss in the fair value of cryptocurrency of $20,648. This was offset by a $494,018 gain on the settlement of accounts payable through the issuance of common stock. For the six months ended June 30, 2025, we incurred interest expense for related parties of $395,124 and other expense of $45,000. We also recognized a loss on the extinguishment of debt of $52,000 and a loss on conversion of accrued salaries and loans payable of $175,763. 31 Table of Contents Our net loss for the six months ended June 30, 2026, was $2,132,388 compared to $3,213,312 for the six months ended June 30, 2025. This was a decrease in our net loss of $1,080,924. Liquidity and Capital Resources Changes in Cash Flows Operating Activities For the six months ended June 30, 2026, we used $2,397,514 of cash in operating activities, which included our net loss of $2,132,388 offset by non-cash reconciling items of $6,822 for depreciation, $226,320 for stock compensation expense for shares issued, an unrealized loss for the fair value of cryptocurrency of $20,648 and a $494,018 gain on the settlement of accounts payable and debt. There were net changes in operating assets and liabilities of $24,898. For the six months ended June 30, 2025, we used $1,175,615 of cash in operating activities, which included our net loss of $3,213,312 offset by $867,196 of non-cash reconciling items and net changes in operating assets and liabilities of $1,170,501. Financing Activities For the six months ended June 30, 2026, we received net cash of $3,661,963 in financing activities. We received $14,024 from loans from our CEO, $2,619,999 from the sale of prefunded warrants and contributed capital of $9,940. We also received $1,097,000 from the sale of common stock, net of $203,000 offering fees. The shares were sold at $0.60 per share. We made repayments on our note payable of $34,000 and to our CEO of $45,000. For the six months ended June 30, 2025, we received net cash of $1,150,841 from financing activities as a result of receiving $346,073 from our CEO and $887,786 from the sale of common stock, and a decrease in our cash overdraft of $5,299. We made repayments on our note payable of $38,838 and to our CEO of $38,881. Liquidity and Capital Resources At June 30, 2026, the Company had cash of $1,280,226 and other current assets of $1,418,035. We have reviewed the cash flow activity during the six months ended June 30, 2026 and projected cash flow forecast for the remainder of 2026 and performed an overall analysis of market trends to determine whether or not it has sufficient liquidity to continue as a going concern for a period of at least twelve months from the date of this Quarterly Report. Based on projected cash to be used in operations to be offset by expected proceeds from capital raises, the ATM program and loan proceeds from Ronny Yakov under the loan agreement, the Company believes it has sufficient liquidity in order to sustain operations for at least the twelve months following the filing of this Quarterly Report. However, management recognizes that it may be required to obtain additional resources to successfully execute its business plans. No assurances can be given that management will be successful in raising additional capital, if needed, or on acceptable terms. Management believes that the Company’s existing cash resources, together with expected capital raises, potential advances under the ATM program, related party financing, and other available funding sources, will be sufficient to support operations through August 14, 2027. On August 7, 2026, the Company entered into an Equity Distribution Agreement (the “Agreement”) with Maxim Group LLC (“Maxim”) to create an at-the-market equity program. Under the Agreement, the Company may offer and sell its common stock, par value $0.0001 per share, from time to time as set forth in the Agreement (the “ATM Offering”). The Company has agreed to pay Maxim a commission equal to 3.0% of the gross sales price from the sales of Shares pursuant to the Agreement. In addition, the Company agreed to reimburse Maxim for its costs and out-of-pocket expenses incurred in connection with its services, including the fees and out-of-pocket expenses of its legal counsel. 32 Table of Contents During the six months ending June 30, 2026, Mr. Yakov advanced the Company $14,024 and received repayments of $45,000. As of June 30, 2026 and December 31, 2025, the amount due to Yakov Holdings, LLC is $136,339 and $167,315, respectively. On January 22, 2026, the Company entered into a securities purchase agreement with certain institutional investors pursuant to which it agreed to sell, in a registered direct offering, 2,166,666 shares of common stock and, in a concurrent private placement, warrants to purchase up to 2,166,666 additional shares of common stock at a combined purchase price of $0.60 per share and accompanying warrant. The offering closed on January 26, 2026, generating aggregate net proceeds of approximately $1,096,783, after deducting placement agent fees and other offering expenses. The shares were issued pursuant to an effective shelf registration statement on Form S-3, while the warrants were issued in a private placement. On February 18, 2026, the Company entered into a securities purchase agreement with an institutional investor pursuant to which it issued, in a private placement, pre-funded warrants to purchase up to 2,857,142 shares of common stock and common warrants to purchase up to 3,571,428 shares of common stock at a combined purchase price of $1.05 per unit. The pre-funded warrants are immediately exercisable at a nominal exercise price, and the common warrants have an exercise price of $0.92 per share and a five-year term. The offering closed on February 19, 2026, generating net proceeds of approximately $2,619,713, after deducting placement agent fees and other offering expenses. On January 21, 2026, the Company issued 550,000 shares of common stock for payment of various accounts payable totaling approximately $518,731. The shares were valued at $0.80, the closing stock price on the date of grant, for a total value of $437,325. The Company recorded a gain on the extinguishment of debt of $81,406. On January 21, 2026, the Company issued 350,000 shares of common stock for prepaid legal services totaling approximately $278,250. The shares were valued at $0.80, the closing stock price on the date of grant. Critical Accounting Policies Refer to our Form 10-K for the year ended December 31, 2025, for a full discussion of our critical accounting policies. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and, as such, are not required to provide the information under this Item.