What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2026-02-17 compared with 2025-08-13 · 469 added, 359 removed, 229 unchanged (78% of the section changed)

FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEETS

thousands, except share and per share data)

and cash equivalents

receivable, net

expenses and other current assets

CONDENSED CONSOLIDATED

BALANCE SHEETS

(In thousands, except share and per share data)

December 31, 2025

September 30, 2025

Current assets

& STOCKHOLDERS’ EQUITY

payable and accrued liabilities

taxes payable

Cash and cash equivalents

Short-term investments

Accounts receivable, net

Prepaid expenses and other current assets

Total current assets

LIABILITIES & STOCKHOLDERS’ EQUITY

Current liabilities

and contingencies (Note 14)

stock, $ 0.001 par value, 681,000,000 shares authorized;

231,229,054 and 225,975,331 shares issued and outstanding as of June 30,

2025, and September 30, 2024

paid-in capital

stockholders’ equity

liabilities and stockholders’ equity

accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

CONSOLIDATED STATEMENT OF OPERATIONS

thousands, except share and per share data)

and administrative

and marketing

and development

Accounts payable and accrued liabilities

Deferred revenue

Income taxes payable

Total current liabilities

Total liabilities

Commitments and contingencies (Note 14)

Common stock, $ 0.001 par

value, 681,000,000 shares authorized;

shares issued and outstanding as of December 31, 2025, and September 30, 2025

Additional paid-in capital

Accumulated deficit

Total stockholders’ equity

Total liabilities and stockholders’ equity

Company’s common stock shares issued and outstanding, common stock and additional paid-in capital as of December 31, 2025, and

September 30, 2025, have been retroactively restated for the reverse stock split as described in Note 2 of the accompanying notes, which

are an integral part of these unaudited condensed consolidated financial statements.

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(In thousands, except share and per share data)

Three Months Ended

Cost of revenues

Operating expenses

loss before income tax expense

loss per common share – basic and diluted

average common shares outstanding – basic and diluted

accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

General and administrative

Selling and marketing

Research and development

Total operating expenses

Operating loss

Other income, net

Net loss before income tax expense

Income tax expense

Net loss per common share – basic and diluted

Weighted average common shares outstanding – basic and diluted

Company’s weighted average common shares outstanding and net loss per common share – basic and diluted for the three months

ended December 31, 2025, and December 31, 2024, have been retroactively restated for the reverse stock split as described in Note 2 of

the accompanying notes, which are an integral part of these unaudited condensed consolidated financial statements.

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

thousands, except share data)

at September 30, 2024

issued for legal settlement

at December 31, 2024

at March 31, 2025

at June 30, 2025

at September 30, 2023

issued for 2021 Investor Warrants

issued for services

at December 31, 2023

issued for services

at March 31, 2024

at June 30, 2024

accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

(In thousands, except share data)

Paid-in Capital

Balance at September 30, 2025

Stock-based compensation

Balance at December 31, 2025

Paid-in Capital

Balance at September 30, 2024

Shares issued for legal settlement

Stock-based compensation

Balance at December 31, 2024

Company’s common shares outstanding (shares and amount) and additional paid-in capital have been retroactively restated for

the reverse stock split as described in Note 2 of the accompanying notes,

which are an integral part of these unaudited condensed

consolidated financial statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Months Ended June 30,

FLOWS FROM OPERATING ACTIVITIES:

to reconcile net loss to net cash flows provided by / (used in) operating activities:

and amortization

Settlement Paid in Stock

compensation and payments for services, net

in operating assets and liabilities:

receivable, net

expenses and other current assets

payable and accrued liabilities

Deferred revenue

(In thousands)

Three Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES:

Adjustments to reconcile net loss to net cash flows provided by (used in) operating activities:

Depreciation and amortization

Legal settlement paid in stock

Stock-based compensation and payments for services, net

Changes in operating assets and liabilities:

Accounts receivable, net

Prepaid expenses and other assets

Accounts payable and accrued liabilities

Income taxes payable

cash provided by / (used in) operating activities

FLOWS FROM INVESTING ACTIVITIES:

sale (purchase) of short-term investments

of fixed assets

cash provided by / (used in) investing activities

FLOWS FROM FINANCING ACTIVITIES:

of note payable

cash used in financing activities

BEGINNING OF PERIOD

END OF PERIOD

DISCLOSURES OF CASH FLOW INFORMATION:

Issued for Services

of RSUs sold by employees to pay for taxes due on vested RSUs

Deferred revenue

Net cash provided by (used in) operating activities

CASH FLOWS FROM INVESTING ACTIVITIES:

Net cash provided by / (used in) investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Net cash used in financing activities

INCREASE (DECREASE) IN CASH

CASH, BEGINNING OF PERIOD

CASH, END OF PERIOD

accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THE NINE MONTHS ENDED JUNE 30, 2025 AND 2024

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THE THREE MONTHS ENDED DECEMBER 31, 2025 AND 2024

1 – DESCRIPTION OF BUSINESS

mission is to make cybersecurity simple and accessible for mid-market and emerging companies, a market that we believe is currently

We believe that our cybersecurity product and service offerings provide cybersecurity and privacy risk management

solutions for our customers.

mission is to make cybersecurity simple and accessible for mid-market and emerging companies, a market that we believe is currently underserved.

We believe that our cybersecurity product and service offerings provide cybersecurity and privacy risk management solutions for our customers.

We anticipate that our target customers will continue to need cost-effective security solutions.

continue to expand our catalogue of services and solutions to address the cybersecurity needs of our customers, including virtual

Chief Information Security Officer (“vCISO”), cyber program strategy, zero trust, third-party risk management,

compliance readiness, cloud security and architecture services, privacy, threat intelligence, managed end-point security solutions,

and cybersecurity awareness.

We continue to expand our catalogue

of services and solutions to address the cybersecurity needs of our customers, including virtual Chief Information Security Officer (“vCISO”),

cyber program strategy, zero trust, third-party risk management, compliance readiness, cloud security services, privacy, threat intelligence,

managed end-point security solutions, and cybersecurity awareness.

are marketing and selling Enclave, a proprietary software product that simplifies important cybersecurity tasks to achieve “microsegmentation.”

8 unchanged sentences

and minimal resource requirements.

growth strategy focuses on these three initiatives:

adoption of Enclave,

new vCISO Services clients, and

new Cybersecurity Software and Services offerings.

vCISO Services agreements are in the form of a monthly subscription;

some clients select a prepaid block of hours or time and materials

Rates for vCISO Services range from $ 350 to $ 450 per hour.

Each of our vCISOs is generally embedded into the C-suite executive

teams of two (2) to four (4) of our clients.

We augment our vCISO Services offering with a full range of other cybersecurity products

and services, including third-party software and services that we resell and those delivered by our security engineer employees and independent

headquarters are located at 146 Main Street, Suite 405, Worcester, MA 01608.

Our website is www.sidechannel.com .

2 – REVERSE STOCK SPLIT

On February 12, 2025, at the annual meeting of stockholders, the stockholders of the Company approved and adopted

an amendment to the Company’s certificate of incorporation, as amended (the “Certificate of Incorporation”), to effectuate

a reverse stock split of the Company’s outstanding shares of common stock, at a ratio of no less than 1-for-2 and no more than

1-for-200, with such ratio to be determined by the Company’s board of directors (the “Board”) in its sole discretion.

On August 21, 2025, the Board approved a reverse stock split at a ratio of 1-for-52 (the “Reverse Split”) .

On January 12,

2026, the Company filed a certificate of amendment to its Certificate of Incorporation (the “Certificate of Amendment”) with

the Secretary of State of the State of Delaware to effectuate the Reverse Split.

The Certificate of Amendment was effective for state

law purposes at 4:00 p.m.

ET on January 22, 2026, after the close of trading on the OTCQB, such that the Company’s common stock

began trading on a post-Reverse Split basis at market open on January 23, 2026.

January 16, 2026, the Company filed a certificate of correction to the Certificate of Amendment (the “Certificate of Correction”)

to correct a scrivener’s error in the Certificate of Amendment.

The Certificate of Amendment indicated that any fractional shares

resulting from the Reverse Split would be rounded “to the nearest whole share” of common stock, rather than providing that

any fractional shares would be rounded “up to the nearest whole share” of common stock, as the Company intended.

ET on January 22, 2026, after the close of trading on the OTCQB, each

52 shares of issued and outstanding common stock (collectively, the “Pre-Split Common Stock”) were automatically, and without

any action on the part of the holder thereof, reclassified such that each 52 shares of Pre-Split Common Stock became one share of common

stock, with any resulting fractional shares common stock being rounded up to the nearest whole share of common stock .

The Reverse Split had no effect on our

authorized number of shares of common stock, par value of common stock, total assets, total liabilities or stockholders’ equity.

We restated our common shares outstanding (shares and amount) and the value of our additional paid-in capital (“APIC”)

to reflect the number of shares outstanding after the Reverse Split.

3 – GOING CONCERN ASSESSMENT

has evaluated the Company’s ability to continue as a going concern within one year after the date that these financial statements

are issued in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification

(“ASC”) 205-40, Presentation of Financial Statements – Going Concern.

Management’s evaluation considered the

Company’s current financial condition, including its cash position, recurring operating losses, and historical negative cash flows

from operations, as well as its forecasted results and cash flows for the twelve months following the date of issuance of these financial

of December 31, 2025, the Company had incurred recurring operating losses and experienced negative cash flows from operations,

and it had limited cash on hand and constrained access to additional sources of capital.

We did not have any credit facilities

available to us as of December 31, 2025, or as of the filing date of this Quarterly Report.

These conditions initially raised substantial

doubt about the Company’s ability to continue as a going concern within one year after the date that these financial statements

Based on its current cash balance, projected cash used in operations, and other obligations coming due during the

next twelve months, management determined that, absent mitigating plans, the Company may not have had sufficient liquidity to fund operations

and meet its obligations as they become due over that period.

response to these conditions, management has developed and begun implementing plans intended to improve liquidity and address the factors

that initially raised substantial doubt.

These plans include a cost-reduction program that is expected to reduce annual operating expenses

by approximately $ 930 thousand beginning in fiscal year 2026.

The cost-reduction program consists of actions such as personnel reductions,

renegotiation of vendor contracts, and reductions in discretionary spending.

Management has already initiated a portion of these actions

as of the date these financial statements were issued.

Management’s plans also include seeking additional equity and/or debt financing.

considering the expected impact of these plans, including the anticipated $ 930 thousand annual reduction in operating expenses, management

believes that the Company will have sufficient liquidity to fund its operations and meet its obligations as they become due within one

year after the date that these financial statements were issued.

The accompanying financial statements have therefore been prepared on

a going concern basis and do not include any adjustments that might result from the outcome of these uncertainties.

4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

of Presentation and Use of Estimates

accompanying unaudited condensed consolidated interim financial statements have been prepared in accordance with accounting principles

generally accepted in the United States of America (“U.S.

GAAP”) for interim financial information with the instructions

to Form 10-Q and Rule 8-01 of Regulation S-X.

Accordingly, they do not include all the disclosures required for complete financial statements,

and they do include our accounts and those of our wholly owned subsidiaries.

All significant intercompany accounts and transactions have

been eliminated upon consolidation.

References to fiscal year 2025 and fiscal year 2024 used throughout this report shall mean the current

fiscal year ending September 30, 2025, and the prior fiscal year ended September 30, 2024, respectively.

the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments (consisting

only of normal recurring adjustments) necessary to present fairly the financial position, results of operations, and changes in cash

flows for the interim periods presented.

Certain footnote information has been condensed or omitted from these consolidated financial

Therefore, these condensed consolidated financial statements should be read in conjunction with the consolidated financial

statements and accompanying footnotes included in our Form 10-K for the fiscal year ended September 30, 2024, filed with the Securities

and Exchange Commission on December 13, 2024 (“2024 Form 10-K”).

The same accounting policies have been followed in these

unaudited interim condensed consolidated financial statements as those applied in the preparation of our consolidated audited financial

statements for the year ended September 30, 2024.

preparation of financial statements in conformity with U.S.

GAAP requires us to make estimates and assumptions that affect the reported

amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the

reported amounts of revenue and expenses during the reporting period.

accompanying unaudited condensed consolidated financial statements include our accounts and those of our wholly owned subsidiaries.

significant intercompany accounts and transactions have been eliminated upon consolidation.

The preparation of financial statements in

conformity with accounting principles generally accepted in the United States of America (“U.S.

GAAP”) requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and

disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses

during the reporting period.

Actual results could differ from those estimates.

Certain of our

accounts, including goodwill and deferred tax assets and liabilities, including related valuation allowances, are based upon estimates.

Certain of our accounts, including goodwill, identifiable

intangibles, and deferred tax assets and liabilities, including related valuation allowances, are based upon estimates.

References to

fiscal year 2026 and fiscal year 2025 used throughout this report shall mean the current fiscal year ending September 30, 2026, and the

prior fiscal year ended September 30, 2025, respectively.

Reclassifications

prior year amounts have been reclassified to be comparable with the current year’s presentation.

These reclassifications had no

effect on the previous operations or financial condition of the Company.

manage our operations as a single operating segment for the purposes of assessing performance and making operating decisions.

prior year amounts have been reclassified to be comparable with the current year’s presentation or adjusted due to rounding and

have had no impact on net income or stockholders’ equity.

Company operates as a single reportable segment focused on cybersecurity solutions, which consists of two primary revenue-generating

(1) vCISO Services, and (2) Cybersecurity Software and Services.

vCISO Services:

category captures the revenue from the Chief Information Security Officer services that we provide to our clients on a “virtual”

or outsourced basis.

Embedded into the C-suite executive teams of our clients, our vCISOs deliver services including assessing the

cybersecurity risk profile, implementing policies and programs to mitigate risks, and managing the day-to-day tasks to ensure compliance

with the adopted cybersecurity framework.

Most of our clients use our vCISO Services.

Engagements typically include a fixed monthly

subscription fee and exceed 12 months because of renewal options of 1, 3, 6, or 12 months.

Cybersecurity Software

and Services:

This category encompasses an array of cybersecurity software and services that our clients deem necessary to protect

their digital assets, including Enclave.

These augment our vCISO offering and include a full range of other cybersecurity products

and services delivered through a team of security engineers along with a network of third-party service providers and value-added resellers (“VARs”).

relationships with third-party service providers and VARs provide SideChannel with additional internal capabilities to mitigate cybersecurity

We earn licensing revenue from software contracts and commissions from third-party service provider partnerships which are

included in this revenue category.

Chief Executive Officer is our chief operating decision maker (“CODM”).

Revenue is the primary segment performance measure

reviewed by the CODM for operational and capital allocation decisions.

following table presents revenue reviewed by the CODM for the three months ended December 31, 2025 and 2024:

OF DISAGGREGATED REVENUE

Three Months Ended

(in thousands)

vCISO Services

Cybersecurity Software and Services

Cash Equivalents, and Short-Term Investments

11 unchanged sentences

on short-term investments is accrued in interest receivable which is included on our balance sheet in “Accounts receivable, net.”

income related to cash equivalents and short-term investments is reported in “Other income, net” on the Condensed Consolidated

Statement of Operations.

income related to cash equivalents and short-term investments is reported in “Other income, net” on the Consolidated Statement

of Operations.

accounts receivable are recorded at the invoiced amounts and do not bear interest.

3 unchanged sentences

Effective January

1, 2023, we follow the guidance in Accounting Standards Codification (“ASC”) Topic 326 (Financial Instruments

1, 2023 , we follow the guidance in ASC Topic 326 (Financial Instruments

– Credit Losses) in developing our estimate of the allowance for credit losses related to our accounts receivable.

10 unchanged sentences

are recorded in operating cash flows.

analysis indicated we did not require an allowance for June 30, 2025.

was no bad debt expense recorded for the three months ended December 31, 2025 and 2024.

Value of Financial Instruments

6 unchanged sentences

Within the measurement of fair value, the use of market-based information is prioritized

over entity specific information, and a three-level hierarchy for fair value measurements is used based on the nature of inputs used

in the valuation of an asset or liability as of the measurement date.

over entity specific information and a three-level hierarchy for fair value measurements is used based on the nature of inputs used in

the valuation of an asset or liability as of the measurement date.

three-level hierarchy for fair value measurements is defined as follows:

1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets;

2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets and inputs

that are observable for the asset or liability other than quoted prices, either directly or indirectly, including inputs in markets

that are not considered to be active;

3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement.

Level 1 – inputs to

the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets;

Level 2 – inputs to

the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable

for the asset or liability other than quoted prices, either directly or indirectly, including inputs in markets that are not considered

to be active;

Level 3 – inputs to

the valuation methodology are unobservable and significant to the fair value measurement.

more information about the Company’s accounting policies surrounding fair value investments, see Note 7.

18 unchanged sentences

determine the impairment, if any, contain management’s best estimates using appropriate assumptions and projections at that time.

There have been no significant events or changes in circumstances during the nine months ended June 30, 2025, that would indicate that

the carrying amount of the Company’s intangible asset, goodwill, may be impaired as of June 30, 2025.

There have been no significant events or changes in circumstances during the three months ended December 31, 2025, that would indicate

that the carrying amount of the Company’s intangible asset, goodwill, may be impaired as of December 31, 2025.

recognize revenue in accordance with the guidance in ASC Topic 606 (Revenue from Contracts with Customers).

3 unchanged sentences

products and services as either vCISO Services or Cybersecurity Software and Services.

Cybersecurity Software and Services includes revenue

earned from both Enclave, our proprietary software product, and third-party software and services that we resell.

The revenue earned from Enclave, our proprietary

software product, as well as the revenue from reselling third-party software and services, is included in Cybersecurity Software and

performance obligation is a promise in a contract to transfer a distinct good or service to the client and is the unit of accounting

4 unchanged sentences

respective transaction prices.

We refer to an MSA and its SOW(s) as a “Contract.” Our Contracts generally contain monthly

service subscriptions, annual software licenses, time and materials based billing, or fixed fee projects.

We refer to an MSA and its SOW(s) as a “Contract”.

Our Contracts generally contain monthly

service subscriptions, annual software licenses, time and material based billing, or fixed fee projects.

Contract’s transaction price is allocated to each distinct performance obligation.

2 unchanged sentences

is recognized over a period of time for monthly service subscriptions and software licenses.

Revenue is recognized at a point in time

when, or as, the performance obligation is satisfied for fixed fee projects and time and materials billing.

The assets we create for

our clients do not have alternative uses to SideChannel, and our Contracts created a right to payment for work completed.

Our determination

for point in time revenue recognition is based upon client acceptance of the performance obligation.

Revenue is recognized at a point in

time when, or as, the performance obligation is satisfied for fixed fee projects and time and material based billing.

The completed

work products we create for our clients do not have alternative uses to SideChannel and our Contracts created a right to payment for

work completed.

Generally, each of the fixed fee project performance obligations we deliver is accompanied

by an upfront payment.

Our determination for point in time revenue recognition is based upon client acceptance of the performance

do not have any material variable consideration arrangements, client-specific acceptance criteria, or any material payment terms with

our clients other than standard payment terms which generally range from net 15 to net 30 days.

resell the software and services provided by third parties.

resell software and services provided by third parties.

When we have discretion over the pricing used in the Contracts with our clients

we deem ourselves to be the principal for purposes of revenue recognition and record revenue on a gross basis using the price specified

then we deem ourselves to be the principal for purposes of revenue recognition and record revenue on a gross basis using the price specified

in the Contract.

This is the case for almost all the third-party software and services we sell.

Also consistent with our determination

Also consistent in our determinations

to recognize revenue as the principal is our ability to direct the third party to provide the service to the client on our behalf.

14 unchanged sentences

Commissions are calculated based on

set percentages of the invoice value of each product or service sold.

set percentages of the revenue value of each product or service sold.

Commissions are considered earned by our internal sales personnel

and third-party sales representatives at the time we invoice our customers.

We record commission expense in our consolidated statements

of operations at the time the commission is earned.

Commissions earned but not yet paid are included in current liabilities on our balance

All costs to acquire customers and contracts are reported in operating expenses.

at the time we recognize revenue for a particular transaction.

Commissions are considered earned by third-party sales representatives

at the time that revenue is recognized for a particular transaction.

We record commission expense in our consolidated statements of operations

at the time the commission is earned.

Commissions earned but not yet paid are included in current liabilities on our balance sheets.

account for leases in accordance with ASC Topic 842 (Leases).

10 unchanged sentences

Leases are classified as either operating leases or finance leases based on the guidance in ASC Topic 842.

leases are included in operating lease ROU assets and operating lease liabilities in our consolidated balance sheets.

leases are included in operating lease right-of-use (“ROU”) assets and operating lease liabilities in our consolidated balance sheets.

Finance leases

4 unchanged sentences

a term of one year or less at the commencement date of the lease).

Lease expense for short-term lease payments is recognized on a straight-line

basis over the lease term.

Our lease periods are less than one year in duration.

expense for short-term lease payments is recognized on a straight-line basis over the lease term.

the guidance of ASC Topic 842, we are not required to record ROU assets and operating lease liabilities.

account for stock-based compensation in accordance with ASC Topic 718 (Compensation – Stock Compensation), which requires that

employee share-based equity awards be accounted for under the fair value method and requires the use of an option pricing model for estimating

Note 6 for further disclosures regarding our leases.

and Development and Software Development Expenses

research and development costs, including patent and software development costs, are expensed as incurred.

account for stock-based compensation in accordance with ASC Topic 718 (Compensation – Stock Compensation) which requires that employee

share-based equity awards be accounted for under the fair value method and requires the use of an option pricing model for estimating

fair value of awards, which is then amortized to expense over the service periods.

5 unchanged sentences

See further disclosures related to our stock-based compensation plans in Note 13.

are subject to legal proceedings, claims, and liabilities that arise in the ordinary course of business, and we accrue for losses associated

are subject to legal proceedings, claims, and liabilities which arise in the ordinary course of business, and we accrue for losses associated

with legal claims when such losses are probable and can be reasonably estimated.

1 unchanged sentence

becomes available or circumstances change.

Legal fees are charged to expense as they are incurred.

Legal fees are charged to general and administrative expenses as they are incurred.

utilize the asset and liability method in accounting for income taxes.

Under this method, deferred tax assets and liabilities are recognized

for operating loss and tax credit carry forwards and for the future tax consequences attributable to differences between the financial

for operating loss and tax credit carryforwards and for the future tax consequences attributable to differences between the financial

statement carrying amounts of existing assets and liabilities and their respective tax bases.

6 unchanged sentences

unless it is more likely than not that the value of such assets will be realized.

use the two-step approach to recognize and measure uncertain tax positions.

The first step is to evaluate the tax position for recognition

by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit,

including resolution of related appeals or litigation processes, if any.

The second step is to measure the tax benefit as the largest

amount, which is more than 50% likely of being realized upon ultimate settlement.

We consider many factors when evaluating and estimating

our tax positions and tax benefits, which may require periodic adjustments.

We did no t record any liabilities for uncertain tax positions

during the three months ended December 31, 2025.

Loss Per Common Share

8 unchanged sentences

are incurred since the inclusion of the potential common stock equivalents would be anti-dilutive because of the net loss.

account for warrants in accordance with FASB ASC Topics 480 and 815.

The result of this accounting treatment is that the fair value of

the embedded derivative, if required to be bifurcated, is marked-to-market at each balance sheet date and recorded as a liability.

change in fair value is recorded in our consolidated statement of operations as a component of other income or expense.

Upon exercise

of a warrant, it is marked to fair value at the exercise date and then that fair value is reclassified to equity.

of Recently Issued Amendments to Authoritative Accounting Guidance

evaluate warrants in accordance with ASC Topics 480 (Distinguishing Liabilities from Equity) and 815 (Derivatives and Hedging).

of this accounting treatment is that the fair value of the embedded derivative, if required to be bifurcated, is marked-to-market at

each balance sheet date and recorded as a liability.

The change in fair value is recorded in the Statement of Operations as a component

of other income or expense.

Upon exercise of a warrant, it is marked to fair value at the exercise date and then that fair value is reclassified

Accounting Announcements

FASB issues Accounting Standards Updates (“ASU”) to amend the authoritative

literature in the ASC.

There have been several ASUs to date that amend the original text of the ASCs.

Other than those discussed below,

we believe those ASUs issued to date either (i) provide supplemental guidance, (ii) are technical corrections, (iii) are not applicable

to us, or (iv) are not expected to have a significant impact on us.

Pronouncements Adopted

November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280):

9 unchanged sentences

and interim periods within fiscal years beginning after December 15, 2024.

For us, annual reporting requirements will be effective for

our fiscal year 2025 beginning on October 1, 2024, and interim reporting requirements will be effective beginning with our first quarter

of fiscal year 2026.

Early adoption is permitted.

We are currently evaluating the impact that the new guidance will have on our consolidated

financial statements.

For us, annual reporting requirements were effective for our

fiscal year 2025 beginning on October 1, 2024, and interim reporting requirements were effective beginning with our first quarter of

fiscal year 2026.

We manage our operations as a single operating segment for the purpose of assessing performance and making operating

Our Chief Executive Officer is our CODM.

No changes have been made to the presentation of our financial statements because

of this pronouncement.

December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740):

6 unchanged sentences

us is our fiscal year 2026 beginning on October 1, 2025.

Early adoption is permitted.

We are currently evaluating the impact that the

new guidance will have on our consolidated financial statements.

November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses, which will require the disclosure of additional

information about specific expense categories in the notes to the financial statements.

The guidance is effective for fiscal years beginning

after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027.

For us, annual reporting requirements

will be effective for our fiscal year 2028 beginning on October 1, 2027, and interim reporting requirements will be effective beginning

with our first quarter of fiscal year 2029.

did not adopt additional new accounting pronouncements during the three months ended December 31, 2025.

Pronouncements Not Yet Adopted

In November 2024, the FASB also issued

ASU 2024-03, Disaggregation of Income Statement Expenses, which will require the disclosure of additional information about specific

expense categories in the notes to the financial statements.

The guidance is effective for fiscal years beginning after December 15,

2026, and interim periods within fiscal years beginning after December 15, 2027.

For us, annual reporting requirements will be effective

for our fiscal year 2028 beginning on October 1, 2027, and interim reporting requirements will be effective beginning with our first

quarter of fiscal year 2029.

Early adoption is permitted.

We are currently evaluating the impact of this amended disclosure

Company does not believe that any recently issued, but not yet effective accounting standards, when adopted, will have a material effect

on the accompanying condensed consolidated financial statements.

3 – LIQUIDITY AND CAPITAL RESOURCES

of June 30, 2025, and September 30, 2024, we had $ 1.1 million and $ 1.0 million, respectively, of cash and cash equivalents.

we had $ 100 thousand in short-term investments as of June 30, 2025, and $ 250 thousand at September 30, 2024.

We incurred net losses during

the nine-month period ended June 30, 2025, of $ 510 thousand.

primary requirements for liquidity and capital are working capital, research and development, selling and marketing activities, and other

general corporate needs.

Historically, these cash requirements have been met through cash provided by operating activities and cash and

cash equivalents.

As of June 30, 2025, we are not party to any off-balance sheet arrangements that have had or are reasonably likely

to have a current or future material effect on our financial condition, results of operations, liquidity, capital expenditures, or capital

believe that our existing cash, cash equivalents, and our anticipated cash flows from operations will be sufficient to meet our working

capital, expenditure, and contractual obligation requirements for the next 12 months.

Although we believe we have adequate sources of

liquidity for the next 12 months and the foreseeable future, the success of our operations, the global economic outlook, and the pace

of sustainable growth in our markets could impact our business and liquidity.

We are currently evaluating the impact of this amended disclosure guidance.

March 2024, the Securities and Exchange Commission issued a rule which will require companies to make certain climate-related disclosures

in periodic filings.

The rule includes certain disclosures in the footnotes of the financial statements:

capitalized costs, expenditures expensed, and losses incurred because of severe weather events and other natural conditions, such as

hurricanes, tornadoes, flooding, drought, wildfires, extreme temperatures, and sea level rise;

capitalized costs, expenditures expensed, and losses related to carbon offsets and renewable energy credits or certificates if they are

used as a material component of a registrant’s plans to achieve its disclosed climate-related targets or goals;

whether estimates and assumptions used to produce the financial statements were materially impacted by risks and uncertainties associated

with severe weather events and other natural conditions or any disclosed climate-related targets or transition plans.

climate-related footnote disclosures are effective for annual filings for the year ending September 30, 2026.

The Company is

currently evaluating the impact of the adoption of the rule.

Company does not believe that the above recently issued, but not yet effective, accounting standards, if and when adopted, will have

a material effect on the accompanying unaudited condensed consolidated financial statements.

5 – CASH EQUIVALENTS AND INVESTMENTS

1 unchanged sentence

Money market funds and time

deposits with original maturities of less than 90 days are included in “Cash and cash equivalents.” Time deposits with original

maturities from 91-360 days are included in “Short-term investments.” As of June 30, 2025, and September 30, 2024, the Company

had no long-term investments.

following table presents the carrying amounts of cash equivalents and short-term investments:

deposits with maturities of less than 90 days from the purchase date are included in “Cash and cash equivalents.” Time deposits

with maturities from 91-360 days are included in “Short-term investments.” As of December 31, 2025, the Company had no long-term

following table presents the carrying amounts of cash equivalents and short-term investments as of December 31, 2025, and September 30,

OF CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS

September 30,

Cash equivalents

Money market funds

Total cash equivalents

Short-term investments

Time deposits

Total short-term investments

Short-Term Investment

1 unchanged sentence

Time deposits

August 5, 2025

March 8, 2026

more information about the fair value of the Company’s financial instruments, see Note 7.

5 – DEFERRED COSTS

July 23, 2021, Cipherloc Corporation (“Cipherloc”) entered into a financial advisory and consulting agreement with Paulson

Investment Company, LLC (“Paulson”).

The agreement with Paulson remains in place after the Business Combination.

to the agreement, Paulson will provide the following services at the Company’s request:

(a) familiarize itself with the Company’s

business, assets, and financial condition;

(b) assist the Company in developing strategic and financial objectives;

in increasing its exposure in the software industry;

(d) assist the Company in increasing its profile in the investment and financial

community through introductions to analysts and potential investors, participation in investment conferences, and exploitation of reasonably

available media opportunities;

(e) identify potentially attractive merger and acquisition opportunities;

(f) review possible innovative

financing opportunities;

and (g) render other financial advisory services as may be reasonably requested.

The term of the agreement is

four years from the date of the agreement, unless terminated earlier by either party as provided therein.

As compensation for these services,

the Company issued to Paulson 4 million shares of the Company’s common stock and agreed to reimburse Paulson for all reasonable

and documented expenses incurred by Paulson in connection with providing such services.

The fair value of the shares issued was $ 720

thousand, which Cipherloc recognized as deferred costs which are amortized at a rate of $ 45 thousand per quarter.

The Company expensed

$ 135 thousand for the nine months ended June 30, 2025, and 2024, respectively.

The unamortized balance of the deferred costs was $ 15 thousand

at June 30, 2025.

December 10, 2021, we entered a lease for approximately 500

square feet of office space at 146 Main Street in Worcester,

Massachusetts, with the option to renew

December 10, 2021, we entered into a lease for approximately 500 square

feet of office space at 146 Main Street in Worcester, Massachusetts, with the option

to renew annually.

The annual renewal date is January 1 st .

Our current lease payment is $ 986 per month.

The lease allows for a 2% increase effective at the beginning of each renewal period.

lease expenses were $ 9 thousand for both the nine months ended June 30, 2025, and 2024, respectively.

expect to pay approximately $ 6 thousand through December 2025, the remaining term of the Worcester lease .

We intend to renew the

lease for another twelve-month period beginning January 1, 2026, and ending December 31, 2026, at an annual cost of $ 12 thousand.

Our current lease payment is $ 986

The lease allows for a 2 %

increase effective at the beginning of each renewal period.

The lease payment will be $ 1,006

per month during calendar year 2026.

lease payments are included in cash outflows from operating activities on our consolidated statements of cash flows.

lease expenses were $ 3

thousand and $ 3

thousand for the three months ended December 31, 2025 and 2024, respectively.

have made an accounting policy election not to apply the recognition requirements of ASC Topic 842 (Leases) to short-term leases (leases

with a term of one year or less at the commencement date of the lease).

Lease expense for short-term lease payments is recognized on

a straight-line basis over the lease term.

We do not have any long-term operating leases or financing leases as of December 31, 2025.

expect to pay approximately $ 12 thousand over the next 12 months for the Worcester lease .

7 – FAIR VALUE MEASUREMENT

3 unchanged sentences

liabilities are measured and included in the financial statements at fair value.

following tables present the carrying amounts, estimated fair values, and valuation input levels of certain financial instruments:

following tables present the carrying amounts, estimated fair values, and valuation input levels of certain financial instruments as

of December 31, 2025, and September 30, 2025.

OF FAIR VALUE OF FINANCIAL INSTRUMENTS

Value Measured Using

91 - 360 days

December 31, 2025

Fair Value Measured Using

(in thousands)

Short-term investments

Value Measured Using

Time deposits:

91 - 360 days

Total short-term investments

September 30, 2025

Fair Value Measured Using

(in thousands)

Short-term investments

entire balance of time deposits maturing in 91 to 360 days at June 30, 2025, and September 30, 2024, are certificates of deposit issued

by a bank at which total deposits exceed the FDIC limit of $ 250 thousand.

Company has no debt.

Time deposits:

91 - 360 days

Total short-term investments

entire December 31, 2025, balance of time deposits maturing in 91 to 360 days are certificates of deposit issued by a bank at which total

deposits are less than the FDIC limit of $ 250 thousand.

did no t have debt at December 31, 2025.

9 – STOCKHOLDERS’ EQUITY

of June 30, 2025, we had 231,229,054

shares of common stock outstanding and were authorized to issue 681,000,000

shares of common stock at a par value of $ 0.001 per share .

We had 225,975,331

shares of common stock outstanding as of September 30, 2024.

Stock Issued Under Equity Incentive Plan

the nine months ended June 30, 2025, 6,398,717 Restricted Stock Units vested for which we issued 4,897,323 shares of common stock and

1,501,394 RSU’s were sold by employees to fund payroll taxes.

Stock Issued for Legal Settlement

April 2021, Eric Marquez, the former Secretary/Treasurer and Chief Financial Officer of Cipherloc, and certain other plaintiffs, filed

a lawsuit against Cipherloc and Michael De La Garza, Cipherloc’s former Chief Executive Officer and President, in the 20 th

Judicial District for Hays County, Texas (Cause No.

We executed a settlement agreement with the plaintiffs on December

13, 2024, resulting in the dismissal of the lawsuit with prejudice on January 2, 2025.

The settlement agreement required the Company

to issue the plaintiffs a combined 356,400 shares of common stock.

The shares were issued on December 20, 2024, with a fair market value of $ 14

Stock Issued for Cash

did no t issue shares of common stock for cash during the nine months ended June 30, 2025.

Stock Issued for Business Combinations

did no t issue shares for mergers or acquisitions related activity during the nine months ended June 30, 2025.

Stock Issued for Services

did no t issue shares for services during the nine months ended June 30, 2025.

of June 30, 2025, we had zero ( 0 )

shares of preferred stock outstanding and were authorized to issue 10,000,000 shares of preferred stock at a par value of $ 0.001 per share.

following table summarizes warrant activity for the nine months ended June 30, 2025:

of December 31, 2025, and September 30, 2025, we had 4,446,713

shares of common stock outstanding.

The outstanding shares were retroactively restated for the effect of the

Reverse Split from 231,229,054 to 4,446,713 .

authorized shares and par value per share of common stock were unchanged by the Reverse Split and remain at 681,000,000 shares

and $ 0.001 per share ,

respectively.

We restated our common shares outstanding (shares and amount) and the value

of our APIC to reflect the number of shares outstanding after the Reverse Split.

of December 31, 2025, we had zero ( 0 ) shares of preferred stock outstanding and were authorized to issue 10,000,000 shares of preferred

stock at a par value of $ 0.001 per share.

have four categories of warrants outstanding which are summarized below along with exercise prices and expiration dates.

OF WARRANT OUTSTANDING

(In thousands, except prices and lives)

Exercise Price

Expiration Date

2018 Placement Agent

2021 Private Placement

2021 Placement Agent

2023 Warrant Exchange

Total Outstanding Warrants

following table summarizes warrant activity for the three months ended December 31, 2025:

OF WARRANT ACTIVITY

thousands, except prices and remaining lives)

Average Exercise Price

Average Remaining Life

at September 30, 2024

(In thousands, except prices and lives)

Exercise Price

Remaining Life

Outstanding at September 30, 2025

Canceled/Forfeited

at June 30, 2025

10 – REVENUE FROM CONTRACTS WITH CUSTOMERS

Disaggregation

disaggregate our revenue from contracts with customers (clients) by service type as indicated in the table below:

SCHEDULE OF DISAGGREGATED REVENUE

Cybersecurity

software and services

revenue is comprised of payments received from our clients for products or services in advance of receiving the product or service and

primarily occurs for annual software and service contracts, including Enclave.

While software contracts can be initiated at any time

of year, most of our annual software agreements renewed in our second fiscal quarter ending March 31, 2025.

deferred revenue is expected to be earned within 12 months of the balance sheet date.

change in deferred revenue from September 30, 2024, to June 30, 2025, is summarized as follows:

SCHEDULE OF CHANGES IN DEFERRED REVENUE

at September 30, 2024

at June 30, 2025

Outstanding at December 31, 2025

10 – REVENUE FROM CONTRACTS WITH CLIENTS

revenue is comprised of payments received from our clients and customers for products or services in advance of receiving the product

or service and primarily occurs for annual software and service contracts including Enclave.

The deferred revenue is expected to be earned

within 12 months of the balance sheet date.

OF CHANGES IN DEFERRED REVENUE

(In thousands)

Balance at September 30, 2025

Deferral of revenue

Recognition of revenue

Balance at December 31, 2025

11 – BUSINESS RISK AND CREDIT RISK CONCENTRATION INVOLVING CASH

client individually accounted for approximately 13 % of our revenue during the three months ended June 30, 2025.

No client individually

accounted for over 10 % of our revenue during the three months ended June 30, 2024, or the nine months ended June 30, 2025, or 2024.

had two clients with accounts receivable balances together totaling approximately 30 % of our accounts receivable balance at June 30,

maintain our cash, cash equivalents, and short-term investments in accounts held by a highly reputable financial institution which,

at times, may exceed federally insured limits as guaranteed by the Federal Deposit Insurance Corporation (“FDIC”).

FDIC insures these deposits up to $ 250

As of June 30, 2025, approximately $ 899

thousand of our cash and cash equivalent balance and $ 100

thousand of our short-term investment balance were uninsured.

We have not experienced any losses on our cash or short-term investments.

client individually accounted for over 10 % of our revenue during the three months ended December 31, 2025 and 2024.

had three clients each with an accounts receivable balance that exceeded 10 % of accounts receivable at December 31, 2025.

maintain our cash, cash equivalents, and short-term investments in accounts held by highly reputable financial institutions (collectively

The Federal Deposit Insurance Corporation (“FDIC”) insures these Deposits up to $ 250

thousand per financial institution.

At times our balance at

each institution may exceed the $ 250

thousand FDIC insured limit.

As of December 31, 2025, we had

insured Deposits totaling $ 388 thousand

at three (3) distinct financial institutions, leaving approximately $ 207

thousand of our Deposits uninsured.

We have not experienced

any losses on Deposits.

12 – RELATED PARTY TRANSACTIONS

Haugli, our Chief Executive Officer and stockholder in the Company, is also a principal shareholder of RealCISO Inc.

did not have any new related party transactions or material changes to existing related party transactions during the three months ended

December 31, 2025.

Haugli, our Chief Executive Officer, a member of our Board of Directors, and a significant stockholder in the Company, is also a principal shareholder of RealCISO Inc.

(“RealCISO”).

We are a reseller of RealCISO software.

We receive revenue from our customers for the use of RealCISO software and pay licensing fees

to RealCISO for such use.

For the nine months ending June 30, 2025, and 2024, we paid $ 77 thousand and $ 35 thousand, respectively, to

also invoiced $ 17 thousand and $ 119 thousand from RealCISO for software development services that we provided RealCISO during the nine

months ended June 30, 2025, and 2024, respectively.

We are a reseller of the RealCISO software.

We receive revenue from our customers for the use of RealCISO software and pay licensing

fees to RealCISO for such use.

the three months ended December 31, 2025, we paid $ 14 thousand to RealCISO for licenses, and invoiced RealCISO $ 12 thousand for software

development services that we provided RealCISO.

other related party transactions occurred during the three months ended December 31, 2025.

fiscal years ended September 30, 2025 and 2024, SideChannel paid $ 75

thousand and $ 30

thousand to RealCISO for licenses, respectively.

We also invoiced $ 34

thousand and $ 122

thousand from RealCISO for software development services that we provided RealCISO during fiscal years ended September 30, 2025, and

2024, respectively.

October 13, 2023, the Association of the US Army (“AUSA”) signed an agreement for a cybersecurity risk assessment for approximately

$ 24 thousand.

On February 15, 2024, the President of AUSA, Retired U.S.

On February 15, 2024, the President of AUSA, Retired

Army General Robert Brown, joined our Board.

On July 8, 2024,

AUSA signed an agreement for recurring vCISO Services, which generated $ 54 thousand of revenue during the nine months ended June 30,

SideChannel reserved booth space at the AUSA Global Force Symposium held in March 2025.

In the nine months ended June 30, 2025,

we paid $ 8 thousand to AUSA for this event.

other related party transactions occurred during the nine months ended June 30, 2025.

On July 8, 2024, AUSA signed an agreement for recurring vCISO Services which generated

approximately $ 9

thousand of revenue in fiscal year 2024 and $ 54

thousand of revenue in fiscal year 2025 for the Company before

terminating in March 2025.

SideChannel reserved booth space at the AUSA Global Force Symposium held in March 2025 and paid $ 8

thousand to AUSA for this event.

13 – STOCK-BASED COMPENSATION

3 unchanged sentences

over a 3 -year period.

following table summarizes the activity of our RSUs granted under our Equity Incentive Plan during the nine months ended June 30, 2025:

The award quantities and grant date fair values have been retroactively

adjusted to reflect the Reverse Split.

following table summarizes the activity of our RSUs granted under our Equity Incentive Plan during the three months ended December 31,

SCHEDULE OF RESTRICTED STOCK UNITS VESTING

RSUs at September 30, 2024

( 6,398,717 )

(In thousands)

Outstanding RSUs at September 30, 2025

Canceled/Forfeited

RSUs at June, 2025

December 20, 2024, our Board of Directors authorized awarding 1.1

million RSUs to each of the three independent directors vesting over three

years beginning on March 1, 2025, and ending on March 1, 2027 .

On March 3, 2025, we granted 7,937,706

RSUs to officers and employees.

During the quarter ended June 30, 2025, we awarded 250,000

RSUs to new employees vesting over three years beginning on March 1, 2026 and ending on March 1, 2028.

The average grant date fair value of RSUs granted during the nine months ended June 30, 2025, was $ 0.04 .

The Company recognizes compensation cost for unvested share-based awards on a straight-line basis over the requisite service

total stock-based compensation expense for the nine months ended June 30, 2025, was $ 306 thousand for the amortization of outstanding

equity compensation grants.

Stock-based compensation of $ 262 thousand is included in general and administrative expense, $ 11 thousand

in selling and marketing expense, and $ 33 thousand in research and development expense.

unamortized stock compensation expense at June 30, 2025, is $ 622 thousand, and the remaining weighted average term to vesting is 2.1

following table summarizes the activity of our stock options granted under our Equity Incentive Plan during the nine months ended June

SCHEDULE OF STOCK OPTION OUTSTANDING TRANSACTIONS

of Stock Options

Options at September 30, 2024

Cancelled/Forfeited

( 3,300,000 )

Options at June 30, 2025

December 20, 2024, our Board of Directors authorized the termination of stock options previously awarded to independent directors.

Outstanding RSUs at December 31, 2025

the quarter ended December 31, 2025, we awarded 32,695

RSUs to new employees.

Vesting occurs over three

years beginning on March 1, 2026, and ending on March 1, 2028, for 30,771 granted RSUs and the remaining 1,924 vest on March 1, 2026 .

The average grant date fair value of RSUs granted during the three months ended December 31, 2025, was $ 3.36 .

The Company recognizes compensation cost for unvested share-based awards on a straight-line basis over the requisite service period.

total stock-based compensation expense for the three months ended December 31, 2025, was $ 100

thousand for the amortization of outstanding equity compensation

Stock-based compensation of $ 76

thousand is included in general and administrative expense,

thousand in selling and marketing expense, and $ 9

thousand in research and development expense.

unamortized stock compensation expense at December 31, 2025, was $ 531

thousand, and the remaining weighted average term to vesting

14 – COMMITMENTS AND CONTINGENCIES

are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results

are currently not involved in any litigation that we believe could have a material adverse effect on its financial condition or results

of operations.

Settled Litigation

April 2021, Eric Marquez, the former Secretary/Treasurer and Chief Financial Officer of Cipherloc Corporation, and certain other plaintiffs,

filed a lawsuit against Cipherloc Corporation and Michael De La Garza, Cipherloc’s former Chief Executive Officer and President,

in the 20 th Judicial District for Hays County, Texas (Cause No.

We executed a settlement agreement with the plaintiffs

on December 13, 2024, resulting in the dismissal of the lawsuit with prejudice on January 2, 2025.

The settlement agreement requires

the Company to issue the plaintiffs a combined 356,400 shares of common stock and pay a total of $ 95 thousand in cash in six equal,

quarterly installments of approximately $ 16 thousand each, beginning by January 1, 2025, and ending by April 1, 2026.

The expenses associated

with this settlement were included in our results for the fiscal year ended September 30, 2024.

Three payments totaling approximately

$ 47 thousand have been made as of June 30, 2025.

15 - SUBSEQUENT EVENTS

have assessed our operations through the filing date of this Quarterly Report on Form 10-Q and determined that there were no material

subsequent events requiring adjustment to, or disclosure in, our condensed consolidated financial statements for the nine months ended

June 30, 2025 .

On February 12, 2025, at the

Company’s annual meeting of stockholders, stockholders approved and adopted an amendment to the Certificate of Incorporation to

effectuate a reverse stock split of the Company’s outstanding shares of common stock, at a ratio of no less than 1-for-2 and no

more than 1-for-200, with such ratio to be determined by the Board in its sole discretion .

On August 21, 2025, the Board approved the

1-for-52 Reverse Split .

On January 12, 2026, the Company filed a Certificate of Amendment with the Secretary of State of the State of

Delaware to effectuate the Reverse Split.

The Certificate of Amendment was effective for state law purposes at 4:00 p.m.

ET on January

22, 2026, after the close of trading on the OTCQB, such that the Company’s common stock began trading on a post-Reverse Split basis

at market open on January 23, 2026.

On January 16, 2026, the Company

filed a Certificate of Correction to correct a scrivener’s error in the Certificate of Amendment.

The Certificate of Amendment indicated

that any fractional shares resulting from the Reverse Split would be rounded “to the nearest whole share” of common stock,

rather than providing that any fractional shares would be rounded “up to the nearest whole share” of common stock, as the

Company intended.

Accordingly, at 4:00 p.m.

ET on January 22, 2026, after the close of trading on the OTCQB, each 52 shares of issued and outstanding Pre-Split Common Stock was automatically,

and without any action on the part of the holder thereof, reclassified such that each 52 shares of Pre-Split Common Stock became one share

of common stock, with any resulting fractional shares common stock being rounded up to the nearest whole share of common stock .

The Company’s

common stock began trading on a post-Reverse Split basis at market open on January 23, 2026.

The Reverse Split had no effect on our

authorized number of shares of common stock, par value of common stock, total assets, total liabilities or stockholders’ equity.

We restated our common shares outstanding (shares and amount) and the value of our APIC to reflect the number of shares outstanding

after the Reverse Split.

January 23, 2026, in connection with the rounding up of fractional shares resulting from the Reverse Split, the Company issued an

aggregate of 20,494 shares of common stock.

Of this amount, 397

shares of common stock were issued to to stockholders

of record and 20,097

shares of common stock were issued to CEDE & Co.

Company has evaluated events through February 17, 2026, the filing date of this Quarterly Report on Form 10-Q and determined that there

have been no additional subsequent events that occurred that would require adjustments to our disclosures in the unaudited condensed

consolidated financial statements.

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

What changed 10-Q

Item 1. Financial Statements