What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-11-14 compared with 2025-08-19 · 236 added, 214 removed, 604 unchanged (43% of the section changed)

2 unchanged sentences

CONSOLIDATED BALANCE SHEETS

September 30,

Current Assets:

4 unchanged sentences

Prepaid expenses and other current assets

PIPE exchange consideration

Other current assets

8 unchanged sentences

Deferred revenue

PIPE loan payable, net

Notes payable, current portion

19 unchanged sentences

Preferred stock, $ 0.0001 par value, 10 million shares authorized

Convertible Preferred Stock, $ 0.0001 par value per share;

Series A Convertible Preferred Stock, $ 0.0001 par value per share;

authorized - 50,000 shares;

1,885 and 0 shares issued and

outstanding, respectively

8,189 and 0 shares issued and outstanding, respectively.

Liquidation preference of $ 3,140,519 as of September 30, 2025.

Preferred stock value

Common stock, $ 0.0001 par value, 660,000,000 shares authorized:

Common stock - Series A, $ 0.0001 par value, 90 million shares authorized;

810,617 and 522,411 shares issued and outstanding, respectively

Common stock - Series A, $ 0.0001

par value, 650

million shares authorized;

shares issued and outstanding, respectively

Common stock - Series B, $ 0.0001 par value, 10 million shares authorized;

14 unchanged sentences

CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended June 30,

Six Months Ended June 30,

September 30, 2025

September 30, 2024

September 30, 2025

September 30, 2024

Three Months Ended

Nine Months Ended

September 30, 2025

September 30, 2024

September 30, 2025

September 30, 2024

Cost of revenue

7 unchanged sentences

( 4,217,744 )

( 1,728,726 )

Other income (expense):

Other (expenses) income:

Interest income

2 unchanged sentences

( 2,176,810 )

Loss on extinguishment of debt

( 6,135,160 )

Loss on investment

Total other income (expense), net

( 6,135,160 )

Loss on investment

Total other expense

( 6,164,750 )

( 9,052,292 )

Net loss prior to provision for income taxes

( 2,074,922 )

Loss from operations before provision for income taxes

( 7,278,244 )

5 unchanged sentences

$ ( 2,931,370 )

$ ( 2,871,192 )

Net loss per common share Series A - basic and diluted

Net loss per common share Series B – basic and diluted

Weighted average shares outstanding Series A – basic and diluted

Weighted average shares outstanding Series B – basic and diluted

Weighted average shares outstanding - basic and diluted

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

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024

THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024

Preferred Stock

Class A Common Stock

Class B Common Stock

Treasury Stock

Comprehensive

22 unchanged sentences

$ ( 10,508,104 )

Balance at December 31, 2024

Common stock issued for interest

Balance as of September 30, 2024

$ ( 2,037,000 )

1 unchanged sentence

$ ( 10,909,975 )

Balance at December 31, 2024

$ ( 2,037,000 )

3 unchanged sentences

Issuance of common stock for conversion of PIPE notes

Stock-based compensation - options

Stock-based compensation

( 2,670,322 )

4 unchanged sentences

$ ( 4,565,249 )

$ ( 2,037,000 )

$ ( 23,825,818 )

$ ( 4,565,249 )

Issuance of common stock for PIPE interest and make good

2 unchanged sentences

Reverse stock split adjustment

Stock-based compensation - options

Stock-based compensation

Issuance of Series A Preferred and associated warrants

6 unchanged sentences

$ ( 27,147,288 )

Issuance of Series A Preferred

Issuance of Series A Preferred for conversion of warrants

Issuance of common stock for conversion of Series A Preferred

Issuance of common stock for conversion of Series A Preferred dividends

( 2,391,968 )

Stock-based compensation

Stock-based compensation - options

( 7,278,244 )

Balance as of September 30, 2025

$ ( 2,037,000 )

$ ( 36,817,500 )

$ ( 2,037,000 )

$ ( 36,817,500 )

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

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CASH FLOWS

June 30, 2025

June 30, 2024

Six Months Ended

June 30, 2025

June 30, 2024

Nine Months Ended

September 30, 2025

September 30, 2024

Cash flows from operating activities:

7 unchanged sentences

Change in OCI

Loss on extinguishment of debt

Stock issued for make good provisions on debt conversion

Stock options issued to employees

Stock issued for interest

Changes in operating assets and liabilities:

Accounts receivable, net

( 2,143,225 )

Inventory, net

20 unchanged sentences

Proceeds from PIPE loans, net of discount

Proceeds from exercise of Series A Preferred warrants

Proceeds from notes payable - related party

Cash acquired in Merger

6 unchanged sentences

Repayments of notes payable - related party

Repayment of notes payable assumed in Merger

Net cash provided by financing activities

7 unchanged sentences

Dividend note principal converted to Class A and Class B Common Stock

Exchange of PIPE Notes and Series A and B Warrants for Series A Convertible

Preferred Stock and Warrants for Series A Convertible Preferred Stock

Exchange of PIPE Notes and Series A and B Warrants for Series A Convertible Preferred Stock and Warrants for Series A Convertible Preferred Stock

Series A Convertible Preferred Stock issued in exchange of PIPE Notes

Series A Convertible Preferred Stock dividends converted to Class A Common Stock

Notes payable assumed in Merger

8 unchanged sentences

(the “Company” or “TruGolf”), is a Delaware corporation headquartered in Centerville, Utah.

Company and its wholly-owned subsidiary, have historically been engaged in creating indoor golf software and custom hardware as

well as establishing and selling franchises that would use the Company’s indoor golf and recreational sports simulators and other

Company and its wholly-owned subsidiary, have historically been engaged in creating indoor golf software and custom hardware as well

as establishing and selling franchises that would use the Company’s indoor golf and recreational sports simulators and other equipment.

The Company sells its software and custom hardware directly to customers and its franchise owners.

51 unchanged sentences

a going concern, which contemplates realization of assets and satisfying liabilities in the normal course of business.

At June 30, 2025,

At September 30,

2025, the Company has an accumulated deficit of approximately $ 36.8 million and working capital surplus of approximately $ 4.2 million.

three and six months ended June 30, 2025, the Company had a loss from operations of approximately $ 1.9 million and $ 3.1 million, respectively,

and negative cash flows from operations of approximately $ 1.4 million.

Although the Company is showing positive revenue growth and gross

profit trends, the Company expects to incur further losses through the end of 2025.

To date the Company has been funding

operations primarily through the reinvestment of free cash flows generated from its business operations, sale of equity in private

placements, convertible debt instruments and revenues generated by the Company’s services.

During the six months ended June

30, 2025, the Company received $ 2.5

million in proceeds from the issuance of convertible notes (the “PIPE Convertible Notes”), net of $ 280,000

in original issue discounts, from a PIPE Convertible Note.

For the three and nine months ended September 30, 2025, the Company had a loss from operations of approximately $ 1.1 million and $ 4.2

million, respectively, and negative cash flows from operations of approximately $ 2 million.

Although the Company is showing positive

revenue growth and gross profit trends, the Company expects to incur further losses through the end of 2025.

date the Company has been funding operations primarily through the reinvestment of free cash flows generated from its business operations,

sale of equity in private placements, convertible debt instruments and revenues generated by the Company’s services.

nine months ended September 30, 2025, the Company received $ 2.5 million in proceeds from the issuance of convertible notes (the “PIPE

Convertible Notes”), net of $ 280,000 in original issue discounts, from a PIPE Convertible Note and $ 4,999,500 in proceeds from

the exercise of Series A Preferred warrants.

on its current cash resources and commitments, the Company believes it will be able to maintain its current planned development and corresponding

17 unchanged sentences

for a fair presentation of such statements.

The results of operations for the three and six months ended June 30, 2025, are not necessarily

indicative of the results that may be expected for the entire year.

The significant accounting policies used in preparing these unaudited

condensed consolidated are consistent with those described in the audited financial statements included in the Company’s Form 10-K

for the year ended December 31, 2024, except as disclosed below.

These unaudited financial statements and related should be read in conjunction

with the Company’s audited financial statements for the year ended December 31, 2024, included in the Company’s Annual Report

on Form 10-K filed with the SEC on April 15, 2025.

The results of operations for the three and nine months ended September 30, 2025, are not

necessarily indicative of the results that may be expected for the entire year.

The significant accounting policies used in preparing

these unaudited condensed consolidated are consistent with those described in the audited financial statements included in the Company’s

Form 10-K for the year ended December 31, 2024, except as disclosed below.

These unaudited financial statements and related should be

read in conjunction with the Company’s audited financial statements for the year ended December 31, 2024, included in the Company’s

Annual Report on Form 10-K filed with the SEC on April 15, 2025.

Reclassifications

reclassifications have been made to the unaudited condensed consolidated financial statements for the three and six months ended June

30, 2024 to conform to the unaudited condensed consolidated financial statement presentation for the three and six months ended June

reclassifications have been made to the unaudited condensed consolidated financial statements for the three and nine months ended September

30, 2024 to conform to the unaudited condensed consolidated financial statement presentation for the three and nine months ended September

These reclassifications had no effect on net loss or cash flows as previously reported.

Performance Obligations

of June 30, 2025, approximately $ 4.9 million of revenue is expected to be recognized from remaining performance obligations.

expects to recognize 100 % of this revenue over the next 12 months.

of September 30, 2025, approximately $ 6.2 million of revenue is expected to be recognized from remaining performance obligations.

Company expects to recognize 100 % of this revenue over the next 12 months.

Disaggregated

OF DISAGGREGATED REVENUE

Three Months Ended June 30,

Three Months Ended September 30,

Golf Simulators (1)

4 unchanged sentences

items such as shipping income and installation income

Six Months Ended June 30,

Nine Months Ended September 30,

Golf Simulators (1)

7 unchanged sentences

would be anti-dilutive:

OF POTENTIAL DILUTIVE SHARES

Three Months Ended June 30,

Six Months Ended June 30,

SCHEDULE OF POTENTIAL DILUTIVE SHARES

Three Months Ended

September 30,

Nine Months Ended

September 30,

Options to purchase Common Stock

11 unchanged sentences

receivable and allowance for credit losses consisted of the following:

OF ALLOWANCE FOR CREDIT LOSSES

SCHEDULE OF ALLOWANCE FOR CREDIT LOSSES

September 30,

Trade accounts receivable

6 unchanged sentences

following summarizes inventory:

SCHEDULE OF INVENTORY

September 30,

Inventory - raw materials

4 unchanged sentences

OF PROPERTY AND EQUIPMENT

September 30,

Software and computer equipment

3 unchanged sentences

Total property and equipment, net

Company recorded depreciation expense was $ 12,588 and $ 20,967 and $ 27,588 and $ 35,284 for the three and six months ended June 30, 2025 and

2024, respectively.

following summarizes capitalized software development costs as of June 30, 2025 and December 31, 2024:

OF CAPITALIZED SOFTWARE DEVELOPMENT COSTS

Company recorded depreciation expense was $ 14,670 and $ 7,469 and $ 42,258 and $ 42,753 for the three and nine months ended September 30,

2025 and 2024, respectively.

following summarizes capitalized software development costs as of September 30, 2025 and December 31, 2024:

SCHEDULE OF CAPITALIZED SOFTWARE DEVELOPMENT COSTS

Capitalized software, net - beginning balance, December 31, 2024

3 unchanged sentences

development costs, net

Company recorded amortization of capitalized software costs of $ 334,054 and $ 119,453 , and $ 434,054 and $ 137,916 for the three and six

months ended June 30, 2025 and 2024, respectively.

Company recorded amortization of capitalized software costs of $ 317,912 and $ 163,952 , and $ 751,966 and $ 279,001 for the three and nine

months ended September 30, 2025 and 2024, respectively.

7 – ACCRUED AND OTHER CURRENT LIABILITIES

1 unchanged sentence

SCHEDULE OF ACCRUED AND OTHER CURRENT LIABILITIES

September 30,

Accrued payroll

10 unchanged sentences

SCHEDULE OF NOTES PAYABLE

September 30,

Note payable - Ethos Management Inc.

27 unchanged sentences

leaving $ 589,619 , which is included in Accrued and other current liabilities on the unaudited condensed consolidated balance sheets at

June 30, 2025 and December 31, 2024, respectively (See Note 7 – Accrued and Other Current Liabilities ).

September 30, 2025 and December 31, 2024, respectively (See Note 7 – Accrued and Other Current Liabilities ).

Mercedes-Benz

3 unchanged sentences

and interest.

The outstanding principal on the note at June 30, 2025 and December 31, 2024, was $ 14,805 and $ 19,733 , respectively.

The outstanding principal on the note at September 30, 2025 and December 31, 2024, was $ 12,289 and $ 19,733 , respectively.

9 – PIPE CONVERTIBLE NOTES

2 unchanged sentences

for the issuance of PIPE Convertible Notes and Warrants.

the three months ended June 30, 2025, the Company converted an aggregate principal amount of $ 1,558,000 and $ 1,082,194 in accrued and

make-whole interest related to the PIPE Convertible Notes into 142,308 shares of the Company’s Class A common stock.

the nine months ended September 30, 2025, the Company converted an aggregate principal amount of $ 1,558,000 and $ 1,082,194 in accrued

and make-whole interest related to the PIPE Convertible Notes into 142,308 shares of the Company’s Class A common stock.

July 21, 2025, pursuant to the PIPE Exchange Agreements, the Company exchanged the outstanding $ 3,938,311 of principal related to the

PIPE Convertible Notes in exchange for (i) 3,938 shares of the Company’s Series A Preferred Stock and (ii) the Company agreed to

extend the expiration date of the Series A Preferred Warrants held by such holders by two years .

Convertible Notes payable consisted of the following:

7 unchanged sentences

Accretion of debt discount

Less current portion

Total PIPE Convertible Notes, net at June 30, 2025

the three and six months ended June 30, 2025 and 2024, amortization expense related to the Debt Discount of the PIPE Convertible Notes

was $ 127,097 and $ 20,872 and $ 359,037 and $ 24,197 , respectively.

Exchange for Series A Preferred Stock

( 3,734,990 )

Total PIPE Convertible Notes, net at September 30, 2025

the three and nine months ended September 30, 2025 and 2024, amortization expense related to the Debt Discount of the PIPE Convertible

Notes was $ 0 and $ 23,250 and $ 359,037 and $ 47,447 , respectively.

The principal balance of the PIPE Convertible Notes, net of Debt Discounts,

and accrued interest related to the PIPE Convertible Notes at June 30, 2025, was $ 3,734,990 and $ 40,957 , respectively.

The principal

balance net of Debt Discounts and accrued interest related to the PIPE Convertible Notes at December 31, 2024, was $ 4,068,953 and $ 154,500 ,

respectively.

and accrued interest related to the PIPE Convertible Notes at September 30, 2025, was $ 0 and $ 0 , respectively.

The principal balance

net of Debt Discounts and accrued interest related to the PIPE Convertible Notes at December 31, 2024, was $ 4,068,953 and $ 154,500 , respectively.

Exchange Agreements

April 22, 2025, the Company entered into Exchange Agreements, (the “Exchange Agreements” and each, an “Exchange

Agreement”), by and among the Company and each of the PIPE Convertible Note holders (the “Holders”)., pursuant to

which each such Holder would exchange (i) the amounts remaining outstanding under the PIPE Convertible Notes and certain other

amounts outstanding with respect thereto in the aggregate amount (the “Note Exchange”), and (ii) the PIPE Warrants.

Pursuant to the Exchange Agreements, on the effective date of the Exchange Agreements, which was April 22, 2025, the PIPE Warrants

were exchanged, in reliance on the exemption from registration provided by Section 3(a)(9) of the Securities Act of 1933, as amended

(the “Securities Act”), into an aggregate of 1,885

shares of the Company’s newly created Series A preferred stock (the “Series A Preferred Stock”, and (ii) warrants

to purchase up to

37,033 shares of Series A Preferred Stock (the “Series A Preferred Warrants”).

to the Exchange Agreements, on the closing of the Note Exchange the amounts owing under

the PIPE Convertible Notes were to be exchanged into share of the Company’s Series A Preferred Stock.

From the date of the

Exchange Agreements until the date of the Note Exchange, the conversion price of the PIPE Convertible Notes was reduced to $ 1.00

per share, which was then adjusted to $ 50.00

per share as a result of the Reverse Stock Split.

to the bundled nature of the Exchange Agreements transaction and that the PIPE Convertible Notes had not been exchanged as of June

30, 2025, the PIPE Convertible Notes remain outstanding and are classified as liabilities on the Company’s unaudited condensed

consolidated balance sheet as of that date.

The exchange of the PIPE Convertible Notes did not occur until July 21, 2025, and the

associated issued Series A Preferred Stock and Series A Preferred Warrants are presented within equity as non-cash issuances,

pending full settlement.

See Note 13 – Stockholders’ Equity for the impact on the Company’s equity

April 22, 2025, the Company entered into Exchange Agreements, (the “Exchange Agreements” and each, an “Exchange Agreement”),

by and among the Company and each of the PIPE Convertible Note holders (the “Holders”)., pursuant to which each such Holder

would exchange (i) the amounts remaining outstanding under the PIPE Convertible Notes and certain other amounts outstanding with respect

thereto in the aggregate amount (the “Note Exchange”), and (ii) the PIPE Warrants.

Pursuant to the Exchange Agreements, on

the effective date of the Exchange Agreements, which was April 22, 2025, the PIPE Warrants were exchanged, in reliance on the exemption

from registration provided by Section 3(a)(9) of the Securities Act of 1933, as amended (the “Securities Act”), into an aggregate

of 1,885 shares of the Company’s newly created Series A preferred stock (the “Series A Preferred Stock”, and (ii) warrants

to purchase up to 37,033 shares of Series A Preferred Stock (the “Series A Preferred Warrants”).

to the Exchange Agreements, on the closing of the Note Exchange the amounts owing under the PIPE Convertible Notes were to be exchanged

into share of the Company’s Series A Preferred Stock.

From the date of the Exchange Agreements until the date of the Note Exchange,

the conversion price of the PIPE Convertible Notes was reduced to $ 1.00 per share, which was then adjusted to $ 50.00 per share as a result

of the Reverse Stock Split.

See Note 13 – Stockholders’ Equity for the impact on the Company’s equity instruments.

10 – RELATED PARTY NOTES AND LOANS PAYABLE

1 unchanged sentence

SCHEDULE OF RELATED PARTY NOTES PAYABLE

September 30,

Note payable - ARJ Trust

7 unchanged sentences

Note payable long-term portion

maturities of related party notes and loan payables as of June 30, 2025:

maturities of related party notes and loan payables as of September 30, 2025:

SCHEDULE OF FUTURE MATURITIES OF RELATED PARTY NOTES PAYABLE

10 unchanged sentences

extended to September 30, 2025 .

Company made interest-only payments of $ 27,624 and $ 24,713 during the six months ended June 30, 2025 and 2024, respectively.

The principal

balance of the notes was $ 650,000 at both June 30, 2025 and December 31, 2024.

Company made interest-only payments of $ 4,604 and $ 41,436 during the nine months ended September 30, 2025 and 2024, respectively.

The principal balance of the notes was $ 650,000

at both September 30, 2025 and December 31, 2024.

May 2019, the Company entered into a $ 1,750,000 , zero interest rate note payable with a former shareholder to repurchase all their owned

2 unchanged sentences

The note matures on December

I f the annual installment is not paid within 10 days of the due date a late fee of 5% is charged .

If the annual installment is not paid within 10 days of the due date a late fee of 5% is charged .

The principal balance of the

note payable was $ 800,000 at both June 30, 2025 and December 31, 2024.

note payable was $ 800,000 at both September 30, 2025 and December 31, 2024.

January 2021, the Company entered into a $ 222,000 , zero interest rate note payable with a former shareholder to repurchase all their

2 unchanged sentences

matures on October 1, 2027 .

The Company made the required installments totaling $ 18,500 for the three months ended March 31, 2025.

principal balance of the note payable was $ 92,500 and $ 111,000 at June 30, 2025 and December 31, 2024, respectively.

The Company made the required installments totaling $ 18,500 for the three months ended March 31, 2025 and

September 30, 2025.

The principal balance of the note payable was $ 74,000 and $ 111,000 at September 30, 2025 and December 31, 2024, respectively.

the year ended December 31, 2024, the Company chief executive officer loaned the Company an aggregate of $ 2 million for operating expenses.

The loaned amount has a zero interest rate and no stated maturity date.

The Company made a $ 250,000 payment towards the loan during the

three months ended June 30, 2025, however, the Company expects to pay back the loan in full.

The principal balance of the loan payable

was $ 1,750,000 and $ 2,000,000 at June 30, 2025 and December 31, 2024, respectively.

The Company made $ 350,000 in payments towards the loan during

the nine months ended September 30, 2025, however, the Company expects to pay back the loan in full.

The principal balance of the loan

payable was $ 1,650,000 and $ 2,000,000 at September 30, 2025 and December 31, 2024, respectively.

11 – LINES OF CREDIT

11 unchanged sentences

The outstanding

principal balance on the line of credit was $ 802,738 at June 30, 2025 and December 31, 2024.

principal balance on the line of credit was $ 802,738 at September 30, 2025 and December 31, 2024.

February 2023, the Company entered into a variable rate line of credit with Morgan Stanley which was secured by the marketable securities

1 unchanged sentence

The Company terminated the brokerage agreement during the year ended December 31, 2024, liquidated the

vast majority of its investments and has $ 10,114

recorded in cash and cash equivalents on its unaudited condensed

consolidated balance sheet as of June 30, 2025 and December 31, 2024.

vast majority of its investments and has $ 10,114 recorded in cash and cash equivalents on its unaudited condensed consolidated balance

sheet as of September 30, 2025 and December 31, 2024.

12 – DIVIDEND NOTES PAYABLE

16 unchanged sentences

SCHEDULE OF DIVIDENDS DECLARED, DISTRIBUTED, AND ACCRUED

September 30,

Accrued interest on dividends payable

7 unchanged sentences

share of Series A Preferred has a stated value of $ 1,000 per share.

The Series A, with respect to dividends, distributions and payments

upon the liquidation, dissolution and winding up of the Company, ranks senior to all capital stock of the Company.

The holders of Series

A Preferred will be entitled to 10% per annum dividends, payable in cash or shares of Class A common stock, provided that if the shares

of Class A common stock are utilized to pay the dividends then the dividend rate will be recalculated to 15%.

The Series A Preferred

have a conversion rate of $ 6.31 per share and convert into Class A common stock.

of June 30, 2025 and December 31, 2024, there were 1,885 and 0 shares of Series A Preferred issued and outstanding.

The Series A Preferred, with respect to dividends, distributions

and payments upon the liquidation, dissolution and winding up of the Company, ranks senior to all capital stock of the Company.

of Series A Preferred will be entitled to 10% per annum dividends, payable in cash or shares of Class A common stock, provided that if

the shares of Class A common stock are utilized to pay the dividends then the dividend rate will be recalculated to 15%.

Preferred had a conversion rate of $ 6.31 per share and convert into Class A common stock.

On each six-month anniversary of the initial

issuance date of the Series A Preferred conversion price adjusted to the closing price of the Class A common stock on such date.

22, 2025, the conversion price was adjusted to $ 2.16 pursuant to such provisions.

of September 30, 2025 and December 31, 2024, there were 8,189 and 0 shares of Series A Preferred issued and outstanding.

A Common Stock

8 unchanged sentences

Fair Value Measurements for more information on the Company’s valuation methodology.

July 21, 2025, in connection with the Exchange Agreements, the Company issued an aggregate of 3,938 shares of Series A Convertible Preferred

Stock to PIPE Convertible Note holders for the exchange of PIPE Convertible Notes with an aggregate stated value of $ 3,938,311 (representing

100% of the remaining PIPE Convertible Notes).

July 21, 2025, the Company issued 5,555 shares of Series A Convertible Preferred Stock for the exercise of Series A Preferred Warrants

and cash proceeds of $ 5 million.

A Common Stock

the three months ended June 30, 2025, the Company issued an aggregate of 31,160 shares of Class A Common Stock with a fair value of $ 50.00

per share to PIPE Convertible Note holders for conversion of an aggregate principal amount of $ 1,558,000 in PIPE Convertible Notes (See

Note 9 – PIPE Convertible Notes ).

the three months ended June 30, 2025, the Company issued an aggregate of 111,148 shares of Class A Common Stock with fair values ranging

from $ 8.80 - $ 12.17 per share to PIPE Convertible Note holders in lieu of cash for interest and make whole provisions (See Note 9

– PIPE Convertible Notes ).

the three months ended June 30, 2025, the Company issued an aggregate of 84,662 shares of Class A Common Stock with a fair value of $ 16.50

per share to dividend note payable holders in lieu of cash dividends (See Note 12 – Dividend notes payable ).

B Common Stock

the three months ended June 30, 2025, the Company issued an aggregate of 165,663 shares of Class B Common Stock with a fair value of

$ 33.00 per share to dividend note payable holders in lieu of cash dividends (See Note 12 – Dividend notes payable ).

the three months ended September 30, 2025, the Company issued an aggregate of 505,434 shares of Class A Common Stock with a fair value

of $ 6.31 per share for the conversion of 3,189 shares of Series A Convertible Preferred Stock.

the three months ended September 30, 2025, the Company issued an aggregate of 578,468 shares of Class A Common Stock with fair values

ranging from $ 3.50 - $ 5.36 per share to Series A Convertible Preferred Share holders in lieu of cash for unpaid dividends.

There were no Class A Common Stock during the three months ended September

and Option Valuation

13 unchanged sentences

A Preferred Warrants

Series A Preferred Warrants were issued during the three months ended September 30, 2025.

applying the Black-Scholes option pricing model to the Series A Preferred Warrants, the Company used the following assumptions:

SCHEDULE OF FAIR VALUE ASSUMPTIONS OF WARRANTS

June 30, 2025

the Nine Months Ended

September 30, 2025

Risk free interest rate

2 unchanged sentences

Expected dividends

the three months ended June 30, 2025, in connection with the signing of the Exchange Agreements, see Note 9 – PIPE Convertible

Notes , PIPE Warrant holders exchanged their outstanding 28,182 Series A Warrants and 31,000 Series B Warrants for Series A Preferred Warrants to purchase

37,033 shares of Series A Preferred Stock.

The Series A Preferred Warrants are immediately vested, have an exercise price of $ 900 , and

have a grant date fair value of $ 482,701 .

summary of the Series A Warrant Activity during the six months ended June 30, 2025, is presented below:

the nine months ended September 30, 2025, in connection with the signing of the Exchange Agreements, see Note 9 – PIPE Convertible

Notes , PIPE Warrant holders exchanged their outstanding 28,182 Series A Warrants and 31,000 Series B Warrants for Series A Preferred

Warrants to purchase 37,033 shares of Series A Preferred Stock.

The Series A Preferred Warrants are immediately vested, have an exercise

price of $ 900 , and have a grant date fair value of $ 482,701 .

summary of the Series A Warrant Activity during the nine months ended September 30, 2025, is presented below:

SCHEDULE OF WARRANT ACTIVITY

Outstanding, December 31, 2024

Outstanding, June 30, 2025

Exercisable, June 30, 2025

Outstanding, September 30, 2025

Exercisable, September 30, 2025

A and Series B Warrant

summary of the warrant activity during the six months ended June 30, 2025, is presented below:

summary of the warrant activity during the nine months ended September 30, 2025, is presented below:

SCHEDULE OF WARRANT ACTIVITY

Outstanding, December 31, 2024

Outstanding, June 30, 2025

Exercisable, June 30, 2025

Outstanding, September 30, 2025

Exercisable, September 30, 2025

14 – STOCK-BASED COMPENSATION

1 unchanged sentence

Stock Incentive Plan

Company did not grant options during the three months June 30, 2025 or 2024.

Company did not grant options during the three months September 30, 2025 or 2024.

Compensation-based

3 unchanged sentences

Outstanding, December 31, 2024

Outstanding, June 30, 2025

Exercisable, June 30, 2025

Outstanding, September 30, 2025

Exercisable, September 30, 2025

following table summarizes information about options to purchase shares of the Company’s Class A common stock outstanding and exercisable

at June 30, 2025:

at September 30, 2025:

SCHEDULE OF STOCK OPTIONS OUTSTANDING AND EXERCISABLE

3 unchanged sentences

Life In Years

compensation expense related to options was $ 3,342 and $ 6,684 for the three and six months ended June 30, 2025.

As of June 30, 2025,

compensation expense related to options was $ 3,342 and $ 10,025 for the three and nine months ended September 30, 2025.

As of September

30, 2025, there was future compensation cost of $ 1,114 with a weighted average recognition period of 0.25 years.

aggregate intrinsic value totaled $ 0 and was based on the Company’s closing stock price of $ 5.72 as of June 30, 2025, which would

have been received by the option holders had all option holders exercised their options as of that date.

aggregate intrinsic value totaled $ 0 and was based on the Company’s closing stock price of $ 2.42 as of September 30, 2025, which

would have been received by the option holders had all option holders exercised their options as of that date.

Compensation Expense

1 unchanged sentence

SCHEDULE OF STOCK-BASED COMPENSATION EXPENSE

Three Months Ended

Unrecognized at

Weighted Average

September 30, 2025

Amortization Period

General and administrative

the Nine Months Ended

Unrecognized at

Weighted Average

September 30, 2025

Amortization Period (Years)

General and administrative

1 unchanged sentence

value measurements discussed herein are based upon certain market assumptions and pertinent information available to management as of

and during the six months ended June 30, 2025.

The carrying amounts of cash equivalents, accounts receivable, other current assets, other

assets, accounts payable, and accrued expenses approximated their fair values as of the six months ended June 30, 2025, due to their

short-term nature.

April 22, 2025, the Company entered into a bundled non-cash transaction in which it issued 1,885 shares

of Series A Preferred Stock (Series A Preferred) and warrants (Series A Preferred Warrants) to purchase 37,033

shares of Series A Preferred Stock in anticipation of a future exchange for the outstanding PIPE Convertible Notes and previously

issued Series A and Series B Warrants ( see Note 9 – PIPE Convertible Notes ).

The fair value for the Series A Preferred

Stock was determined based on the contractual conversion terms into common stock and the quoted price of the Company’s common

stock on the date of issuance, in accordance with ASC 820.

The Series A Preferred Warrants were valued using the Black-Scholes

Model, including the market price of the Company’s common stock, expected volatility, expected term, and the risk-free

interest rate.

The Series A Preferred and Series A Warrants were measured using Level 2 inputs given the absence of an active market

for the Series A Preferred, specifically the quoted market price of the Company’s common stock and the number of common shares

contractually receivable upon conversion.

and during the nine months ended September 30, 2025.

The carrying amounts of cash equivalents, accounts receivable, other current assets,

other assets, accounts payable, and accrued expenses approximated their fair values as of the nine months ended September 30, 2025, due

to their short-term nature.

following table sets forth a summary of the Company’s assets and liabilities that are measured at fair value on a recurring basis:

OF FAIR VALUE OF ASSETS AND LIABILITIES ON A NONRECURRING BASIS

June 30, 2025

SCHEDULE OF FAIR VALUE OF ASSETS AND LIABILITIES ON A NONRECURRING BASIS

September 30, 2025

December 31, 2024

4 unchanged sentences

Total debt investments

Fair Value Level 2

Series A Preferred Stock

Series A Preferred Warrants

Series A Preferred Stock

Series A Preferred Warrants

Non-recurring fair value

Total non-recurring fair value

Company is party to two leases:

3 unchanged sentences

to expire in November 2025.

There were no material changes to the Company’s lease arrangements during the six months ended June

There were no material changes to the Company’s lease arrangements during the nine months ended September

Additional information regarding the Company’s lease arrangements is included in Note 20 – Leases the consolidated

3 unchanged sentences

The weighted average incremental borrowing rate applied was 8.39 %.

As of June 30,

As of September

30, 2025, the Company’s leases had a remaining weighted average term of 1.65 years.

following table presents net lease cost and other supplemental lease information:

OF LEASE COST AND OTHER SUPPLEMENTAL LEASE INFORMATION

SCHEDULE OF LEASE COST AND OTHER SUPPLEMENTAL LEASE INFORMATION

September 30,

Operating lease cost (cost resulting from lease payments)

5 unchanged sentences

Non-current liabilities - operating lease liabilities

minimum payments under non-cancellable leases for operating leases for the remaining terms of the leases following the six months ended

June 30, 2025, are as follows:

minimum payments under non-cancellable leases for operating leases for the remaining terms of the leases following the nine months ended

September 30, 2025, are as follows:

SCHEDULE OF FUTURE MINIMUM PAYMENTS UNDER OPERATING LEASES

16 unchanged sentences

OF REVENUE BY SEGMENT INFORMATION

For The Three Months Ended June 30,

For The Three Months Ended

September 30,

Consulting expenses

6 unchanged sentences

Total operating expenses

expenses is materially comprised of rent, insurance, stock-based compensation, depreciation and amortization, licenses, dues and

subscriptions, travel and entertainment, and merchant fees.

For The Six Months Ended June 30,

Other expenses is materially

comprised of rent, insurance, stock-based compensation, depreciation and amortization, licenses, dues and subscriptions, travel and

entertainment, and merchant fees.

For The Nine Months Ended

September 30,

Consulting expenses

6 unchanged sentences

Total operating expenses

expenses is materially comprised of rent, insurance, stock-based compensation, depreciation and amortization, licenses, dues and

subscriptions, travel and entertainment, and merchant fees.

Other expenses is materially

comprised of rent, insurance, stock-based compensation, depreciation and amortization, licenses, dues and subscriptions, travel and

entertainment, and merchant fees.

18 – COMMITMENTS AND CONTINGENCIES

6 unchanged sentences

institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $ 250,000 .

As of June 30, 2025 and December

31, 2024, the Company had approximately $ 8,904,000 and $ 9,662,000 , respectively, in excess of the FDIC insured limit.

As of September 30, 2025 and

December 31, 2024, the Company had approximately $ 12,051,504 and $ 9,662,000 , respectively, in excess of the FDIC insured limit.

20 – SUBSEQUENT EVENTS

Convertible Notes and Issuance of Series A Preferred Stock

July 21, 2025, in connection with the Exchange Agreements dated April 22, 2025, (i) holders of the Company’s PIPE Convertible Notes

agreed to waive the remaining closing condition to the Note Exchange, and the exchange was consummated.

PIPE Convertible Notes with an

aggregate principal amount of $ 3,938,311 (representing 100% of the remaining PIPE Convertible Notes) were exchanged for 3,938 shares

of the Company’s Series A Preferred Stock and (ii) the Company agreed to extend the expiration date of the Series A Preferred Warrants

held by such holders by two years.

July 21, 2025, a holder of Series A Preferred Warrants to purchase 18,333

shares of Series A Preferred Stock partially exercised its warrants for cash proceeds of approximately $ 5.0

million and was issued 5,555

shares of Series A Preferred Stock.

of Common Stock

to June 30, 2025, the Company issued an aggregate of 373,308 shares of Class A common stock with fair values ranging from $ 4.13 - $ 6.31

per share to Series A Preferred Stockholders in connection with the conversion of outstanding Series A Preferred Stock, accrued interest,

and make-good provisions.

to September 30, 2025, the Company issued an aggregate of 240,029 shares of Class A Common Stock with fair values ranging from $ 2.16

- $ 6.31 per share for the conversion of 550 shares of Series A Preferred Convertible Stock.

to September 30, 2025, the Company issued an aggregate of 165,873 shares of Class A Common Stock with fair values ranging $ 2.16 - $ 3.50

per share Series A Convertible Preferred Share holders in lieu of cash for unpaid dividends.

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