MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our financial statements, including the notes thereto, appearing elsewhere in this Annual Report on Form 10-K. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this Annual Report. Our audited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.

The following Management's Discussion and Analysis relates to our new restructured business operations, rather than the prior business operations of the Company before February 25, 2025. Following the restructuring of our business, we are mainly focused on UAVs and drone-related sales and services.

The following discussion and analysis of the financial condition and results of operations of Dynamic Aerospace Systems Corporation ("Dynamic Aerospace Systems" or the "Company"), should be read in conjunction with our financial statements and related notes as filed with the U.S. Securities and Exchange Commission (the "SEC"). This discussion contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from those anticipated due to various factors, including those described in our SEC filings. Unless otherwise stated, references to "we," "us," or "our" refer to Dynamic Aerospace Systems Corporation. For additional details on our operations, see our website at https://www.dynamicaerosystems.com. (As noted above, information available on our website is not incorporated by reference in, or a part of, this or any other report we file with or furnish to the SEC).

Dynamic Aerospace Systems (OTC Markets: BRQL, "Dynamic Aerospace Systems," the "Company," "we," "our" or "us"), is a leader in unmanned aerial vehicle ("UAV") manufacturing and autonomous logistics, focusing on advanced vertical takeoff and landing ("VTOL") drones and UAV technologies, such as the Company's G1 VTOL (the "G1") and US-1 electric rotor copter (the "US-1"). We serve government, defense, and commercial sectors, delivering solutions for logistics, surveillance, reconnaissance, and mission-critical operations across the United States, Gulf Coast nations, and NATO countries. Our mission is to optimize efficiency, reduce risk, and accelerate delivery through autonomous aerial solutions that enhance operational effectiveness and situational awareness.

In 2025, we adopted the trade name Dynamic Aerospace Systems to reflect our new strategic focus on autonomous aerospace technologies and to align with its expanded emphasis on UAV innovation and logistics. This rebranding coincided with significant corporate developments, including the acquisition of assets from Vayu (US) Inc., Impossible Aerospace Corporation, and Global Autonomous Corporation from Alpine 4 Holdings, Inc. (ALPP) on April 1, 2025. These acquisitions strengthened our technological capabilities and market position in the UAV sector. Additionally, the appointment of a FedEx logistics expert to our Board of Directors enhanced our strategic expertise in logistics and supply chain optimization.

Dynamic Aerospace Systems Operations

Revenue

Operating as Dynamic Aerospace Systems, we have focused on developing and commercializing advanced VTOL drones and UAV systems, including the G1 and US-1, designed for applications such as autonomous logistics, surveillance, and reconnaissance. Prior revenue was based on the MyTreat Logistics systems; however, as of the period covered by this Annual Report, we had discontinued that revenue model and are solely focused on UAV manufacturing and autonomous logistics using our drones. Our operational focus has been on expanding market reach and advancing research and development ("R&D"). Collaborations with government agencies, NATO allies, and commercial aerospace leaders have driven early-stage contracts and pilot programs, particularly for defense and logistics applications. Revenue generation remains in the growth phase as we scale production and secure larger contracts.

54

Cost Structure and Expenses

Our primary expenses include research and development (R&D), manufacturing, and operational costs associated with our facilities in Ann Arbor, Michigan, and planned flight testing at Strother Field, Kansas (expected to be operational in 2026). The acquisition of assets significantly increased our capital expenditures, aimed at enhancing proprietary UAV designs with autonomous flight controls and advanced sensor integration. We have also invested in secure communication technologies to ensure reliable and secure UAV operations. General and administrative expenses include costs related to corporate governance, regulatory compliance, and the integration of new board expertise to support our strategic vision.

Liquidity Position

Our liquidity position is supported by operational cash flows, strategic partnerships, and financing activities. The asset acquisitions in 2025 were funded through the issuance of Class B Common Stock, aligning with our strategy to preserve cash reserves while expanding our technological portfolio. We are actively pursuing additional contracts with government and commercial clients to bolster cash inflows. Management is also exploring further equity and debt financing to support ongoing R&D and the expansion of manufacturing capabilities. As with many growth-stage companies, our ability to secure additional capital will be critical to sustaining operations and achieving long-term objectives. There can be no assurance that we will obtain financing on favorable terms, and any further issuance of equity could dilute existing shareholders.

Financial Condition

For the year ended December 31, 2025, our financial condition reflects a growth-oriented company with significant investments in technology and infrastructure. The transition to operating as Dynamic Aerospace Systems has positioned us to capitalize on the growing demand for autonomous UAV solutions. However, we have identified potential risks, including material weaknesses in internal controls over financial reporting, which we are actively working to remediate. Our balance sheet is primarily composed of intangible assets related to UAV technology, and physical assets from acquisitions.

Key Trends and Uncertainties

The UAV and autonomous logistics market is rapidly evolving, driven by increasing demand for efficient, secure, and scalable solutions in defense, logistics, and commercial sectors. Our proprietary technologies, such as the G1's VTOL and fixed-wing efficiency and the US-1's extended flight capabilities, position us to meet these demands. However, we face risks including regulatory changes, competitive pressures, and the need for continuous innovation. The integration of AI-driven autonomy and sustainable propulsion systems, planned for future development, will require substantial investment and successful execution to maintain our competitive edge.

Conclusion

The transition to operating as Dynamic Aerospace Systems marks a pivotal shift toward leadership in autonomous aerospace solutions. With the strategic acquisitions discussed above and funded through the issuance of Class B Common Stock, a strengthened board, and a focus on innovative UAV technologies, we are well-positioned to drive growth in the logistics, defense, and commercial sectors. However, our success depends on securing additional capital, scaling operations, and navigating competitive and regulatory challenges. We remain committed to delivering value to our stakeholders through innovation, operational excellence, and strategic partnerships.

Results of Operations

The following information should be read in conjunction with the financial statements and notes appearing elsewhere in this Report. We have generated minimal revenues from inception to date. We anticipate that we may not receive any significant revenues from operations until we begin our planned UAV sales and operations.

55

Results of Operations for Fiscal Year Ended December 31, 2025 and 2024

Revenues

We generated revenues of $0 and $266 in the years ended December 31, 2025 and 2024, respectively. These revenues were derived exclusively from treat sales on our platform. The year-over-year decrease reflects the strategic pivot away from our prior software assets into UAV-related activity. We anticipate future revenue growth will primarily result from UAV-related commercial activity beginning in 2026.

Operating Expenses

Professional fees were $1,308,739 in the year ended December 31, 2025, an increase of $1,198,722, or 1090%, compared to $110,017 in the year ended December 31, 2024, resulting from professional fees paid related to the implementation of our Dynamic Aerospace Systems business acquired in April 2025.

Salaries were $1,058,275 in the year ended December 31, 2025, an increase of $977,275, or 1,207%, compared to $81,000 in the year ended December 31, 2024 due to the hiring of certain Vayu employees following the acquisition of the Vayu assets.

Depreciation and amortization expense increased by $222,629, or 379%, from $58,754 in the year ended December 31, 2024 to $281,383 in the year ended December 31, 2025 as a result of amortization related to the intangible assets acquired from Vayu and GAC in April 2025.

Bad debt expense was $30,000 in the year ended December 31, 2024 related to the write off of legacy accounts receivable. There was no corresponding bad debt charge in the year ended December 31, 2025.

During the year ended December 31, 2025, the Company recorded an impairment of goodwill related to our Vayu and GAC assets in the amount of $2,938,247. The impairment was the result of slower-than-expected development of new revenue streams resulting in lower-than-expected operating results and revised projections of future cash flows attributable to the related technology. During the year ended December 31, 2024, we recorded an impairment of intangible assets related to our legacy business in the amount of $198,193. For additional information, see Notes 7 and 8 to our financial statements included in Part II, Item 8 of this Annual Report.

Other general and administrative costs were $1,056,614 in the year ended December 31, 2025, an increase of $997,138, or 1,677%, compared to $59,476 in the year ended December 31, 2024 due primarily to higher stock compensation expense and higher overhead costs related with the administration of our newly acquired businesses in 2025.

Other Income and Expenses

We had interest and other expense of $816,963 and $153,700 for the year ended December 31, 2025 and 2024, respectively, an increase of $663,263, or 432%. The increased interest expense is attributable to higher amortization of beneficial conversion features that the Company recorded as discounts against convertible notes issued in 2025 that were amortized to interest expense and subsequently converted to various series of preferred stock, as well as higher coupon interest expense on larger debt balances.

We recognized financing cost of $180,609 in the year ended December 31, 2025, reflecting the excess of the allocated components of certain debt instruments at inception over the net proceeds from such instruments. There was no corresponding charge in the year ended December 31, 2024.

During the year ended December 31, 2025, we recognized change in fair value of derivative financial instruments of $150,094 to record the change in fair value of certain floating-rate convertible features embedded in our debt instruments that were treated as derivative financial instruments.

During the year ended December 31, 2024, we recognized a loss on conversion of shares of $426,000 associated with the conversion of a convertible promissory note to equity. There was no corresponding charge in the year ended December 31, 2025.

56

During the year ended December 31, 2024, we recognized a loss on exercise of warrants of $60,000. There was no corresponding charge in the year ended December 31, 2025.

Net Loss

Our net loss for the year ended December 31, 2025, was $7,790,924, compared to $1,171,439 in the year ended December 31, 2024. This increase of $6,619,485, or 565%, was driven primarily by the impairment of Vayu and GAC assets as discussed above, increased operating expenses related with the administration of our newly acquired businesses in 2025, and higher interest and financing-related expenses.

The increase in operating expenses and net loss reflects the Company's investment in scaling its operations and preparing for future growth. Notably, a portion of these expenses were hard costs directly associated with the acquisition and integration of Vayu and GAC aerospace assets transactions that successfully closed on April 1, 2025. These investments included legal, due diligence, and advisory fees that were essential to closing the deals and positioning the Company for revenue generation across its UAV manufacturing and autonomous logistics divisions.

Additionally, we anticipate incurring additional legal and audit-related costs over the next twelve months, tied to our ongoing obligations as a reporting company, completion of the process for our registration statement on Form S-1, and our intent to pursue a listing on the NYSE later this year.

While we expect to continue operating at a net loss in the near term, management believes these strategic investments will support long-term growth, and that commercial activity from acquired assets will begin offsetting operating costs over the coming quarters.

Liquidity and Capital Resources

Going Concern

During the 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern. This update provided generally accepted accounting principles accepted in the United States of America ("U.S. GAAP") guidance on management's responsibility in evaluating whether there is substantial doubt about a company's ability to continue as a going concern and about related footnote disclosures. Under this standard, we are required to evaluate whether there is substantial doubt about our ability to continue as a going concern each reporting period, including interim periods. In evaluating our ability to continue as a going concern, management considered the conditions and events that could raise substantial doubt about our ability to continue as a going concern within 12 months after our financial statements were issued.

Management considered our current financial condition and liquidity sources, including current funds available, forecasted future cash flows and our obligations due before April 15, 2027, and concluded that, without additional funding, we will not have sufficient funds to meet our obligations within one year from the date the financial statements were issued. Without raising additional capital, there is substantial doubt about our ability to continue as a going concern through March 31, 2027. The accompanying financial statements have been prepared assuming that we will continue as a going concern. This basis of presentation contemplates the recovery of our assets and the satisfaction of liabilities in the normal course of business.

As of December 31, 2025, we had cash balances of $54,009, a working capital deficit of $2,811,077 and an accumulated deficit of $9,791,120. For the year ended December 31, 2025, we had a net loss of $7,790,924 and used cash from operating activities of $1,928,835.

Significant Liquidity Transactions

Since inception, we have generated modest revenues while funding operations primarily through support from affiliates, shareholders, and related parties. Notably, Aerospace Capital Partners, one of our largest shareholders, has already contributed financial resources to help support the Company during this period of growth. In addition, we have engaged an investment bank, A.G.P./Alliance Global Partners, to assist in raising additional capital to accelerate our business plan and ensure sufficient liquidity.

57

Although we may require additional equity or debt financing in the short term, management believes the Company is well-positioned to execute on its strategic objectives with the support of existing investors and engaged advisors. While any future financing may involve dilution or debt obligations, we are focused on securing capital on terms that preserve long-term shareholder value and support our path to profitability.

Equity Purchase Agreement

On July 31, 2025, we entered into an Equity Purchase Agreement (the "ELOC") with Platinum Point Capital LLC, a Nevada limited liability company (the "Purchaser") pursuant to which the Purchaser committed to purchase up to $15,000,000 of our Common Stock. In connection with the execution of the ELOC, we issued 598,404 shares of our Common Stock to the Purchaser as a commitment fee.

Upon filing and effectiveness of a Registration Statement on Form S-1 to register the Advance Shares (defined below) and provided other closing conditions are met, from time to time over the term of the ELOC, we have the right, but not the obligation, to direct the Purchaser to purchase shares of our Common Stock (the "Advance Shares") in a maximum amount of one hundred percent (100%) of the average daily trading volume over the five trading days preceding the applicable advance date. At any time and from time to time during the three-year term of the ELOC, we may deliver a notice to Purchaser (the "Advance Notice") and shall deliver the Advance Shares to Purchaser on the next trading day. The purchase price for the Advance Shares shall equal 90.0% of the gross proceeds received by the Purchaser for the resale of the Advance Shares during the three consecutive trading days immediately following the date an Advance Notice is delivered. The ELOC terminates upon the first to occur of (i) July 31, 2028; (ii) the date that $15,000,000 in Advance Shares have been purchased by the Purchaser; and (iii) the date that we terminate the ELOC. A Form S-1 registering the Advance Shares was declared effective by the SEC on December 19, 2025.

Notes Payable

During the year ended December 31, 2025, we issued convertible notes payable and promissory notes with a total face value of $1,777,700 that resulted in net proceeds of $1,635,900. Certain of the convertible notes with face value of $843,200 were converted into shares of our preferred stock during 2025. We also repaid existing promissory notes totaling $55,000. The remaining outstanding debt matures at various times during 2026.

As of December 31, 2025, we had a working capital deficit of $2,811,077. However, the Company is actively pursuing financing opportunities and anticipates revenue growth from sales that are expected to begin offsetting operating expenses within the next twelve months.

Historical Cash Flows

Net Cash Used in Operating Activities.

Net cash used in operating activities was $1,928,835 for the year ended December 31, 2025, compared to $34,098 used in operating activities during the year ended December 31, 2024. The increase in cash used in operating activities is mainly due to increased professional fees and general and administrative costs associated with the acquisition and implementation of our new business. Our primary use of funds in operations was payments made for salaries, legal and professional fees.

Net Cash Used in Investing Activities.

For the year ended December 31, 2025, and December 31, 2024, our net cash used from investment activities was $1,089 and $85,871, respectively. Amounts invested in 2025 related to office equipment purchased. Amounts invested in 2024 related to software from our prior business that has since been impaired.

58

Net Cash Provided by Financing Activities.

For the year ended December 31, 2025, net cash provided by financing activities was $1,983,900, comprised of $1,635,900 received from the issuance of Notes and Convertible Notes, $403,000 from agreements to issue shares of preferred stock, and the repayment of two promissory notes in the amount of $55,000. For the year ended December 31, 2024, net cash provided by financing activities was $90,000 received from one Promissory Note and $30,000 from the sale of common stock.

Off-Balance Sheet Arrangements

We have not and do not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of establishing off-balance sheet arrangements or other contractually narrow or limited purposes. Therefore, we do not believe we are exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in such relationships.

The above discussion should be read in conjunction with our condensed financial statements and the related notes. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements.

Plan of Operations

In support of the Company's strategic transformation into a drone manufacturing and autonomous logistics company, the Company intends to raise new growth capital to fund product development, and operational expansion. To facilitate this effort, the Company has engaged A.G.P./Alliance Global Partners ("A.G.P."), a reputable investment bank, to advise on and execute a structured capital raise. Management anticipates that this capital raise will include potential equity and/or debt offerings aimed at fueling the Company's entry into the UAV and autonomous delivery sectors, expanding its technology stack, and establishing key commercial partnerships. The capital raise will be aligned with the Company's long-term vision and will be critical to positioning the Company as an innovation leader in next-generation aerospace logistics.

The report of the independent registered public accounting firm accompanying our audited financial statements for the year ended December 31, 2025 includes an explanatory paragraph expressing substantial doubt as to our ability to continue as a going concern. The financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business.

To address this uncertainty, the Company has taken a series of meaningful steps to strengthen its financial position and operational outlook

	·	In the first and second quarters of 2025, we finalized multiple memorandums of understanding including agreements with Drops Smart Hubs and Noon Fulfillment in the United Arab Emirates which support future UAV based logistics operations and infrastructure deployment in key international markets
	·	The Company has engaged Alliance Global Partners AGP as its non-exclusive investment banking partner to raise capital and evaluate additional financial strategies aligned with our business model
	·	Strategic partnerships and Local Representation Agreements have been executed to support expansion across multiple geographies without significant increases in fixed operating costs

Additionally, Aerospace Capital Partners ("ACP"), our single largest shareholder, continues to provide financial support and strategic guidance by leveraging institutional banking relationships to assist in our ongoing capital formation efforts. We anticipate that revenue from our UAV product portfolio including the US-1 electric multicopter and the G1 hybrid VTOL platform will begin contributing meaningfully to our financial results in 2025.

As of December 31, 2025, the Company had a working capital deficit of approximately $2,811,077. Although this presents a near term liquidity challenge, management believes that continued investment from A.G.P.-led financing efforts and UAV contract execution will help address the shortfall in the coming quarters.

59

Our ability to continue as a going concern will depend on timely access to capital, the successful execution of our revenue plan, and continued support from our strategic partners. The Company is actively pursuing a capital strategy that includes the following initiatives

	·	Technical upgrades to our US-1 MKII UAV platform which has drawn interest from public safety, industrial inspection, and autonomous logistics operators in the United States
	·	Progress on commercial deployment opportunities under the Drops Smart Hubs and Noon Fulfillment MOUs particularly in Dubai and the surrounding Gulf region
	·	Ongoing coordination with ACP and AGP to pursue institutional and strategic investment aligned with our operational goals

While uncertainty remains, we believe the measures already taken, combined with support from our stakeholders and a focused operational plan, provide a viable path forward. The accompanying condensed financial statements do not reflect any adjustments that might be necessary if we are ultimately unable to execute on these plans. Nonetheless, management remains confident in its ability to navigate current challenges and create long term shareholder value.

Critical Accounting Estimates

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenue and expenses and disclosure of contingent assets and liabilities at the date the financial statements and the reported amount of revenues and expenses, during the reporting period. Actual results could differ from those estimates.

Income Taxes

Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.

Revenue Recognition

The Company recognizes revenue in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 606 upon the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company's previous business operations had three types of revenues; a) fees charged to shops for registering with the Company's app, b) treats sent from receiving and/or sending consumers, and c) advertising from other company brands on the app.

All services are recorded at the time that control of the products is transferred to the receiving consumers upon their redemption of their treat. In evaluating the timing of the transfer of control of products to customers, we consider several indicators, including our right to payment, and the legal title of the products. Based on the assessment of control indicators, sales are generally recognized when products are delivered to consumers.

Revenue recognized from contracts with customers is disclosed separately from other sources of revenue. ASC 606 includes guidance on when revenue should be recognized on a Gross (Principal) or Net (Agent) basis. The Company's revenue is recognized primarily as performance obligations are satisfied. For all fixed-price contracts, revenue is recognized based on the actual service provided to the end of the reporting period.

60

Stock-Based Compensation

The measurement and recognition of stock-based compensation expense is based on estimated fair values for all share-based awards made to employees and directors, including stock options and for non-employee equity transactions as per ASC 718 rules.

For transactions in which the Company obtains certain services of employees, directors, and consultants in exchange for an award of equity instruments, the Company measures the cost of the services based on the grant date fair value of the award. The Company recognizes the cost over the vesting period.

Goodwill and Intangible Assets

Intangible assets are measured at cost less accumulated amortization and impairment losses, if any. They are amortized on a straight-line basis over their estimated useful lives. The straight-line method of amortization is used as it has been determined to approximate the use pattern of the assets. We evaluate goodwill for impairment annually, or whenever events or changes in circumstances indicate that the fair value of the reporting unit is more likely than not below its carrying amount.

Our goodwill and intangible assets represent a significant portion of our total assets and are subject to impairment testing, which requires us to make significant estimates and assumptions. Long-lived assets (including amortizable identifiable intangible assets) or asset groups held for use are tested for recoverability whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. When such events occur, we compare the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset or asset group to the carrying amount of a long-lived asset or asset group. The cash flows are based on our best estimate of future cash flows derived from the most recent business projections. If this comparison indicates that the asset is not recoverable, we estimate the fair value of the asset group using a discounted cash flow model. An impairment charge is then recorded for any excess carrying value above the estimated fair value of the asset group.

Goodwill is tested for impairment on an annual basis and more often if circumstances indicate that an impairment may be necessary. Goodwill impairment is recognized for any excess carrying value above the estimated fair value of the asset group. Fair value is estimated using the same approach as described above for long-lived asset testing.

The significant assumptions we use in the discounted cash flow models are revenue growth rate, gross profit margins on product sales, operating income margin, and the discount rate used to determine the present value of the cash flow projections. Among other inputs, revenue growth rate and operating income margin are determined by management using historical performance trends, projected performance from existing partnerships, industry data, relevant changes in the reporting unit's underlying business, and other market trends that may affect the reporting unit. The discount rate is based on the estimated weighted average cost of capital as of the test date of market participants in the industry in which the reporting unit operates. The assumptions used in the discounted cash flow model are subject to significant judgment and uncertainty. Changes in projected revenue growth rates, gross profit margins, projected operating income margins, or estimated discount rates due to uncertain market conditions, changes in technology, changes in geopolitical factors, or other factors, could result in one or more of our reporting units with a significant amount of identifiable intangible assets recognizing material impairment charges, which could be material to our results of operations and financial position. Our historical or projected revenues or cash flows may not be indicative of actual future results.

Impairment of Vayu and GAC Intellectual Property and Goodwill

During the year ended December 31, 2025, we identified indicators of impairment related to our intellectual property intangible assets and goodwill associated with the Company's Dynamic Aerospace Systems and Dynamic Deliveries platforms, which were acquired in connection with the Company's acquisitions of certain assets of Vayu and GAC in April 2025. These indicators included slower-than-expected development of new revenue streams resulting in lower-than-expected operating results and revised projections of future cash flows attributable to the related technology. As a result, the Company performed a goodwill impairment test in accordance with ASC 350 Intangibles-Goodwill and Other.

Prior to performing the goodwill impairment test, the Company evaluated the recoverability of the long-lived assets associated with the reporting unit in accordance with ASC 360, Property, Plant, and Equipment-Impairment or Disposal of Long-Lived Assets. Based on this evaluation, the Company determined that certain long-lived assets, including developed technology and customer relationship intangible assets, were not impaired.

The Company then compared the fair value of the reporting unit with its carrying value, including goodwill. Among other inputs, revenue growth rate and operating income margin are determined by management using historical performance trends, projected performance from existing partnerships, industry data, relevant changes in the reporting unit's underlying business, and other market trends that may affect the reporting unit. The discount rate is based on the estimated weighted average cost of capital as of the test date of market participants in the industry in which the reporting unit operates. The assumptions used in the discounted cash flow model are subject to significant judgment and uncertainty.

During the year ended December 31, 2024, we identified indicators of impairment related to our legacy online software platform for our former business.

61

As a result of these impairment indicators, during the years ended December 31, 2025 and 2024, we recorded an impairment charge totaling $2,938,247, and $198,193, respectively, allocated as follows:

		Year Ended December 31,
		2025				2024
Vayu intellectual property impairment charge		$	---			$	---
GAC intellectual property impairment charge			---				---
Legacy software platform impairment charge			---				198,193
Total intellectual property impairment charge		$	---			$	198,193
Vayu goodwill impairment charge		$	437,065			$	---
GAC goodwill impairment charge			2,501,182				---
Total goodwill impairment charge		$	2,938,247			$	---
Total impairment charge		$	2,938,247			$	198,193

Future impairment could occur if the estimates used in the discounted cash flow models change. If our estimates of profitability in the reporting unit decline, the fair value estimate will decline. Additionally, changes in the broader economic environment could cause changes to our estimated discount rate and comparable company valuation indicators, which may impact the estimated fair value.