Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)

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

Forward-Looking Statements

This Quarterly Report Form 10-Q contains forward-looking statements. For this purpose, any statements contained in this Form 10-Q that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, words such as "may," "will," "expect," "believe," "anticipate," "estimate," "continue," or comparable terminology are intended to identify forward-looking statements. These statements by their nature involve substantial risks and uncertainties, and actual results may differ materially depending on a variety of factors, many of which are not within our control. Our actual results could differ materially from those set forth as a result of general economic conditions and changes in the assumptions used in making such forward-looking statements. The following discussion and analysis of our financial condition and results of operations should be read together with the unaudited condensed financial statements and accompanying notes and the other financial information appearing elsewhere in this report. The analysis set forth below is provided pursuant to applicable Securities and Exchange Commission regulations and is not intended to serve as a basis for projections of future events. All forward-looking statements speak only as of the date they are made. We undertake no obligation to update such statements to reflect events or circumstances that exist after the date on which they are made.

Our Company

Eva Live Inc. (the "Company") was incorporated under the laws of the State of Nevada on August 27, 2002, as International Pit Boss Gaming, Inc. On October 1, 2002, the Company merged with Pro Roads Systems, Inc. (a Florida corporation), a public shell company traded on the Pink Sheets. Pro Roads Systems, Inc. had no operations before the merger. The purpose of the merger was to change the Company's domicile from Florida to Nevada. From its inception to 2006, the Company designed and developed software for the gaming industry. The Company changed its name on February 14, 2006, to Logo Industries Corporation and, on November 18, 2008, to Malwin Ventures Inc. On February 11, 2014, the Company announced negotiations with Impact Future Media LLC, and its President/Founder, Francois Garcia, acquired 100% of Impact Future Media LLC and its media and entertainment assets. The Company announced the closing of this transaction on March 25, 2014. From March 2014 to September 28, 2021, the Company was involved in the entertainment, publishing, and interactive industries.

On September 28, 2021 (the "Acquisition Date"), the Company merged into EvaMedia Corp. ("EvaMedia"). Upon completion of the reverse merger, the Company acquired all issued and outstanding shares of EvaMedia's capital stock. As a result, the Company issued 110,192,177 shares of the Company's common stock to shareholders of EvaMedia, and immediately following the Acquisition, 111,169,525 shares of common stock were issued and outstanding. As a result, EvaMedia's shareholders control 99.12% of the issued and outstanding shares of the Company on a fully diluted basis. Following the Acquisition, David Boulette of EvaMedia became the company's CEO, director, and controlling shareholder. He appointed two additional board members from EvaMedia, Phil Aspin and Daryl Walser. Terry Fields remained the only board member of the Company.

We deemed EvaMedia as an accounting acquirer based on the following facts: (i) after the reverse merger, former shareholders of EvaMedia held a majority of the voting interest of the combined company; (ii) former Board of Directors of EvaMedia possess majority control of the Board of Directors of the combined company; (iii) members of the management of EvaMedia are responsible for the management of the combined company. As such, we have treated the financial statements of EvaMedia as the historical financial statements of the combined company, and (iv) EvaMedia's relative size, measured in assets and revenues, is significantly larger than that of the Company.

We have identified the Company as the legal acquirer, as it is the entity that issued securities. Comparatively, we have identified EvaMedia as the legal acquiree, the entity whose equity interests are acquired.

Since September 28, 2021, the Company has operated at the junction of digital marketing and media monetization.

On September 9, 2021, the Company completed a reverse split in the amount of 1-for-150, changed the Company's name to Eva Live Inc., changed the Company's trading symbol from "MLWN" to "GOAI," and executed an Acquisition Agreement resulting in a change of control of the Company. On September 10, 2021, the Financial Industry Regulatory Authority ("FINRA") announced the effectiveness of a change in the Company's name from "Malwin Ventures, Inc." to "Eva Live, Inc." and a change in the Company's ticker symbol from "MLWN" to the new trading symbol "GOAI". Trading under the new ticker symbol began at market opening on July 11, 2021.

We execute our business through the Eva Platform based on Artificial Intelligence, or AI, to match advertising campaigns to specific ad spots one at a time. Our system creates conversion mapping tables that allow us to increase conversion rates by analyzing those trends with optimized historical conversion rates and further capitalizing on and improving those rates. We leverage "big data," an accumulation of data that is too large and complex for traditional database management tools to process. Since more companies are attempting to leverage big data to make strategic business decisions, we have built automated tools that analyze the data and feed the relevant information into our decision logic. We have designed our solution to optimize brand campaigns to create brand awareness and direct response campaigns with a fixed conversion point.

Corporate Information

The Company's principal office is The Plaza, 1800 Century Park East, Suite 600. Our telephone number is (310) 229-5981, and our corporate website is www.eva.live.

Going Concern

Although our financial statements have been prepared on a going concern basis, we must raise additional capital in order to continue as a going concern. See "Risk Factors - Risks Related to the Company - There is doubt that the Company can continue as a "going concern" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, and Note 3 - Going Concern in this report.

PLAN OF OPERATIONS

The Company's near-term plan of operations focuses on: (i) continued execution of the Eva Platform digital advertising and media monetization business, which comprises all revenue other than the AI-driven marketing services described below and generated revenue of $3,042,487 and $6,294,021 for the three and six months ended June 30, 2026, compared with $4,138,712 and $7,820,232 for the comparative prior-year periods; (ii) growth of the AI-driven marketing services line of business introduced in the first quarter of 2026, which comprises solely the Jet.AI, Inc. and Braiin Limited service contracts described in Note 4 and generated revenue of $1,161,903 and $1,813,600 for the three and six months ended June 30, 2026, with no comparable revenue in either prior-year period; (iii) deployment of the cash proceeds received from the Streeterville Initial Note ($6,405,000 net of debt issuance costs) toward working capital and growth initiatives; and (iv) continued reduction of legacy convertible note obligations through scheduled cash repayments and holder-elected conversions, as described in Note 9.

As of June 30, 2026, the Company had 39,252,186 shares of common stock issued and outstanding and approximately $2,238,216 of unrestricted cash. The Company entered into an Equity Distribution Agreement with Maxim Group LLC on April 14, 2026, supporting an at-the-market offering of up to $100,000,000 in common stock under the Company's effective Form S-3 shelf registration statement (Registration No. 333-294416, declared effective March 24, 2026). Sales under the Equity Distribution Agreement are at the Company's discretion and may be used to fund operations, working capital needs, and other general corporate purposes.

Financial Conditions at June 30, 2026 and December 31, 2025

The following discussion compares the Company's financial position at June 30, 2026, to its financial position at December 31, 2025.

Total Assets

Total assets increased by $8,059,262, from $16,315,862 at December 31, 2025, to $24,375,124 at June 30, 2026. The increase reflects $2,035,692 of cash generated principally from financing activities, the $3,000,000 equity interest in PSQUARED Inc. received in settlement of a receivable, $1,209,005 of marketable securities received as customer consideration and remeasured to fair value, $1,458,391 of growth in net accounts receivable, and $311,852 of capitalized website development costs.

Cash and Cash Equivalents

Cash and cash equivalents increased by $2,035,692, from $202,524 at December 31, 2025, to $2,238,216 at June 30, 2026. The increase was funded by financing activities rather than by operations; operating activities used cash of $5,229,216 during the six months ended June 30, 2026.

Accounts Receivable, Net

Accounts receivable, net increased by $1,458,391, from $16,006,624 at December 31, 2025, to $17,465,015 at June 30, 2026, net of an allowance for doubtful accounts of $1,379,519 at each date. Realization of this balance in cash is central to funding operations. Balances aged more than 90 days from invoice date were $15,408,659, or approximately 88% of the net balance, net of the $(3,000,000) credit arising from the settlement of Psquared Inc. receivables in equity; balances aged 90 days or less totaled $2,056,356. See Note 2 - Summary of Significant Accounting Policies for the full aging schedule.

Marketable Securities

The Company recorded marketable securities of $1,209,005 at June 30, 2026 (none at December 31, 2025). The marketable securities represent common shares of customers received as non-cash consideration under investor relations services contracts, carried at fair value. The Company recognized an unrealized gain of $495,405 on these securities for the six months ended June 30, 2026. In addition, the Company holds a $3,000,000 non-marketable equity interest in PSQUARED Inc. received in settlement of accounts receivable, which is classified as a non-current asset.

Original Issue Discount and Deferred Financing Costs, Net

Original issue discount, net increased by $49,997, from $73,482 at December 31, 2025, to $123,479 at June 30, 2026, and deferred financing costs, net decreased by $5,181, from $18,044 to $12,863, in each case reflecting discounts and costs added on notes issued during the period less amortization and amounts written off on conversion. These balances are presented as separate current assets and are not netted against the related notes payable.

Property and Equipment, Net

Property and equipment, net decreased by $494, from $14,919 at December 31, 2025, to $14,425 at June 30, 2026, reflecting depreciation for the period. The Company did not acquire or dispose of significant property and equipment during the period.

Accounts Payable and Payroll Liabilities

Accounts payable and payroll liabilities decreased by $2,933,844, from $2,933,844 at December 31, 2025, to nil at June 30, 2026. The balance was settled substantially in common stock rather than cash, including $4,532,974 of shares issued in settlement of accounts payable during the six months ended June 30, 2026.

Accrued Expenses

Accrued expenses decreased by $2,633,885, from $2,633,885 at December 31, 2025, to nil at June 30, 2026, reflecting the June 10, 2026, settlement of accrued compensation owed to officers, directors and the spouse of the Chief Executive Officer through the issuance of 825,483 shares of common stock valued at $1,882,094, together with cash payments made during the period.

Accrued Interest

Accrued interest increased by $215,331, from $68,601 at December 31, 2025, to $283,932 at June 30, 2026, principally reflecting stated interest on the Streeterville Initial Note that accretes to the outstanding balance rather than being paid in cash.

Notes Payable, Current Portion

Notes payable (current) increased by $340,021, from $985,330 at December 31, 2025, to $1,325,351 at June 30, 2026, comprising Diagonal of $913,211, Boot of $202,140, the D. Allison Note of $100,000 and the Global Alliance Note of $110,000. These are face amounts; unamortized original issue discount of $123,479 and deferred financing costs of $12,863 are presented as separate current assets and are not netted against the notes. The change comprised:

Cash movements during the period:

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$1,043,000 of cash proceeds from the issuance of new convertible promissory notes, comprising Diagonal Note 6 of $100,000 and Note 7 of $350,000 in the first quarter, Diagonal Note 8 of $393,000 in the second quarter, and Boot Notes #3 and #4 aggregating $200,000 in the first quarter.

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$(298,429) of cash repayments of note principal, comprising $266,069 on the Diagonal notes and $32,360 on the Boot notes; total cash paid to these lenders including interest was $327,406.

Non-cash movements during the period:

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$(578,326) of principal converted into common stock, comprising Diagonal Notes 2, 3, 4 and 5 of $450,981 and Boot Notes #1 and #2 of $127,345.

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$207,810 of original issue discount and deferred financing costs added to face value on the notes issued during the period ($186,810 of OID, comprising Diagonal of $152,310 and Boot of $34,500, and $21,000 of deferred financing costs), together with a $34,500 face value adjustment to gross Boot Notes #3 and #4 to their contractual face value.

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$(34,038) reclassification of payments originally recorded against Traffic Purchase expense in the fourth quarter of 2025 that related to Boot Note #1. The D. Allison Note of $100,000 and the Global Alliance Note of $110,000 were unchanged during the period.

Deferred Revenue

The contract liability of $549,803 at March 31, 2026, was fully recognized as revenue during the three months ended June 30, 2026, and no deferred revenue remained at June 30, 2026 (none at December 31, 2025).

Convertible Note Payable, Net of Unamortized Discount

The Company recorded a convertible note payable, net of unamortized discount, of $1,099,862 at June 30, 2026 (none at December 31, 2025), representing the $6,475,000 face value of the Streeterville Initial Note outstanding at that date less unamortized discount of $5,375,138. The note matures February 26, 2028, and is classified as a long-term liability.

Derivative Liability

The Company recorded a derivative liability of $4,562,001 at June 30, 2026 (none at December 31, 2025). The derivative liability represents the compound embedded derivative bifurcated from the Streeterville Initial Note under ASC 815-15, initially recognized at $6,662,000 on February 26, 2026, reduced by $706,541 reclassified to additional paid-in capital on conversions during the second quarter and remeasured to fair value at each reporting date. It is classified within Level 3 of the fair value hierarchy.

Stockholders' Equity

Total stockholders' equity increased by $7,409,776, from $9,694,202 at December 31, 2025, to $17,103,978 at June 30, 2026.

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Common stock and additional paid-in capital increased by an aggregate of $19,598,609, reflecting $11,269,169 of stock-based compensation and shares issued for services (including $7,611,669 of officer stock-based compensation recognized with no shares issued), shares issued in settlement of accounts payable, accrued related-party liabilities and convertible notes, and $456,166 of net proceeds from at-the-market sales of common stock.

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Deferred stock-based compensation of $(1,875,000) was recognized as a contra-equity balance representing the unvested portion of equity awards granted during the period.

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Accumulated deficit increased by $10,313,833, reflecting the net loss for the six months ended June 30, 2026, from $20,342,362 at December 31, 2025 to $30,656,195 at June 30, 2026.

Working Capital

The Company's working capital increased from $9,679,283 at December 31, 2025, to $19,439,564 at June 30, 2026, an increase of $9,760,281, reflecting total current assets of $21,048,847 and total current liabilities of $1,609,283. Working capital is composed principally of non-cash assets: net accounts receivable of $17,465,015 represented approximately 83% of total current assets and marketable securities a further $1,209,005, while cash represented approximately 11%. See Note 3 - Going Concern.

RESULTS OF OPERATIONS

Three Months Ending June 30, 2026 and 2025

The following table summarizes the Company's results of operations for the three months ended June 30, 2026, compared to the three months ended June 30, 2025:

		Three Months Ended				Three Months Ended				$ Change				% Change
		June 30, 2026				June 30, 2025				(2026 vs 2025)				(2026 vs 2025)
Revenue
Total revenue		$	4,204,390			$	4,138,712			$	65,678				1.6	%
Operating expenses
General and administrative			2,017,316				331,451				1,685,865				508.6	%
Media traffic purchase			3,049,042				1,175,780				1,873,262				159.3	%
Amortization and depreciation			245				380				(135	)			-35.5	%
Total operating expenses			5,066,603				1,507,611				3,558,992				236.1	%
Operating income (loss)			(862,213	)			2,631,101				(3,493,314	)			-132.8	%
Other income (expense)
Interest expense			(1,178,007	)			(6,000	)			(1,172,007	)			19,533.5	%
Unrealized gain (loss) on marketable securities			636,005				-				636,005				NM
Change in fair value of derivative liability			(345,542	)			-				(345,542	)			NM
Loss on settlement of payable			-				-				-				NM
Loss on issuance of convertible note			-				-				-				NM
Total other income (expense)			(887,544	)			(6,000	)			(881,544	)			14,692.4	%
Net loss		$	(1,749,757	)		$	2,625,101			$	(4,374,858	)			-166.7	%

Six Months Ending June 30, 2026 and 2025

The following table summarizes the Company's results of operations for the six months ended June 30, 2026, compared to the six months ended June 30, 2025:

		Six Months Ended June 30, 2026				Six Months Ended June 30, 2025				$ Change (2026 vs 2025)				% Change (2026 vs 2025)
Total revenue		$	8,107,621			$	7,820,232			$	287,389				3.7	%
Operating expenses
General and administrative			11,297,250				708,836				10,588,414				1,493.8	%
Media traffic purchase			6,778,484				2,476,546				4,301,938				173.7	%
Amortization and depreciation			494				787				(293	)			-37.2	%
Total operating expenses			18,076,228				3,186,169				14,890,059				467.3	%
Operating income (loss)			(9,968,607	)			4,634,063				(14,602,670	)			-315.1	%
Other income (expense)
Interest expense			(1,677,089	)			(13,268	)			(1,663,821	)			12,539.7	%
Unrealized gain on marketable securities			495,405				-				495,405				NM
Change in fair value of derivative liability			1,393,458				-				1,393,458				NM
Loss on settlement of payable			(310,000	)			-				(310,000	)			NM
Loss on issuance of convertible note			(247,000	)			-				(247,000	)			NM
Total other income (expense)			(345,226	)			(13,268	)			(331,958	)			2,501.9	%
Net income (loss)		$	(10,313,833	)		$	4,620,795			$	(14,934,628	)			-323.2	%

Revenue

Total revenue was $4,204,390 for the three months ended June 30, 2026, compared to $4,138,712 for the three months ended June 30, 2025, an increase of $65,678, or 1.6%. For the six months ended June 30, 2026, total revenue was $8,107,621, compared to $7,820,232 for the six months ended June 30, 2025, an increase of $287,389, or 3.7%. While total revenue was substantially flat between periods, the composition of revenue changed materially. Brand marketing revenue was $4,204,390 for the three months ended June 30, 2026, compared to $48,000 in the comparative quarter, and $6,781,329 for the six months ended June 30, 2026, compared to $142,074 for the six months ended June 30, 2025. XML revenue was nil for the three months ended June 30, 2026, compared to $4,090,712 in the comparative quarter, and $1,326,292 for the six months ended June 30, 2026, compared to $7,678,158 for the six months ended June 30, 2025. The Company's revenue base has therefore shifted almost entirely from XML syndication to brand marketing and customer acquisition campaigns, and the Company generated no XML revenue during the second quarter of fiscal 2026. Presented on the disaggregated basis in Note 4, digital advertising and media monetization revenue - comprising all revenue other than the Jet.AI and Braiin arrangements - was $3,042,487 and $6,294,021 for the three and six months ended June 30, 2026, compared with $4,138,712 and $7,820,232 in the prior-year periods, while AI-driven marketing services revenue, comprising solely those two customers, was $1,161,903 and $1,813,600, with no comparable prior-year revenue. Revenue is generated primarily from media buying, customer acquisition campaigns, and investor relations services. A portion of revenue was settled in non-cash consideration: equity securities with a fair value at receipt of $713,600 were received under customer contracts during the six months ended June 30, 2026.

General & Administrative Costs

General and administrative expense was $2,017,316 for the three months ended June 30, 2026, compared to $331,451 for the three months ended June 30, 2025, an increase of $1,685,865, or 508.6%. For the six months ended June 30, 2026, general and administrative expense was $11,297,250, compared to $708,836 for the six months ended June 30, 2025, an increase of $10,588,414, or 1,493.8%. The prior-year amounts group professional fees with general and administrative expense to conform to the current-period caption.

The six-month increase is predominantly non-cash. It includes $7,611,669 of stock-based compensation recognized on the January 1, 2026, vesting of the first tranche of the Chief Executive Officer's option award. Excluding that charge, general and administrative expense for the six months ended June 30, 2026, was $3,685,581, comprising principally professional and consulting fees of approximately $2,529,686 (consulting fees of $1,491,647, professional fees of $799,864, legal fees of $189,801 and review and audit fees of $48,375), advertising and promotion of $624,208, salaries and wages of $411,000, payroll expenses of $46,380, insurance of $30,351, office supplies of $18,809 and rent of $8,887, with the balance comprising bank service charges, server fees and other administrative costs.

For the three months ended June 30, 2026, no stock-based compensation was recognized in respect of the option award, and general and administrative expense of $2,017,316 comprised principally professional and consulting fees of approximately $1,202,525 (consulting fees of $573,610, professional fees of $428,364, legal fees of $189,801 and review and audit fees of $10,750), advertising and promotion of $509,733 and salaries and wages of $205,500. Sequentially, general and administrative expense declined from $9,279,934 in the first quarter of fiscal 2026 to $2,017,316 in the second quarter, principally reflecting the non-recurrence of the option-award charge and of the professional and consulting fees associated with the fiscal 2025 Annual Report on Form 10-K and the Streeterville Note placement.

Media Traffic Purchase

Media traffic purchase expense was $3,049,042 for the three months ended June 30, 2026, compared to $1,175,780 for the three months ended June 30, 2025, an increase of $1,873,262, or 159.3%. For the six months ended June 30, 2026, media traffic purchase expense was $6,778,484, compared to $2,476,546 for the six months ended June 30, 2025, an increase of $4,301,938, or 173.7%. The increase reflects an expansion in media buying and customer acquisition activity through Hottest Media LLC, Advertala PTE, Wise Ltd., and other media partners in support of the higher revenue base. Media traffic purchase expense generally moves directionally with revenue, and the year-over-year increase also reflects a change in the mix of customer acquisition channels.

Amortization and Depreciation

Amortization and depreciation expense was $245 for the three months ended June 30, 2026, compared to $380 for the three months ended June 30, 2025, a decrease of $135, or 35.5%. For the six months ended June 30, 2026, amortization and depreciation expense was $494, compared to $787 for the six months ended June 30, 2025, a decrease of $293, or 37.2%. The decrease reflects the continuing depreciation of property and equipment that is approaching the end of its useful life. The Company did not acquire or dispose of significant property and equipment during the period.

Operating Income (Loss)

The Company recognized an operating loss of $862,213 for the three months ended June 30, 2026, compared to operating income of $2,631,101 for the three months ended June 30, 2025, an unfavorable variance of $3,493,314. For the six months ended June 30, 2026, the Company recognized an operating loss of $9,968,607, compared to operating income of $4,634,063 for the six months ended June 30, 2025, an unfavorable variance of $14,602,670. The change in operating results primarily reflects the non-cash equity-based compensation recognized within general and administrative expense in the first quarter of 2026, together with higher media traffic purchase expense supporting the revenue base, partially offset by a modest increase in revenue.

Interest Expense

Interest expense was $1,178,007 for the three months ended June 30, 2026, compared to $6,000 for the three months ended June 30, 2025. For the six months ended June 30, 2026, interest expense was $1,677,089, compared to $13,268 for the six months ended June 30, 2025, an increase of $1,663,821. Of the six-month amount, $1,388,768 represents amortization of debt discount, original issue discount and deferred financing costs, including accelerated amortization recognized on notes converted during the period, consistent with the add-backs presented in the condensed consolidated statements of cash flows, and $288,321 represents stated and other interest, of which $201,670 relates to the senior secured convertible promissory note issued to Streeterville Capital, LLC that accretes to the outstanding balance rather than being paid in cash. Only a small portion of interest expense for the period was paid in cash. See Note 9 - Debt Financing for further details.

Unrealized Gain (Loss) on Marketable Securities

The Company recognized an unrealized gain on marketable securities of $636,005 for the three months ended June 30, 2026, and an unrealized gain of $495,405 for the six months ended June 30, 2026 (no comparable amounts in the prior-year periods). The amounts reflect the mark-to-market adjustment of common shares of Jet.AI Inc. and Braiin Limited received as non-cash consideration under investor relations services contracts.

Change in Fair Value of Derivative Liability

The Company recognized a loss on the change in fair value of derivative liability of $345,542 for the three months ended June 30, 2026, and a net gain of $1,393,458 for the six months ended June 30, 2026 (no comparable amounts in the prior-year periods). The amounts reflect the mark-to-market remeasurement of the compound embedded derivative bifurcated from the senior secured convertible promissory note issued to Streeterville Capital, LLC in February 2026. The derivative was initially recognized at a fair value of $6,662,000 on the issuance date, was remeasured to $4,923,000 at March 31, 2026 and to $4,562,001 at June 30, 2026, and was reduced by $706,541 reclassified to additional paid-in capital on conversions during the second quarter. The fair value measurement is sensitive to changes in the Company's common stock price, volatility, and the conversion-trigger probability. See Note 2 - Summary of Significant Accounting Policies for further detail.

Loss on Settlement of Payable

The Company recognized a loss on settlement of payable of $310,000 for the six months ended June 30, 2026, and no such loss for the three months ended June 30, 2026 (no comparable amounts in the prior-year periods). The loss reflects the issuance of 500,000 shares of common stock to Hottest Media LLC in February 2026 in settlement of outstanding trade accounts payable. The shares were issued at 80% of the closing price of the Company's common stock on February 5, 2026; the loss reflects the difference between the carrying value of the settled payable ($1,240,000) and the fair value of the common stock issued ($1,550,000).

Loss on Issuance of Convertible Note

The Company recognized a loss on issuance of convertible note of $247,000 for the six months ended June 30, 2026, and no such loss for the three months ended June 30, 2026 (no comparable amounts in the prior-year periods). The loss reflects the excess of the initial fair value of the compound embedded derivative bifurcated from the Streeterville Capital senior secured convertible promissory note ($6,662,000) over the available debt discount allocation ($6,415,000) on the issuance date of February 26, 2026. See Note 9 - Debt Financing for further details.

Net Loss

The Company recognized a net loss of $1,749,757, or $(0.05) per basic and diluted share, for the three months ended June 30, 2026, compared to net income of $2,625,101, or $0.08 per basic and diluted share, for the three months ended June 30, 2025. For the six months ended June 30, 2026, the Company recognized a net loss of $10,313,833, or $(0.28) per basic and diluted share, compared to net income of $4,620,795, or $0.15 per basic and diluted share, for the six months ended June 30, 2025. The change from net income to net loss is driven predominantly by non-cash charges rather than cash costs: $11,269,169 of stock-based compensation and shares issued for services recognized within general and administrative expense, and $1,388,768 of debt discount, original issue discount and deferred financing cost amortization within interest expense. Cash used in operating activities for the six months was $5,229,216. The weighted-average number of common shares outstanding, basic and diluted, was 37,331,301 for the three months and 36,676,809 for the six months ended June 30, 2026, compared to 31,341,436 in each of the prior-year periods.

LIQUIDITY AND CAPITAL RESOURCES

As of June 30, 2026, the Company had cash and cash equivalents of $2,238,216, compared to $202,524 at December 31, 2025. At June 30, 2026, the Company had total current assets of $21,048,847, total current liabilities of $1,609,283 and working capital of $19,439,564. Accounts receivable, net of an allowance for doubtful accounts of $1,379,519, was $17,465,015, and realization of that balance is central to funding operations. The principal source of liquidity during the six months ended June 30, 2026, was the senior secured convertible promissory note issued to Streeterville Capital, LLC in February 2026 (the "Streeterville Initial Note"), which generated net cash proceeds of approximately $6,970,000. The Streeterville Initial Note has a face value of $7,560,000; cash proceeds at issuance were reduced by an original issue discount of $560,000, an investor closing expense reimbursement of $30,000, placement agent fees of $402,500 paid to Maxim Group LLC, and legal fees of $152,500 paid to Sichenzia Ross Ference Carmel LLP, in each case netted from the wire at closing or paid promptly thereafter. The Company also received $1,043,000 of proceeds from other promissory notes and $456,166 of net proceeds from at-the-market sales of common stock during the period. See Note 9 - Debt Financing for further information regarding the terms of these notes.

Net cash used in operating activities was $5,229,216 for the six months ended June 30, 2026, compared to net cash provided by operating activities of $2,341 for the six months ended June 30, 2025. The increase in operating cash usage primarily reflects the increase in accounts receivable arising from the timing of customer collections and the settlement of previously accrued obligations, partially offset by non-cash add-backs in the reconciliation of net loss to operating cash flow, including stock-based compensation of $8,011,669, shares issued for services of $3,257,500, amortization of debt discount, original issue discount and deferred financing costs of $1,388,768 and stated interest accreted to the Streeterville Initial Note of $201,670, less the $1,393,458 net gain on remeasurement of the compound embedded derivative and $1,209,005 of marketable securities received as consideration.

Net cash used in investing activities was $311,852 for the six months ended June 30, 2026, compared to $7,581 for the six months ended June 30, 2025.

Net cash provided by financing activities was $7,576,760 for the six months ended June 30, 2026, compared to $189,963 for the six months ended June 30, 2025. Financing activities comprised $6,970,000 of net proceeds from the Streeterville Initial Note, $1,043,000 of proceeds from other promissory notes and $456,166 of net proceeds from the at-the-market equity program, less $327,406 of note repayments and $565,000 of debt issuance costs paid. Net cash increased $2,035,692 during the six months ended June 30, 2026, to $2,238,216 at period end, compared to an increase of $184,723 to $261,079 in the prior-year period.

Approximately 88% of the Company's net accounts receivable balance at June 30, 2026, was outstanding for more than 90 days from the invoice date. Management is actively engaged with the Company's largest counterparties regarding the collection of these balances and, based on counterparty confirmations received to date, the Company's historical collection experience with these counterparties, and the absence of disputes regarding amounts owed, management expects substantially all of these balances to be collected within the look-forward period.

On April 14, 2026, the Company entered into an Equity Distribution Agreement with Maxim Group LLC providing for the offer and sale, from time to time and at the Company's discretion, of shares of the Company's common stock having an aggregate offering price of up to $100,000,000 in transactions deemed to be "at-the-market offerings" under Rule 415 promulgated under the Securities Act of 1933. Sales under the Equity Distribution Agreement are conducted under the Company's effective Form S-3 shelf registration statement (Registration No. 333-294416). Maxim is entitled to a fixed commission of 3.0% of the gross sales price of shares sold. The Equity Distribution Agreement has a term of twelve months from execution. From execution through June 30, 2026, the Company sold 114,384 shares under the agreement for gross proceeds of approximately $470,274 and net proceeds of $456,166. Because the Company's public float is below $75,000,000, sales under the Form S-3 are limited by General Instruction I.B.6 thereto; see Note 3 - Going Concern.

GOING CONCERN CONSIDERATION

Although the accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, management has evaluated, in accordance with FASB Accounting Standards Codification 205-40, whether the conditions and events described in Note 3 - Going Concern, considered in the aggregate, raise substantial doubt about the Company's ability to continue as a going concern within one year after the date these financial statements are issued. Management has concluded that the conditions and events described in Note 3 - including the operating loss and negative operating cash flow for the six months ended June 30, 2026, an accumulated deficit of $30,656,195 at June 30, 2026, the concentration of working capital in aged accounts receivable, elevated media traffic purchase costs as a percentage of revenue, and the contingent redemption right of the Streeterville Initial Note - raise substantial doubt, and that management's plans do not alleviate that substantial doubt. See Note 3 - Going Concern for the full going-concern discussion.

CRITICAL ACCOUNTING POLICIES AND SIGNIFICANT JUDGMENTS AND ESTIMATES

We have based our management's discussion and analysis of our financial condition and results of operations on our financial statements, prepared in accordance with U.S. generally accepted accounting principles. In preparing our financial statements, we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenues and expenses for the reporting periods. Our actual results may differ from these estimates, and such differences could be material and uncertain, particularly in the current economic environment.

In more detail, we have described significant accounting policies in Note 2 of our annual financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. We evaluate our critical accounting estimates and judgments, as required by our policies, on an ongoing basis and update them as necessary in response to changing conditions.

JOBS ACT ACCOUNTING ELECTION

We are an "emerging growth company," as defined in the JOBS Act. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued after the enactment of the JOBS Act until those standards apply to private companies. As an emerging growth company, we have elected to use the extended transition period; as a result, the Company may delay the adoption of certain accounting standards until the standards apply to private companies.

OFF-BALANCE SHEET ARRANGEMENTS AND CONTRACTUAL OBLIGATIONS

We have not engaged in any off-balance sheet arrangements as defined in Item 303(b) of the SEC's Regulation S-K. We did not have any relationships with unconsolidated organizations or financial partnerships, such as structured finance or special purpose entities that would have been established to facilitate off-balance sheet arrangements or other contractually narrow or limited purposes.

RECENT ACCOUNTING PRONOUNCEMENTS

The amendments in the ASU are effective for fiscal years beginning after January 1, 2020, including interim periods within those fiscal years. Early adoption of the standard is permitted, including adoption in interim or annual periods for which financial statements have not yet been issued. We have adopted this ASU as of January 1, 2020, for ASC 606, Revenue Recognition, and Amended ASU 2016-02, Leases (Topic 840). The ASU is currently not expected to have a material impact on our consolidated financial statements. While we have described significant accounting policies in more detail in Note 2 of our annual financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, we believe the accounting policies as described in Note 2 to be critical to the judgments and estimates used in the preparation of our financial statements.