Quarterly Report for Quarter Ending June 30, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations.

Forward-Looking Statements

Statements in the following discussion and throughout this report that are not historical in nature are "forward-looking statements." You can identify forward-looking statements by the use of words such as "expect," "anticipate," "estimate," "may," "will," "should," "intend," "believe," and similar expressions, although not all forward-looking statements contain these identifying words. Although we believe the expectations reflected in these forward-looking statements are reasonable, such statements are inherently subject to significant risks and uncertainties and we can give no assurances that our expectations will prove to be correct. Actual results could differ materially from those described in this report because of numerous factors, many of which are beyond our control. These factors include, without limitation, those risk factors discussed in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 15, 2025. We undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date of this report or to reflect actual outcomes.

Overview

We were incorporated on June 5, 2014, under the laws of the State of Delaware. We are a consulting firm that provides business development and consulting services to start-up and development-stage companies. Our business model is to provide businesses in various industries with customized consulting services to meet their business needs and help them improve their business models, sales and marketing plans and internal operations, as well as introduce these businesses to experienced professional contacts that would be vital to the success of these companies.

The Company is not a registered investment company under the Investment Company Act of 1940, as amended (the "1940 Act") and does not engage primarily in the business of investing, reinvesting, or trading in securities. The Company is not managed like an active investment vehicle, is not an investment company registered under the 1940 Act and is not required to register under the 1940 Act.

Additionally, in accordance with the 1940 Act, Section 3(c)(1), the Company is not an Investment Company as defined by the 1940 Act because the Company does not have outstanding securities beneficially owned by more than one hundred persons and, at this time, the Company is not making and does not presently propose to make a public offering of its securities. Additionally, the Company has not and has no plans to purchase or acquire any securities issued by any registered investment company.

Our business focuses on providing advisement services to entrepreneurs and assisting business owners so that their ideas can be fully developed and implemented. Due to limited resources, lack of experienced management and competing priorities, start-up and developmental stage companies are not operating as efficiently as they can be, and therefore would, benefit from an outside party that could assist in developing and executing certain strategies. We utilize our knowledge in developing businesses, share practical experiences with our clients and introduce the business owners to experienced professionals who could help these inexperienced entrepreneurs further implement their ideas. Start-ups and development stage businesses across all industries commonly experience these certain "growing pains".

Plan of Operations

Our plan is to prepare our clients for the many inevitable challenges they will encounter and to develop a customized strategy that allows them to navigate these obstacles efficiently. This approach ensures that our clients can focus on scaling their businesses and marketing their products and services to their potential customers. Additionally, as our clients plan for an IPO, we help them align their operations, financial reporting, and compliance measures to meet the rigorous demands of public market investors, ensuring they are well-prepared for the complexities of going public.

Although we've only worked with three clients since inception, our goal is to add and service a minimum of two to three new clients between now and the end of 2025. We're marketing our services through both personal contact and online by (a) mining our existing network of professional contacts via personal outreach programs, which will also target international prospects that may wish to enter the US market; (b) expanding our network by attending targeted conferences and professional gatherings; and (c) utilizing our website at www.balancelabs.co, plus engaging potential clients on social media, including LinkedIn, Facebook and Twitter. However, because we have a limited budget allocated for an on-line marketing campaign, we anticipate that professionals within our professional network and personal referrals from companies that are satisfied with our professional services are likely to be our most significant and efficient near-term form of marketing.

We believe that we can support our clients with our existing full-time staff, supplemented with part-time sub-contracted professionals and service providers, as necessary. Between now and the end of 2025, we intend to formalize our relationships with these subcontractors so that we can offer our clients turn-key business development products and services.

Our primary requirement for funding is for working capital in order to accommodate temporary negative cash flows from operations (see "Liquidity and Capital Resources").

Results of Operations

Three Months Ended June 30, 2025 Compared with Three Months Ended June 30, 2024.

Overview

We reported a net loss of $146,142 and of $42,829 for the three months ended June 30, 2025 and 2024, respectively. This represents an increase of $110,537, or 241%, primarily due to an increase in professional fees and an unrealized loss of $10,363 on available for sale securities during the three months ended June 30, 2025, as compared to an unrealized gain of $14,083 in the same period for 2024.

General and Administrative Expenses

General and administrative expenses were $5,845 and $3,181 for the three months ended June 30, 2025 and 2024, respectively, an increase of $2,664 or 84% primarily due to an increase in bank service charges and corporate state franchise taxes.

Professional Fees

Professional fees were $26,681 and $8,545 for the three months ended June 30, 2025 and 2024, respectively, an increase of $18,136 or 212% due primarily to an increase in legal fees.

Other Income and Expense

Other expenses for the three months ended June 30, 2025 was $66,883. Other expenses for the three months ended June 30, 2024 was $42,829 due to an unrealized loss of $10,363 on available for sale securities during the three months ended June 30, 2025, as compared to an unrealized gain of $14,083 in the same period for 2024.

Unrealized gain or loss on available for sale securities

Unrealized loss on available for sale securities for the three months ended June 30, 2025 was $10,363. Unrealized gain on available for sale securities for the three months ended June 30, 2024 was $14,083. This represents an increase to unrealized loss on available for sale securities of $24,445 attributable to changes in the stock price of the securities than in prior periods.

Six Months Ended June 30, 2025 Compared with Six Months Ended June 30, 2024.

Overview

We reported a net loss of $152,548 and of $217,653 for the six months ended June 30, 2025 and 2024, respectively. This represents a decrease of $65,103, or 30%, primarily due a gain on settlement to the cancellation of an accounts payable balance by one of the company's professional services vendors during the six months ending June 30, 2025.

General and Administrative Expenses

General and administrative expenses were $10,107 and $7,222 for the six months ended June 30, 2025 and 2024, respectively, an increase of $2,885 or 40% primarily due to an increase in dues and subscriptions.

Professional Fees

Professional fees were $51,716 and $24,545 for the six months ended June 30, 2025 and 2024, respectively, an increase of $27,171 or 111% due to an increase in legal and accounting fees.

Other Income and Expense

Other income for the six months ended June 30, 2025 was $5,550, as compared to other expense for the six months ended June 30, 2024 of $94,054.

Unrealized gain or loss on available for sale securities

Unrealized loss on available for sale securities for the six months ended June 30, 2025 was $8,769. Unrealized gain on available for sale securities for the six months ended June 30, 2024 was $19,770. This represents an increase in unrealized loss on available for sale securities of $28,539 attributable to changes in the stock price of the securities.

Liquidity and Capital Resources

We measure our liquidity in a number of ways, including the following:

		June 30, 2025				December 31, 2024
			(Unaudited)
Cash		$	3,625			$	13,199
Working capital (deficiency)		$	(5,223,654	)		$	(5,071,106	)

Availability of Additional Funds

Except for the monthly consulting fee to our CEO and Chairman of the Board and the monthly lease of our virtual office, as described elsewhere in this annual report, we currently do not have any material commitments for capital expenditures. We are actively pursuing new client relationships. Even if we were to add a new client(s), due to our current lack of a diversified client base, there could be temporary imbalances between cash receipts and cash operating expenditures, which means that we may need additional capital. The engagement revenues associated with most client engagements will self-fund the in-house and sub-contractor services we need in order to supply products and services to our clients.

As of June 30, 2025, the Company had a working capital deficiency of $5,223,654. The Company used cash in operations of $57,574. In addition, the Company is working to manage its current liabilities while it continues to make changes in operations to further improve its cash flow and liquidity position.

Net Cash Used in Operating Activities

We experienced negative cash flows from operating activities for the six months ended June 30, 2025 and 2024, in the amount of $57,574 and $69,015, respectively. This was primarily due to a net loss of $152,548 and a change in accounts payable and accrued expenses of $86,205.

Our Auditors Have Issued a Going Concern Opinion

The Company's independent registered public accounting firm has expressed substantial doubt as to the Company's ability to continue as a going concern as of June 30, 2025. The unaudited condensed consolidated financial statements in this report on Form 10-Q have been prepared assuming that the Company will continue as a going concern. As discussed in the notes to the unaudited condensed consolidated financial statements, these conditions raise substantial doubt from the Company's ability to continue as a going concern. The Company's plans in regard to these matters are also described in the notes to the Company's unaudited condensed consolidated financial statements. The unaudited condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should the Company be unable to continue as a going concern.

The Company anticipates the receipt of funding within such period, but there can be no assurance that it will occur. If the Company is unable to meet its internal revenue forecasts or obtain additional financing on a timely basis, it may have to delay vendor payments and/or initiate cost reductions, which would have a material adverse effect on the Company's business, financial condition and results of operations, and ultimately it could be forced to discontinue the Company's operations, liquidate, and/or seek reorganization under the U.S. bankruptcy code. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, it may contain restrictions on our operations, in the case of debt financing or cause substantial dilution for our stockholders, in case of equity financing.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Critical Accounting Policies and Estimates

Use of Estimates

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Estimates may include those pertaining to accruals, stock-based compensation and income taxes. Actual results could materially differ from those estimates.

Revenue Recognition

The Company accounts for revenues under FASB ASC 606, which is a comprehensive new revenue recognition model that requires revenue to be recognized in a manner to depict the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. The Company considers revenue realized or realizable and earned when all the five following criteria are met: (1) Identify the Contract with a Customer, (2) Identify the Performance Obligations in the Contract, (3) Determine the Transaction Price, (4) Allocate the Transaction Price to the Performance Obligations in the Contract, and (5) Recognize Revenue When (or As) the Entity Satisfies a Performance Obligation.

Fair Value of Financial Instruments

The Company measures its financial assets and liabilities in accordance with GAAP. For certain of our financial instruments, including cash, accounts payable, and the short-term portion of long-term debt, the carrying amounts approximate fair value due to their short maturities.

We adopted accounting guidance for financial and non-financial assets and liabilities (ASC 820). This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements. This guidance does not apply to measurements related to share-based payments. This guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

●	Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.
●	Level 2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
●	Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use.

Recent Accounting Standards

We have implemented all new accounting standards that are in effect and may impact our consolidated financial statements and do not believe that there are any other new accounting standards that have been issued that might have a material impact on our financial position or results of operations.

In August 2020, FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity; Own Equity ("ASU 2020-06"), as part of its overall simplification initiative to reduce costs and complexity of applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial statements. Among other changes, the new guidance removes from GAAP separation models for convertible debt that require the convertible debt to be separated into a debt and equity component, unless the conversion feature is required to be bifurcated and accounted for as a derivative or the debt is issued at a substantial premium. As a result, after adopting the guidance, entities will no longer separately present such embedded conversion features in equity and will instead account for the convertible debt wholly as debt. The new guidance also requires use of the "if-converted" method when calculating the dilutive impact of convertible debt on earnings per share, which is consistent with the Company's current accounting treatment under the current guidance. The guidance is effective for financial statements issued for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years, with early adoption permitted, but only at the beginning of the fiscal year. The Company is still evaluating the impact of this standard on its financial statements

In November 2023, the FASB issued ASU 2023-07, which introduces enhancements to the disclosure requirements for reportable segments. The update mandates:

● More detailed disclosures regarding significant segment expenses.

● Alignment of segment reporting requirements with the information regularly reviewed by management.

● The Company adopted ASU 2023-07 effective January 1, 2024.

This adoption did not have a material impact on the Company's consolidated financial statements.