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

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

CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS

Some statements in this Quarterly Report on Form 10-Q of Bubblr, Inc. (hereinafter referred to as the "Company," "Bubblr," "BBLR," "Ethical Web.AI," "EW", "we," "us," or "our") discuss future expectations, include projections of our plans for operations or financial condition, or contain other forward-looking information. In this Quarterly Report, forward-looking statements are identified by words such as "anticipate," "plan," "believe," "expect," "estimate," and similar terms. These forward-looking statements involve future risks and uncertainties, and certain factors could cause actual results or plans to differ significantly from those expressed or implied. These statements are subject to known and unknown risks, uncertainties, and other factors that could lead to material differences in actual results compared to those contemplated by the statements. The forward-looking information is based on numerous factors and assumptions. Readers should not place undue reliance on these forward-looking statements, which are only applicable as of the date of this Quarterly Report. Key factors that could cause actual results to differ from projections include, for example:

	●	Our strategies, prospects, plans, expectations, forecasts, or objectives;
	●	Our ability to achieve marketable products and the costs and timing thereof;
	●	Acceptance of our products by our target market and our ability to compete in such a market;
	●	Our ability to raise additional financing when needed and the terms and timing thereof;
	●	Our ability to expand, protect, and maintain our intellectual property rights;
	●	Our future operations, financial position, revenues, costs, expenses, uses of cash, capital requirements, our need for additional financing, or the period for which our existing cash resources will be sufficient to meet our operating requirements;
	●	Our analysis of the target market for our platform;
	●	Regulatory developments in the United States and other countries;
	●	Our compliance with all applicable laws, rules, and regulations, including those of the Securities and Exchange Commission, or SEC;
	●	Our ability to compete in the United States and internationally with more substantial companies;
	●	General economic, business, political, and social conditions;
	●	Our reliance on and our ability to retain (and, if necessary, timely recruit and replace) our officers, directors, and key employees, and their ability to timely and competently perform;
	●	Our ability to generate significant revenues and achieve profitability;
	●	Our ability to manage the growth of our business;
	●	The commercialization of our platform, marketing capabilities, and strategies;
	●	Our ability to expand, protect, and maintain our intellectual property position;
	●	The success of competing third-party platforms;
	●	Our ability to fully remediate our identified internal control material weaknesses;
	●	Our ability to comply with regulatory requirements relating to our business and the costs of compliance with those requirements;
	●	The specific risk factors discussed under the heading "Risk Factors" set forth in this Quarterly Report; and
	●	Various other matters, many of which are beyond our control.

Readers are advised not to rely too heavily on the forward-looking statements in this document, which speak only as of the date hereof. The Company believes the information in this Form 10-Q to be accurate as of the same date. However, changes may happen after this date. The Company will not update that information unless required by law or as part of our usual public disclosure practices. Also, the discussion of our financial condition and results of operations should be read together with the financial statements and notes included in this Form 10-Q.

Business Overview

Bubblr, Inc., doing business as EthicalWeb AI ("EW"), is an artificial intelligence company built on a foundation of patented intellectual property. The Company is entering a phase of anticipated revenue growth driven by its enterprise-focused products, which are designed to capture emerging opportunities in the artificial intelligence ("AI") and data-driven technology markets.

The rapid expansion of generative AI across consumer and enterprise segments underscores how EW's combination of advanced technical expertise, proprietary intellectual property ("IP"), and agile development practices positions the Company to identify, pursue, and monetize high-value market opportunities.

AI Vault

The rise of generative AI presents substantial opportunities for organizations to increase productivity by automating and streamlining tasks and workflows. While the enterprise generative AI market is in its preliminary stages, adoption of large language model ("LLM") applications-most notably ChatGPT-has accelerated rapidly. Simultaneously, data security and privacy remain critical concerns, as many widely used consumer tools lack clear, enforceable controls to prevent the upload of sensitive corporate information.

As a result, many organizations restrict or prohibit the use of generative AI tools due to concerns regarding data leakage beyond their controlled environments. In some cases, these restrictions take the form of blanket bans on external tools based on perceived privacy and security risks. Nonetheless, third-party industry reports indicate that employees continue to utilize such tools without corporate authorization, including by entering sensitive, non-public corporate data and proprietary details into these open platforms.

EW has identified strong market demand for a solution that enables enterprises to realize the productivity benefits of generative AI while minimizing the operational risks associated with managing and exposing proprietary corporate data. In response, EW has developed and launched AI Vault, an enterprise solution available through the Amazon Web Services ("AWS") Marketplace. AI Vault is designed to provide a secure, controlled environment for generative AI, allowing enterprises to harness AI-driven productivity gains while maintaining robust protections for their most sensitive data assets.

EthicalWeb.AI Search Platform

The EthicalWeb.AI search platform is the technical implementation of U.S. Patent No. 10,977,387. This platform enables search functionality across inventory and related data, providing users with real-time insights and an enhanced user experience. EW believes the platform has the potential to serve as a transformative white-label solution for leading technology companies and firms across strategic sectors. The Company continues to actively pursue commercial partnerships that utilize this and other elements of its patented intellectual property portfolio.

Key functional areas of the EthicalWeb.AI search platform include:

	●	Decentralized Network Architecture: Implements decentralized control, revenue collection, and delivery, enabling partners to establish a global network of locally managed "super apps" that share a single database.
	●	Data Anonymization: Utilities capabilities to anonymize user data and suppress behavioral data tracking, significantly improving privacy protections for end users.
	●	Ad-Free Commercial Structure: Supports an advertisement-free commercial model, allowing suppliers of goods and services to operate on a subscription basis rather than through traditional ad-supported business frameworks.

Intellectual Property

EW has developed a search system titled "AN INTERNET-BASED SEARCH MECHANISM," which has been granted patents in South Africa (2016/06947), New Zealand (725014), the United States (Utility Patent No. US 10,977,387), and Canada (2962520). Patents are pending for related processes in Australia (2015248619), the European Union (157239906), and the United Kingdom (PCT/GB2015/051130). This system offers an alternative economic model to traditional search and is intended to better serve all key participant groups. Its technical implementation is based on the Ethical Web ATI Open-Source Platform.

EW has filed a related U.S. patent application, Patent Application No. 17/980298. It is titled "Contextual Enveloping of Dynamic Hypertext Links." This utility patent describes a groundbreaking technology that significantly differs from traditional search engines. The key technical feature of this patent is the AI Seek AI LLM, which is designed to enhance conversational search alongside foundational models such as ChatGPT and Claude.

Furthermore, EW has filed U.S. Patent Application No. 18/376,101, titled "Computer-Implemented Method and System." This application addresses the limitations of foundational AI LLMs that are typically constrained by specific training data cutoff dates, providing a system that dynamically incorporates contemporaneous, real-time data into prompt responses. In addition, EW has filed U.S. Patent Application No. 19/055,968, titled "Sensitive Data Protection for Generative AI." This application describes processes for detecting and managing sensitive terms in generative AI prompts in real time, with the objective of strengthening privacy and data protection controls for enterprise deployments.

Competition

The enterprise generative AI market for security-focused products remains in its early stages, and no dominant participants have yet emerged. Existing market participants offer solutions that often require substantial infrastructure integration work and bespoke software development. Because the competitive landscape is highly dynamic, existing, or future competitors may introduce products, services, or technical enhancements that better address industry developments or customer requirements. These advancements may include improved encryption features, broader mobile accessibility, or a targeted focus on niche corporate segments.

Increased competition may result in pricing pressure, customer attrition, or reduced user engagement, any of which could adversely affect the Company's business operations, results of operations, and financial condition.

EW believes that its portfolio of granted patents and pending applications, together with its broader proprietary intellectual property and engineering capabilities, provides meaningful competitive differentiation. However, there can be no assurance that EW's perceived competitive advantages and intellectual property protections will be sufficient to prevent well-capitalized competitors from developing or marketing products and services that are similar to, or more effective than, those of the Company.

Government Regulation

The Company is subject to a wide range of domestic and international laws and regulations applicable to companies conducting business online, and these legal structures continue to evolve in ways that could adversely affect our business, financial condition, and results of operations.

In the United States and globally, legal regimes governing the liability of online service providers for the activities of their users and other third parties are being heavily evaluated and reinterpreted through continuous claims and regulatory actions. These matters include, among others, alleged invasion of privacy, unfair competition, copyright and trademark infringement, and various changing legal theories concerning the nature, ranking, and content of search results and user-generated content.

In certain jurisdictions outside the United States, governments also impose additional regulatory requirements or licensing regimes on online businesses, such as those governing employment-related services, recruiting, and news- or media-related activities. Any adverse court ruling, legislative development, or governmental action that expands the obligations or liability of online service providers for user or third-party conduct could require us to modify our products or business practices, increase our compliance costs, or otherwise negatively impact our operations. In addition, heightened global concerns about the potential misuse of online and social networking technologies for unlawful or harmful purposes-such as the unauthorized disclosure of national security information, money laundering, or facilitating criminal activities-may prompt the adoption of new laws, regulations, or stricter monitoring measures. These could require changes to our platform, impose additional reporting obligations, restrict key features of our services, or cause users to reduce their engagement with our platform.

We are also subject to numerous and increasingly stringent federal, state, and international laws and regulations relating to information security, data protection, and privacy. Many jurisdictions require organizations to implement reasonable security measures to protect personal data and to notify individuals and regulators in the event of data breaches. These requirements are often complex, ambiguously drafted, and difficult to implement in practice. The costs associated with compliance, including ongoing investments in security technology, compliance personnel, and external advisors, may increase over time due to new legislation or evolving enforcement practices. Any failure or perceived failure by us to comply with these laws could subject us to regulatory investigations, enforcement actions, structural fines, private litigation, or other liabilities.

Our privacy policies describe our practices regarding the collection, use, storage, transmission, and disclosure of personal information, including information relating to visitors and users of our platform. If our actual practices differ from those described in our policies, our contractual commitments, or applicable privacy and data protection laws, The Company may be subject to inquiries or enforcement actions by consumer protection agencies and data protection regulators.

The interpretation and application of privacy, data protection, and data security laws in the context of online services are subject to differing and sometimes conflicting regulatory and judicial views. While historical frameworks like the U.S.-EU Safe Harbor and subsequent Privacy Shield agreements were systematically invalidated by European courts, cross-border data transfers between the European Union and the United States are currently evaluated under the EU-U.S. Data Privacy Framework. However, ongoing uncertainty surrounding international data transfer, data localization, and strict regional data protection requirements continues to pose compliance hurdles. Regulation varies significantly from state to state within the U.S. (such as the California Consumer Privacy Act) and from country to country internationally, creating a complex patchwork of requirements. Because our platform is globally accessible, foreign authorities may assert jurisdiction over our operations even where The Company does not have a physical corporate entity or local infrastructure. Complying with these diverse requirements may increase our operational costs and permanently limit our ability to offer certain features or services in key regional markets.

Employees

As of August 21, 2026, The Company has one full-time employee based in the US and five full-time employees based in the UK, none of whom are represented by a labor union.

Smaller Reporting Company

The Company is a "smaller reporting company" as defined in Rule 12b-2 under the Exchange Act. As a smaller reporting company, and are eligible to utilize certain scaled disclosure exemptions, including: (1) providing scaled executive compensation disclosures; and (2) providing only two years of audited financial statements, rather than three years, in our annual filings.

Additionally, as a non-accelerated filer, the Company is exempt from the internal control auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002. We will continue to utilize these scaled disclosure and reporting exemptions for as long as we maintain smaller reporting company and non-accelerated filer status.

Implications of Being an Emerging Growth Company

The company qualifies as an "emerging growth company," as defined in the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act").

Consequently, we may elect to take advantage of various scaled disclosure requirements otherwise applicable to public reporting entities. These exemptions include:

	●	Presenting reduced historical financial statements and corresponding management discussions in our periodic filings.
	●	An exemption from the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002.
	●	We utilize reduced disclosure obligations regarding executive compensation in our periodic reports, proxy statements, and registration statements.
	●	An exemption from holding non-binding advisory votes on executive compensation and obtaining stockholder approval of any unapproved golden parachute payments.

The Company elected to utilize certain reduced disclosure obligations within our periodic reports, including this quarterly report. The Company may take advantage of other scaled reporting requirements in future SEC filings. As a result, the information we provide to our stockholders may differ from disclosures made by other public reporting companies that are not emerging growth companies.

The JOBS Act also provides that an emerging growth company may use an extended transition period to comply with new or revised accounting standards. The Company have irrevocably elected to opt out of this extended transition period. Therefore, the Company is subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.

Compliance after Termination of Emerging Growth Company Status

Upon the termination of our emerging growth company status, the Company will no longer be eligible to utilize certain exemptions available under the Jumpstart Our Business Startups (JOBS) Act. However, if the Company continues to qualify as a "smaller reporting company" as defined under Rule 12b-2 of the Exchange Act following such termination, the Company will remain eligible to take advantage of the scaled disclosure provisions available to smaller reporting companies. These include providing scaled executive compensation disclosures and presenting only two years of audited financial statements in our annual filings. The Company intends to utilize these scaled reporting exemptions for as long as the Company maintains smaller reporting company status.

Available Information

The Company makes available, free of charge, on or through its website at EthicalWeb AI, its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after such material is electronically filed with, or furnished to, the Securities and Exchange Commission ("SEC").

The SEC maintains an internet site at the SEC Official Page that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. The Company's website and the information contained therein or connected to it are not intended to be and are not incorporated into this Quarterly Report on Form 10-Q.

Results of Operation

Three months ended June 30, 2026, compared to the three months ended June 30, 2025

		Three Months Ended June 30,								Changes
		2026				2025				Amount				%
Revenue
Net sales		$	33			$	712			$	(679	)			-95	%
Cost of sales			-				100				(100	)			-100	%
Gross profit			33				612				(579	)			-95	%
Operating Expenses
General and administrative			(17,970	)			147,028				(164,998	)			-112	%
Professional fees			40,249				13,567				26,682				197	%
Sales and marketing			1,875				71,460				(69,585	)			-97	%
Amortization and depreciation			64,167				55,394				8,773				16	%
Research and development			92,282				64,547				27,735				43	%
Total operating expense			180,603				351,996				(171,393	)			-49	%
Operating loss			(180,570	)			(351,384	)			170,814				49	%
Other income (expense)
Other income			(191	)			-				(191	)			N/A
Interest income			-				-				-				0	%
Interest expense			(411,734	)			(4,017	)			(407,717	)			-10,150	%
Loss on derivative issuance			(2,279	)			-				(2,279	)			N/A
Loss on extinguishment of debt			(60,542	)			-				(60,542	)			N/A
Gain on change in fair value of derivative liability			214,743				(16,358	)			231,101				1,413	%
Foreign currency transaction (loss) gain			12				(445	)			457				103	%
Total other income (expense)			(259,991	)			(20,820	)			(239,171	)			-1,149	%
Net loss before income tax			(440,561	)			(372,204	)			(68,357	)			18	%

Revenue and Gross Profit:

Net sales decreased by $679, or 95%, to $33 for the three months ended June 30, 2026, compared to $712 for the three months ended June 30, 2025. The decline was driven primarily by the removal of the AI Seek Application from the Apple App Store. Cost of sales decreased by $100, or 100% to $0 during the period. As a result, gross profit declined by $579, or 95% to $33. Future revenue growth remains constrained, and the company assurances that it will generate significant revenues without securing additional financing.

Operating Expenses:

Total operating expenses decreased by $171,393, or 49%, to $180,603 for the three months ended June 30, 2026, compared to $351,996 for the three months ended June 30, 2025. This decrease was driven primarily by reductions in general and administrative expenses and sales and marketing costs, which were partially offset by increases in research and development, professional fees, and depreciation and amortization.

General and administrative expenses decreased by $164,998, or 112%, resulting in a net credit balance of $17,970 for the three months ended June 30, 2026, compared to an expense of $147,028 for the three months ended June 30, 2025. This reduction and net credit were primarily driven by a $144,148 credit for forfeited stock options recorded within general administration. This credit resulted from the forfeiture of share options due to employee separations.

Sales and marketing expenses decreased by $69,585, or 97%, to $1,875 from $71,460 in the three months ended June 30, 2025. This reduction was due to liquidity constraints, which required the Company to scale back promotional and marketing activities.

These cost reductions were partially offset by a $27,735, or 43%, increase in research and development expenses, which rose to $92,282 from $64,547. This increase was primarily due to the capitalization of certain development costs in the three months ended June 30, 2025, resulting in a lower R&D expense base in the current period relative to the prior period.

Professional fees increased by $26,682, or 197%, to $40,249 from $13,567 due to higher legal and accounting compliance costs and $10,500 in legal fees for note conversions.

Amortization and depreciation expenses rose by $8,773, or 16%, to $64,167 from $55,394 due to recent asset placements.

As a result of the overall reduction in operating spend, operating loss decreased by $170,814, or 49%, to $180,570 for the three months ended June 30, 2026, compared to $351,384 for the three months ended June 30, 2025.

Other Income (Expense)

Total other income (expense), net increased by $239,171, or 1,149%, resulting in a net other expense of $259,991 for the three months ended June 30, 2026, compared to a net other expense of $20,820 for the three months ended June 30, 2025.

This unfavorable shift into a net expense position was primarily driven by a $407,717 increase in interest expense, which rose to $411,734 for the three months ended June 30, 2026, compared to $4,017 for the three months ended June 30, 2025. This increase included $372,779 interest accretion. This increase was further impacted by a $60,542 loss recognized on the extinguishment of debt and a $2,279 loss on derivative issuance.

These negative impacts were partially offset by a $231,101, improvement in the fair value of derivative liabilities, which swung to a gain of $214,743 for the three months ended June 30, 2026, from a loss of $16,358 for the three months ended June 30, 2025.

As a result of these operational and other income shifts, net loss before income taxes increased by $68,357, or 18%, to $440,561 for the three months ended June 30, 2026, compared to $372,204 for the three months ended June 30, 2025.

Six months ended June 30, 2026, compared to the six months ended June 30, 2025

		Six Months Ended June 30,								Changes
		2026				2025				Amount				%
Revenue
Net sales		$	469			$	1,353			$	(884	)			-65	%
Cost of sales			-				100				(100	)			-100	%
Gross profit			469				1,253				(784	)			-63	%
Operating Expenses
General and administrative			118,888				312,050				(193,162	)			-62	%
Professional fees			62,154				30,347				31,807				105	%
Sales and marketing			6,225				85,798				(79,573	)			-93	%
Amortization and depreciation			128,628				109,348				19,280				18	%
Research and development			164,041				120,932				43,109				36	%
Total operating expense			479,936				658,475				(178,539	)			-27	%
Operating loss			(479,467	)			(657,222	)			177,755				27	%
Other income (expense)
Other income			105,301				3				105,298				3,509,933	%
Interest income			386				-				386				N/A
Interest expense			(446,680	)			(4,017	)			(442,663	)			-11,020	%
Loss on derivative issuance			(72,177	)			-				(72,177	)			N/A
Loss of extinguishment of debt			(60,542	)			-				(60,542	)			N/A
Gain on change in fair value of derivative liability			370,206				10,853				359,353				3,311	%
Foreign currency transaction (loss) gain			(12	)			(377	)			365				97	%
Total other income (expense)			(103,518	)			6,462				(109,980	)			-1,702	%
Net loss before income tax			(582,985	)			(650,760	)			67,775				10	%

Revenue and Gross Profit:

Net sales decreased by $884, or 65%, to $469 for the six months ended June 30, 2026, compared to $1,353 for the six months ended June 30, 2025. This decline was driven by the removal of the Company's AI Seek Application from the Apple App Store. Cost of sales decreased by $100, or 100%, to $0 for the six months ended June 30, 2026, from $100 for the six months ended June 30, 2025, due to volume optimizations. As a result, gross profit decreased by $784, or 63%, to $469 for the six months ended June 30, 2026, compared to $1,253 for the six months ended June 30, 2025. Future growth remains constrained, as the company cannot provide assurances that it will generate significant revenue without securing additional financing.

Operating Expenses

Total operating expenses decreased by $178,539, or 27%, to $479,936 for the six months ended June 30, 2026, compared to $658,475 for the six months ended June 30, 2025. This decrease was driven primarily by reductions in general and administrative expenses and sales and marketing costs, which were partially offset by increases in research and development, professional fees, and depreciation and amortization.

General and administrative expenses decreased by $193,162, or 62%, to $118,888 for the six months ended June 30, 2026, compared to $312,050 for the six months ended June 30, 2025. This reduction was primarily driven by the $144,148 stock-based compensation credit recorded during the three months ended June 30, 2026, resulting from the forfeiture of unvested share options due to employee separations.

Sales and marketing expenses decreased by $79,573, or 93%, to $6,225 for the six months ended June 30, 2026, compared to $85,798 for the six months ended June 30, 2025. This reduction was due to liquidity constraints, which required the Company to scale back promotional activities.

Research and development expenses increased by $43,109, or 36%, to $164,041 for the six months ended June 30, 2026, compared to $120,932 for the six months ended June 30, 2025. This increase was primarily due to the capitalization of certain development costs in the prior year, which lowered the prior period's expense base.

Professional fees increased by $31,807, or 70%, to $62,154 for the six months ended June 30, 2026, compared to $30,347 for the six months ended June 30, 2025. The increase was driven by higher legal and accounting compliance requirements and $10,500 in legal fees for note conversions.

Amortization and depreciation expenses rose by $19,280, or 18%, to $128,628 for the six months ended June 30, 2026, compared to $109,348 for the six months ended June 30, 2025, due to recent asset placements.

As a result of the overall reduction in operating spend, operating loss decreased by $177,539, or 27%, to $479,936 for the six months ended June 30, 2026, compared to $657,222 for the six months ended June 30, 2025.

Other Income (Expense) and Net Loss

Total other income (expense), net decreased by $109,980, or 1,702%, resulting in a net other expense of $103,518 for the six months ended June 30, 2026, compared to a net other income of $6,462 for the six months ended June 30, 2025.

This unfavorable shift into a net expense position was primarily driven by a $442,663 increase in net interest expense rising to $446,680 from $4,017 due to interest accretion of $372,779 on outstanding convertible notes, alongside a $72,177 loss on derivative issuance and a $60,542 loss on the extinguishment of debt.

These negative impacts were partially offset by a $359,353 positive change in the fair value of derivative liabilities, which swung to a gain of $370,206 in 2026 from a gain of $10,853 in 2025. Additionally, the variance was aided by $105,301 in other income, primarily from a research and development tax credit received in the United Kingdom.

As a result of these operational and other income shifts, net loss before income taxes decreased by $67,775, or 10%, to $582,985 for the six months ended June 30, 2026, compared to $650,760 for the six months ended June 30, 2025.

Liquidity and Capital Resources

The following table provides selected financial data about our Company:

		June 30, 2026				December 31, 2025				Change				%
Current Assets		$	7,160			$	18,471			$	(11,311	)			-61	%
Current Liabilities			3,366,231				2,918,193				448,038				15	%
Working Capital Deficit		$	(3,359,071	)			(2,899,722	)		$	(459,349	)			-16	%

As of June 30, 2026, the Company had total current assets of $7,160, representing a $11,311, or 61%, decrease from $18,471 as of December 31, 2025. This decrease in liquidity primarily reflects cash used to fund ongoing operating activities.

Current liabilities increased by $448,038, or 15%, to $3,359,071 as of June 30, 2026, compared to $2,918,193 as of December 31, 2025. This increase was driven primarily by an accumulation of obligations related to the Company's outstanding convertible notes.

Concurrently, the Company's working capital deficit expanded by $459,349 or 16%, from $2,899,722 as of December 31, 2025, to $3,366,231 as of June 30, 2026. This working capital deficit and limited cash balance raise substantial doubt about the Company's ability to continue as a going concern. Management continues to evaluate alternative funding sources; however, there can be no assurance that the Company will successfully secure additional financing on commercially acceptable terms, or at all, to sustain operations.

Over the last three years, and as of the date of this Report, the Company has faced an increasingly challenging liquidity situation that has limited our ability to execute our operating plan. The Company will need to obtain capital to continue operations; however, there is no assurance that the Company can secure such funding on commercially acceptable terms, or at all.

As the Company is not generating significant revenues from its current operations, it will require additional debt or equity capital to sustain its business activities and support future expansion. Sources of additional financing or structural arrangements with third parties may include equity or debt financing, financial institution loans, related-party loans, or revolving credit facilities. The Company may not successfully identify or close suitable financing transactions within the required timeframe, and it may not be able to obtain the necessary capital through alternative means. Unless the Company can attract additional investment capital, our ability to continue as a going concern is in doubt.

Furthermore, we are required to file annual, quarterly, and current reports with the SEC pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act"). In addition, the Sarbanes-Oxley Act of 2002 ("Sarbanes-Oxley") and the rules subsequently implemented by the SEC and the Public Company Accounting Oversight Board ("PCAOB") impose various requirements on public companies, including requiring changes in corporate governance practices. The Company anticipates that these rules and regulations will increase our legal and financial compliance costs and render our activities more time-consuming and costly. The Company will require capital investment to satisfy these regulatory and compliance obligations.

If the Company cannot obtain sufficient additional capital, we may be forced to cease its SEC obligations and terminate operations altogether. If additional funds are obtained through sale of equity securities or via issuance of common stock to satisfy current or future obligations, the stockholders may experience substantial dilution. Furthermore, such equity securities may possess rights, preferences, or privileges that are senior to those of the common stock.

Cash Flow

		June 30, 2026				June 30, 2025				Change				%
Cash used in Operating activities		$	(204,919	)		$	(72,619	)		$	(132,300	)			-182	%
Cash used in provided by Investing Activities			(6,439	)			(157,132	)			150,693				96	%
Cash provided by Financing Activities			203,670				232,700				(29,030	)			-12	%
Cash on Hand		$	335				4,104			$	(3,769	)			-92	%

Net cash used in operating activities increased by $132,300, or 182%, to $204,919 for the six months ended June 30, 2026, compared to $72,619 for the six months ended June 30, 2025. This expanded cash outflow was primarily driven by changes in working capital items, including an acceleration of payments due to related parties and suppliers, as well as a reduction in cash receipts from revenue contracts.

Net cash used in investing activities decreased by $150,693, or 96%, to $6,439 for the six months ended June 30, 2026, compared to $157,132 for the six months ended June 30, 2025. This reduction in cash outflows was due to lower capital expenditures on intangible asset acquisitions.

Net cash provided by financing activities decreased by $29,030, or 12%, to $203,670 for the six months ended June 30, 2026, compared to $232,700 for the six months ended June 30, 2025. This variance was primarily driven by an increase in net proceeds from convertible note issuances and loans from related parties.

As a result of these net cash flows and the effects of exchange rate fluctuations, cash at the end of the period decreased by $3,769, or 92%, to $335 as of June 30, 2026, compared to $4,104 as of June 30, 2025. This limited cash balance constrains the Company's ongoing operational runway.

Critical Accounting Policies and Significant Judgments and Estimates

This discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States ("GAAP"). Preparing these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported expenses incurred during the reporting periods. Our estimates are based on our historical experience and various other factors that the Company believes are reasonable under the circumstances, which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. While our significant accounting policies are described in more detail in the notes to our financial statements included elsewhere in this Report, the Company believes that the following accounting policies are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management's judgments and estimates.

The Company our most critical accounting policies and estimates relate to the following:

	●	Foreign Currency Translations
	●	Intangible Assets
	●	Long-lived Assets
	●	Income Taxes
	●	Stock-based Compensation
	●	Common Stock Purchase Warrants and Derivative Financial Instruments
	●	Convertible Financial Instruments
	●	Fair Value of Financial Instruments

Foreign Currency Translations

The functional currency of the Company's international subsidiaries is generally their local currency, the Great British Pound (GBP). Local currency assets and liabilities are translated at the exchange rates on the balance sheet date, and local currency revenues and expenses are translated at the weighted-average exchange rates for the period. Equity accounts are translated at historical rates. The resulting translation adjustments are recorded directly into accumulated other comprehensive income.

Intangible Assets

The cost of intangible assets with determinable useful lives is amortized to reflect the pattern of economic benefits consumed, using the straight-line method over the estimated periods benefited. Patents, technology, and other intangibles with contractual terms are generally amortized over their respective legal or contractual lives. When certain events or changes in operating conditions occur, an impairment assessment is performed, and lives of intangible assets with determinable lives may be adjusted.

Long-Lived Assets

Long-lived assets are evaluated for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. Each impairment test is based on comparing the undiscounted future cash flows to the asset's recorded value. The asset is written down to its estimated fair value if an impairment is indicated.

Income Taxes

The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, "Income Taxes." The asset and liability method provides that deferred tax bases for assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases, and for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount more likely than not to be realized.

Convertible Financial Instruments

Under ASC 815, the Company bifurcates conversion options from hybrid host instruments and accounts for them as free-standing derivatives if three criteria are met: (1) the option's risks are not clearly and closely related to the host; (2) the hybrid instrument is not already marked to fair value through earnings; and (3) the option independently qualifies as a derivative. This bifurcation rule does not apply if the host instrument is deemed conventional under U.S. GAAP.

Fair Value of Financial Instruments

The Company accounts for financial instruments in accordance with ASC 820, "Fair Value Measurements and Disclosures." ASC 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

Stock-Based Compensation

The Company accounts for stock-based compensation per ASC Topic 718 Compensation-Stock Compensation, which prescribes accounting and reporting standards for all share-based payment transactions in which employee and non-employee services are acquired. Share-based payments to employees and non-employees, including grants of stock options, are recognized as compensation expenses in the financial statements based on the stock awards' fair values on the grant date. That expense is recognized over the period required to provide services in exchange for the award, known as the requisite service period (usually the vesting period). Stock Options awarded as compensation per the Company's 2022 Equity Incentive Plan are deemed unissued until vested. Stock Option compensation is recognized as an expense over the vesting period. Awards forfeited due to the unfulfillment of obligations, such as termination of employment before the award is fully vested, for no cash or other consideration, are not recognized as an expense, and any previously recognized costs are reversed in the period of forfeiture.

Common Stock Purchase Warrants and Derivative Financial Instruments

Common stock purchase warrants and other derivative financial instruments are classified as equity if the contracts (1) require physical settlement or net-share settlement or (2) give the Company a choice of net-cash settlement or settlement in its shares (physical settlement or net-share settlement). Contracts which (1) require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside the control of the Company), (2) give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement), or (3) contain reset provisions that do not qualify for the scope exception are classified as liabilities. The Company assesses the classification of its common stock purchase warrants and other derivatives at each reporting date to determine whether a change in classification between equity and liabilities is required.

Recent Accounting Pronouncements

For discussion of recently issued and adopted accounting pronouncements, please see Note 2 to the unaudited consolidated financial statements as of and for the three months ended June 30, 2026, and 2025, included herein.

Off-Balance Sheet Arrangements

As of June 30, 2026, there were no off-balance sheet arrangements.