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

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

The following discussion and analysis of our financial condition and results of operations should be read together with our financial statements and the related notes and the other financial information included elsewhere in this Quarterly Report. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed below and elsewhere in this Quarterly Report, particularly those under "Risk Factors."

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This report on Form 10-Q contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 under Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates, intentions and future performance, and involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. All statements other than statements of historical fact are statements that could be forward-looking statements. You can identify these forward-looking statements through our use of words such as "may," "can," "anticipate," "assume," "should," "indicate," "would," "believe," "contemplate," "expect," "seek," "estimate," "continue," "plan," "point to," "project," "predict," "could," "intend," "target," "potential" and other similar words and expressions of the future.

Results of Operations and Financial Condition

Three Months Ended September 30, 2025 as Compared to the Three Months Ended September 30, 2024

Sales and Cost of Sales

We did not have any revenue or cost of revenue from operations for the three months ended September 30, 2025 and 2024.

Operating Expenses

Operating expenses for the three months ended September 30, 2025 and 2024 consisted solely of general and administrative expenses. For the three months ended September 30, 2025, general and administrative expenses increased by $95,108, or 25%, compared to the same period in 2024, from $385,257 to $480,365. The increase was primarily attributed to $119,372 in consulting fees, $15,000 in board compensation fees, $16,878 in advertising and marketing expenses offset by a decrease of $70,700 in product development expense.

Other Expense

Other expense for the three months ended September 30, 2025 and 2024 were composed of interest expense and loss on extinguishment of liabilities.

Interest expense for the three months ended September 30, 2025 decreased by $63,733 or 85%, compared to the same period in 2024, decreasing from $74,887 to $11,154 The decrease was primarily driven by the absence of interest expense related to convertible notes following the conversion of accrued interest and overall lower interest-bearing balances during the period.

Loss on extinguishment of liabilities for the three months ended September 30, 2025 increased by $38,403 or 100%, compared to the same period in 2024, increasing from $0 to $38,403. The increase was primarily driven by the loss recognized on the conversion of accrued interest during the current period, whereas no such transactions occurred in the prior-year period.

Net Loss

For the three months ended September 30, 2025 and 2024 we had a net loss of $529,921 and $460,144, respectively.

Nine Months Ended September 30, 2025 as Compared to the Nine Months Ended September 30, 2024

Sales and Cost of Sales

We had revenue and cost of revenue from operations for the nine months ended September 30, 2025, of $2,183, as compared to $0 revenue and cost of revenue from operations for the nine months ended September 30, 2024.

Operating Expenses

Operating expenses for the nine months ended September 30, 2025 and 2024 consisted solely of general and administrative expenses. For the nine months ended September 30, 2025, general and administrative expenses increased by $235,052, or 21%, compared to the same period in 2024, from $1,137,539 to $1,372,591. The increase was primarily attributed to $161,332 in consulting fees, $45,000 in board compensation fees, $23,129 in advertising and marketing expenses offset by a decrease of $9,113 in product development expense.

Other Expense

Other expense for the nine months ended September 30, 2025 and 2024 were composed of interest expense and loss on extinguishment of liabilities.

Interest expense for the nine months ended September 30, 2025 decreased by $52,875 or 24%, compared to the same period in 2024, decreasing from $219,222 to $166,347 The decrease was primarily driven by the absence of interest expense related to convertible notes following the conversion of accrued interest and overall lower interest-bearing balances during the period.

Loss on extinguishment of liabilities for the three months ended September 30, 2025 increased by $70,713 or 100%, compared to the same period in 2024, increasing from $0 to $70,713. The increase was primarily driven by the loss recognized on the conversion of accrued interest during the current period, whereas no such transactions occurred in the prior-year period.

Net Loss

For the nine months ended September 30, 2025 and 2024, we had a net loss of $1,607,467 and $1,356,761, respectively.

Liquidity and Capital Resources

Liquidity refers to a company's ability to generate sufficient cash to meet its short-term financial obligations. As of September 30, 2025, we had $230,470 in cash and cash equivalents, compared to $185,097 as of December 31, 2024, representing an increase of $45,373. This increase was primarily driven by cash provided by financing activities. As of September 30, 2025, we had undiscounted obligations of approximately $1.3 million related to indebtedness due within one year.

As of September 30, 2025, we had a working capital deficit of $4,661,176, compared to a working capital deficit of $4,666,666 as of December 31, 2024. Our current assets totaled $241,396, consisting primarily of cash. Current liabilities totaled $4,902,572, which were mainly comprised of related party accrued expenses, convertible notes payable, and shares to be issued.

As of September 30, 2025, we had an accumulated deficit of $12,416,723, compared to $10,809,256 as of December 31, 2024, reflecting continued operating losses during the period.

Our monthly operating costs averaged approximately $10,000 per month for the nine months ended September 30, 2025, excluding capital expenditure. We did not have capital expenditures during the nine months ended September 30, 2025. We plan to fund our operations with our cash on hand and additional financing.

Cash Flows

		Nine Months Ended September 30,
		2025				2024
Net cash used in operating activities		$	(371,636	)		$	(241,776	)
Net cash provided by investing activities			-				-
Net cash provided by financing activities			417,009				165,000
Net increase (decrease) in cash		$	45,373			$	(76,776)

Operating activities used net cash of $371,636 for the nine months ended September 30, 2025, as compared to using net cash of $241,776 for the nine months ended September 30, 2024. For the nine months ended September 30, 2025, cash used in operating activities was primarily driven by our net loss of $1,607,467; offset primarily by amortization expense of approximately $496,000, the gain recognized on common stock issued to settle liability of approximately $70,712, the increase in accrued interest of approximately $52,798, the increase in accounts payable and accrued expenses of approximately $484,935 and increase in accrued expenses-related of $126,000. For the nine months ended September 30, 2024, cash used in operating activities was primarily driven by our net loss of $1,356,761;

offset primarily by the amortization expense of approximately $500,000, and the increase in related party and non-related party accrued interest of approximately $426,000, and the increase in accounts payable and accrued expenses of approximately $180,000.

Investing activities used net cash of $0 for the nine months ended September 30, 2025, and 2024.

Financing activities provided by cash flows of $417,009 and $165,000 for the nine months ended September 30, 2025 and 2024, respectively. For the nine months ended September 30, 2025, cash provided by financing activities was primarily driven by proceeds from convertible notes payable of $250,000 and proceeds from the issuance of common stock of $167,009. For the nine months ended September 30, 2024, cash provided by financing activities was primarily driven by proceeds from notes payable - related party of $165,000.

Going Concern

Our consolidated financial statements have been prepared assuming we will continue as a going concern. Our ability to continue our operations as a going concern is dependent on management's plans. The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. These consolidated financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should we be unable to continue as a going concern.

For the nine months ended September 30, 2025, the Company incurred a net loss of $1,607,467, had negative cash flows from operations of $371,636 and may incur additional future losses. At September 30, 2025, the Company had total current assets of $241,396 and total current liabilities of $4,902,572, resulting in a working capital deficit of $4,661,176. These conditions raise substantial doubt about the Company's ability to continue as a going concern for a period of time within one year after that date that the consolidated financial statements are issued.

The Company's existence is dependent upon our ability to develop profitable operations. We are devoting substantially all of our efforts to developing the Company's business and raising capital and there can be no assurance that our efforts will be successful. No assurance can be given that our actions will result in profitable operations or the resolution of its liquidity problems. The accompanying consolidated financial statements do not include any adjustments that might result should the company be unable to continue as a going concern.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Critical Accounting Policies

We have identified the policies outlined below as critical to our business operations and an understanding of our results of operations. The list is not intended to be a comprehensive list of all of our accounting policies. In many cases, the accounting treatment of a particular transaction is specifically dictated by generally accepted accounting principles in the United States, with no need for management's judgment in their application. The impact and any associated risks related to these policies on our business operations is discussed throughout Management's Discussion and Analysis of Financial Condition and Results of Operations when such policies affect our reported and expected financial results. For a detailed discussion on the application of these and other accounting policies, see the notes to our September 30, 2025, financial statements. Note that our preparation of the financial statements requires us to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities at the date of our financial statements, and the reported amounts of revenue and expenses during the reporting period. We cannot assure that actual results will not differ from those estimates.

Intangible assets, net

The Company's intangible assets include finite lived assets. Finite lived intangible assets, consisting of intellectual property are amortized on a straight-line basis over the estimated useful lives of the assets.

Finite lived intangible assets are tested for impairment when events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. An impairment loss is recognized if the sum of the expected long-term undiscounted cash flows the asset is expected to generate is less than its carrying amount. Actual future cash flows may differ from the estimates used in the impairment testing.

Use of estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. These estimates and assumptions are reviewed on an on-going basis and updated as appropriate. Actual results could differ from those estimates. The Company's estimates include the useful lives of property plant and equipment.

The depreciation of equipment is dependent upon estimates of useful lives and residual values, both of which are determined through the exercise of judgement. The assessment of any impairment of these assets is dependent upon estimates of recoverable amounts that consider factors such as economic/market conditions and the useful lives of assets.

Stock Based Compensation

We follow 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 expense in the financial statements based on their 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).

Recently Issued Accounting Pronouncements

We are subject to recently issued accounting standards, accounting guidance and disclosure requirements. For a description of these new accounting standards, see Note 3, "Summary of Significant Accounting Policies," of the Notes to our Unaudited Condensed Consolidated Financial Statements contained in Item 1 of Part I of this Quarterly Report on Form 10-Q, which is incorporated herein by reference.