USBL United States Basketball League Inc - 10-K

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation

Results of Operations

Year Ended December 31, 2025, Compared to the Year Ended December 31, 2024

Revenue and Cost of Revenue

We had total revenue of $203,655 and $65,121 for the years ended December 31, 2025 and December 31, 2024, respectively, an increase of 138,534 or 212.7%. We had cost of revenue of $79,210 and $72,799, respectively, and a deduction for revenue share of $4,391 and $5,027, respectively, for gross margins of $120,054 and ($12,705), respectively. Our cost of service is included with our salary and wage expense.

Professional Fees

For the year ended December 31, 2025, the Company incurred $32,681 of professional fees compared to $89,289 for the year ended December 31, 2024, a decrease of $56,608 or 63.4%. Professional fees generally consist of audit, legal, accounting and investor relation fees. In the current period we have had a $38,000 decrease in audit fees, an approximately $12,000 decrease in legal fees and $6,600 in accounting fees.

General and Administrative Expense

For the year ended December 31, 2025, the Company incurred $105,264 of G&A expenses compared to $99,802 for the year ended December 31, 2024, an increase of $5,462 or 5.5%.

Consulting Expense

For the year ended December 31, 2025 and 2024, we recognized $51,383 and $42,025, respectively, of consulting expense, an increase of $9,358 or 22.3%. Our consulting expense is primarily for grant writing, engineering services and other consultants to take advantage of available government contracts and grant application opportunities, and update product offerings.

Officer Compensation

For the year ended December 31, 2025 and 2024, we had officer compensation expense of $200,000 and $186,668, respectively, an increase of $13,332 or 7.1%. Beginning in April 2024 officer compensation for our CEO increased to $16,667 a month. However, this compensation was not paid to the officer in 2025 and 2024 and has been deferred.

Other Income/Expense

For the year ended December 31, 2025, for other expense we had only interest expense of $67,820.

For the year ended December 31, 2024, we had total other expense of $19,829. We had had interest expense of $69,829 and received $50,000 as a grant award to start development of a battery energy storage DC fast Charger.

Net Loss

For the year ended December 31, 2025 and, we had a net loss of $337,094 compared to $450,318 for the year ended December 31, 2024, a decrease of $113,224 or 25.1%. We had a decrease of our net loss mainly due to the increase of our net margin.

Liquidity and Capital Resources

Operating Activities

For the year ended December 31, 2025, the Company used $2,958 of cash in operating activities compared to $154,046 for the year ended December 31, 2024.

Financing Activities

We had no financing activity during the year ended December 31, 2025. During the year ended December 31, 2024, we repaid $113,245 of related party loans.

Critical Accounting Policies

Refer to Note 2 of our financial statements contained elsewhere in this Form 10-K for a summary of our critical accounting policies and recently adopted and issued accounting standards.