Humbl, Inc. - 10-K

ITEM 1A. RISK FACTORS

Our operations and financial results are subject to various risks and uncertainties, including those described below. You should consider and read carefully all of the risks and uncertainties described below, together with all of the other information contained in this Annual Report on Form 10-K, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes, before making an investment decision. The risks described below are not the only ones we face. The occurrence of any of the following risks or additional risks and uncertainties not presently known to us or that we currently believe to be immaterial could materially and adversely affect our business, financial condition, or results of operations. In such case, the trading price of our common stock could decline. You should not interpret our disclosure of any of the following risks to imply that such risks have not already materialized.

RISK FACTORS

Investing in our common stock involves a high degree of risk. You should carefully consider the risks described below, together with all of the other information included or referred to in this Annual Report on Form 10-K before purchasing shares of our common stock. There are numerous and varied risks that may prevent us from achieving our goals. If any of these risks actually occurs, our business, financial condition or results of operations may be materially adversely affected. In such case, the trading price of our common stock could decline and investors in our common stock could lose all or part of their investment.

Risks Related to Our Real Estate Tokenization Business

The regulatory framework surrounding real estate tokenization is uncertain and evolving, which could adversely affect our business

Our real estate tokenization business operates in a regulatory environment that is new and rapidly evolving. Federal and state securities laws, real estate regulations, and money transmission requirements may apply to our tokenized real estate offerings in ways that are not yet clearly defined. The SEC, FINRA, state securities regulators, and other governmental bodies may adopt new rules, guidance, or enforcement positions that could require us to modify our business model, obtain additional licenses, or cease certain activities. If our tokens are deemed to be securities under the Howey test or similar analyses, we could face significant compliance obligations, enforcement actions, or liability. The costs of regulatory compliance, or our inability to comply with applicable regulations, could materially and adversely affect our business, financial condition, and results of operations.

Our real estate tokenization technology is new and relatively unproven, and we may not achieve market acceptance

Real estate tokenization is an emerging technology that has not yet been widely adopted in the commercial real estate market. Our success depends on the willingness of property owners, investors, and intermediaries to adopt blockchain-based fractional ownership models, which represent a significant departure from traditional real estate investment structures. Potential customers and investors may be reluctant to adopt our technology due to concerns about security, regulatory uncertainty, liquidity limitations, or unfamiliarity with blockchain technology. If we are unable to achieve sufficient market acceptance of our tokenization platform, our business and prospects would be materially harmed.

We do not own the intellectual property we use and rely on a temporary license that may not be extended

We do not own the core technology platform used in our real estate tokenization business. On December 30, 2025, we entered into a 90-day royalty-free license agreement with TAP, Inc. to use its technology platform while the parties negotiate a longer-term license arrangement. There can be no assurance that we will be able to negotiate a long-term license on commercially reasonable terms, or at all. If we are unable to extend or replace this license, we would lose access to the technology platform that is fundamental to our business operations, which would have a material adverse effect on our business, financial condition, and results of operations. Even if we negotiate a long-term license, the terms may be less favorable than the current arrangement, and we would remain dependent on a third party for our core technology. As of March 25, 2026, the parties are in the final stages of completing a long-term license agreement.

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The valuation of tokenized real estate assets involves significant judgment and uncertainty

The valuation of tokenized real estate assets requires significant judgment and is subject to inherent uncertainty. Unlike publicly traded securities, tokenized real estate interests do not have an established public market with transparent pricing. The value of tokenized assets depends on the underlying real estate values, which are affected by local and national economic conditions, interest rates, property-specific factors, and real estate market conditions. Disagreements over valuation methodologies or assumptions could lead to disputes with investors, regulatory scrutiny, or impairment charges that could materially affect our financial statements.

We face significant competition in the real estate tokenization market from both traditional real estate companies and emerging technology platforms

The real estate tokenization market is increasingly competitive. We compete with traditional real estate investment trusts, real estate crowdfunding platforms, and other blockchain-based tokenization companies, many of which have greater financial resources, more established reputations, and more extensive operating histories than we do. Traditional real estate companies may also develop their own tokenization capabilities or partner with technology providers to offer competing products. If we are unable to differentiate our platform and compete effectively, our ability to attract and retain customers and generate revenue could be materially and adversely affected.

Risks Related to Our Company and Our Business

We are dependent on a license agreement for rights to critical intellectual property, and the loss or impairment of those rights could materially harm our business.

Our business depends on a license agreement pursuant to which we have been granted rights to use certain intellectual property that is material to our operations. This license agreement contains various obligations that we must satisfy to maintain our rights thereunder. If we fail to comply with any of these obligations, the licensor may have the right to terminate the license agreement, which would deprive us of the right to use the underlying intellectual property and could materially and adversely affect our ability to conduct our business as currently operated. In addition the license is only for limited period of time while the parties negotiate a longer term license, if we are unable to reach terms on a long-term license agreement with the licensor, that would deprive us of the right to use the underlying intellectual property and could materially and adversely affect our ability to conduct our business as currently operated

Even if we satisfy all of our obligations under the license agreement, we cannot guarantee that the licensor will not attempt to terminate the agreement, dispute the scope of rights granted thereunder, or take positions adverse to our interests in connection with the licensed intellectual property. Any such dispute could result in costly litigation, divert management attention and resources, and result in the loss or limitation of our licensed rights.

In addition, our rights under the license agreement are only as strong as the underlying intellectual property itself. The licensor is responsible for prosecuting and maintaining the patents and other intellectual property rights that are the subject of the license. If the licensor fails to adequately prosecute, maintain, or defend the licensed intellectual property, those rights could be narrowed, invalidated, or rendered unenforceable. We may have limited ability to compel the licensor to take protective action, and we may lack the right to independently enforce the licensed intellectual property against third-party infringers. The weakening or loss of the underlying intellectual property rights could significantly diminish the value of our license and adversely affect our competitive position.

Furthermore, the license agreement may be subject to termination in connection with the licensor’s bankruptcy or insolvency, a change of control of the licensor, or other events outside of our control. In such circumstances, our ability to continue using the licensed intellectual property could be impaired or eliminated entirely, and we may be unable to obtain a replacement license on commercially reasonable terms, or at all.

The occurrence of any of the foregoing could have a material adverse effect on our business, financial condition, results of operations, and prospects.

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Our operating losses and working capital deficiency raise substantial doubt about our ability to continue as a going concern. If we do not continue as a going concern, investors could lose their entire investment.

Our operating losses and working capital deficiency raise substantial doubt about our ability to continue as a going concern. We have an accumulated deficit of $(134,810,209) as of December 31, 2025 as well as a net loss of $(15,973,496) and $(14,446,392) for the years ended December 31, 2025 and 2024. We may never achieve profitability. If we do not generate sufficient revenues, do not achieve profitability and do not have other sources of financing for our business, we may have to curtail or cease our development plans and operations, which could cause investors to lose the entire amount of their investment.

We may acquire other assets or businesses, or form collaborations or make investments in other companies or technologies that could harm our operating results, dilute our stockholders’ ownership, increase our debt or cause us to incur significant expense.

As part of our business strategy, we may pursue acquisitions of businesses and assets or enter into strategic alliances and collaborations, to initiate and then expand our operations. We may not identify or complete these transactions in a timely manner, on a cost-effective basis, or at all, and we may not realize the anticipated benefits of any such transaction, any of which could have a detrimental effect on our financial condition, results of operations and cash flows. We have limited experience with acquiring other companies and assets and limited experience with forming strategic alliances and collaborations. We may not be able to find suitable acquisition candidates, and if we make any acquisitions, we may not be able to integrate these acquisitions successfully into our existing business and we may incur additional debt or assume unknown or contingent liabilities in connection therewith. Integration of an acquired company or assets may also disrupt ongoing operations, require the hiring of additional personnel and the implementation of additional internal systems and infrastructure, especially the acquisition of commercial assets, and require management resources that would otherwise focus on developing our existing business. We may not be able to find suitable strategic alliance or collaboration partners or identify other investment opportunities, and we may experience losses related to any such investments.

To finance any acquisitions or collaborations, we may choose to issue debt or equity securities as consideration. Any such issuance of securities would dilute the ownership of our stockholders. If the price of our common stock is low or volatile, we may not be able to acquire other assets or companies or fund a transaction using our stock as consideration. Alternatively, it may be necessary for us to raise additional funds for acquisitions through public or private financings. Additional funds may not be available on terms that are favorable to us, or at all.

Current global financial conditions have been characterized by increased volatility which could negatively impact our business, prospects, liquidity and financial condition.

Current global financial conditions and recent market events have been characterized by increased volatility, and the resulting tightening of the credit and capital markets has reduced the amount of available liquidity and overall economic activity. We cannot guarantee that debt or equity financing, the ability to borrow funds or cash generated by operations will be available or sufficient to meet or satisfy our initiatives, objectives or requirements. Our inability to access sufficient amounts of capital on terms acceptable to us for our operations will negatively impact our business, prospects, liquidity and financial condition.

We are growing the size of our organization, and we may experience difficulties in managing any growth we may achieve.

As our growth plans proceed and development and commercialization plans and strategies develop, we expect to need additional development, managerial, operational, sales, marketing, financial, accounting, legal, and other resources. Future growth would impose significant added responsibilities on members of management. Our management may not be able to accommodate those added responsibilities, and our failure to do so could prevent us from effectively managing future growth, if any, and successfully growing our Company.

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Our potential for rapid growth and our entry into new markets make it difficult for us to evaluate our current and future business prospects, and we may be unable to effectively manage any growth associated with these new markets, which may increase the risk of your investment and could harm our business, financial condition, results of operations and cash flow.

Our entry into new markets as we seek to expand the adoption of our products and services may place a significant strain on our resources and increase demands on our executive management, personnel and systems, and our operational, administrative and financial resources may be inadequate. We may also not be able to effectively manage any expanded operations or achieve planned growth on a timely or profitable basis, particularly if the number of customers using our technology significantly increases or their demands and needs change as our business expands. If we are unable to manage expanded operations effectively, we may experience operating inefficiencies, the quality of our products and services could deteriorate, and our business and results of operations could be materially adversely affected.

If we are unable to develop and maintain our brand and reputation for our service and product offerings, our business and prospects could be materially harmed.

Our business and prospects depend, in part, on developing and then maintaining and strengthening our brand and reputation in the markets we will serve and for the companies we acquire. If problems arise with our future products or services, our brand and reputation could be diminished. If we fail to develop, promote and maintain our brand and reputation successfully, our business and prospects could be materially harmed.

Our expansion into new products, services, technologies, and geographic regions subjects us to additional risks.

We may have limited or no experience in our newer markets, and our customers may not adopt our product or service offerings. These offerings, which can present new and difficult technology challenges, may subject us to claims if customers of these offerings experience service disruptions or failures or other quality issues. In addition, profitability, if any, in our newer activities may not meet our expectations, and we may not be successful enough in these newer activities to recoup our investments in them. Failure to realize the benefits of amounts we invest in new technologies, products, or services could result in the value of those investments being written down or written off.

Our financial results fluctuate and may be difficult to forecast, and this may cause a decline in the trading price of our stock.

Our revenues, expenses and operating results are difficult to predict given our limited history of current operations. We expect that our operating results will continue to fluctuate in the future due to a number of factors, some of which are beyond our control. These factors include, but are not limited to:

our ability to increase our brand awareness;

our ability to attract new customers;

our ability to increase our customer base;

the amount and timing of costs relating to the expansion of our operations, including sales and marketing expenditures;

our ability to introduce new mobile payment offerings or customer services in a competitive environment;

technical difficulties consumers might encounter in using our mobile apps; and

our ability to manage third-party outsourced operations;

Due to all of these factors, our operating results may fall below the expectations of investors, which could cause a decline in the trading price of our common stock.

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Our plans for expansion cannot be implemented if we lose our key personnel or cannot recruit additional personnel.

We depend substantially on the continued services, specialized knowledge and performance of our senior management, particularly Gregory Hopkins, our CEO, and Jeffrey Hinshaw, our COO and CFO. We do not have anything preventing them from terminating their employment with us at any time. As a result, these executives may elect to pursue other opportunities at any time. If one or more of these individuals choose to leave our company, we may lose a significant number of supplier relationships and operating expertise which they have developed over many years, and which would be difficult to replace. The loss of the services of any executive officer or other key employee could hurt our business.

In addition, as our business expands, we will need to add new information technology and engineering personnel to maintain and expand our website and systems and customer support personnel to serve our growing customer base. If we are unable to hire and successfully train employees or contractors in these areas, users of our website may have negative experiences and we may lose customers, which would diminish the value of our brand and harm our business. The market for recruiting qualified information technology and other personnel is extremely competitive, and we may experience difficulties in attracting and retaining employees. Should we fail to retain or attract qualified personnel, we may not be able to compete successfully or implement our plans for expansion.

We have an evolving business model with still untested growth initiatives.

We have an evolving business model and intend to implement new strategies to grow our business in the future. There can be no assurance that we will be successful in developing new product categories or in entering new specialty markets or in implementing any other growth strategies. Similarly, there can be no assurance that we already have or will be able to obtain or retain any employees, consultants or other resources with any specialized skills or relationships to successfully implement our strategies in the future.

If we do not begin to generate significant revenues, we will still need to raise additional capital to meet our long-term business requirements. Any such capital raising may be costly or difficult to obtain and would likely dilute current stockholders’ ownership interests. If we are unable to secure additional financing in the future, we will not be able to continue as a going concern.

If we do not begin to generate significant revenues from our operations we will need additional capital, which may not be available on reasonable terms or at all. The raising of additional capital will dilute current stockholders’ ownership interests. We may need to raise additional funds through public or private debt or equity financings to meet various objectives including, but not limited to:

maintaining enough working capital to run our business;

pursuing growth opportunities, including more rapid expansion;

acquiring complementary businesses and technologies;

making capital improvements to improve our infrastructure;

responding to competitive pressures;

complying with regulatory requirements for advertising or taxation; and

maintaining compliance with applicable laws.

Any additional capital raised through the sale of equity or equity-linked securities may dilute current stockholders’ ownership percentages and could also result in a decrease in the fair market value of our equity securities because our assets would be owned by a larger pool of outstanding equity. The terms of those securities issued by us in future capital transactions may be more favorable to new investors, and may include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect that is different from or in addition to that reflected in the capitalization described in this report.

Further, any additional debt or equity financing that we may need may not be available on terms favorable to us, or at all. If we are unable to obtain required additional capital, we may have to curtail our growth plans or cut back on existing business and we may not be able to continue operating if we do not generate sufficient revenues from operations needed to stay in business.

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We may incur substantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees and other costs. We may also be required to recognize non-cash expenses in connection with certain securities we issue, such as convertible notes and warrants, which may adversely impact our financial condition.

Risks Related to Our Common Stock

Our securities are “Penny Stock” and subject to specific rules governing their sale to investors.

Under SEC Rule 15g-9 we are a “penny stock,” which is defined as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require that a broker or dealer approve a person’s account for transactions in penny stocks; and the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.

To approve a person’s account for transactions in penny stocks, the broker or dealer must obtain financial information and investment experience objectives of the person; and make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which, in highlight form sets forth the basis on which the broker or dealer made the suitability determination; and that the broker or dealer received a signed, written agreement from the investor prior to the transaction.

Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult for Company’s shareholders to sell shares of our common stock.

Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

Because we became public by means of a merger, we may not be able to attract the attention of major brokerage firms.

Additional risks may exist since we became public through a merger with a publicly traded company. Securities analysts of major brokerage firms may not provide coverage of us since there is little incentive to brokerage firms to recommend the purchase of our common stock. No assurance can be given that brokerage firms will want to conduct any secondary offerings on behalf in the future.

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Applicable regulatory requirements, including those contained in and issued under the Sarbanes-Oxley Act of 2002, may make it difficult for us to retain or attract qualified officers and directors, which could adversely affect the management of our business and our ability to obtain or retain listing of our common stock.

As a fully reporting company under Section 13 of the Exchange Act, we may be unable to attract and retain those qualified officers, directors and members of board committees required to provide for effective management because of the rules and regulations that govern publicly held companies, including, but not limited to, certifications by principal executive officers. The enactment of the Sarbanes-Oxley Act has resulted in the issuance of a series of related rules and regulations and the strengthening of existing rules and regulations by the SEC, as well as the adoption of new and more stringent rules by the stock exchanges. The perceived increased personal risk associated with these changes may deter qualified individuals from accepting roles as directors and executive officers.

Further, some of these changes heighten the requirements for board or committee membership, particularly with respect to an individual’s independence from the corporation and level of experience in finance and accounting matters. We may have difficulty attracting and retaining directors with the requisite qualifications. If we are unable to attract and retain qualified officers and directors, the management of our business and its ability to obtain or retain listing of our shares of common stock on any stock exchange (assuming we elect to seek and are successful in obtaining such listing) could be adversely affected.

If we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results or detect fraud. Consequently, investors could lose confidence in our financial reporting and this may decrease the trading price of our stock.

We must maintain effective internal controls to provide reliable financial reports and detect fraud. We have been assessing our internal controls to identify areas that need improvement. Failure to identify and thereafter implement required changes to our internal controls or any others that we identify as necessary to maintain an effective system of internal controls, if any, could harm our operating results and cause investors to lose confidence in our reported financial information. Any such loss of confidence would have a negative effect on the trading price of our stock.

The price of our common stock may become volatile, which could lead to losses by investors and costly securities litigation.

The trading price of our common stock is likely to be highly volatile and could fluctuate in response to factors such as:

actual or anticipated variations in our operating results;

announcements of developments by us or our competitors;

regulatory actions regarding our products;

announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments;

adoption of new accounting standards affecting our industry;

additions or departures of key personnel;

introduction of new products by us or our competitors;

sales of our common stock or other securities in the open market; and

other events or factors, many of which are beyond our control.

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The stock market is subject to significant price and volume fluctuations. In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been initiated against such a company. Litigation initiated against us, whether or not successful, could result in substantial costs and diversion of its management’s attention and resources, which could harm our business and financial condition.

Our bylaws include a forum selection clause, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us, remove current management or to be acquired by a third party .

Our bylaws require that, unless we consent in writing to the selection of an alternative forum, either (i) the Court of Chancery of the State of Delaware is to be the sole and exclusive forum for (a) any derivative action or proceeding brought on our behalf, (b) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders, (c) any action asserting a claim arising pursuant to any provision of the General Corporation Law of the State of Delaware or our bylaws or (d) any action or proceeding asserting a claim governed by the internal affairs doctrine or (ii) the federal district court in the State of Delaware will be the exclusive forum for a cause of action arising under the Securities Act and the Exchange Act. In addition, our bylaws could make it more difficult for a third party to acquire us or to remove current management through provisions that preclude cumulative voting in the election of directors and that allow our bylaws to be adopted, amended or repealed by our board of directors.

This exclusive forum provision will apply to other state and federal law claims including actions arising under the Securities Act (although our stockholders will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder). Section 22 of the Securities Act, however, creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. Accordingly, there is uncertainty as to whether a court would enforce such a forum selection provision as written in connection with claims arising under the Securities Act. Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock is deemed to have notice of and consented to the foregoing provisions. This forum selection provision in our bylaws may limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us. It is also possible that, notwithstanding the forum selection clause included in our bylaws, a court could rule that such a provision is inapplicable or unenforceable.

We are an “emerging growth company,” and we cannot be certain if the reduced reporting requirements applicable to emerging growth companies will make our common stock less attractive to investors.

We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, as amended, or the JOBS Act, and we intend to take advantage of some of the exemptions from reporting requirements that are applicable to other public companies that are not emerging growth companies, including:

● being permitted to provide only two years of audited financial statements, in addition to any required unaudited interim financial statements, with correspondingly reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosure;

● not being required to comply with the auditor attestation requirements in the assessment of our internal control over financial reporting;

● not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements;

● reduced disclosure obligations regarding executive compensation; and

● not being required to hold a non-binding advisory vote on executive compensation or obtain stockholder approval of any golden parachute payments not previously approved.

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Further, the JOBS Act permits an “emerging growth company” such as us to take advantage of an extended transition time to comply with new or revised accounting standards as applicable to public companies. We are choosing to elect the extended transition period for complying with new or revised accounting standards applicable to public companies. We have elected the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

We cannot predict if investors will find our common stock less attractive because we will rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile. We may take advantage of these reporting exemptions until we are no longer an emerging growth company.

If we do not meet the listing standards of a national securities exchange our investors’ ability to make transactions in our securities will be limited, and we will be subject to additional trading restrictions.

Our securities currently are traded over-the-counter on OTC Pink and are not qualified to be listed on a national securities exchange, such as NASDAQ. Accordingly, we face significant material adverse consequences, including:

● a limited availability of market quotations for our securities;

● reduced liquidity with respect to our securities;

● our shares of common stock are currently classified as “penny stock” which requires brokers trading in our shares of common stock to adhere to more stringent rules, resulting in a reduced level of trading activity in the secondary trading market for our shares of common stock;

● a limited amount of news and analyst coverage for our company; and

● a decreased ability to issue additional securities or obtain additional financing in the future.

The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Since our Common Stock is traded on OTC Pink, our common stock is a covered security. Although the states are preempted from regulating the sale of our securities, the federal statute allows the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. Further, if we were no longer traded over-the-counter, our common stock would not be a covered security and we would be subject to regulation in each state in which we offer our securities.

Because we do not anticipate paying any cash dividends on our capital stock in the foreseeable future, capital appreciation, if any, will be your sole source of gain.

We have never declared or paid cash dividends on our capital stock. We currently intend to retain all of our future earnings, if any, to finance the growth and development of our business. In addition, the terms of any future debt agreements may preclude us from paying dividends. As a result, capital appreciation, if any, of our securities will be your sole source of gain for the foreseeable future.

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Some provisions of our charter documents and Delaware law may have anti-takeover effects that could discourage an acquisition of us by others, even if an acquisition would be beneficial to our stockholders and may prevent attempts by our stockholders to replace or remove our current management.

Provisions in our certificate of incorporation and bylaws, as well as provisions of Delaware law, could make it more difficult for a third party to acquire us or increase the cost of acquiring us, even if doing so would benefit our stockholders, or remove our current management. These include provisions that:

● provide that all vacancies on our Board of Directors, including as a result of newly created directorships, may, except as otherwise required by law, be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum;

● not provide for cumulative voting rights, thereby allowing the holders of a majority of the shares of common stock entitled to vote in any election of directors to elect all of the directors standing for election;

● provide that special meetings of our stockholders may be called by a majority of the Board of Directors; and

● provide that our Board of Directors is expressly authorized to make, alter or repeal the bylaws.

These provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our Board of Directors, who are responsible for appointing the members of our management. Any provision of our articles of incorporation or bylaws or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock and could also affect the price that some investors are willing to pay for our common stock.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the consolidated financial statements and the related notes contained herein. In addition to historical information, the following discussion contains forward-looking statements based upon current expectations that are subject to risks and uncertainties. Actual results may differ substantially from those referred to herein due to a number of factors, including, but not limited to, risks described in the section entitled “Risk Factors”.

General

Our executive offices are located at 101 W. Broadway, Suite 1450, San Diego, California 92101, telephone (786) 738-9012. Our corporate website address is www.taprealestate.com .

Overview

The Company announced on December 31, 2025 that it has initiated a strategic corporate rebrand to TAP Real Estate Technologies, Inc. (“TAP Real Estate”), reflecting the Company’s sharpened focus on real estate asset acquisition, ownership, and blockchain-enabled real estate tokenization. In connection with the rebrand, the Company will also be submitting an application to change its ticker symbol, subject to regulatory approval.

TAP Real Estate Is focused on the acquisition, management, and tokenization of real estate. The Company seeks to combine established real estate fundamentals with emerging digital and blockchain tokenization technologies in order to enhance transparency, operational efficiency, and investor access in the real estate industry.

The rebrand marks a formal repositioning of the Company toward the next generation of real estate capital formation, where traditional property ownership models converge with digital wallets, blockchain registries, smart contracts, and tokenized investment infrastructure.

Initial Capital Raise and Strategic Focus on Blockchain-Enabled Real Estate

As part of this transition, TAP Real Estate has secured $500,000 in initial investment capital to establish operations and support early-stage execution. The Company is actively evaluating a pipeline of residential, commercial, and hospitality real estate opportunities for potential fractional or full contribution to its balance sheet, alongside select tokenization opportunities to be offered through the TAP Invest platform.

Property evaluations are being conducted with a disciplined focus on asset quality, cash-flow durability, jurisdictional suitability, and long-term value creation. Particular emphasis is being placed on identifying properties that are well-positioned to support blockchain-tokenized capital inflows, interest-bearing yield structures, and digital ownership frameworks anticipated under emerging U.S. regulatory guidance expected in 2026.

A Public Company Model for the Next Era of U.S. Real Estate

In support of this strategy, TAP Real Estate has entered into a licensing agreement with TAP, a private technology company headquartered in Salt Lake City, Utah, granting TAP Real Estate the right to utilize the proprietary TAP Platform technologies specifically for real estate use cases.

This agreement establishes a public company model designed to combine the benefits of a publicly held company (TAP Real Estate) with a patented, vertically integrated blockchain technology and intellectual property platform held as a private company (TAP).

Under this structure, TAP Real Estate will hold and manage select real estate assets, while leveraging licensed digital infrastructure to tokenize ownership interests, manage investor participation, and support compliant issuance and lifecycle administration.

The objective is to create a repeatable, compliant model for how real estate can be acquired, structured, tokenized, and administered within U.S. capital markets, serving as a blueprint for the broader industry.

TAP Technology Platform: A Patented Rail System for Real Estate Transactions

The TAP Platform products that will be licensed by TAP Real Estate, specifically for tokenized real estate listings, includes:

TAP AI Analyzer - In addition to its core features of investment portfolio insights and tailoring, the analyzer is being developed to define real estate listings metrics and quality of properties for inclusion in the portfolio.

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TAURUS AI-Agent - Serves as an agentic customer service agent, and, in the future, an automated payments agent across the lifecycle of real estate transactions.

TAP Wallet - Serves as an investor’s access and identity layer for tokenized real estate, helping abstract blockchain complexity while supporting security and compliance controls. The wallet is intended to hold tokenized interests, receive income distributions, and support permitted voting or corporate actions, while enabling onboarding and investor eligibility gating through KYC, accreditation verification (as applicable), and jurisdiction-based rules.

TAP Token Engine - Provides an issuance and lifecycle layer that converts approved real estate holding structures (such as SPVs) into tokenized interests with defined parameters. This includes supply configuration, ownership caps, transfer restrictions, and jurisdictional limitations where required. The Token Engine is intended to support the ongoing lifecycle of tokenized interests, including primary issuance, permitted secondary transfers, redemptions or buybacks, and select corporate actions.

TAP Smart Contracts - Encodes and enforces key rules of a tokenized real estate offering at the transaction level, including who can hold tokens and under what conditions transfers are permitted. The smart contract layer is intended to automate functions such as distributions, governance/voting, and other real estate specific mechanics, reducing reliance on manual processing and improving auditability.

TAP Invest - An investment platform with integrations across stocks, Mutual Funds, ETFs, digital assets, precious metals and real world assets with integrations across major brokerages, digital asset exchanges and broker-dealers such as Public, E*TRADE, Fidelity, Coinbase, Gemini, Kraken, Binance and more.

TAP Registry - Serves as the asset “source of truth” for the platform, operating as a private, semi-private, and public registry environment for real-world assets. The registry is intended to maintain the canonical record of each underlying real estate holding and its lifecycle events such as structuring, approvals, liens, transfers, redemptions, anchoring those records to a combination of public blockchains and permissioned infrastructure. For each asset, TAP Registry is designed to store structured metadata, document references such as deeds, appraisals, inspections, insurance, and compliance attestations in a tamper-evident format, while separating public verification data from confidential owner, counterparty, and transaction details. This registry layer is intended to power authentication, registry, and transfer of tokenized interests across the TAP platform, and to provide an auditable history that can be consumed by the TAP Wallet, TAP Token Engine, TAP Smart Contracts, and downstream real estate ecosystem partners such as title, mortgage, brokerage, and marketplace platforms, for integrations.

TAPs - TAP Real Estate and TAP will also collaborate on the structure and issuance of Tokenized Asset Portfolios (TAPs), being designed as a next-generation evolution beyond legacy real estate investment trusts (REITs). These portfolios are intended to modernize real estate capital formation, ownership, and liquidity through blockchain-enabled infrastructure, and can be developed in coordination with ecosystem partners across real estate, title, mortgage, and adjacent transactional industries.

At a high level, the TAP platform will operate through a streamlined, end-to-end lifecycle designed to ensure regulatory compliance, operational integrity, and investor transparency. Each real estate asset will first be approved and structured through a formal legal and compliance review. Once approved, the issuance is configured within the Token Engine, including token supply, investor permissions, and economic parameters. Purpose-built smart contracts are then deployed to enforce transaction logic and compliance at the protocol level. Investors are onboarded through the Invest Platform, where identity verification and eligibility checks are completed prior to participation. Following onboarding, the primary issuance is executed and tokens are delivered directly to investor wallets. After issuance, the platform supports ongoing administration, including distributions, governance actions, and permitted transfers, providing a fully managed and auditable post-issuance environment.

TAP Real Estate plans to drive revenues through a blend of management fees, listing fees and success fees on tokenized listings of real estate listings; as well as adding to the balance-sheet value any properties that are attributed to the TAP Real Estate portfolio after vetting by the TAP Real Estate team.

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Patented Intellectual Property and Regulatory Alignment

The TAP intellectual property portfolio includes U.S. Patent 12,118,613, “System and Method for Transferring Currency Using Blockchain” (Foote et al., valid through 2041). The patent contemplates the transfer of stablecoins, digital assets, and tokenized currencies between digital wallets and computer systems, with direct applicability across escrow, payment, and settlement workflows in real estate, title, and mortgage transactions. Additional patents are pending in areas related to blockchain tokenization of assets, multi-asset tokenized baskets, and real-world assets.

Results of Continuing Operations for the Years Ended December 31, 2025 and 2024

The following table sets forth the summary operations for the years ended December 31, 2025 and 2024:

For the Years Ended

December 31, 2025

December 31, 2024

Revenues

Cost of Revenues

Gross Profit

Professional Fees

Settlement

General and Administrative Expenses

Interest Expense

Gain on sale of HUMBL financial assets

Amortization of Debt Discounts

Loss on investee

Change in fair value of derivative liabilities

Derivative expense

Loss on disposal of minerals

Loss on extinguishment of debt

Loss on conversion of convertible notes payable and exchange of warrants

Provision for Income Taxes

Net Loss from Continuing Operations

Revenues and Cost of Revenues and Gross Profit

Revenues, cost of revenues and gross profit for the years ended December 31, 2025 and 2024 are related to our operations that are reflected in discontinued operations. The Company was focused on the business of FinCapital which consisted of one singular asset which were minerals located in Brazil until the fourth quarter of 2025 when they focused on the rebranding of the Company to TAP Real Estate. There are no revenues, cost of revenues or gross profit for either of the two years 2025 and 2024 in continuing operations.

Operating Expenses

Operating expenses for the year ended December 31, 2025 were $7,621,857 as compared to $8,302,341 for the year ended December 31, 2024, a decrease of $680,484. Operating expenses consists of professional fees, settlement expenses and general and administrative expenses as fully described below. We expect our professional fees to decrease in our next 12 months as we look to scale back on outside contract labor due to the change in our business operations. Our non-cash charges have already declined over the past year as our stock-based compensation is reduced.

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Professional Fees

Professional fees which consist of contracted individuals and companies, legal, audit and accounting costs for the year ended December 31, 2025 were $1,346,657 compared to $1,051,539 for the year ended December 31, 2024. The increase in professional fees is related to the professional fees incurred in regulatory filings including OTC compliance and reporting as well as increases in consultant costs in 2024 versus 2025. We expect that these costs will decrease during 2026.

Settlement

The Company incurred $2,131,171 in settlement expenses for the year ended December 31, 2025 and $2,976,380 in settlement expenses for the year ended December 31, 2024 related to agreements with individuals for liabilities incurred.

General and Administrative

General and administrative expenses for the year ended December 31, 2025 were $4,144,029 compared with $4,274,422 for the year ended December 31, 2024. The decrease in general and administrative expenses was $130,393. Much of the decrease in general and administrative expenses relates to decreases in stock-based compensation as well as payroll and payroll-related expenses due to less personnel employed, and decreases in travel costs, computer software, meals and entertainment, bank charges due to reductions in operations as we transitioned into TAP Real Estate.

Other Income (Expense)

In the year ended December 31, 2025 we incurred $25,151,224 in other expenses, compared to $3,122,068 in other expenses in the year ended December 31, 2024, an increase of $22,029,156 in other expenses. The other expenses relate to amortization of discounts, interest expense and losses on the conversion of convertible notes, changes in fair value of derivative liabilities, derivative expense, and a loss on investee and on the investment in TAP HoldCo and the loss on disposal of minerals and extinguishment of debt. In 2024, we incurred other income from the gain on the sale of HUMBL financial assets in the amount of $2,800,000 and changes in the fair value of derivative liabilities offset by losses attributable to conversions of debt and derivative expenses.

Net Loss from Continuing Operations

Net loss from operations from continuing operations for the year ended December 31, 2025 was ($32,773,081) as compared to a net loss of ($11,424,409) for the year ended December 31, 2024. The $21,348,672 increase in the net loss was due to the changes noted herein.

Liquidity and Capital Resources

Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. Significant factors in the management of liquidity are funds generated by operations, levels of accounts receivable and accounts payable and capital expenditures.

During the past two years, we devoted a substantial amount of capital to build out our platform and as a result our working capital deficit and accumulated deficit have increased significantly. In addition, we have incurred significant debt from both unrelated and related parties to assist in supporting our operations.

As discussed above in Note 1, the Company has recently begun a rebranding to TAP Real Estate in efforts to build sustaining operations and drive cash flow.

As of December 31, 2025, we had $126,066 in cash. During the last two years we built our platform and grew our operations by acquiring companies to support what we consolidated into HUMBL.com, prior to the sale to TAP. The acquisitions of Tickeri and Monster, which have since been disposed of, increased our debt and our common shares issued as we spent very little cash in these acquisitions.

We had a working capital deficit of $2,870,414 and $23,693,753 as of December 31, 2025 and 2024, respectively. The majority of our current liabilities are in the form of notes payable, and accounts payable and accrued expenses. It is expected that a portion of these liabilities will require cash to settle them. The increase in working capital is the direct result of the settlement of $20 million worth of common stock that were to be issued to Ybyrá that have been reflected in additional paid in capital due to the related party nature of the settlement, and our investment in TAP Holdco as well as reductions of notes payable, accrued interest and accrued expenses as well as the receipt of the remaining balance owed by TAP received in the year ended December 31, 2025. A significant portion of the investment in TAP Holdco received in February 2025 was exchanged for Series C Preferred shares in August 2025. The Company’s assets as of December 2, 2024 were sold to TAP Inc. and the Company commenced a new business with the purchase of the magnesium silicate which was returned to Ybyrá pursuant to the Settlement Agreement dated September 9, 2025. The Company anticipates entering into profitable businesses upon the sale of the magnesium silicate. As a result of the operating losses and working capital deficit, management has determined that there is substantial doubt about the Company’s ability to continue as a going concern.

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Net cash used in operating activities was $1,656,535 and $3,183,582 for the years ended December 31, 2025 and 2024, respectively. The $1,527,047 decrease in net cash used in operating activities was primarily a result of the change in the net loss and the non-cash charges impacting our net loss from 2024 to 2025, such as the gain on sale of HUMBL Financial assets, gain on sale of HUMBL.com and related assets, losses on the conversion of convertible notes, extinguishment of debt and stock-based compensation.

We had no activities from investing activities in the years ended December 31, 2025 and 2024 other than the balance of the proceeds received from TAP for the sale of HUMBL.com in the amount of $2,000,000 in 2025 and $500,000 in 2024.

Cash (used in) provided by financing activities was $(237,886) and $2,109,705 for the years ended December 31, 2025 and 2024, respectively. In 2024, the Company raised $2,279,500 from the proceeds from related party, non-related party and convertible notes payable, $356,000 from proceeds for the sale of warrants, as well as repayments of related party and convertible notes payable of $525,795. In 2025, we raised $904,825 from proceeds of convertible notes payable and $12,000 from related party notes payable. In addition, in 2025, we repaid $404,711 in related party notes and $750,000 in notes payable.

The consolidated financial statements of the Company have been prepared assuming that the Company will continue as a going concern, which contemplates, among other things, the realization of assets and the satisfaction of liabilities in the normal course of business over a reasonable period. The consolidated financial statements of the Company do not include any adjustments that may result from the outcome of the uncertainties.

Off-Balance Sheet Arrangements

As December 31, 2025 and 2024, we had no off-balance sheet arrangements.

Critical Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management 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 reported amounts of revenues and expenses during the reporting period. These estimates include, but are not limited to, management’s estimate of provisions required for permanent and temporary differences related to income taxes, liabilities to accrue, estimates of the fair value and determination of the fair value of stock awards. Actual results could differ from those estimates.

Fair Value of Financial Instruments

ASC 825 Financial Instruments requires the Company to disclose estimated fair values for its financial instruments. Fair value estimates, methods, and assumptions are set forth below for the Company’s financial instruments: The carrying amount of cash, accounts receivable, prepaid and other current assets, accounts payable and accrued liabilities, and amounts payable to related parties, approximate fair value because of the short-term maturity of those instruments.

Fair Value Measurements

ASC 820 Fair Value Measurements defines fair value, establishes a framework for measuring fair value in accordance with GAAP, and expands disclosure about fair value measurements. ASC 820 classifies these inputs into the following hierarchy:

Level 1 inputs: Quoted prices for identical instruments in active markets.

Level 2 inputs: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

Level 3 inputs: Instruments with primarily unobservable value drivers.

Level 3 inputs are unobservable inputs for the asset or liability and are used when observable market data is not available. The Company’s Level 3 investments primarily consist of [private equity investments, illiquid debt instruments, complex derivatives, or other investments for which little or no market activity exists].

The fair value of Level 3 investments is estimated using valuation techniques that incorporate significant unobservable inputs and reflect the Company’s assumptions about the assumptions that market participants would use in pricing the asset or liability. The Company applies a combination of valuation approaches, including the market approach, income approach, and, when applicable, the cost approach, depending on the nature of the investment and the availability of relevant information.

Under the market approach, fair value is estimated based on observable transactions for similar instruments, including recent third-party transactions in the same or comparable investments, or by applying valuation multiples derived from comparable public companies or precedent transactions. Significant inputs may include EBITDA or revenue multiples, liquidity discounts, control premiums, and adjustments for differences in growth prospects, profitability, and risk characteristics.

Under the income approach, the Company utilizes discounted cash flow models or other present value techniques to estimate fair value. These models incorporate significant assumptions, including projected revenues and expenses, expected cash flows, discount rates, terminal growth rates, and timing of exit. Discount rates are generally developed using a weighted-average cost of capital that reflects current market conditions and the risks inherent in the investment.

For certain investments, particularly illiquid debt instruments, valuation techniques may incorporate expected recovery values, probability-weighted scenarios, default assumptions, and credit spreads. For complex or structured instruments, option pricing models or simulation techniques may also be used.

The determination of fair value for Level 3 investments requires significant management judgment. The Company calibrates its valuation techniques to transaction prices, when available, and periodically evaluates and updates key assumptions to reflect current market conditions and specific investment performance. Changes in valuation techniques or significant increases or decreases in unobservable inputs may result in materially different fair value measurements.

The Company may utilize information from independent third-party valuation specialists to assist in determining fair value. The Company evaluates the methodologies, significant assumptions, and outputs of such specialists, and performs procedures to assess the reasonableness of the valuations, including back-testing against realized transactions, comparison to relevant market data, and sensitivity analyses over significant unobservable inputs.

Given the inherent uncertainty associated with the use of unobservable inputs, the estimated fair values of Level 3 investments may differ materially from the values that would have been used had an active market existed for such investments.

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Non-Equity Method Equity Securities

The Company holds investments in equity securities that are accounted for in accordance with ASC 321. These investments consist of equity interests in privately held and publicly traded entities over which the Company does not have a controlling financial interest or significant influence.

Equity securities with readily determinable fair values are measured at fair value at each reporting date, with unrealized gains and losses recognized in earnings.

For equity securities without readily determinable fair values, the Company has elected the measurement alternative in accordance with ASC 321-10-35. Under this alternative, investments are carried at cost, adjusted for observable price changes in orderly transactions for identical or similar investments of the same issuer, less impairment, if any.

The Company performs a qualitative assessment for impairment at each reporting period. If an investment is determined to be impaired, the Company writes down the investment to its fair value and recognizes the resulting loss in earnings. Impairment losses are not reversed in subsequent periods.

Dividend income is recognized in earnings when declared, to the extent such amounts are not considered a return of investment.

Equity Method Investments

The Company accounts for investments in entities over which it has significant influence, but not control or joint control, using the equity method of accounting under ASC 323. Significant influence is generally presumed to exist when the Company holds 20% or more of the voting power of the investee, unless it can be clearly demonstrated that such influence does not exist.

Under the equity method, the investment is initially recognized at cost, and the carrying amount is subsequently adjusted to recognize the Company’s share of the investee’s net income or loss, which is recognized in the consolidated statement of operations. The carrying amount of the investment is also adjusted for the Company’s share of other comprehensive income or loss of the investee and is reduced by any dividends received from the investee.

If the Company’s share of losses in the equity method investee exceeds the interest in the investee, the carrying amount of the investment is reduced to zero, and recognition of further losses is discontinued unless the Company has incurred obligations or made payments on behalf of the investee.

The Company assesses its equity method investments for indicators of impairment at each reporting period. If impairment indicators exist and the fair value of the investment has declined below its carrying value and is deemed to be other than temporary, an impairment loss is recognized in the consolidated statements of operations.

The Company eliminates unrealized gains and losses on transactions with equity method investees to the extent of the interest in the investee.

When such investments fall below the threshold of 20%, as is the case with TAP HoldCo, they no longer will include the share of gains and losses of the investee and the Company will assess the value of that investment to determine whether the investment has been impaired as there is no such readily determinable market value for those investments.