ITEM 7. 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 in conjunction with the consolidated financial statements and the notes thereto contained elsewhere in this report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Unless otherwise indicated, references to the “Company,” “us” or “we” refer to Sentient Brands Holdings Inc. and its subsidiaries.
Special Note Regarding Forward-looking Statements
All statements other than statements of historical fact included in this Form 10-K including, without limitation, statements under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding our financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. When used in this Form 10-K, words such as “anticipate,” “believe,” “estimate,” “expect,” “intend” and similar expressions, as they relate to us or our management, identify forward-looking statements. Such forward-looking statements are based on the beliefs of management, as well as assumptions made by, and information currently available to, our management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of a number of factors, including those set forth under the risk factors and business sections in this Form 10-K.
Overview
Sentient Brands is currently a next-generation brand platform focused on the acquisition, development, and commercialization of premium and functional consumer packaged goods (CPG) with an emphasis on wellness, sustainability, and emergency preparedness. The Company has implemented a product innovation and acquisition-driven growth strategy through its operating subsidiaries, focusing on consumer categories that offer long-term secular growth potential.
Going Concern
We have a limited operating history in the CPG sector, and our continued growth is dependent upon the continuation of selling our products to our customers; hence generating revenues and obtaining additional financing to fund future obligations and pay liabilities arising from normal business operations. We had an accumulated deficit of $6,332,894 and $5,131,317 at December 31, 2025 and 2024, respectively and a working capital deficit of $3,902,970 and $2,752,810 at December 31, 2025 and 2024, respectively. Included in the working capital deficit for the year ended December 31, 2025 is $2,640,712 in Acquisition Credits as a contingent liability which is solely settleable in equity to be issued for acquiring the subsidiaries AIGFB & AE NV, in the amount of $2,500,712, with an additional issuance of $140,000 for a reduction in accounts payable. The report of our independent registered public accounting firm on our consolidated financial statements for the year ended December 31, 2025 and December 31, 2024 contained an explanatory paragraph regarding our ability to continue as a going concern based upon cash used in operating activities and the current cash balance cannot be projected to cover the operating expenses for the next twelve months from the release date of this report. These factors, among others, raised substantial doubt about our ability to continue as a going . Our consolidated financial statements appearing elsewhere in this report do not include any adjustments that might result from the outcome of this uncertainty. There are no assurances we will be in our efforts to generate significant revenues or report operations or to continue as a going , in which event investors would their entire investment in our company.
Our ability to continue as a going concern is dependent upon our ability to carry out our business plan, achieve profitable operations, obtain additional working capital funds from our significant shareholders, and or through debt and equity financings. However, there can be no assurance that any additional financings will be available to us on satisfactory terms and conditions, if any.
The accompanying consolidated financial statements, included in Item 8, do not include any adjustments related to the recoverability or classification of asset-carrying amounts or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern.
Critical Accounting Policies and Estimates
Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We continually evaluate our estimates, including those related to bad debts, recovery of long-lived assets, income taxes, acquisition credits payable and the valuation of equity transactions.
We base our estimates on historical experience and on various other assumptions that we believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Any future changes to these estimates and assumptions could cause a material change to our reported amounts of revenues, expenses, assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions. We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of the consolidated financial statements.
Revenue Recognition
During the years ended December 31, 2025 and 2024, our revenue recognition policy was in accordance with Financial Accounting Sta ndards Board (“FASB”), Accounting Standards Codification (“ASC”) ASC 606, “ Revenue from Contracts with Customers ”, which requires the recognition of sales following five steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation.
Our customers place orders for our products pursuant to their purchase orders and the Company is paid by our customers pursuant to our invoices. Each invoice calls for a fixed payment in a fixed period of time. We recognize revenue by selling and delivering our products under our customers’ purchase orders and our related invoices to our customers. Prepayments, if any, received from customers prior to the products being delivered are recorded as advance from customers. In these cases, when the products are delivered, the amount recorded as advance from customers is recognized as revenue.
Income Taxes
The Company is governed by the income tax laws of the United States. Income taxes are accounted for pursuant to ASC 740 “ Accounting for Income Taxes ,” which is an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in our consolidated financial statements or tax returns. The charge for taxes is based on the results for the period as adjusted for items, which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.
Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the consolidated financial statements and the corresponding tax basis used in the computation of assessable tax profit. As a principle, deferred tax liabilities are recognized for all taxable temporary differences, and deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which deductible temporary differences can be utilized.
Deferred tax is calculated using tax rates that are expected to apply to the period when the asset is realized, or the liability is settled. Deferred tax is charged or credited in the income statement, except when it is related to items credited or charged directly to equity, in which case the deferred tax is changed to equity. Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and we intend to settle its current tax assets and liabilities on a net basis.
Stock-based Compensation
Stock-based compensation is accounted for based on the requirements of the Share-Based Payment topic of ASC 718, “ Compensation - Stock Compensation ” which requires recognition in the consolidated financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award. The Accounting Standards Codification also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award.
Pursuant to ASC 505-50, for share-based payments to consultants and other third-parties, compensation expense is determined at the “measurement date.” The expense is recognized over the period of services or the vesting period, whichever is applicable. Until the measurement date is reached, the total amount of compensation expense remains uncertain. We record compensation expenses based on the fair value of the award at the reporting date. The awards to consultants and other third parties are then revalued, or the total compensation is recalculated based on the then current fair value, at each subsequent reporting date.
Business Combinations
As noted above, on May 12, 2025, the Company, through its wholly-owned subsidiary AIGFB, acquired Assets totaling $595,440 from American Industrial Group, Inc. (“AIG”). Consideration was Acquisition Credits (deferred contingent liability).
The transaction has been accounted for as an asset acquisition pursuant to ASC 805-50, “Business Combinations – Related Issues” , as the acquired set of assets and activities did not meet the definition of a business. As such, the total consideration transferred, including direct transaction costs, has been allocated to the individual identifiable assets acquired and liabilities assumed on a relative fair value basis as of the acquisition date.
In accordance with the guidance applicable to asset acquisitions:
No goodwill has been recognized, as the transaction did not qualify as a business combination under ASC 805-10.
The asset values presented reflect the relative fair value allocation of the total purchase price among the identifiable assets acquired.
The consolidated financial statements do not include the results of operations or cash flows of the acquired assets prior to the acquisition date.
On July 5, 2025, Aqua Emergency, Inc. (Nevada), a 51%-owned subsidiary, acquired certain assets of Aqua Emergency, Inc. (AE FL ) valued at $1,905,272 under the July 5, 2025 Exchange Agreement. Consideration was Acquisition Credits (deferred contingent liability).
The Company has determined under ASC 805 that the transaction is a business combination
The Company acquired 51% controlling interest in AE NV and obtained control over all net assets as well as all rights to the business IP, contracts, customer lists, formulations and trade marks. SNBH paid fair value in issuing $1,905,272 Acquisition Credits to the shareholders of AE FL.
The Company recognized all the assets acquired as well as intangible assets such as trademarks, licenses, customer lists, contracts and goodwill.
Goodwill
Goodwill represents the excess of the purchase price over the fair value of the net identifiable tangible and intangible assets acquired in a business combination. The Company accounts for goodwill in accordance with ASC 350, “Intangibles—Goodwill and Other” . Goodwill is not amortized but is tested for impairment at least annually, or whenever events or changes in circumstances indicate that the fair value of a reporting unit is less than its carrying amount. The Company performs its annual goodwill impairment test during the fourth quarter of the fiscal year. Impairment is measured by comparing the carrying value of the reporting unit, including goodwill, to its fair value. If the carrying amount exceeds the fair value, an impairment loss equal to that excess is recognized. The Company recorded goodwill of $532,473 in connection with the acquisition of a controlling interest in Aqua Emergency, Inc. (AE NV) on July 5, 2025.
Impairment of Long-Lived Assets
Long-lived assets and certain identifiable intangible assets to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. Measurement of an impairment loss for long-lived assets and certain identifiable intangible assets that management expects to hold, and use is based on the fair value of the asset. Long-lived assets and certain identifiable intangible assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell.
Fair value of financial instruments
We value our financial assets and liabilities on a recurring basis using the fair value hierarchy established in Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosures” .
ASC 820 describes three levels of inputs that may be used to measure fair value, as follows:
Level 1 input, which include quoted prices in active markets for identical assets or liabilities.
Level 2 inputs, which include observable inputs other than Level 1 inputs, such as quoted prices for similar assets or liabilities; quoted prices for identical or similar assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability; and
Level 3 inputs, which include unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the underlying asset or liability. Level 3 assets and liabilities include those whose fair value measurements are determined using pricing models, discounted cash flow methodologies or similar valuation techniques, as well as significant management judgment or estimation.
Segment Reporting
The Company applies ASC 280, “Segment Reporting”, in determining reportable segments for its financial statement disclosure. Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s CODM is its President and Chief Operating Officer. The Company has determined that it operates as a single operating segment and has one reportable segment based on the consolidated results of SNBH as reviewed by the CODM.
Acquisition Credits
The Company has classified the Acquisition Credits issued to shareholders of AIG and AE FL as contingent liabilities in compliance with ASC 480-10-25 which classifies a financial instrument as a liability if all the following criteria are met.
It is mandatorily redeemable;
It requires or may require the issuer to repurchase it by transferring assets:
It is settled in a variable number of shares with monetary value fixed or indexed.
The Acquisition Credits meet the criteria and have been recorded as liabilities in the consolidated financial statements.
Related Party Transactions
During the year ended December 31, 2025, the Company issued the following shares of common stock and compensation to related parties:
1. George Furlan, its CEO, was issued 203,667 shares for management services, including a bonus of 66,667 shares related to the closing of exchange agreement with AIGFB and 137,000 shares for prior management services. He received $84,000 in compensation, of which $44,000 is accrued. These bonus issuances and debt conversions were not disclosed in the AIGFB Share Exchange Agreement and they were not approved by the new independent Board of Directors of the Company. The Company is reviewing eligibility and compliance for these transactions.
2. James Mansour, former Chief Marketing Officer, was issued 56,667 shares as full settlement of all previous obligations.
3. Evan Costaldo, former Legal Counsel, was issued 66,667 shares during the year ended December 31, 2025, with a total of 133,333 shares issued as compensation for the AIG & AIGFB acquisition. He invoiced $15,000 and $95,000 in services for the year ended December 31, 2025 and 2024, respectively, with $35,000 in unpaid balances. Costaldo’s retainer agreement for closing a reverse merger deal with American Industrial Group, Inc. was for a stipulated fixed fee of 100,000 shares and $30,000 in compensation. This exceeds contracted compensation by 33,333 shares and over $5,000 in total monetary compensation. Costaldo also invoiced a monthly fee of $5,000 as legal counsel. The reverse merger transaction did not occur and Costaldo resigned several months prior to the closing of the AIGFB deal. The Company believes these bonus and debt issuances, cash compensation and debt conversions were not approved by the new independent Board of Directors of the Company. The Company is reviewing eligibility and compliance for these transactions.
4. Steven Spanos, the former outside CFO, received a bonus of 33,333 shares related to the closing of exchange agreement with AIGFB in addition to $41,250 in compensation. Company believes these bonus and debt issuances are in breach of AIGFB Share Exchange Agreement and they were not approved by the new independent Board of Directors of the Company. The Company is reviewing eligibility and compliance for these transactions.
5 . Jelena Vadanjel-Doukas and John Doukas through their company Grace Court Advisors, LLC, received 10,000 shares for services and a bonus of 51,334 shares related to the closing of the exchange agreement with AIGFB. The Company believes these bonus and debt issuances, plus cash compensation received, are in breach of AIGFB Share Exchange Agreement and they were not approved by the new independent Board of Directors of the Company. The Company is reviewing eligibility and compliance for these transactions.
6 . Dante Jones, the former single member board chairman and CEO received a bonus of 33,334 shares related to the closing of exchange agreement with AIGFB. The Company believes these bonus and debt issuances, plus cash compensation received, are in breach of AIGFB Share Exchange Agreement and they were not approved by the new independent Board of Directors of the Company. The Company is reviewing eligibility and compliance for these transactions.
Additional relationships exist as follows:
1. Serge Knazev, President and Chief Operating Officer effective January 1st, 2026, is also an active investor and managing partner of American Industrial Group, Inc. (“AIG”). AIG is an investor in the Company, a source of operational funding through non-interest-bearing advances, and a manufacturing and fulfillment provider for the Company’s subsidiaries, including under the prepaid fulfillment arrangement entered into on December 31, 2025. To mitigate this inherent conflict of interest, Mr. Knazev has formally recused himself from all decisions involving AIG, its subsidiaries, and affiliated entities as well as his investments in SNBH and its subsidiaries. All existing and future transactions with AIG or its affiliates, including but not limited to acquisitions, pricing, credit, and fulfillment terms under ongoing arrangements, are subject to review and approval solely by the independent members of the Board of Directors, CFO and Legal Counsel, without participation by Mr. Knazev.
2. Dionne Pendleton, an independent member of the Board of Directors, is President of SNBH Holdings, Inc. which holds 1,000,000 shares of Preferred Series B of the Company. The shares are not held by Ms. Pendleton personally.
3 . Erskine Spriggs is the CEO and owner of Concent, Inc., the sole managing member of GA3 Consortium, LLC, which owns the Company’s notes and warrants which were purchased from Leonite Capital and Adriatic Advisors, LLC.
4 . Mr. Lee Puglisi, Mr. Serge Knazev and GA3 Consortium, LLC, have been providing funds for Company’s operations and overhead through non-interest bearing loans, as per Emergency Funding Agreement.
5. American Industrial Group, Inc. an investor and a majority limited member in GA3 Consortium, LLC.
With the exceptions specifically outlined above, management believes all related party transactions were made on terms equivalent to those that prevail in arm’s length transactions and were approved by the Company’s Board of Directors or an authorized committee.
Recent Accounting Pronouncements
We review newly issued accounting standards and pronouncements for the potential impact to the Company’s consolidated financial statements. Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on our consolidated financial statements upon adoption. We do not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to our consolidated financial condition, results of operations, cash flows or disclosures.
ASU 2024-04, Improvements to Accounting for Certain Convertible Instruments: This standard is highly relevant as it simplifies the accounting for instruments like the Company’s Acquisition Credits by eliminating specific separation models, which is expected to reduce future complexity and may result in a non-cash adjustment upon adoption in 2027. The impact of the potential non-cash adjustment cannot be reasonably anticipated at this time.
The Company continues to evaluate the enhanced disclosure requirements of ASU 2023-09, Improvements to Income Tax Disclosures, to ensure compliance with increased transparency mandates regarding rate reconciliation and Net Operating Loss (NOL) carryforward categories.
RESULTS OF OPERATIONS
Comparison of Results of Operations for the Years Ended December 31, 2025 and 2024.
Revenue
We generated revenue of $701,463 and $0, respectively, for the years ended December 31, 2025 and 2024. Sales were a result of activities associated with the acquisition of AIGFB in May 2025 and AE NV in July 2025. Revenue is net of inter-company sales elimination for the sales between the subsidiaries, as per GAAP.
Cost of Goods Sold
The Company had Cost of Goods Sold as a result of the revenue activities and incurred an expense of $509,026 for the year ended December 31, 2025 and $153,155 including a one time loss on obsolete inventory of $150,000 for the year ended December 31, 2024, respectively.
Operating Expenses
For the year ended December 31, 2025 and 2024, operating expenses consisted of the following:
Advertising and Marketing
General and Administrative
Legal and Professional
Management Fees
TOTAL OPERATING EXPENSES
The increase in Advertising is related to a trade show expense. General and Administrative expenses increased $84,104 due to $34,934 for additional filing fees and SEC related expenses and travel expenses increased by $49,145 for travel to manufacturers and customers related to our additional subsidiaries. See Consulting Services below for additional information.
Consulting Services
For the year ended December 31, 2025 and 2024, consulting expenses consisted of the following:
Accounting & Auditing
Other Advisory Services
Legal Fees
Management Fees
TOTAL CONSULTING EXPENSES
The primary reason for the increase in consulting fees is acquisition activity for AIGFB and AE NV. In addition, there was an increase of $71,720 for Investor Relations in Other Advisory Services. There was an adjustment to both the years ended December 31, 2025 and 2024 for services related to the CEO compensation of $44,000 and $54,500 that hadn’t previously been recorded. Bonuses and compensation were also issued to current and former company executives and consultants through shares of the Company and the Company is currently evaluating all past issuances for compliance, eligibility and possible restitution of these shares back to the Company. In addition, an adjustment of $129,500 to Retained Earnings was made for CEO compensation not recorded in the years 2021-2023.
Income (Loss) from Operations
As a result of the foregoing, for the year ended December 31, 2025, loss from operations amounted to $1,017,741 as compared to loss from operations of $944,833 for the year ended December 31, 2024.
Other Income (Expense)
Other income (expense) in total was ($183,836) for the year ended December 31, 2025, compared to $40,209 for the year ended December 31, 2024.
There were other income items of $113,653, with $98,653 in income for embedded derivative calculations for a convertible note and three warrants and a fraud claim adjudicated in the state of New Jersey which resulted in a claim for $25,000, of which $15,000 was received in the year ended December 31, 2025. No reserve for the additional $10,000 has been made as the collection is not reasonably assured. There was a gain on the embedded derivative for the year ended December 31, 2024 in the amount of $381,246.
The other expenses for the year ended December 31, 2025 and 2024 are related to interest expense, including default interest, in the amount of $297,489 and $341,037, respectively . There was a decrease in interest expense over the year ending December 31, 2024 due to conversion of several notes and interest payable into shares of common stock.
Income Taxes
We did not have any income taxes expense for the years ended December 31, 2025 and December 31, 2024.
Net Income (Loss)
Net loss for the years ended December 31, 2025 and 2024 were $1,201,577 and $904,624, respectively. The decrease in Net Loss was primarily due to the net profit contribution from the new acquisitions as the Company executed its acquisition strategy.
Liquidity and Capital Resources
The consolidated financial statements have been prepared using accounting principles generally accepted in the United States of America (“U.S. GAAP”) applicable for a going concern, which assumes that the Company will realize its assets and discharge its liabilities in the ordinary course of business.
To the extent the Company is successful in growing our business both organically and through acquisition, we continue to plan our working capital and the proceeds of any financing to finance such acquisition costs.
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. On December 31, 2025 and 2024, we had a cash balance of $29,011 and $3,432, respectively. These funds are kept in financial institutions located in the United States.
Short-Term Liquidity and Capital Plan: The Company is actively pursuing several strategic financing and debt restructuring initiatives to address short-term liquidity and cash needs, as its ability to continue as a going concern is dependent on obtaining additional working capital funds through debt and equity financings. Key initiatives include:
Working with an institutional investor for an equity credit line starting with $250,000 and expandable to $1.5 million.
Working with short-term note holders on the conversion of their obligations into equity, continuing the strategy of converting notes and interest payable into common stock.
Working with the GA3 Consortium on note and warrant restructuring, including a freeze of the interest and the elimination of “toxic” debt provisions. The Company issued shares to GA3 Consortium, LLC for the conversion of accrued interest on a convertible note in the amount of $85,000 for the year ended December 31, 2025.
Working with GA3 Consortium on continuing to provide additional financing in the form of non-recursive, forgivable, interest free loans.
Cash flows from Operating Activities
Operating activities used $223,873 in cash the year ended December 31, 2025, as compared with cash used of $402,718 for the year ended December 31, 2024.
Our net loss of $1,201,577 is the main component of our negative cash flow in 2025. We recognized prepaid fulfillment costs for inventory transferred to AIG & AE FL of $(9,206), our accounts payable and prepaid expenses increased by $104,776 and we accrued $297,657 of interest for notes payable. The Company also had an increase in accounts receivable of $161,480.
For the year ended December 31, 2024, our net loss of $904,624 is the main component of our negative operating cash flow. This includes a write down of unsalable inventory of $150,000. Accounts payable decreased by $37,337.
Cash flows from Investing Activities
Cash used for investing activities was $35,896 and $0 in for the year ended December 31, 2025 and 2024, respectively. This was for web site and artwork development.
Cash flows from Financing Activities
Cash flows provided by financing activities during the year ended December 31, 2025 amounted to $285,348, as compared with $404,851, for the year ended December 31, 2024. We received $71,000 in cash from the sale of common stock that has not yet been issued, proceeds from short term loans of $164,348 net proceeds from the sale of common stock of $50,000 for the year ended December 31, 2025. During the year ended December 31, 2024 we received $317,297 in cash from the sale of common stock and $8,000 from the exercise of warrants to purchase common stock, shares were issued for common stock tht had not been issued of $68,054 and we received the proceeds from a short term loan in the amount of $11,500.
We will need to raise additional funds, particularly if the Company is unable to generate positive cash flow as a result of our operations. We estimate that based on current plans and assumptions, that our available cash will be insufficient to satisfy our cash requirements under our present operating expectations. Other than working capital and advances received from related parties and funds received pursuant to securities purchase agreements, we presently have no other significant alternative source of working capital. We have used these funds to fund our operating expenses, pay our obligations and grow our company. We will need to raise significant additional capital to fund our operations and to provide working capital for our ongoing operations and obligations. Therefore, our future operation is dependent on our ability to secure additional financing. Financing transactions may include the issuance of equity or debt securities, obtaining credit facilities, or other financing mechanisms. However, the trading price of our common stock and a downturn in the U.S. equity and debt markets could make it more difficult to obtain financing through the issuance of equity or debt securities. Even if the Company is to raise the funds required, it is possible that we could incur costs and expenses or experience cash requirements that would us to seek alternative financing. Furthermore, if we issue additional equity or debt securities, stockholders may experience additional dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of our common stock. The to obtain additional capital may restrict our ability to grow and may reduce our ability to continue to conduct business operations. If the Company is to obtain additional financing, we will be required to our operations. To date, we have not considered this alternative, nor do we view it as a likely occurrence.
Going Concern
The Company’s consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and settlement of liabilities and commitments in the normal course of business. During the year ended December 31, 2025, the Company incurred a net loss of $1,201,577. The Company had an accumulated deficit of $6,332,894 and a working capital deficit of $3,902,970. During the year ended December 31, 2024, the Company had a net loss of $904,624, an accumulated deficit of $5,131,317 and a working capital deficit of $2,752,810. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. Included in the working capital deficit for the year ended December 31, 2025 is $2,640,712 of Acquisition Credits solely convertible into equity issued to acquire the subsidiaries AIGFG & AE NV, in the amount of $2,500,712, as well as an issuance of $140,000 in exchange for a reduction in accounts payable. The Company’s plan for its operating capital needs are discussed in the Liquidity and Capital Resources section above.
Off-balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
