Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
All statements contained in this prospectus that are not historical facts, including statements regarding anticipated activity, are "forward-looking statements" within the meaning of the federal securities laws, involve a number of risks and uncertainties and are based on our beliefs and assumptions and information currently available to us. Words such as "may," "will," "should," "expect," "plan," "intend," "anticipate," "believe," "estimate," "predict," "project," "potential," "forecast," "continue," "strategy," and similar expressions identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties, and other factors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted. We do not intend to update these forward-looking statements except as required by law.
Overview
TAG is an integrated infrastructure and service provider to the alternative-energy industry. Through our proprietary national platform, the TAG GRID, we deliver a full suite of support services that enable solar sales organizations and licensed contractors to more efficiently develop and deploy residential and commercial solar energy projects. Our direct customers are industry service providers — sales teams and installers — who in turn serve homeowners and businesses as end users. TAG does not perform installations, nor does it employ solar sales agents. Instead, we support our customers through five interconnected business units operating under the TAG GRID platform: TAG Financial Services, TAG Capital, TAG Construction, TAG Distribution, and the TAG Dealer & Broker Network.
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Results of Operations
RESULTS OF OPERATIONS — FINAL CONSOLIDATED VERSION WITH COMMENTARY
Revenues
For the fiscal year ended September 30, 2025, the Company recognized revenue of $540,891 , as compared to $604,789 for the fiscal year ended September 30, 2024 (As Restated). The fiscal 2024 figures have been restated to reflect the full fiscal year of TAG operations, as TAG is the accounting acquirer in the September 2024 reverse recapitalization. The originally filed Form 10‑K included only the two‑week post‑merger stub period, which reported $52,400 of revenue.
The year‑over‑year decrease in recognized revenue is primarily attributable to the timing of revenue recognition under ASC 606 rather than a decline in operational activity. During fiscal 2025, the Company executed a higher volume of prepaid Power Purchase Agreements and originated consumer loan notes with gross transaction values substantially exceeding the revenue recognized in the period. However, under ASC 606, revenue is recognized only when the Company satisfies its performance obligations. A significant portion of the economic value generated in fiscal 2025 relates to long‑term contractual arrangements for which performance obligations will be satisfied — and revenue recognized — in future periods.
Accordingly, the decline in recognized revenue reflects the timing of revenue recognition relative to contract structure, not a reduction in sales activity or customer demand. Fiscal 2025 revenue is final based on the Company’s application of ASC 606 and completion of audit procedures.
Cost of Revenue and Gross Profit
Cost of revenue for the fiscal year ended September 30, 2025, was $187,906 , producing a gross profit of $352,985 and a gross margin of approximately 65.3% . Cost of revenue for the fiscal year ended September 30, 2024 (As Restated) was $34,605 , producing a gross profit of $570,184 and a gross margin of approximately 94.3% .
The restated fiscal 2024 gross margin reflects TAG’s operating model during that period, which consisted primarily of origination, administrative, and coordination activities with minimal associated cost of revenue. In fiscal 2025, the Company expanded its operational footprint, including increased utilization of licensed third‑party solar contractors and higher commission payments to third‑party sales organizations. These activities carry direct costs that were not present, or were present at a significantly lower scale, in the restated fiscal 2024 period.
The resulting margin compression from 94.3% to 65.3% reflects the Company’s transition from a limited‑scope administrative model to a more operationally active model with increased fulfilment activity, rather than deterioration in pricing or unit economics.
Operating Expenses
Operating expenses for the fiscal year ended September 30, 2025, were $967,315 , substantially all of which represents selling, general and administrative expenses. Operating expenses for the fiscal year ended September 30, 2024 (As Restated) were $702,068 , an increase of $265,247 . The increase primarily reflects higher professional and audit fees associated with SEC reporting, the ongoing S‑1 registration process, and expansion of back‑office capacity to support the Company’s operational growth and public‑company compliance requirements.
The originally filed fiscal 2024 results included $254,000 of stock‑based compensation . During the restatement process, management and the auditors reviewed the underlying equity issuances and determined that the previously recorded amount did not meet the criteria for stock‑based compensation expense under ASC 718. The related issuances were reclassified to equity as capital contributions rather than period expenses. As a result, the restated fiscal 2024 operating expenses no longer include stock‑based compensation.
Other Expense
Interest expense for the fiscal year ended September 30, 2025, was $150,436 , primarily attributable to advances from the Chief Executive Officer (which accrue interest at 12.75% per annum) and convertible promissory notes. Interest expense for fiscal 2024 (As Restated) was $2,088 .
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The Company recorded $322,489 of assets written off during fiscal 2025, principally related to the unwind of the REPM acquisition. The Company recognized gains on extinguishment of debt of $3,395 in fiscal 2025 and $24,839 in fiscal 2024 (As Restated), and other income of $1,424 in fiscal 2024 (As Restated).
Net Loss
Net loss for the fiscal year ended September 30, 2025 was $1,083,860 , of which $102,724 was attributable to non‑controlling interests and $981,136 was attributable to stockholders of Freedom Holdings, Inc. Net loss for the fiscal year ended September 30, 2024 (As Restated) was $107,709 , of which $75,209 was net income attributable to non‑controlling interests and $182,918 was a net loss attributable to the Company.
Liquidity and Capital Resources
Liquidity and Capital Resources. As of September 30, 2025, the Company held approximately $89,914 in cash and cash equivalents, compared to $74,952 on September 30, 2024 (As Restated). The Company had a working capital deficit of approximately $10,727,376 on September 30, 2025. We have incurred substantial net losses since inception, resulting in an accumulated deficit of $1,357,440 on September 30, 2025 (compared to an accumulated deficit of $376,304 on September 30, 2024, As Restated — see Note 2 to the consolidated financial statements for a description of the prior-period restatement charged against additional paid-in capital). We have historically funded operations through advances from our Chief Executive Officer (which accrue interest at 12.75% per annum and, as of September 30, 2025, aggregated approximately $965,000), convertible promissory notes, and the issuance of equity. These conditions raise substantial doubt about our ability to continue as a going concern. Our independent registered public accounting firm's report on the consolidated financial statements included elsewhere in this prospectus contains an explanatory paragraph describing this uncertainty. Our continued operations are dependent on our ability to (i) increase revenues through the TAG GRID platform and the build-out of the TAG Capital portfolio, (ii) manage operating costs, (iii) complete the SPA equity line funding and additional debt or equity financings, and (iv) realize the Investment Tax Credit and long-term cash flows associated with the Hard Solar operating portfolio measured at fair value under ASC 820 (see Note 5). There is no assurance that such financings or realizations will . 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, results of operations or liquidity that is material to investors.
Critical Accounting Policies
Use of Estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include the fair value of the Hard Solar operating portfolio measured under ASC 820 (see Note 5), the useful lives of solar infrastructure assets, the valuation of cryptocurrency holdings, and the recoverability of consumer loan notes and PPA receivables. Revenue Recognition. Revenue is recognized in accordance with ASC 606, Revenue from Contracts with Customers. For prepaid PPAs, revenue is recognized on a milestone or ratable basis depending on system commissioning and the satisfaction of performance obligations. For consumer loan notes, the Company recognizes origination fees at the point of sale or servicing income over the life of the loan, depending on whether servicing rights are retained. Revenue from TAG Distribution and TAG Construction is recognized when control of the underlying goods or services transfers to the customer. Business Combinations. The Company accounts for business combinations under ASC 805, Business Combinations, using the acquisition method. The purchase consideration is allocated to assets acquired and liabilities assumed based on their acquisition-date fair values, with any excess recorded as goodwill. The reverse-merger transaction with TAG on September 17, 2024, has been accounted for as a reverse recapitalization, with TAG treated as the accounting acquirer. See Note 4. Fair Value Measurements. The Company measures certain assets and liabilities at fair value in accordance with ASC 820, using a three-level hierarchy based on observability of inputs. See Note 5 for Level 3 disclosures. Recent Accounting Pronouncements. The Company has evaluated recently issued accounting pronouncements and does not believe that any of them will have a material impact on the Company's consolidated financial position, results of operations or cash flows.
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Management's Outlook — Assessment of Future Value
The Company has adopted a two-pronged approach to the presentation of value in its public filings. Under the first prong, the consolidated balance sheet carries the GAAP-defensible exit valuation of the Company's assets as measured under ASC 820 — that is, the price a market participant would pay to acquire these assets today, in their current condition, based on currently available evidence. This measurement does not include the value of future business that has not yet been contracted, unexecuted pipeline, or strategic optionality. Under the second prong, described in this section, management presents its assessment of the Company's future value potential based on forward-looking assumptions and projections.
Management believes the current balance sheet fair values do not fully reflect the growth trajectory and earnings potential of the business. The Company's $45 million contracted pipeline, the scalability of the TAG GRID platform, and the expansion of the dealer and contractor network represent significant future value that, while not yet recognizable on the balance sheet under GAAP, is central to the investment thesis. Management's forward-looking assessment, based on a discounted cash flow analysis using the following key assumptions, indicates a substantially higher potential enterprise value:
Annual project growth rate: 25% (based on current pipeline momentum and $45M contracted backlog)
Gross margin per project: 40% (based on actual APA sale economics and financier pricing)
Weighted average cost of capital (WACC): 15% (reflecting the Company's current risk profile as a micro-cap with limited operating history)
Terminal growth rate: 3% (aligned with long-term GDP growth and clean energy sector expansion)
Terminal value methodology: Gordon Growth Model applied to Year 5 free cash flow
The detailed assumptions, year-by-year projections, and sensitivity analysis supporting this assessment are available in the Company's investor presentation, which is published on the Company's website at www.awarenessgroup.llc. The investor presentation carries the customary forward-looking statements disclaimer in compliance with the safe harbour provisions of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements involve risks and uncertainties. Actual results could differ materially from those projected due to factors including, but not limited to: delays in project permitting and interconnection; changes in federal or state solar incentive programs; fluctuations in equipment costs and labor availability; the Company's ability to secure project financing on favorable terms; competitive dynamics in the residential and commercial solar market; and the other risk factors described in Item 1A of this Annual Report. Investors should not place undue reliance on these projections.
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, results of operations or liquidity that is material to investors.
