Freedom Holdings, Inc. - 10-K

Item 1A. Risk Factors

You should carefully consider the risks described below, together with all of the other information in this Annual Report, before making an investment decision. Our business, financial condition, results of operations or liquidity could be materially adversely affected by any of these risks.

Substantial doubt about our ability to continue as a going concern.

Our consolidated financial statements for the fiscal years ended September 30, 2025, and September 30, 2024, have been prepared on a going-concern basis. We have a history of operating losses and, as of September 30, 2025, had an accumulated deficit of $1,357,440 and limited cash resources. Our independent registered public accounting firm's report contains an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. Our continued operations are highly dependent upon our ability to increase revenues, manage operating costs, and complete additional equity and/or debt financings. If we are unable to secure additional capital, we may be required to scale back or cease operations and investors in our common stock could lose all or part of their investment.

We changed our independent registered public accounting firm following an SEC enforcement action against our prior auditor, and the fiscal year ended September 30, 2024, is being re-audited.

On April 25, 2025, the Company dismissed Olayinka Oyebola & Co. (PCAOB ID 5968) as its independent registered public accounting firm following the enforcement action brought by the Securities and Exchange Commission against that firm and its principal. On March 24, 2026, the Company engaged Shah Teelani & Associates of Ahmedabad, India to audit the Company's consolidated financial statements for the fiscal year ended September 30, 2025 and to re-audit the consolidated financial statements for the fiscal year ended September 30, 2024 that were previously audited by Olayinka Oyebola & Co. and included in our Annual Report on Form 10-K filed in February 2025. The staff of the SEC has informed the Company that the prior audit opinion issued by Olayinka Oyebola & Co. with respect to the fiscal year ended September 30, 2024 may no longer be relied upon, and that the fiscal 2024 financial statements must be re-audited before the Company's pending registration statement on Form S-1 can be declared effective. The re-audit process may result in restatements of previously reported financial information, additional audit scope and cost, and further delays in our regulatory filings, any of which could have a material adverse effect on the Company. A Current Report on Form 8-K reporting the change of auditors under Item 4.01 of Form 8-K is expected to be filed on April 15, 2026, such filing may be later than the four-business-day window prescribed by Form 8-K.

We are delinquent in filing our Annual Report on Form 10-K for the fiscal year ended September 30, 2025.

Our Annual Report on Form 10-K for the fiscal year ended September 30, 2025, was due on December 29, 2025, and has not yet been filed as of the date of this prospectus. The delay is the result of the ongoing initial audit of the fiscal year ended September 30, 2025, and the concurrent re-audit of the fiscal year ended September 30, 2024, by our newly engaged independent registered public accounting firm. We intend to file a Form NT 10-K (Notification of Late Filing) under Rule 12b-25 and to file the Annual Report on Form 10-K as soon as practicable following completion of the audit. Our delinquency in filing periodic reports may result in the loss of our status as a current filer, the inability to use short-form registration statements, limitations on the availability of Rule 144 for our shareholders, and potential enforcement action by the Securities and Exchange Commission. The staff of the SEC may decline to declare the pending S-1 registration statement effective until we are current with our periodic reporting obligations.

Our prior auditor was charged by the SEC with aiding and abetting antifraud violations.

Our prior independent registered public accounting firm, Olayinka Oyebola & Co. (Chartered Accountants), and its principal, Olayinka Oyebola, were charged by the Securities and Exchange Commission with aiding and abetting violations of the antifraud provisions of the federal securities laws. The SEC's complaint alleged that the firm failed to take action upon learning that a client created fake audit reports bearing the principal's signature for use in SEC filings. The relief sought included potential civil penalties and an order permanently barring the principal from acting as an auditor for U.S. public companies. These circumstances contributed to the Company's decision to change auditors. See the SEC press release at https://www.sec.gov/newsroom/press-releases/2024-157.

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Level 3 fair-value measurements are subject to significant estimation uncertainty.

As described in Note 5 to the Consolidated Financial Statements, we have elected to measure our Hard Solar operating portfolio (634 projects) at fair value as of September 30, 2025, in accordance with ASC 820, using unobservable Level 3 inputs. The adopted Conservative (Low) fair value of $60,524,911 has been determined from an average installed cost of $75,766 per project, an Investment Tax Credit (ITC) realization rate of 46.3%, a DCF multiplier of 1.8x and an ITC realization probability of 70.0%. Under less conservative assumptions, our Base and Optimistic reference scenarios would produce fair values of approximately $89.8 million and $127.8 million, respectively, though only the Conservative scenario has been adopted on the balance sheet. Our internally developed platform assets — including the TAG Enterprise / TAG GRID platform, the PPA Finance Program, the Candela Coin tokenized loyalty platform, and the Captain Manicorn media subsidiary,— have been derecognized from the consolidated balance sheet through a prior-period restatement (see Note 2) charged against additional paid-in capital, reflecting management's determination that such assets either fail capitalization criteria under ASC 350-40 / ASC 985-20, represent period costs under ASC 720, or constitute unrealized gain contingencies under ASC 450. No fair-value election was in effect on September 30, 2024; accordingly, the September 30, 2024, balance sheet is presented at carrying value per the Company's predecessor consolidated financial statements, and all of the fair-value revaluation surplus of $31,547,080 is recorded in the fiscal year ended September 30, 2025. Fair-value measurements are inherently subjective and dependent on the assumptions identified above. Actual results could differ materially from these estimates, and the final measurements included in the audited financial statements will reflect the methodology confirmed by the Company's independent registered public accounting firm.

We depend on the continued services of our Chief Executive Officer.

Our ability to compete and develop our business is largely dependent on the services of Pablo Diaz, our Chief Executive Officer, and certain third-party consultants and suppliers who assist him. We do not maintain key-man life insurance on Mr. Diaz. The loss of Mr. Diaz's services would have a material adverse effect on our business.

Our common stock is a penny stock with limited trading volume.

Our common stock trades on the OTCID market under the symbol "TAAG" at prices below $5.00 per share and is therefore classified as a "penny stock" under the rules of the Securities and Exchange Commission. The penny-stock rules impose additional sales-practice requirements on broker-dealers, which may reduce the trading activity in, and liquidity of, our common stock.

Sales under the SPA will cause dilution and may depress the market price of our common stock.

On January 30, 2025, the Company entered into a Standby Share Purchase Agreement (the "SPA") pursuant to which the Selling Stockholder has committed to purchase up to $10,000,000 of our common stock at formula-based discounts to volume-weighted average price. Issuances under the SPA will be dilutive to existing stockholders and the perception that such issuances may occur could cause the market price of our common stock to decline.

We do not have a traditional credit facility.

We do not presently have a traditional credit facility with a financial institution. To fund working capital, we have historically relied on advances from our Chief Executive Officer, which accrue interest at 12.75% per annum, and on convertible promissory notes issued from time to time. This internal funding approach limits our ability to scale rapidly.

Our corporate governance measures are limited.

We have not voluntarily implemented many of the corporate-governance measures that would be required of companies listed on a national securities exchange. We do not have an audit committee, a compensation committee, or a nominating committee, and we do not have an "audit committee financial expert" as defined in Item 401 of Regulation S-K.

We are a smaller reporting company and an emerging growth company.

As a smaller reporting company and an emerging growth company, we are entitled to reduced disclosure requirements, including only two years of audited financial statements and reduced executive-compensation disclosure. As a result, the information we provide to investors may be less comprehensive than that provided by other public companies.

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Our statement of cash flows contains a reconciliation gap that may require adjustment.

Management's draft consolidated statement of cash flows for the fiscal year ended September 30, 2025, contains an approximately $109,000 reconciliation difference between the subtotal of identified cash flows and the change in cash and cash equivalents per the consolidated balance sheet. This gap is believed to relate to movements in deferred construction costs, contract liabilities, and intercompany cash flows that are not yet fully captured in the consolidating cash-flow workpapers. The Company is working with Shah Teelani & Associates to identify and properly classify the reconciling items. If the reconciliation reveals misclassified or unrecorded transactions, additional adjustments to operating, investing, or financing cash flows may be necessary. While the $109,000 gap is not material to total cash flows, the existence of a reconciliation difference is indicative of the Company's overall internal-control weaknesses described in Item 9A.

The share count of our common stock requires reconciliation with the transfer agent.

The Company's August 2025 S-1/A amendment reported 58,608,825 common shares outstanding on the cover page but 3,388,065,460 common shares outstanding in the Security Ownership section. This inconsistency has not yet been resolved. Management is working with the Company's transfer agent to determine the correct number of authorized and outstanding common shares and to reconcile any discrepancies arising from historical stock splits, reverse splits, or other corporate actions. If the higher figure is correct, the Company's per-share metrics, penny-stock status, and market capitalization disclosures will differ materially from those implied by the lower figure. Investors should not rely on either share count until this reconciliation is complete.

Legal proceedings.

On April 25, 2025, the Company was named as a defendant in a complaint relating to an agreement entered into by the Company's prior management team, in which the plaintiff alleges it is owed compensation for services rendered in relation to the acquisition of The Awareness Group. As of April 2026, the case is ongoing.

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 succeed. 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.