Vynleads, Inc. - 10-K

ITEM 1A. RISK FACTORS

An investment in our common stock involves a high degree of risk. You should carefully consider the following risk factors, together with the other information contained in this annual report. If any of the risks described below occur, our business, reputation, operating results, prospects and the value of our securities could be materially adversely affected. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business.

Our transition to an app-based subscription and platform model may not succeed. Our current strategy depends on scaling the Done With Diabetes app as a recurring subscription product and, over time, expanding into a broader technology-enabled platform. This model is materially different from a historical emphasis on discrete wellness products and related offerings. We may not be able to acquire users cost-effectively, convert trial users into paying subscribers, retain users for the duration of the program, maintain engagement in Lifetime Wellness Mode or realize the operational leverage management expects from our AI-enabled and agentic workflows. If our subscription model does not achieve the growth, retention or operating leverage we expect, our business and prospects could be materially harmed.

Our business depends on sustained user engagement, retention and perceived relevance. The value proposition of our platform depends on repeated use over time. Our current product experience includes onboarding, daily missions, meal guidance, dashboards, community participation, AI coaching and gamified features intended to reinforce adherence. If users do not find these features helpful, engaging, easy to use or worth the ongoing subscription price, they may cancel, become inactive or fail to recommend the product to others. Because our strategy is designed around recurring engagement rather than a single transaction, weak retention could have a disproportionate adverse effect on our growth and brand perception.

We operate in a highly competitive and rapidly evolving market. We compete with digital wellness applications, metabolic health and diabetes support platforms, nutrition and habit-tracking products, coaching programs, large consumer health brands, free online resources and enterprise wellness vendors. Many current and potential competitors have significantly greater financial, technical, marketing and organizational resources than we do. Competitors may introduce products with broader distribution, stronger brands, more sophisticated technology, more substantial evidence packages, lower pricing or more favorable enterprise contracting terms. If we fail to differentiate our platform in a meaningful way, demand for our offerings could be limited.

Our enterprise strategy may involve long sales cycles, additional requirements and uncertain conversion. We intend to market our platform not only to individual consumers but also to self-insured employers, health plans, payers, provider groups and pharmacy benefit managers. Enterprise opportunities may require lengthy evaluation cycles, pilot programs, security reviews, reporting capabilities, integration support, specialized contractual terms and additional compliance commitments. We may invest management time, development resources and external expenses in pursuit of enterprise opportunities that do not ultimately close or do not scale as expected. As a result, our enterprise strategy may take longer to develop and may be more costly than anticipated.

Our use of artificial intelligence, including agentic and agent-to-agent workflows, may expose us to product, legal and reputational risk. Our platform uses AI-enabled features, including Dr. Smith AI Coach and other automated engagement functions, to personalize guidance and user support. As we continue to develop agentic workflows, specialized AI agents may retrieve program content, exchange context, sequence recommendations or support community-related interactions. AI systems can produce inaccurate, incomplete, outdated, inconsistent or otherwise unsatisfactory outputs. They may also reflect biases, fail to account for user-specific context, or be used in ways we did not anticipate. In agentic environments, errors, inappropriate instructions, unsafe outputs or permission failures may be amplified when context is transferred across tools, models or agents, or when AI-mediated content appears inside a community experience. If users rely on AI-generated content they perceive to be misleading, harmful or inappropriate, or if regulators, partners or the public challenge our use of AI, our reputation, customer relationships and business prospects could be materially harmed. In addition, evolving laws and standards governing AI may increase our compliance burden or limit certain product features.

If we cannot appropriately substantiate, communicate or qualify claims regarding our platform, we could face regulatory and reputational harm. Our website and public materials describe our platform as evidence-informed and focused on metabolic health, and our commercial success depends in part on how effectively we communicate user value, outcomes potential and product differentiation. Claims relating to wellness outcomes, engagement, retention, lifestyle improvement, cost savings or other benefits may be challenged by regulators, advertising platforms, enterprise buyers, competitors or consumers if they are viewed as insufficiently supported, misleading or not appropriately qualified. Even if claims are based on internal data or good-faith interpretation, disputes regarding substantiation or presentation could result in investigations, platform restrictions, negative publicity, litigation or reduced trust.

The regulatory environment applicable to digital wellness, subscription commerce, privacy and health-adjacent claims is evolving and may become more burdensome. Our operations are subject to laws and regulations relating to consumer protection, subscriptions and automatic renewal, digital advertising, privacy and data security, intellectual property, payment processing, accessibility, online communications and health-related representations. Because our offerings address topics closely related to chronic conditions, there is a risk that regulators or counterparties could take a different view than we do regarding the scope of permissible claims, the boundary between wellness support and regulated medical activity, or the compliance obligations associated with particular features. Changes in law, regulation, enforcement priorities or platform policies could require us to modify product features, marketing practices, disclosures, pricing flows or data handling practices, any of which could increase our costs or limit our growth.

If our platform, systems or data are compromised, unavailable or exposed, our business could be materially harmed. We collect and process personal information, profile data, engagement history, subscription records and health-related lifestyle information through our digital platform. Our business relies on cloud infrastructure, third-party software, payment processors and communications providers. A security incident, ransomware event, credential compromise, software vulnerability, insider misuse, vendor failure or significant service outage could disrupt operations, expose data, damage our brand, trigger legal or contractual claims, increase regulatory scrutiny and reduce user or partner confidence. Any significant cybersecurity or reliability event could materially adversely affect our business.

We rely heavily on third-party service providers and external platforms. Important parts of our platform and commercial operations depend on third-party vendors for hosting, payments, analytics, communications, development tools, AI-enablement, model providers, search visibility and social distribution. We may have limited control over the performance, pricing, security, service continuity or policy decisions of these providers. If a critical vendor experiences downtime, increases prices, changes technical requirements, restricts our access, terminates services, alters content or advertising policies, or suffers its own cybersecurity incident, our product performance and customer acquisition could be adversely affected. Replacing key providers may be time-consuming, costly and disruptive.

Our business is dependent on a small number of key personnel and external support relationships. At the date of this report, we have a very limited number of internal personnel and rely significantly on third-party consultants, contractors and service providers for selected operational, development, finance, marketing and support functions. Our ability to execute our strategy depends on the continued availability and performance of these individuals and organizations. The loss of key personnel, an inability to attract qualified external support, or disruption in important vendor relationships could delay product development, impair execution and weaken internal controls and oversight.

Our DWX platform vision, broader agentic architecture and future condition-specific offerings may never be realized or may distract management. We have discussed a broader Done With, or DWX, platform vision under which the underlying personalization, AI support, agentic workflows and community framework may be extended to additional condition-aware programs, including publicly referenced areas such as heart disease and depression. These expansion opportunities remain subject to significant uncertainty, including product development, regulatory positioning, market acceptance, funding, staffing and partner demand. If we pursue new offerings or additional platform layers too aggressively, we may divert resources from our flagship product. If we do not successfully expand, the market may view our long-term platform narrative as unproven.

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

The following discussion should be read in conjunction with our financial statements, including the notes thereto, appearing elsewhere in this annual report. The following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Our audited financial statements are stated in United States Dollars and are prepared in accordance with the United States Generally Accepted Accounting Principles.

Management’s Discussion and Analysis of Financial Condition and Results of Operations included in this report discusses the Company’s financial condition and results of operations as of and for 2025 and 2024.

Results of Operations

The Company has incurred losses since inception resulting in an accumulated deficit of $3,040,596 as of December 31, 2025. Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.

We will require additional capital to meet our short and long term operating requirements. We expect to raise additional capital through, among other things, the sale of equity securities.

Fiscal year ended December 31, 2025 compared to the year fiscal ended December 31, 2024

Revenues

Revenues for 2025 were $0, a decrease of $0, or 0%, from $0 in 2024.

Costs and Expenses

Total costs and operating expenses increased 8,079, or 3.38%, in $247,318 in 2025 from $239,239 in 2024. The increase in operating costs and expenses was due to an increase in back office support as operations begin to ramp up.

Cost of revenue decreased $8,394, or 56.36%, to 6,499 in 2025 compared to $14,893 in 2024. Our cost of revenue includes the cost of the supplements we sell as well as shipping and handling costs for shipments to customers, merchant processing fees, call center support, and order processing.

Selling, general and administrative expenses increased $16,473 or 7.34%, to $240,819 in 2025 from $224,346 in 2024. The increase in SG&A is principally attributable to increases in consulting and accounting expenses, legal expenses, office expenses and general expenses.  This was offset by a decrease in interest expense from the prior year due to a large portion of debt being converted to equity in FY 2024.

Net Loss

Our net loss for the year ended December 31, 2025 was $255,066 compared to $261,192 for the year ended December 31, 2024.

Liquidity and capital resources

Liquidity is the ability of a company to generate sufficient cash to satisfy its needs for cash. The following table summarizes our total current assets, total current liabilities and working capital deficit at December 31, 2025 as compared to December 31, 2024.

December 31,

December 31,

Total current assets

Total current liabilities

Working capital deficit

The reduction in total current assets between the periods primarily reflects a reduction in cash and prepaid expense. The increase in total current liabilities reflects an increase in notes payable, accounts payable, and accrued expenses. We do not have any capital commitments and do not have any external sources of working capital available.

Going concern and management’s liquidity plans

We have experienced recurring operating losses and negative operating cash flows, and have financed our recent working capital requirements primarily through the issuance of notes payable. During the years ended December 31, 2025 and 2024, we have reported net losses of $255,066 and $261,192, respectively. As of December 31, 2025, our working capital was a deficit of $352,431, our accumulated deficit was $3,040,596, and we had negative cash flows from operations of $108,860. These factors, among others, raise substantial doubt about our ability to continue as a going concern. Our Financial Statements do not include any adjustments that might result from the outcome of this uncertainty. The accompanying Financial Statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. There are no assurances we will be successful in our efforts to report profitable operations or to continue as a going concern, in which event investors would lose their entire investment in our company.

Our ability to continue to grow our business is dependent upon our ability to raise additional sufficient capital to fund our operating expenses, including advertising, until such time, if ever, that we are able to report profitable operations, as well as for our short-term and long-term growth plans. We do not generate operating income and we are presently relying on cash we receive from bridge loans to pay our operating expenses. Our management estimates that we require approximately $5,500,000 in additional working capital during the next 12 months in order to meet our current business objectives, including the development of new indicators for our Lifestyle Blueprint platform, the addition of print versions of our DWD Protocol, expanding our supplement product line and additional subscription content offerings for our customers. This additional working capital is also necessary to fund increases in our advertising and marketing costs, costs associated with the development of additional infrastructure to support our expected growth, as well as funds to pay our operating expenses and general working capital. We currently do not have any firm commitments to provide any additional capital to us. There are no assurances we will be successful in securing the additional capital necessary to grow our company and pay our operating expenses. Any delay in raising sufficient funds could adversely impact our ability to continue to increase our revenues in future periods. In addition, if we are unable to raise the necessary additional working capital, we may be forced to reduce certain operating expenses in an effort to conserve our working capital which will adversely impact our revenues and results of operations in future periods and there are no assurances we could continue as a going concern.

Summary of cash flows

December 31,

December 31,

Net cash used in operating activities

Net cash provided by investing activities

Net cash provided by financing activities

The decrease in cash used in our operating activities in 2025 as compared to 2024 is due to a decrease in accounts payable and decrease in the holdback receivable.

There was no net cash provided by or used in investing activities during 2025 and 2024.

Net cash provided by financing activities during 2025 and 2024 reflects proceeds from notes payable from two investors and proceeds from the issuance of common stock.

Commitments and Contingencies

Information regarding our Commitments and Contingencies is contained in Note 8 to the Financial Statements.

Off-Balance Sheet Arrangements

We have not entered 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 and would be considered material to investors.

Critical Accounting Policies and Estimates

Our financial statements have been prepared in conformity with U.S. GAAP and are based upon certain critical accounting policies. These policies may require management to make estimates, judgments and assumptions that we believe are reasonable based on our historical experience, contract terms, observance of known trends in our Company and the industry as a whole, and information available from other outside sources. Our estimates affect the reported amounts of assets and liabilities and related disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reporting period. Actual results may differ from those initial estimates. Our significant accounting policies are more fully described in Note 3 of the Financial Statements.

Revenue recognition  – Our product revenues are generated through online channels, in which customers provide their credit and/or debit cards for processing payments to purchase our products and services. The credit cards go through various checks and balances to ensure these are valid charges. We use our judgment in various ways including: that the payment is valid if it is approved by the various credible checks in place by the online banking systems, we have engaged with to complete each transaction. In some cases, the banking partners in place will address charges as invalid or fraudulent, due to a lost credit card, or related, and can redress payments issued for up to 12 months or longer. These adjustments are typically done via chargebacks. Every transaction is tracked, but we are unable to ever completely verify a valid transaction. Beyond that, there are also estimated elements of when a consumer “changes their mind” on sale transactions and leveraging their banking relationships to chargeback the transaction. (Also known as friendly fraud in the space.) In addition to these elements and judgements, there is the case of all of our products having a 60-day money-back guarantee. In some cases, customers will take advantage of this system to use our digital services and products for 1-59 days, then decide to request a refund. As these and future events and their effects of these revenue-impacting elements cannot be determined with complete precision, actual results could differ from these estimates and assumptions, and those differences could be material to the Financial Statements.

Holdback Receivables  – Since a primary source of our income is generated through online channels, in which a merchant account and merchant bank relationship is developed, we naturally must account for holdback receivables. These merchant banks require “holdbacks,” based on the level of risk associated to a specific business or merchant account. In our case, to ensure we can continue processing credit/debit card sales online, our merchant bank requires them to holdback a percentage of that receivable money as a guarantee. The money they hold back is held in their accounts as a ‘reserve.’ They are able to hold a percentage of our monies based on our receivables. We use our judgment in various ways including: we believe the merchant bank will honor their agreement, and release funds based on what is agreed upon in our merchant agreement. We also believe they will continue to operate as expected and allow us to process sales and transactions accordingly. We also expect our partner merchant bank to be truthful and honorable should we close our accounts and request our monies to be released, in which they are able to hold those funds for upwards of 12 months to cover refunds, chargebacks, and related processing fees. As these and future events and their effects of these holdback receivable elements cannot be determined with complete precision, actual results could differ from these estimates and assumptions, and those differences could be material to the Financial Statements.

Income Taxes – The provision for income taxes includes federal, state, local and foreign taxes. Income taxes are accounted for under the liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences of temporary differences between the financial statement carrying amounts and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which the temporary differences are expected to be recovered or settled. We evaluate the realizability of our deferred tax assets and establish a valuation allowance when it is more likely than not that all or a portion of deferred tax assets will not be realized.