AIAI Holdings Corp

As of the date of this Quarterly Report on Form 10‑Q, there have been no material changes to the risk factors previously disclosed in the Company's Registration Statement on Form S‑1/A.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) prior to the filing of this Quarterly Report on Form 10-Q. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this Quarterly Report on Form 10-Q, our disclosure controls and procedures were not effective at a reasonable assurance level due to the material weaknesses described below.

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Historically, our Predecessor, CCCI, and other Portfolio Companies were not subject to SEC reporting requirements and did not maintain internal control over financial reporting or disclosure controls designed for a public company reporting environment. As CCCI is included in the Company's financial reporting during the Predecessor periods and all Portfolio Companies are included in the Company’s financial reporting in the Successor period, management continues to evaluate and integrate the control environment of CCCI and the other Portfolio Companies as part of its post-acquisition integration activities.

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In connection with the audits of CCCI for the years ended December 31, 2025, 2024 and 2023, management and the independent auditors identified material weaknesses related to deficiencies in control design and implementation, including information technology general controls, segregation of duties, and an insufficient complement of personnel with appropriate public company accounting and financial reporting expertise. These material weaknesses existed at CCCI as of the acquisition date and continue to be reported as part of the Company's evaluation of internal control over financial reporting until such deficiencies are remediated.

Changes in Internal Control over Financial Reporting

Following the identification of the material weaknesses at CCCI described above, management commenced remediation activities during the quarter ended June 30, 2026, to address the identified deficiencies and support the integration of CCCI's control environment into the Company's overall internal control framework.

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To address the material weaknesses related to internal controls over financial reporting, management engaged qualified external consultants to assist with financial reporting processes, account reconciliations, and review controls. These consultants provide an additional layer of oversight and help mitigate risks associated with limited internal staffing. As the Company grows and additional resources become available, management plans to expand the finance organization and reassign responsibilities to achieve a more effective segregation of duties. Enhanced management review procedures have also been implemented.

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Management has initiated the development of comprehensive accounting and financial reporting policies and procedures covering key processes, including revenue recognition, expense accruals, account reconciliations, financial close procedures, estimate preparation, and journal entry documentation and review.

The material weaknesses identified will not be considered fully remediated until the applicable controls have been designed, implemented, operated for a sufficient period of time, and tested by management to conclude that they are operating effectively. Management will continue to evaluate the effectiveness of these remediation efforts and implement additional measures, as necessary.

If the material weaknesses identified are not remediated, they could adversely affect the reliability of financial information included in the Company's unaudited condensed consolidated financial statements. Management is continuing its remediation and integration efforts and will monitor the effectiveness of the related controls on an ongoing basis until the identified deficiencies have been fully remediated.

There were no changes in internal control over financial reporting during the quarter end June 30, 2026 that materially affected, or are reasonably likely to materially affect, internal control over financial reporting, except as described above.