RenX Enterprises Corp.
For the period ended Jun 30, 2026. Filed Aug 13, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 13, 2026
RENX$0.92+7.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-15.
0001213900-26-057186
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-13.
0001213900-26-089068
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 73 previous paragraphs and 98 current paragraphs.
37 unchanged; 27 reworded; 32 added; 8 removed; 1 previous and 2 current paragraphs rearranged.
Tables are not compared: 4 previous and 5 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (32)
Current report
Market Opportunity and Growth Strategy
Current report
We believe the market backdrop for organics recycling provides a durable tailwind for our business. State and local governments are increasingly adopting organics-diversion requirements and restrictions on the landfilling of green waste, expanding the feedstock available to permitted processors, while demand for engineered soils, mulch, compost and organic growing media continues to grow across agricultural, commercial, landscaping and infrastructure end markets. In particular, domestically produced, waste-derived substrates are increasingly preferred by commercial and municipal buyers over imported and mined alternatives, such as Canadian sphagnum peat, virgin topsoil and imported bark products, reflecting supply-chain disruptions, rising import costs and tariffs on imported inputs, and procurement mandates favoring recycled-content materials.
Current report
With that in mind, we are developing our permitted Myakka City, Florida facility into what we believe will be a differentiated organic substrate production platform. The planned deployment of the UTM 1200 system described above is designed to move our output beyond bulk mulch and compost into consistent, specification-grade engineered soils and organic growing substrates, including growing media formulated to serve as a domestically produced replacement for imported sphagnum peat-based products. Permitted organics processing facilities face significant barriers to entry, including capital intensity, land requirements and regulatory complexity, and our platform combines the permitted site and approximately 9 million tons of entitled sand reserves acquired in connection with the Resource Group acquisition with ZEI’s collection and logistics network, which helps secure feedstock supply and internalize transportation costs, allowing us to source raw organic material, process it and deliver finished products within a single vertically integrated system.
Current report
Our two primary operating segments, compost sales and logistics, carry complementary margin profiles: for the six months ended June 30, 2026, our compost sales segment generated a gross margin of approximately 64%, while our logistics segment generated a gross margin of approximately 23%. As our compost sales and substrate production business grows relative to our logistics business, we believe this segment mix has the potential to expand our consolidated gross margin over time. Revenue for the quarter ended June 30, 2026 of $4,255,906 represented an increase of approximately 7.5% over revenue of $3,958,124 for the quarter ended March 31, 2026, with sequential growth in both our logistics and compost sales segments. Our growth strategy contemplates organic expansion, including increased processing throughput and new substrate products at Myakka City and expanded collection and logistics services, and we may from time to time evaluate acquisitions or investments that complement our vertically integrated platform. Any such expansion will require additional capital and is subject to the risks described under “Item 1A. Risk Factors” in this Quarterly Report and in our Annual Report on Form 10-K for the year ended December 31, 2025.
Current report
Company History
Current report
We were formed as a Delaware corporation in 2021 under the name SGB Development Corp. and, prior to our June 2025 acquisition of Resource Group, focused primarily on residential real property development and related real estate investments. In December 2025, we changed our name to RenX Enterprises Corp. to reflect our new strategic direction. See Note 1 — Description of Business for additional background.
Current report
The April 2026 Notes are initially convertible, at the option of the holder, at any time after the date of issuance, into that number of shares of Common Stock equal to the principal amount of the April 2026 Notes, plus all accrued and unpaid interest and late charges and any other unpaid amounts, at the Initial April 2026 Conversion Price of $2.895 per share, subject to adjustment for any stock splits, stock dividends, recapitalizations and similar events. Subject to the receipt of stockholder approval, which was obtained at our 2026 Annual Meeting on June 12, 2026, the holders of the April 2026 Notes shall have the right, at any time after the later of (i) the date of the receipt of the stockholder approval and (ii) 120 calendar days following the Initial Closing Date, to convert their April 2026 Notes or any portion thereof into shares of Common Stock (an “Alternate Conversion”) at a conversion price equal to the greater of (x) a floor price of $0.534 (which is equal to 20% of the Nasdaq Minimum Price applicable to the Initial Notes) (the “April 2026 Note Floor Price”) and (y) 92% of the lowest volume weighted average price in the ten trading days prior to the date of such Alternate Conversion. See Note 7 — Notes Payable and Notes Payable – Related Party for a complete description of the April 2026 Private Placement.
Current report
At the 2026 Annual Meeting, our stockholders approved, pursuant to Nasdaq Listing Rule 5635(d), the issuance of up to 26,779,029 shares of Common Stock upon conversion of the Initial April 2026 Notes and the Second April 2026 Notes and of up to an additional 179,213,485 shares of Common Stock upon conversion of Additional April 2026 Notes (in each case assuming that such notes accrue interest at 10% for a period of 12 months and that the conversion price is reduced to the floor price provided for in the April 2026 Notes). As a result of such approvals, commencing 120 calendar days following the date that the Initial April 2026 Notes were issued (September 1, 2026), the holders of outstanding Initial April 2026 Notes shall have the right to complete an Alternate Conversion at the Alternate Conversion Price equal to the greater of (x) the April 2026 Note Floor Price and (y) 92% of the lowest VWAP in the ten trading days prior to the date of such Alternate Conversion.
Current report
We filed the Initial April 2026 Registration Statement with the SEC on May 15, 2026, and amended it on each of June 22, 2026 and July 13, 2026, in which amendment we removed shares of Common Stock issuable upon conversion of the Second April 2026 Notes and Second April 2026 Warrants in response to comments received from the SEC. The Initial April 2026 Registration Statement was declared effective by the SEC on August 5, 2026; however, as of the date of this Quarterly Report, neither the Second Closing nor any Additional Closing has occurred, and no February 2026 Notes have been repaid with the proceeds of the April 2026 Private Placement.
Current report
June 2026 Related Party Debt Exchange
Current report
On June 11, 2026, we entered into an exchange agreement with Index Equity US, LLC, a related party (the “Debtholder”), which was amended on June 15, 2026 (as amended, the “Exchange Agreement”), pursuant to which we exchanged $7,169,072.79 of principal and accrued interest outstanding (the “Outstanding Debt”) under an Amended and Restated Promissory Note, dated January 1, 2025, originally issued by us to MCS Lending, LLC, a related party, and assigned to the Debtholder on June 9, 2026, for (i) 7,169 shares of a newly designated series of Series C Convertible Preferred Stock, par value $0.001 per share (“Series C Preferred Stock”), and with a stated value of $1,000.00 per share, initially convertible, at the option of the holder, into an aggregate of 2,476,338 shares of Common Stock at an initial conversion price of $2.895 per share, and (ii) a common stock purchase warrant to purchase up to 619,084 shares of Common Stock at an initial exercise price of $2.895 per share, in each case subject to adjustment, stockholder approval (to the extent required under the applicable rules of Nasdaq) and certain beneficial ownership limitations. On June 11, 2026, we issued the shares of Series C Preferred Stock and such warrant to the Debtholder, and the Outstanding Debt was cancelled. Bjarne Borg, a member of our Board of Directors, is the manager of the Debtholder.
Current report
The terms of the Series C Preferred Stock are set forth in a Certificate of Designation filed with the Secretary of State of the State of Delaware on June 10, 2026. The conversion price of the Series C Preferred Stock is subject to proportional adjustment for stock dividends, stock splits and similar events, and to full-ratchet adjustment in connection with certain dilutive issuances, in each case subject to a floor price of $1.50 per share (with a cash true-up payable if a holder converts following a dilutive issuance that would otherwise have reduced the conversion price below such floor price). If the Series C Preferred Stock were converted in full at the floor price, we would issue up to 4,779,333 shares of Common Stock, not taking into account any dividends that may be paid in additional shares of Series C Preferred Stock. Dividends accrue on the Series C Preferred Stock at a rate of 8% per annum, compounding quarterly (increasing to 9% per annum if not paid in cash), and may be paid in cash, in additional shares of Series C Preferred Stock or by an increase in the stated value of the Series C Preferred Stock. Holders of the Series C Preferred Stock may not convert shares of Series C Preferred Stock to the extent that, after giving effect to such conversion, the holder, together with its affiliates, would beneficially own in excess of 4.99% (or, upon at least 61 days’ prior notice to us, up to 19.99%) of our outstanding Common Stock. See Part I, Item 1. Financial Statements Note 10 – Stockholder’s Equity included elsewhere in this Quarterly Report on Form 10-Q for additional information regarding the terms of the Series C Preferred Stock.
Current report
During the three months ended June 30, 2026 and 2025, we generated revenues of $4,255,906 and $1,402,511, respectively, primarily from logistics, collection, processing and disposal services provided by our subsidiary ZEI ($3,207,133 for the 2026 period), and from the sale of materials, including compost, engineered soils, and mulch, by Resource Group ($1,048,773 for the 2026 period). Revenues also included proceeds from converting a portion of collected waste into saleable materials. This increase of $2,853,395 resulted from a full three months of revenue from Resource Group, which we acquired on June 2, 2025, in the 2026 period versus approximately one month in the 2025 period, and the resulting change of focus in our core business.
Current report
Loss on Exchange Transaction
Current report
During the three months ended June 30, 2026 and 2025, we recognized a loss on exchange transactions of $2,215,127 and $0, respectively.
Current report
Results of Operations for the Six Months Ended June 30, 2026 and Six Months Ended June 30, 2025
Current report
Revenues
Current report
Cost of Revenues
Current report
Cost of revenue for the six months ended June 30, 2026, were $5,524,079 compared to $869,356 for the six months ended June 30, 2025. This increase of $4,654,723 in costs resulted primarily from additional revenues generated as a result from the acquisition of Resource Group and the resulting change of focus in our core business. Gross profit for the six months ended June 30, 2026 was $2,689,951, representing a gross margin of approximately 32.7%.
Current report
Payroll and Related Expenses
Current report
Payroll and related expenses for the six months ended June 30, 2026 were $2,065,693 compared to $1,137,426 for the six months ended June 30, 2025. This increase of $928,267 in expenses resulted primarily from additional employees hired to support the growth of our logistics and compost sales operations following the acquisition of Resource Group.
Current report
Marketing and Business Development Expenses
Current report
General And Administrative Expenses
Current report
General and administrative expenses for six months ended June 30, 2026 were $3,337,811 compared to $1,879,489 for the six months ended June 30, 2025. This increase of $1,458,322 resulted primarily from a full six months of Resource Group and ZEI operating overhead, including insurance, facility and vehicle-related costs, and from the increased costs of operating as a public company.
Current report
Professional and Consulting Fees
Current report
Professional and consulting fees for six months ended June 30, 2026 were $1,753,481 compared to $467,180 for the six months ended June 30, 2025. This increase of $1,286,301 resulted primarily from the increased cost of professional fees in relation of being a public company, including increased audit and accounting fees, legal fees associated with our financing transactions and registration statements, and consulting fees supporting the integration of Resource Group.
Current report
Interest Expense
Current report
During the six months ended June 30, 2026 and 2025, we incurred interest expense of $4,141,183 and $1,784,845, respectively. This increase of $2,356,338 resulted from an increase in the balance of our notes payable.
Current report
Interest Income
Current report
During the six months ended June 30, 2026 and 2025, we earned $0 and $47,672 of interest income. This decrease of $47,672 resulted from a decrease in notes receivable balance during the six months ended June 30, 2026.
Current report
Loss on Exchange Transaction
Current report
During the six months ended June 30, 2026 and 2025, we recognized a loss on exchange transactions of $2,215,127 and $0, respectively.
Removed paragraphs (8)
Previous report
We are a Delaware corporation, formed in 2021 under the name SGB Development Corp., originally to engage in real property development using purpose-built, prefabricated modules constructed from both wood and steel. From our inception through 2023, our operations primarily focused on the acquisition, entitlement, and development of residential properties in high-growth markets across the United States. These efforts included the direct acquisition of land, strategic investments in real estate entities, and joint venture partnerships targeting green, single-family and multifamily housing projects.
Previous report
In 2023 and early 2024, we expanded our strategy by investing in real estate-related artificial intelligence (“AI”) technologies and entering into additional joint ventures in the Southern Texas market aimed at developing sustainable single-family housing. Due to our shift in focus described below, we are no longer pursuing real estate related AI activities. We also announced plans to monetize our real estate holdings by selling properties where third-party appraisals indicated meaningful value appreciation, with proceeds to be reinvested in our current operations.
Previous report
December 2025 Resource Group Equipment Financing
Previous report
Effective December 30, 2025, our wholly owned subsidiary Resource Group LLC entered into two Negotiable Promissory Notes and Security Agreements with Commercial Credit Group in the original principal amounts of $1,507,658 and $1,047,528, respectively, to finance the acquisition of a Komptech Crambo shredder and a Diamond Z horizontal grinder. The notes are secured by substantially all of the assets of Resource Group LLC and are payable over 48 monthly installments following an initial installment on December 30, 2025.
Previous report
The First Note is payable as follows: the first installment of $265,266 was due on December 30, 2025 followed by 48 monthly installments of $25,879. The Second Note is payable as follows: the first installment of $195,000 was due on December 30,2025 followed by 48 monthly installments of $17,761. The Notes are secured by all the assets of Resource Group of whatever nature and kind, wherever located, in which Resource Group at the time the Notes were issued or thereafter should have any right or interest (the “Collateral”). Upon a default by Resource Group (as defined in the Notes), which includes, among other things, the failure to make any payment under the Notes on the date on which such payment is due, the failure by Resource Group to perform any other obligation under the Notes, the lender at any time deeming the security afforded by the Notes unsafe, inadequate or at any risk or any of the Collateral in danger of misuse, concealment or misappropriation, the affairs of Resource Group so evolve such that, in the lender’s sole discretion, the lender becomes insecure as to the performance of the Notes, Resource Group shall incur, create, assume, cause or suffer to exist any mortgage, trust, lien, security interest, pledge, hypothecation, other encumbrance (other than the lender’s interest), or attachment or execution of any kind whatsoever upon, affecting or with respect to the Collateral or any of the lender’s interests under the Notes, Resource Group shall sell, pledge, assign, rent, lease, lend, destroy or otherwise transfer or dispose of any Collateral or Resource Group fails to obtain or maintain insurance on the Collateral satisfactory to the lender in its sole discretion, the rate of interest under the Notes will automatically increase to the maximum lawful rate permitted by law not to exceed eighteen percent (18.0%) per annum, Resource Group is to immediately deliver possession of the Collateral to the lender, and the lender, without demand or notice, may, among other things, at its option accelerate the maturity of and declare the entire indebtedness under the Notes immediately due and payable and take possession of and sell all or part of the Collateral.
Previous report
January 2026 Lago Vista Restructuring
Previous report
On January 6, 2026, our wholly owned subsidiary LV Peninsula Holding, LLC (“LV Peninsula”), and our wholly owned subsidiary Norman Berry II Owners, LLC (“Norman Berry”), entered into a Restructuring and Collateral Agreement (the “Restructuring Agreement”) with an institutional investor relating to the approximately $7.0 million outstanding promissory note issued by LV Peninsula and secured by our Lake Travis project site in Lago Vista, Texas (the “Lago Vista Property”). Pursuant to the Restructuring Agreement, LV Peninsula delivered a Deed in Lieu of Foreclosure conveying title to the Lago Vista Property to the lender in exchange for the lender’s conditional extinguishment of $5.0 million of the outstanding note, subject to the terms of the Restructuring Agreement; LV Peninsula issued a $5.0 million conditional promissory note that springs into effect on specified terms if the project is not substantially completed within 24 months; and we pledged our 50% membership interest in Norman Berry as collateral. Upon sale of the Lago Vista Property by the lender, we are entitled to receive 70% of any net sale proceeds above $5.0 million, subject to the terms of the Restructuring Agreement.
Previous report
The Initial April 2026 Notes, without taking into account any accrued and unpaid interest, are initially convertible, at the option of the holder, into an aggregate of 2,176,168 shares of Common Stock at the Initial April 2026 Conversion Price, which is equal to the Minimum Price (as defined in the rules of The Nasdaq Capital Market) (the “Nasdaq Minimum Price”) at the time of the signing of the April 2026 Purchase Agreement plus $0.225. Assuming that the Initial April 2026 Notes accrue interest at 10% for a period of 12 months, the Initial April 2026 Notes would be convertible into an aggregate of 2,393,784 shares of Common Stock, based on the Initial April 2026 Conversion Price. The Initial April 2026 Warrants have a term ofsix years from the date of issuance and are exercisable at a price of $2.67 per share of Common Stock (the “April 2026 Exercise Price”). The Second April 2026 Notes shall have the same terms as the Initial April 2026 Notes, and, without taking into account any accrued and unpaid interest, will be initially convertible, at the option of the holder, into an aggregate of 2,314,336 shares of Common Stock at the Initial April 2026 Conversion Price. Assuming that the Second April 2026 Notes accrue interest at 10% for a period of 12 months, the Second April 2026 Notes would be convertible into an aggregate of 2,545,770 shares of Common Stock, based on the Initial April 2026 Conversion Price. The Second April 2026 Warrants will have a term ofsix years from the date of issuance and will be exercisable at the April 2026 Exercise Price. The Additional April 2026 Notes, if any, shall have the same terms as the Initial April 2026 Notes, and, without taking into account any accrued and unpaid interest, will be initially convertible, at the option of the holder, into an aggregate of up to 30,051,816 shares. Assuming that all Additional April 2026 Notes are issued and sold and that such Additional April 2026 Notes accrue interest at 10% for a period of 12 months, the Additional April 2026 Notes would be convertible into an aggregate of 33,056,996 shares of Common Stock, based on the Initial April 2026 Conversion Price. The Additional April 2026 Warrants, if any, will have a term ofsix years from the date of issuance and will be exercisable at the April 2026 Exercise Price.
Reworded paragraphs (27)
Previous wording
As used in this Quarterly Report on Form 10-Q, unless the context requires otherwise, references to the “Company,” “RENX,” “we,” “us,” and “our” refer to RenX Enterprises Corp. and its subsidiaries. The following discussion and analysis of the financial condition and results of our operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes and schedules included elsewhere in this Quarterly Report on Form 10-Q and with our audited consolidated financial statements for the year ended December 31, 2025 and 2024 and the accompanying notes, which are included in our Annual Report for the year ended December 31, 2025 filed with the Securities and Exchange Commission on April 1, 2026 (the “2025 10-K”). This discussion, particularly information with respect to our future operations, includes forward-looking statements that involve risks and uncertainties as described under the heading “Special Note Regarding Forward-Looking Statements” in this Quarterly Report on Form10-Q. You should review the disclosure under the heading “Risk Factors” in this Quarterly Report on Form 10-Q and the 2025 10-K for a discussion for important factors that could cause our actual results to differ materially from those anticipated in these forward-looking statements.
Current wording
As used in this Quarterly Report on Form 10-Q, unless the context requires otherwise, references to the “Company,” “RENX,” “we,” “us,” and “our” refer to RenX Enterprises Corp. and its subsidiaries. The following discussion and analysis of the financial condition and results of our operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes and schedules included elsewhere in this Quarterly Report on Form 10-Q and with our audited consolidated financial statements for the years ended December 31, 2025 and 2024 and the accompanying notes, which are included in our Annual Report for the year ended December 31, 2025 filed with the Securities and Exchange Commission on April 1, 2026 (the “2025 10-K”). This discussion, particularly information with respect to our future operations, includes forward-looking statements that involve risks and uncertainties as described under the heading “Special Note Regarding Forward-Looking Statements” in this Quarterly Report on Form10-Q. You should review the disclosure under the heading “Risk Factors” in this Quarterly Report on Form 10-Q and the 2025 10-K for a discussion for important factors that could cause our actual results to differ materially from those anticipated in these forward-looking statements.
Previous wording
Although we believe that our assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance that the forward-looking statements included in this**Quarterly Report on Form 10-Qwill prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that the objectives and plans of ours will be achieved. Investors are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date on which such statements are made. Any forward-looking statements made by us or on our behalf speak only as of the date they are made, and we do not undertake to update any forward-looking statement that may be made from time to time on our behalf.
Current wording
Although we believe that our assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance that the forward-looking statements included in this Quarterly Report on Form 10-Q will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that the objectives and plans of ours will be achieved. Investors are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date on which such statements are made. Any forward-looking statements made by us or on our behalf speak only as of the date they are made, and we do not undertake to update any forward-looking statement that may be made from time to time on our behalf.
Previous wording
In June 2025, we completed our acquisition of Resource Group US Holdings LLC (“Resource Group”), which marked a significant strategic shift in our core business. Resource Group, through its subsidiaries, is a vertically integrated, full-service operator in the engineered soils and organic recycling industry. Its operations center on the transformation of targeted organic green waste materials into environmentally friendly soil and mulch products. Through our subsidiary, Zimmer Equipment Inc. (“ZEI”), we provide comprehensive waste logistics and collection services for our own products as well as for products of third parties through ZEI’s owned fleet of high-capacity transportation equipment and third-party contractors engaged by us. ZEI offers year-round collection and disposal services through high-capacity grapple trucks, open-top walking floor trailers, and variable-sized containers serving green waste generators, landscaping companies, golf courses, communities, and municipalities. Resource Group works with ZEI to streamline operations by internalizing certain transportation services, reducing over-the-road mileage, lowering disposal costs, and maximizing efficiency.
Current wording
We are a vertically integrated, full-service operator in the engineered soils and organic recycling industry, operating through Resource Group US Holdings LLC (“Resource Group”), which we acquired in June 2025 in a transaction that marked a significant strategic shift in our core business. Resource Group, through its subsidiaries, centers its operations on the transformation of targeted organic green waste materials into environmentally friendly soil and mulch products. Through our subsidiary, Zimmer Equipment Inc. (“ZEI”), we provide comprehensive waste logistics and collection services for our own products as well as for products of third parties through ZEI’s owned fleet of high-capacity transportation equipment and third-party contractors engaged by us. ZEI offers year-round collection and disposal services through high-capacity grapple trucks, open-top walking floor trailers, and variable-sized containers serving green waste generators, landscaping companies, golf courses, communities, and municipalities. Resource Group works with ZEI to streamline operations by internalizing certain transportation services, reducing over-the-road mileage, lowering disposal costs, and maximizing efficiency.
Previous wording
In addition to our organics processing and logistics operations, we are in the process of implementing the Microtec UTM 1200 Turbo Mill system at our Myakka City facility. The UTM 1200 is a high-efficiency milling and processing technology designed to enhance the throughput and output quality of our existing organics processing operations, including the production of engineered soils and mulch products. Phase 1 deployment is targeted for 2026 and is expected to meaningfully expand processing capacity at Myakka City. There can be no assurance that the UTM 1200 system will be deployed on the anticipated timeline or that it will perform as expected upon installation.
Current wording
In addition to our organics processing and logistics operations, we are in the process of implementing the Microtec UTM 1200 Turbo Mill system at our Myakka City facility. The UTM 1200 is a high-efficiency milling and processing technology designed to enhance the throughput and output quality of our existing organics processing operations, including the production of engineered soils and mulch products. The mill shipped from Germany in August 2026 and is in transit to the United States, with arrival expected in the third quarter of 2026 and commissioning targeted for the second half of 2026, and site preparation at Myakka City, including foundations and utility infrastructure, is substantially advanced. Phase 1 deployment is targeted for 2026 and is expected to meaningfully expand processing capacity at Myakka City. There can be no assurance that the UTM 1200 system will be deployed on the anticipated timeline or that it will perform as expected upon installation.
Previous wording
We currently operate in three segments: compost sales, logistics, and real estate development. For the quarter ended March 31, 2026, we operated in three segments and generated $3,958,124 in revenue, of which approximately $3,010,162 was generated from our logistics business and $947,962 was generated from our compost sales business. While our logistics business operated by our subsidiary, ZEI, and our compost sales business operated by our subsidiary, Resource Group, are expected to serve as our primary operational focuses going forward, we also currently intend to continue to try to monetize our legacy real estate assets and joint venture interests.** **
Current wording
We currently operate in three segments: compost sales, logistics, and real estate development. For the quarter ended June 30, 2026, we operated in three segments and generated $4,255,906 in revenue, of which approximately $3,207,133 was generated from our logistics business and $1,048,773 was generated from our compost sales business. While our logistics business operated by our subsidiary, ZEI, and our compost sales business operated by our subsidiary, Resource Group, are expected to serve as our primary operational focuses going forward, we also currently intend to continue to try to monetize our legacy real estate assets and joint venture interests.
Previous wording
On January 26, 2026, we received written notice from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) notifying us that for the preceding 30 consecutive business days our Common Stock did not maintain a minimum closing bid price of $1.00 per share as required by Nasdaq Listing Rule 5550(a)(2). The notice had no immediate effect on the listing or trading of our Common Stock. Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), we were granted 180 calendar days, or until July 27, 2026, to regain compliance. On April 10, 2026, we received written notice from the Nasdaq Listing Qualifications staff notifying us that we had regained compliance with Nasdaq Listing Rule 5550(a)(2).
Current wording
On January 26, 2026, we received written notice from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) notifying us that our common stock had failed to maintain the minimum $1.00 closing bid price required by Nasdaq Listing Rule 5550(a)(2) for the preceding 30 consecutive business days. On April 10, 2026, we received written notice that we had regained compliance with that rule, resolving the deficiency.
Previous wording
On February 12, 2026, we entered into a securities purchase agreement (the “February 2026 Purchase Agreement”) with certain institutional investors (the “February 2026 Purchasers”) for the issuance and sale in a private placement transaction (the “February 2026 Private Placement”) of Senior Convertible Notes (“February 2026 Notes”) in the aggregate principal amount of $6,042,985.39. The February 2026 Notes bear interest at a rate of 12% per annum, mature 13 months from the date of issuance, are payable in ten monthly installments in an amount equal to 110% of (i) 1/10 th of the principal of the February 2026 Notes (ii) plus accrued interest, with the first installment due and payable on the earlier of 180 days from the closing date of the February 2026 Private Placement or 90 days following the date that the registration statement registering the Common Stock to be issued upon conversion of the February 2026 Notes and upon exercise of the February 2026 Warrants (as defined below) is declared effective by the SEC. Without taking into account any accrued and unpaid interest, the February 2026 Notes were initially convertible, at the option of the holder, into an aggregate of 21,505,287 shares of Common Stock (1,075,264 as adjusted for the Reserve Stock Split) at a conversion price of $0.281 per share ($5.62 as adjusted for the Reserve Stock Split). In connection with the February 2026 Private Placement, we also issued the February 2026 Purchasers warrants (collectively, the “February 2026 Warrants”) to purchase an aggregate of 38,751,991 shares of Common Stock (1,937,600 as adjusted for the Reserve Stock Split), of which (i) Warrants to purchase 21,505,287 shares of Common Stock (1,075,264 as adjusted for the Reserve Stock Split) (the “First February Warrants”) were exercisable immediately upon issuance and (ii) Warrants to purchase 17,246,704 shares of Common Stock (862,335 as adjusted for the Reserve Stock Split) (the “Second February Warrants) cannot be exercised unless and until stockholder approval of their exercise (the “Stockholder Approval”)is obtained. The First February Warrants have a term of six years from the date of issuance and are exercisable at a price of $0.15594 per share of Common Stock ($3.1188 as adjusted for the Reserve Stock Split), and the Second February Warrants have a term of six years from the date that Stockholder Approval is obtained and will be exercisable at a price of $0.15594 per share of Common Stock ($3.1188 as adjusted for the Reserve Stock Split). On [May 10], 2026, we filed a definitive proxy statement that includes a proposal seeking Stockholder Approval.
Current wording
On February 12, 2026, we entered into a securities purchase agreement (the “February 2026 Purchase Agreement”) with certain institutional investors (the “February 2026 Purchasers”) for the sale in a private placement transaction (the “February 2026 Private Placement”) of senior convertible notes (the “February 2026 Notes”) in the aggregate principal amount of $6,042,985.39. The February 2026 Notes bear interest at 12% per annum, mature 13 months from issuance, are payable in ten monthly installments equal to 110% of one-tenth of the principal amount plus accrued interest (the first of which payments became due and payable on July 14, 2026), and are convertible into shares of Company common stock, par value $0.001 per share (“Common Stock”), at a conversion price of $5.62 per share. In connection with the February 2026 Private Placement, we also issued the February 2026 warrants (collectively, the “February 2026 Warrants”) to purchase an aggregate of 1,937,599 shares of Common Stock, at an exercise price of $3.1188 per share, of which (i) warrants to purchase 1,075,264 shares of Common Stock (the “First February Warrants”) were exercisable immediately upon issuance and (ii) warrants to purchase 862,335 shares of Common Stock (the “Second February Warrants”) became exercisable upon receipt of stockholder approval of the exercise thereof, which was obtained at our 2026 Annual Meeting held on June 12, 2026. The February 2026 Private Placement closed on February 17, 2026, and we received net proceeds of approximately $5.4 million after deducting placement agent fees and offering expenses. See Note 7 — Notes Payable and Notes Payable – Related Party for a complete description of the February 2026 Private Placement.
Previous wording
On April 30, 2026, we entered into a securities purchase agreement (the “April 2026 Purchase Agreement”) with certain institutional investors (the “April 2026 Purchasers”) related to a tranched private placement transaction (the “April 2026 Private Placement”) of Senior Convertible Notes (“April 2026 Notes”) and warrants (“April 2026 Warrants”) to purchase shares of Common Stock as more particularly set forth below. Pursuant to the April 2026 Purchase Agreement, we (i) issued and sold to the purchasers, at the initial closing on May 4, 2026 (the “Initial Closing”), April 2026 Notes in the aggregate principal amount of $6,300,000 (the “Initial April 2026 Notes”) and warrants (the “Initial April 2026 Warrants”) to purchase an aggregate of 3,917,099 shares of Common Stock (which is equal to 180% of the face value of the Initial April 2026 Notes divided by $2.895 (the “Initial April 2026 Conversion Price”)), (ii) agreed to issue and sell to the purchasers, at a second closing (the “Second Closing”), April 2026 Notes in the aggregate principal amount of $6,700,000 (the “Second April 2026 Notes”) and Warrants (the “Second April 2026 Warrants”) to purchase an aggregate of 4,165,805 shares of Common Stock (which is equal to 180% of the face value of the Second April 2026 Notes divided by the Initial April 2026 Conversion Price), such issuance to occur promptly after effectiveness of a registration statement (the “Initial April 2026 Registration Statement”) registering the shares of Common Stock issuable upon conversion of the Initial April 2026 Notes (the “Initial April 2026 Conversion Shares”) and the Second April 2026 Notes (the “Second April 2026 Conversion Shares”), in each case calculated based on the Initial April 2026 Conversion Price, and the shares of Common Stock issuable upon exercise of the Initial April 2026 Warrants (the “Initial April 2026 Warrant Shares”) and the Second April 2026 Warrants (the “Second April 2026 Warrant Shares”); and (iii) agreed to sell and issue to the purchasers additional April 2026 Notes in the aggregate principal amount of up to $87,000,000 (the “Additional April 2026 Notes”) and Warrants (the “Additional April 2026 Warrants”) to purchase an aggregate of 54,093,267 shares of Common Stock (which is equal to 180% of the principal amount of the Additional April 2026 Notes that are issued, divided by the Initial April 2026 Conversion Price (the “Additional April 2026 Warrant Shares”)), such issuances of Additional April 2026 Notes and Additional April 2026 Warrants to be at additional closings (each, an “Additional Closing”) from time to time as determined by the purchasers and us, subject to mutual consent to such sales and issuances and certain conditions being met.
Current wording
On April 30, 2026, we entered into a securities purchase agreement (the “April 2026 Purchase Agreement”) with certain institutional investors providing for a tranched private placement transaction (the “April 2026 Private Placement”) of senior convertible notes (the “April 2026 Notes”) and warrants (“April 2026 Warrants”) to purchase shares of Common Stock, consisting of: (i) April 2026 Notes in the aggregate principal amount of $6,300,000 (the “Initial April 2026 Notes”) and April 2026 Warrants to purchase 3,917,099 shares of Common Stock (the “Initial April 2026 Warrants”), issued at the initial closing on May 4, 2026 (the “Initial Closing”), for net proceeds of approximately $5.7 million; (ii) April 2026 Notes in the aggregate principal amount of $6,700,000 (the “Second April 2026 Notes”) and April 2026 Warrants to purchase 4,165,805 shares of Common Stock (the “Second April 2026 Warrants”), to be issued in a second closing (the “Second Closing”) promptly following effectiveness of a registration statement (the “Initial April 2026 Registration Statement”) registering the shares of Common Stock issuable upon conversion of the Initial April 2026 Notes and the Second April 2026 Notes, in each case calculated based on the initial conversion price of $2.895, and the shares of Common Stock issuable upon exercise of the Initial April 2026 Warrants and the Second April 2026 Warrants, with expected net proceeds of approximately $6.4 million, which we have agreed to apply to the repayment of the February 2026 Notes at 110% of their outstanding principal amount; and (iii) up to $87,000,000 of additional April 2026 Notes and related warrants at additional closings (“Additional Closings”), subject to mutual consent and certain conditions, as to which no assurance can be given.
Previous wording
The Initial Closing of the April 2026 Private Placement occurred on May 4, 2026 (the “Initial Closing Date”). The net proceeds to us from the Initial Closing of the April 2026 Private Placement were approximately $5.7 million, after deducting placement agent fees and the payment of other offering expenses associated with the offering that were payable by us. The Second Closing shall occur promptly after effectiveness of the Initial April 2026 Registration Statement registering the Initial April 2026 Conversion Shares and the Second April 2026 Conversion Shares, in each case calculated based on the Initial April 2026 Conversion Price, and the Initial April 2026 Warrant Shares and the Second April 2026 Warrant Shares. The net proceeds to us from the Second Closing of the April 2026 Private Placement are expected to be approximately $6.4 million, after deducting placement agent fees and the payment of other offering expenses associated with the offering that will be payable by us. Pursuant to the Purchase Agreement, we agreed to use the net proceeds from the April 2026 Private Placement, following the Second Closing, for the repayment of February 2026 Notes, in an amount equal to 110% of the outstanding aggregate principal amount of such February 2026 Notes. Subject to the satisfaction of certain closing conditions, including the mutual agreement of the purchasers and us, Additional Closings for an aggregate of up to $87,000,000 may occur from time to time after the Second Closing. There can be no assurance that any Additional Closings will occur.
Current wording
The Initial Closing of the April 2026 Private Placement occurred on May 4, 2026 (the “Initial Closing Date”). The net proceeds to us from the Initial Closing were approximately $5.7 million, after deducting placement agent fees and the payment of other offering expenses associated with the offering that were payable by us. The April 2026 Purchase Agreement provided that Second Closing should occur promptly after effectiveness of the Initial April 2026 Registration Statement registering the Initial April 2026 Conversion Shares and the Second April 2026 Conversion Shares, in each case calculated based on the Initial April 2026 Conversion Price, and the Initial April 2026 Warrant Shares and the Second April 2026 Warrant Shares. Pursuant to the April 2026 Purchase Agreement, we agreed to use the net proceeds from the Second Closing, expected to be approximately $6.4 million, for the repayment of February 2026 Notes, in an amount equal to 110% of the outstanding aggregate principal amount of such February 2026 Notes. Subject to the satisfaction of certain closing conditions, including the mutual agreement of the purchasers and us, Additional Closings for an aggregate of up to $87,000,000 may occur from time to time after the Second Closing. There can be no assurance that any Additional Closings will occur.
Previous wording
Cost of revenue for the three months ended March 31, 2026, were $2,625,668 compared to $11,800 for the three months ended March 31, 2025. This increase of $2,613,868 in costs resulted primarily from additional revenues generated as a result from the acquisition of Resource Group. Gross profit for the three months ended March 31, 2026 was $1,332,456, representing a gross margin of approximately 34%.
Current wording
Cost of revenue for the three months ended June 30, 2026, were $2,898,411 compared to $857,556 for the three months ended June 30, 2025. This increase of $2,040,855 in costs resulted primarily from additional revenues generated as a result from the acquisition of Resource Group and the resulting change of focus in our core business. Gross profit for the three months ended June 30, 2026 was $1,357,495, representing a gross margin of approximately 31.9%.
Previous wording
Payroll and related expenses for the three months ended March 31, 2026 were $1,053,960 compared to $451,451 for the three months ended March 31, 2025. This increase of $602,509 in expenses resulted primarily from the acquisition of Resource Group, resulting in additional employees.
Current wording
Payroll and related expenses for the three months ended June 30, 2026 were $1,011,733 compared to $685,974 for the three months ended June 30, 2025. This increase of $325,759 in expenses resulted primarily from additional employees hired to support the growth of our logistics and compost sales operations following the acquisition of Resource Group.
Previous wording
Marketing and business development expenses for three months ended March 31, 2026 were $539,727 compared to $83,661 for the three months ended March 31, 2025. This increase resulted from additional spending on marketing related activities during the three months ended March 31, 2026.
Current wording
Marketing and business development expenses for three months ended June 30, 2026 were $758,143 compared to $156,778 for the three months ended June 30, 2025. This increase resulted from additional spending on marketing related activities during the three months ended June 30, 2026.
Previous wording
General and administrative expenses for three months ended March 31, 2026 were $1,421,421 compared to $564,506 for the three months ended March 31, 2025. This increase of $856,915 resulted primarily from the increased cost from the acquisition of Resource Group
Current wording
General and administrative expenses for three months ended June 30, 2026 were $1,916,390 compared to $1,429,935 for the three months ended June 30, 2025. This increase of $486,455 resulted primarily from a full quarter of Resource Group and ZEI operating overhead, including insurance, facility and vehicle-related costs, and from the increased costs of operating as a public company.
Previous wording
Professional and consulting fees for three months ended March 31, 2026 were $1,086,275 compared to $170,614 for the three months ended March 31, 2025. This increase of $915,661 resulted primarily from the increased cost of professional fees in relation of being a public company, as well as an increase in professional fees from various activities.
Current wording
Professional and consulting fees for three months ended June 30, 2026 were $667,206 compared to $181,614 for the three months ended June 30, 2025. This increase of $485,592 resulted primarily from the increased cost of professional fees in relation of being a public company, including increased audit and accounting fees, legal fees associated with our financing transactions and registration statements, and consulting fees supporting the integration of Resource Group.
Previous wording
During the three months ended March 31, 2026 and 2025, we incurred $1,331,744 and $954,648 of interest expense. This increase of $377,096 resulted from an increase in the balance of our notes payable.
Current wording
During the three months ended June 30, 2026 and 2025, we incurred $2,809,439 and $830,196 of interest expense. This increase of $1,979,243 resulted from an increase in the balance of our notes payable.
Previous wording
During the three months ended March 31, 2026 and 2025, we incurred $0 and $23,688 of interest income. This decrease of $23,688 resulted from a notes receivable balance during the three months ended March 31, 2025.
Current wording
During the three months ended June 30, 2026 and 2025, we earned $0 and $23,984 of interest income. This decrease of $23,984 resulted from a decrease in notes receivable balance during the three months ended June 30, 2026.
Previous wording
During the three months ended March 31, 2026, we generated revenues of $3,958,124 primarily from the sale of materials, including compost, engineered soils, and mulch, as well as from the collection, processing, and disposal of organic and construction-related waste. Revenues also included proceeds from converting a portion of collected waste into saleable materials. For the three months ended March 31, 2025, we generated revenues from commissions on residential real estate purchases and sale transactions amounting to $18,170. This increase of $3,939,954 resulted from the acquisition of Resource Group during 2025.
Current wording
During the six months ended June 30, 2026 and 2025, we generated revenues of $8,214,030 and $1,420,681, respectively, primarily from logistics, collection, processing and disposal services provided by our subsidiary ZEI ($6,217,295 for the 2026 period), and from the sale of materials, including compost, engineered soils, and mulch, by Resource Group ($1,996,735 for the 2026 period). Revenues also included proceeds from the conversion of a portion of collected waste into saleable materials. For the six months ended June 30, 2025, we generated revenues from commissions on residential real estate purchases and sale transactions amounting to $18,170. This increase of $6,793,349 resulted from the acquisition of Resource Group during 2025 and the resulting change of focus in our core business.
Previous wording
During the three months ended March 31, 2026 and 2025, we incurred $1,268,162 and $0 of change in fair value. This increase of $1,268,162 resulted from a derivative liability balance during the three months ended March 31, 2026.
Current wording
During the six months ended June 30, 2026 and 2025, we incurred $1,268,162 and $0 of change in fair value. This increase of $1,268,162 resulted from a derivative liability balance during the six months ended June 30, 2026.
Previous wording
During the three months ended March 31, 2026 and 2025, we incurred $3,881,922 and $0 of loss on settlement. This increase of $3,881,922 resulted from the settlement of derivative liability balance during the three months ended March 31, 2026.
Current wording
During the six months ended June 30, 2026 and 2025, we incurred $3,881,922 and $0 of loss on settlement. This increase of $3,881,922 resulted from the settlement of derivative liability balance during the six months ended June 30, 2026.
Previous wording
We have generated limited revenue and have incurred significant net losses in each year since inception. For the three months ended March 31, 2026, we incurred a net loss of $9,329,001 as compared to a net loss of $2,179,993 for the three months ended March 31, 2025. We expect to incur increasing losses in the future. As of March 31, 2026 and December 31, 2025, we had cash of $511,741 and $54,066, respectively. Since becoming a public company, we have funded our operations through note financings, project level financings, and the issuance of our equity and debt securities. See Part I, Item 1. Financial Statements; Note 7– Notes Payable and Notes Payable– Related Party and Note 16-Subsequent Events. We intend to continue to finance our operations and finance Resource Group’s expansion if needed from the proceeds of future financings, proceeds from the sale of properties, and future revenues from operations. As of the date of the filing of this Quarterly Report on Form 10-Q, we do not have any committed sources of financing other than the funding of the Second April 2026 Notes if the conditions to funding are met. Although the April 2026 Purchase Agreement provides for the funding of an additional $87,000,000, such funding is subject to the Purchasers’ discretion and our ability to meet certain conditions and there can be no assurance that we will be able to access such funding. Additional financing will be required to continue operations, which may not be available at acceptable terms, if at all. There is no guarantee we will be successful in raising capital outside of our current sources. In addition, under the purchase agreements from our recent private placement offerings, we are subject to certain restrictive covenants that may make it difficult for us to procure additional financing. Our current cash is anticipated to be sufficient to fund operations through June 2027 . We expect that we will need additional future financing which may not be available on acceptable terms, if at all. These and other factors raise substantial doubt about our ability to continue as a going concern. The report of our independent registered public accounting firm includes an explanatory paragraph that our auditors have expressed substantial doubt that we will be able to continue as a going concern.
Current wording
We have generated limited revenue and have incurred significant net losses in each year since inception. For the six months ended June 30, 2026, we incurred a net loss of $17,348,217 as compared to a net loss of $7,903,950 for the six months ended June 30, 2025. We expect to incur increasing losses in the future. As of June 30, 2026 and December 31, 2025, we had cash of $2,160,288 and $54,066, respectively. Since becoming a public company, we have funded our operations through note financings, project level financings, and the issuance of our equity and debt securities. See Part I, Item 1. Financial Statements; Note 7– Notes Payable and Notes Payable– Related Party, Note 10 – Stockholder’s Equity and Note 16-Subsequent Events. We intend to continue to finance our operations and finance Resource Group’s expansion if needed from the proceeds of future financings, proceeds from the sale of properties, and future revenues from operations. As of the date of the filing of this Quarterly Report on Form 10-Q, we do not have any committed sources of financing other than the use of the funding of the Second April 2026 Notes to repay the balance of the February 2026 Notes if the conditions to funding are met and the Second Closing is completed. As of the date of this Quarterly Report on Form 10-Q, the Second Closing has not been completed, and no assurances can be provided that the Second Closing will be completed. In addition, although the April 2026 Purchase Agreement provides for the funding of an additional $87,000,000, such funding is subject to the Purchasers’ discretion and our ability to meet certain conditions and there can be no assurance that we will be able to access such funding. Additional financing will be required to continue operations, which may not be available at acceptable terms, if at all. There is no guarantee we will be successful in raising capital outside of our current sources. In addition, under the purchase agreements from our recent private placement offerings, we are subject to certain restrictive covenants that may make it difficult for us to procure additional financing. Our current cash is anticipated to be sufficient to fund operations through December 2026. We expect that we will need additional future financing which may not be available on acceptable terms, if at all. These and other factors raise substantial doubt about our ability to continue as a going concern. The report of our independent registered public accounting firm includes an explanatory paragraph that our auditors have expressed substantial doubt that we will be able to continue as a going concern.
Previous wording
The following table represents our financing activities during the three months ending March 31, 2026. See Note 8 to the financial statements included elsewhere in this Quarterly Report for additional information regarding our financing activities.
Current wording
The following table represents our financing activities during the six months ending June 30, 2026. See Part I, Item 1. Financial Statements Note 7– Notes Payable and Notes Payable– Related Party, Note 10 -Stockholder’s Equity to the financial statements included elsewhere in this Quarterly Report for additional information regarding our financing activities.
Previous wording
Operating activities used net cash of $2,016,375 during the three months ended March 31, 2026, and used cash of $551,874 during the three months ended March 31, 2025. Cash used in operating activities increased by $1,464,501 due to an increase of net loss of $7,149,008, partially offset by a $5,150,084 increase in the change in fair value of derivative liabilities. Additional factors impacting operating cash flows included an increase in depreciation expense of $553,449, a decrease in amortization of debt issuance costs of $164,840, and a decrease in stock-based compensation of $88,500, as well as common stock issued for services of $119,608 in 2026 compared to no such issuance in 2025. Changes in operating assets and liabilities also contributed to the increase in cash used, including a $603,206 increase in accounts receivable, a $124,571 decrease in inventory, and a $110,013 decrease in prepaid assets and other current assets, partially offset by a $445,980 increase in accounts payable and accrued expenses and a $47,455 decrease in amounts due to affiliates.
Current wording
Operating activities used net cash of $5,103,907 during the six months ended June 30, 2026, and provided net cash of $313,418 during the six months ended June 30, 2025. Cash used in operating activities increased by $5,417,325 due to an increase of net loss of $9,444,267, partially offset by a $5,150,084 increase in the change in fair value of and loss on settlement derivative liabilities as well as $2,215,127 in loss on exchange transaction. Additional factors impacting operating cash flows included an increase in depreciation expense of $964,528, an increase in amortization of debt issuance costs of $1,122,734, and a decrease in stock-based compensation of $177,011, as well as common stock issued for services of $178,558 in 2026 compared to no such issuance in 2025. Changes in operating assets and liabilities also contributed to the increase in cash used, which amounted to $1,024,710 during 2026 compared to $2,762,313 during 2025.
Previous wording
Investing activities used net cash of $529,675 during the three months ended March 31, 2026, and $10,000 net cash during the three months ended March 31, 2025, which is an increase in cash used of $519,675. This change results from an increase in proceeds from sale of property and equipment of $25,000, decrease in intangible assets of $10,000, increase in the purchase of property and equipment of $533,375, an increase in additions to equity based investments $21,300.
Current wording
Investing activities used net cash of $1,743,096 during the six months ended June 30, 2026, and provided net cash of $358,795 during the six months ended June 30, 2025, which is an increase in cash used of $2,101,891. This change results from an increase in proceeds from sale of property and equipment of $25,000, decrease in intangible assets of $7,778, increase in the purchase of property and equipment of $1,746,796, an increase in additions to equity based investments $21,300.
Previous wording
Cash provided from financing activities was $3,003,725 during the three months ended March 31, 2026, which resulted from $728,009 debt issuance costs paid, increased by $8,193,226 proceeds from short-term note payable, $1,646,350 in repayments of short-term notes payable and $2,769,189 of cash payments on derivative liabilities. Cash provided from financing activities was $283,211 during the three months ended March 31, 2025, which resulted from $232,784 debt issuance costs paid, increased by $1,094,400 proceeds from short-term note payable, and $578,405 in repayments of short-term notes payable.
Current wording
Cash provided from financing activities was $8,953,225 during the six months ended June 30, 2026, which resulted from $2,068,717 in debt issuance costs paid, $90,640 in finance lease payments, increased by $16,323,308 proceeds from short-term note payable, $2,441,537 in repayments of short-term notes payable and $2,769,189 of cash payments on derivative liabilities. Cash used in financing activities was $496,893 during the six months ended June 30, 2025, which resulted from $361,477 debt issuance costs paid, increased by $1,041,800 proceeds from short-term note payable, $1,139,993 in repayments of short-term notes payable, $13,620 payments on finance lease and $58 from payment related to stock splits.
Previous wording
Our significant accounting policies are discussed in “Note 2— Summary of Significant Accounting Policies” of the notes to our financial statements for the three months ended March 31, 2026 and the year ended December 31, 2025 included elsewhere in this Form 10-Q. We believe that the following accounting policies are the most critical in fully understanding and evaluating our reported financial results.
Current wording
Our significant accounting policies are discussed in “Note 2— Summary of Significant Accounting Policies” of the notes to our financial statements for the six months ended June 30, 2026 and the year ended December 31, 2025 included elsewhere in this Form 10-Q. We believe that the following accounting policies are the most critical in fully understanding and evaluating our reported financial results.
Previous wording
Investment Entities— The Company obtained a 50% membership interest in Norman Berry II Owner LLC (“Norman Berry”). The purpose of the investment in Norman Berry is to develop and provide affordable housing in the Atlanta, Georgia metropolitan area. The Company has determined it is not the primary beneficiary of Norman Berry and thus will not consolidate the activities in its financial statements. The Company will use the equity method to report the activities as an investment in its condensed consolidated financial statements. As of March 31, 2026 the Company continued to hold a 50% interest in Norman Berry. The Norman Berry partnership recently obtained final city council and entitlement approval for the project. The next step involves completing the consolidation of the various lots into a single parcel, and the Company’s development team and surveyors are preparing the required documentation and submittals for city review and approval. Survey documents reflecting the approved M-I zoning designation are expected to be submitted to the city’s Planning Department for administrative review to obtain final parcel-map approval.
Current wording
Investment Entities — The Company obtained a 50% membership interest in Norman Berry. The purpose of the investment in Norman Berry is to develop and provide affordable housing in the Atlanta, Georgia metropolitan area. The Company has determined it is not the primary beneficiary of Norman Berry and thus does not consolidate the activities in its financial statements. The Company uses the equity method to report the activities as an investment in its condensed consolidated financial statements. As of June 30, 2026 the Company continued to hold a 50% interest in Norman Berry. The Norman Berry partnership recently obtained final city council and entitlement approval for the project. The next step involves completing the consolidation of the various lots into a single parcel, and the Company’s development team and surveyors are preparing the required documentation and submittals for city review and approval. Survey documents reflecting the approved M-I zoning designation are expected to be submitted to the city’s Planning Department for administrative review to obtain final parcel-map approval.
Previous wording
During the three months ended March 31, 2026 and 2025, Norman Berry did not have any material earnings or losses as the investments are in development. In addition, management believes there was no impairment as of March 31, 2026 and December 31, 2025.
Current wording
During the six months ended June 30, 2026 and 2025, Norman Berry did not have any material earnings or losses as the investments are in development. In addition, management believes there was no impairment as of June 30, 2026 and December 31, 2025.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
The following table sets forth, for the periods indicated, the dollar value represented by certain items in our Statements of Operations:
Current report — wording carried from elsewhere
Marketing and business development expenses for six months ended June 30, 2026 were $1,297,870 compared to $240,439 for the six months ended June 30, 2025. This increase resulted from additional spending on marketing related activities during the six months ended June 30, 2026.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
The February 2026 Private Placement closed on February 17, 2026, and we received net proceeds of approximately $5.4 million, after deducting placement agent fees and the payment of other offering expenses associated with the offering that were payable by us and excluding any deductions for make whole payments made to certain of the February 2026 Purchasers.