Onar Holding Corp

Notes to the Consolidated Financial Statements

Note 1. The Company and Summary of Significant Accounting Policies

The Company

ONAR Holding Corporation (the “Company”) was formed as a Nevada corporation under the name Reliant Holdings, Inc. on May 19, 2014. On May 23, 2014, Reliant Holdings, Inc., along with Reliant Pools, Inc., formerly Reliant Pools, G.P., which was formed in September 2013 (“Reliant Pools”) and the shareholders of Reliant Pools, entered into an Agreement for the Exchange of common stock whereby Reliant Pools, Inc. became a wholly-owned subsidiary of Reliant Holdings, Inc. Reliant Holdings, Inc. designs, and installs swimming pools.

On July 25, 2024, the Company acquired HLDCO, LLC (“HLDCO”) and its subsidiary Integrum Group LLC (“Integrum”) through a reverse merger where the shareholders of HLDCO entered into an Agreement to Contribute the membership interests of HLDCO to the Company in return for common stock of the Company, whereby HLDCO became a wholly-owned subsidiary of Reliant Holdings Inc. Integrum was formed in July 2021 as a Delaware entity and is currently headquartered in Los Angeles, California. Integrum specializes in marketing solutions through a technology-enabled independent marketing agency brand network. Its services span various industries, including performance digital marketing, healthcare industry marketing, and experiential marketing.

On August 23, 2024, the Company filed with the Secretary of State for Nevada a Certificate of Amendment to the Articles of Incorporation, changing its name to ONAR Holding Corporation.

On September 12, 2024, Integrum filed a certificate of amendment to its certificate of formation with the Delaware Secretary of State, pursuant to which it changed its corporate name from Integrum Group, LLC to ONAR, LLC.

On September 17, 2024, the Company filed a Certificate of Cancelation of Limited Liability Company for HLDCO with the Secretary of State of Delaware to dissolve HLDCO, leaving ONAR, LLC as the Company's wholly owned subsidiary.

Going Concern

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. The Company has incurred losses since inception, has negative working capital and has not generated positive cash flows from operations since inception. The Company generated a loss of $3,083,156 and $1,741,902 for the year ended December 31, 2024 and 2023, respectively. The Company also has a working capital deficiency of $4,033,419 as of December 31, 2024. These matters, among others, raise substantial doubt about the Company’s ability to continue as a going concern.

The Company’s ability to continue in existence is dependent on its ability to develop additional sources of capital, and/or achieve profitable operations and positive cash flows. Management’s plans with respect to operations include aggressive marketing and raising additional capital through sales of equity or debt securities as may be necessary to pursue its business plans and sustain operations until such time as the Company can achieve profitability. Management believes that aggressive marketing combined additional financing, as necessary, will result in improved operations and cash flows in the future. However, there can be no assurance that management will be successful in obtaining additional funding or in attaining profitable operations. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Princi****ples of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from estimates.

Revenue Recognition

The Company accounts for revenue in accordance with Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codifications (“ASC”) 606, ‘Revenue from Contracts with Customers’ (“ASC 606”).

A performance obligation is a promise in a contract to transfer a distinct good or service to the client and is the unit of accounting in ASC 606. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation based on the relative standalone selling price. Determining relative standalone selling price and identifying separate performance obligations requires judgment. Contract modifications may occur in the performance of the Company’s contracts. Contracts may be modified to account for changes in the contract specifications, requirements or duration. If a contract modification results in the addition of performance obligations priced at a standalone selling price or if the post-modification services are distinct from the services provided prior to the modification, the modification is accounted for separately. If the modified services are not distinct, they are accounted for as part of the existing contract.

Pool Sale Revenues

Performance Obligations

The Company’s contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts and, therefore, not distinct.

Performance Obligations Satisfied Over Time

The majority of The Company’s revenue is derived from construction contracts and projects that typically span between 4 to 12 months. The Company’s construction contracts will continue to be recognized over time on a percentage of completion basis because of the continuous transfer of control to the customer as all of the work is performed at the customer’s site and, therefore, the customer controls the asset as it is being constructed. Contract costs include labor, material, and indirect costs. The Company estimates the percentage of completion based on accumulated cost incurred and total estimated contract cost to complete the construction project.

Performance Obligations Satisfied at a Point in Time

Revenue for The Company’s contracts that do not satisfy the criteria for over time recognition is recognized at a point in time. Substantially all of The Company’s revenue recognized at a point in time is for work performed for pool maintenance or repairs. Unlike The Company’s construction contracts that use a cost-to-cost input measure for performance, the pool maintenance or repairs utilize an output measure for performance based on the completion of a unit of work. The typical time frame for completion of these services is less than one month. Upon fulfillment of the performance obligation, the customer is provided with an invoice (or equivalent) demonstrating transfer of control or completion of service to the customer. We believe that point in time recognition remains appropriate for these contracts and will continue to recognize revenues upon completion of the performance obligation and the issuance of an invoice.

Contract modifications are routine in the performance of The Company’s contracts. Contracts are often modified to account for changes in the contract specifications or requirements. In most instances, contract modifications are for goods or services that are not distinct, and, therefore, are accounted for as part of the existing contract.

Backlog

On December 31, 2024, we had approximately $154,000 of remaining performance obligations on The Company’s construction contracts, which we also refer to as backlog. We expect to recognize The Company’s backlog as revenue during the next 12 months.

Contract Estimates

Accounting for long-term contracts and programs involves the use of various techniques to estimate total contract revenue and costs. For long-term contracts, we estimate the profit on a contract as the difference between the total estimated revenue and expected costs to complete a contract and recognize that profit over the life of the contract.

Contract estimates are based on various assumptions to project the outcome of future events. These assumptions include labor productivity and availability, the complexity of the work to be performed, the cost and availability of materials, and the performance of subcontractors.

Variable Consideration

Transaction price for The Company’s contracts may include variable consideration, which includes increases to transaction price for approved and unapproved change orders, claims and incentives, and reductions to transaction price for liquidated damages. Change orders, claims and incentives are generally not distinct from the existing contract due to the significant integration service provided in the context of the contract and are accounted for as a modification of the existing contract and performance obligation. We estimate variable consideration for a performance obligation at the most likely amount to which we expect to be entitled (or the most likely amount we expect to incur in the case of liquidated damages), utilizing estimation methods that best predict the amount of consideration to which we will be entitled (or will be incurred in the case of liquidated damages). We include variable consideration in the estimated transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur or when the uncertainty associated with the variable consideration is resolved. The Company’s estimates of variable consideration and determination of whether to include estimated amounts in transaction price are based largely on an assessment of The Company’s anticipated performance and all information (historical, current and forecasted) that is reasonably available to us. The effect of variable consideration on the transaction price of a performance obligation is recognized as an adjustment to revenue on a cumulative catch-up basis. To the extent unapproved change orders and claims reflected in transaction price (or excluded from transaction price in the case of liquidated damages) are not resolved in The Company’s favor, or to the extent incentives reflected in transaction price are not earned, there could be reductions in, or reversals of, previously recognized revenue. No adjustments on any one contract was material to The Company’s consolidated financial statements for the years ended December 31, 2024 and 2023.

Contract Balances

The timing of revenue recognition, billings and cash collections results in billed accounts receivable and costs and estimated earnings in excess of billings on uncompleted contracts (contract assets) on the consolidated balance sheet. On The Company’s construction contracts, amounts are billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals (e.g., biweekly or monthly) or upon achievement of contractual milestones. Generally, billing occurs prior to revenue recognition, resulting in contract liabilities. These assets and liabilities are reported on the consolidated balance sheet on a contract-by-contract basis at the end of each reporting period.

Advertising Management Services

The Company enters into Master Services Agreement (“MSA”) and Scope of Work (“SOW”) which govern the terms of the Company’s performance obligation for purposes of revenue recognition.

The Company’s performance obligation is a single performance obligation, Advertising Management Services which encompasses the following integrated and interdependent services:

These services are integrated and interdependent, all contributing to the goal of improving the Client's business performance, revenue, and brand awareness over time. Revenue is recognized over time as the services are provided and the performance obligation is satisfied, consistent with the ongoing optimization efforts. Amounts recognized but not yet invoiced to the customer are included as ‘contract assets’ within the accompanying consolidated balance sheets.

A monthly retainer is charged for ongoing services. Any additional services outside the agreed-upon scope, such as the inclusion of additional services, are subject to prior written approval and will result in additional fees. Retainers received for future services are classified as ‘deferred revenue’ within the accompanying consolidated balance sheets.

Executive Management Services

The Company’s chief executive officer and financial team provide executive management services to certain affiliated entities at a fixed monthly rate. Revenue is recognized over time as the services are provided and the performance obligation is satisfied, consistent with the ongoing benefits the affiliated entities receive as the services are rendered. See Note 5.

Accounts Receivable and Accounts Receivable, Related Party

The Company does not charge interest to its customers and carries its customers’ receivables at their face amounts, less an allowance for doubtful accounts. Included in accounts receivable are balances billed to customers pursuant to retainage provisions in certain contracts that are due upon completion of the contract and acceptance by the customer, or earlier as provided by the contract. Based on the Company’s experience in recent years, the majority of customer balances at each balance sheet date are collected within twelve months. As is common practice in the industry, the Company classifies retainage, as current assets. The contracting cycle for certain long-term contracts may extend beyond one year, and accordingly, collection of retainage on those contracts may extend beyond one year.

the Company adopted ASU 2016-13, “Financial Instruments — Credit Losses (Accounting Standards Codification (“ASC”) Topic 326): Measurement on Credit Losses on Financial Instruments” The Company grants trade credit, on a non-collateralized basis (with the exception of lien rights against the property in certain cases), to its customers and is subject to potential credit risk related to changes in business and overall economic activity. The Company evaluates its accounts receivable for expected credit losses on a regular basis. The Company records an allowance for credit losses to allow for any amounts that may not be recoverable, which is based on an analysis of the Company’s prior collection experience, customer credit worthiness, current economic trends and expected future losses. Accounts are considered delinquent when payments have not been received within 30 days and are written off when management determines that collection is not probable. During the years ended December 31, 2024 and 2023, the Company recognized allowances for future credit losses totaling $0 and $504,612 respectively. During the year ended December 31, 2024, and 2023, $25,679 and $47,594 of accounts receivable were charged off against the allowance for doubtful accounts. As of December 31, 2022, the Company’s accounts receivable balance was $3,800 and accounts receivables, related party, was $-0-. As of December 31, 2024 and 2023, the Company’s allowance for doubtful accounts was $274,309 and $497,745, respectively.

Classification of Construction Contract-related Assets and Liabilities

Contract assets are presented as a current asset in the accompanying consolidated balance sheets, and contract liabilities are presented as a current liability in the accompanying consolidated balance sheets. The Company’s contracts vary in duration, with the duration of some larger contracts exceeding one year. Consistent with industry practices, the Company includes the amounts realizable and payable under contracts, which may extend beyond one year, in current assets and current liabilities.

Investments in Equity Securities

The Company holds investments in equity securities of publicly listed companies. The Company remeasures any equity securities held at each reporting period and recognizes a gain or losses for any changes in the fair value of those equity securities. The Company determines the fair value of its equity securities using quoted market prices for markets which it can access.

Property and Equipment

The Company accounts for property and equipment such as office furniture and equipment and vehicles at cost. Repairs and maintenance are expensed as incurred and significant replacements and improvements are capitalized. The Company considers the period of future benefit of an asset to determine its appropriate useful life. Depreciation is recorded using the straight-line method over the respective useful lives of the assets. Upon the retirement or other disposition of property and equipment, the related cost and accumulated depreciation are charged to operations. During the year ended December 31, 2024 and 2023, depreciation expense was $16,853 and $2,727, respectively. The estimated useful lives of the Company’s property and equipment are:

Leases

ASC 842, “Leases”, requires recognition of leases on the consolidated balance sheets as right-of-use (“ROU”) assets and lease liabilities. ROU assets represent the Company’s right to use underlying assets for the lease terms and lease liabilities represent the Company’s obligation to make lease payments arising from the leases. Operating lease ROU assets and operating lease liabilities are recognized based on the present value and future minimum lease payments over the lease term at commencement date. As the Company’s leases do not provide an implicit rate, the Company used its estimated incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. A number of the lease agreements may contain options to renew and options to terminate the leases early. The lease term used to calculate ROU assets and lease liabilities only includes renewal and termination options that are deemed reasonably certain to be exercised. The Company recognized lease liabilities, with corresponding ROU assets, based on the present value of unpaid lease payments for existing operating leases longer than twelve months. The ROU assets were adjusted per ASC 842 transition guidance for existing lease-related balances of accrued and prepaid rent, and unamortized lease incentives provided by lessors. Operating lease cost is recognized as a single lease cost on a straight-line basis over the lease term and is recorded in selling, general and administrative expenses. Variable lease payments for common area maintenance, property taxes and other operating expenses are recognized as expense in the period when the changes in facts and circumstances on which the variable lease payments are based occur. The Company has elected not to separate lease and non-lease components for all property leases for the purposes of calculating ROU assets and lease liabilities.

Intangible Assets

Intangible assets are amortized over their estimated useful lives. Each period, the Company evaluates the estimated remaining useful life of its intangible assets and whether events or changes in circumstances warrant a revision to the remaining period of amortization. Management tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets but at least annually on December 31st.

Goodwill

Goodwill represents the excess of the consideration paid of an acquisition over the fair value of the net identifiable assets of the acquired subsidiaries at the date of acquisition. Goodwill is not amortized and is tested for impairment on December 31st or when circumstances indicate an impairment may have occurred. Goodwill is carried at cost less accumulated impairment losses. If impairment exists, goodwill is immediately written off to its fair value and the loss is recognized in the consolidated statements of operations. Impairment losses on goodwill are not reversed.

The Company has the option to assess qualitative factors to determine whether it is necessary to perform further impairment testing in accordance. If the Company believes, as a result of the qualitative assessment, that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, the Company performs further analysis by comparing the fair value of each reporting unit to its carrying amount, including goodwill. A reporting unit is an operating segment or sub-segment to which goodwill is assigned when initially recorded. If the fair value of each reporting unit exceeds its carrying amount, goodwill is not considered to be impaired. If the carrying amount of a reporting unit exceeds its fair value, an impairment is recognized for the difference, limited to the amount of goodwill recognized for the reporting unit. The Company has determined that no impairment of its goodwill or indefinite lived intangible assets occurred as of December 31, 2024.

Impairment Assessment

The Company evaluates its intangible assets and goodwill and other long-lived assets for possible impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable and at least annually on December 31st. This includes but is not limited to significant adverse changes in business climate, market conditions or other events that indicate an asset’s carrying amount may not be recoverable. The recoverability of these assets is measured by comparing the carrying amount of each asset to the future cash flows the asset is expected to generate. If the cash flows used in the test for recoverability are less than the carrying amount of these assets, the carrying amount of such assets is reduced to fair value.

Marketing and Advertising Costs

Marketing and advertising costs are expensed as incurred in accordance with ASC 720-35,Other Expenses – Advertising Costs. These costs primarily include media placements, promotional materials, and digital marketing campaigns. Total marketing and advertising expenses for the years ended December 31, 2024 and 2023, were approximately $24,000 and $2,500, respectively.

Earnin****gs Per Share

In accordance with accounting guidance now codified as ASC Topic 260,*“Earnings (Loss) per Share,”*basic earnings per share is computed by dividing net income by weighted average number of shares of common stock outstanding during each period. Diluted earnings per share is computed by dividing net income by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period. There were no dilutive shares outstanding during the years ended December 31, 2024 and 2023.

Income Taxes

The Company accounts for its income taxes in accordance with ASC 740 “Income Taxes”, which requires recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. The Company has a net operating loss carryforward, however, due to the uncertainty of realization, the Company has provided a full valuation allowance for deferred tax assets resulting from this net operating loss carryforward.

Fair Value Measurements

The Company’s financial instruments consist of cash, accounts receivable, investments, accounts payable, notes payable, accrued expenses and advances, related party. The estimated fair value of cash, accounts receivable, accounts payable, notes payable and advances from related parties approximate their carrying amounts due to the short-term nature of these instruments.

Certain non-financial assets are measured at fair value on a nonrecurring basis but are subject to periodic impairment tests. The hierarchy is broken down into three levels based on the reliability of the inputs as follows:

Level 1 - Valuation is based upon unadjusted quoted market prices for identical assets or liabilities in accessible active markets.

Level 2 - Valuation is based upon quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in inactive markets; or valuations based on models where the significant inputs are observable in the market.

Level 3 - Valuation is based on models where significant inputs are not observable. The unobservable inputs reflect a company’s own assumptions about the inputs that market participants would use.

Recent Accountin****g Pronouncements

In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” which requires a public entity to disclose significant segment expenses and other segment items on an annual and interim basis and to provide in interim periods all disclosures about reportable segment’s profit or loss and assets that are currently required annually. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact this standard will have on its condensed consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which enhances the transparency and decision usefulness of income tax disclosures by requiring; (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. ASU 2023-09 is effective for fiscal years beginning after December 15, 2025, with early adoption permitted. These amendments are to be applied prospectively, with retrospective application permitted. The Company is currently evaluating the impact this standard will have on its condensed consolidated financial statements.

The Company currently believes there are no other issued and not yet effective accounting standards that are materially relevant to our condensed consolidated financial statements.

Note 2. Acquisition of HLDCO LLC

On June 13, 2024 Claude Zdanow via Mount Olympus Ventures, Inc (“Mount Olympus”), purchased the 1,000 shares of Series A Preferred Stock from Elijah May directly. As a result of the transaction there was a change in control of the Company. On June 13, 2024, Elijah May, as the Company’s sole director, resigned from his positions as director, Chief Executive Officer, and President of the Company, effective as of June 13, 2024. Claude Zdanow was appointed as a director of the Company by its Board of Directors, holding the position of Chief Executive Officer.

On June 17, 2024, the Company entered into the acquisition of 100% ownership of HLDCO, LLC, a Delaware limited liability company (the “Agreement”). The transaction was by and between the Company and the Members of HLDCO, LLC, which include Mount Olympus Ventures, Inc., Apollo Management Group, Inc., and M2B Funding Corp. Mount Olympus Ventures, Inc., via the owner Claude Zdanow, has a material relationship with the Company, via his appointment as a director and officer of the Company, and through Mount Olympus Ventures, Inc.’s acquisition of 100% of the Series A Preferred Stock of the Company.

The nature and amount of consideration given or received for the assets was exactly 3,545 shares of newly designated Series B Preferred Stock, par value $0.001 per share, exactly 6,570 shares of newly designated Series C Preferred Stock, par value, $0.001 per share, and exactly 100 shares of Series D Preferred Stock, par value $0.001 to be given to each of the Members of HLDCO, LLC as described in the Agreement.

On July 18, 2024, the Company filed the designations for the Series B, Series C, and Series D preferred shares pursuant the Agreement. On July 25, 2024, the Board of Directors issued those shares of respective preferred stock to the members of HLDCO, LLC, to complete the acquisition (the “Closing”).

Management determined that the acquisition of HLDCO was a reverse acquisition as defined within ASC 805, and that HLDCO was the accounting acquirer or legal acquiree. The Company determined that HLDCO was the accounting acquirer based on the guidance contained within ASC 805-40. The significant factors that led to the Company’s conclusion were (i) the Mr. Zdanow and the members of HLDCO obtained 98% of the voting interest of the Company through the preferred shares held by these parties, (ii) at Closing, the remaining Company shareholders held 2% of the voting interest of the Company, (iii) the composition of executive management and the governing body changed such that the sole director and executive officer of HLDCO became the sole director and shareholder of the Company which provided control over the operations of the Company, and (iv) HLDCO was significantly larger than the Company when considering both total assets and operations. As a result, the Company has applied purchase accounting as of the Closing of the acquisition and reflected the historical financial position and operations of HLDCO as the surviving entity. The assets and liabilities the Company were recognized at fair value as of the Closing and the results of its operations have been included within the consolidated statements of operations from that date forward with all historical activity reflective of the operations of HLDCO.

The assets acquired and liabilities assumed are recognized provisionally in the accompanying consolidated balance sheets at their estimated fair values as of the acquisition date. The initial accounting for the business combination is not complete as the Company is in the process of obtaining additional information for the valuation of acquired intangible assets and deferred tax liabilities, if any. The provisional amounts are subject to change to the extent that additional information is obtained about the facts and circumstances that existed as of the acquisition date. Under U.S. GAAP, the measurement period shall not exceed one year from the acquisition date and the Company will finalize these amounts no later than July 25, 2025. The estimated fair values as of the acquisition date are based on information that existed as of the acquisition date. During the measurement period the Company may adjust provisional amounts recorded for assets acquired and liabilities assumed to reflect new information that the Company has subsequently obtained regarding facts and circumstances that existed as of the acquisition date.

The Company determined the fair value of the consideration transferred using the fair value based on the number of shares that would have needed to be issued to provide the Company’s shareholders with an equivalent ownership interest in the combined entities post-Closing. The fair value of the Company’s common shares issued as consideration was based on the closing price of the Company’s common stock as of the Closing.

The consideration transferred was allocated to the assets acquired and liabilities assumed on a preliminary basis as follows:

The goodwill recognized as a result of the acquisition of the Company is attributable primarily to expected synergies and the assembled workforce. None of the goodwill is expected to be deductible for income tax purposes.

The amounts of revenue and net loss of Reliant, included in the Company’s consolidated statements of operations for the year ended December 31, 2024 are as follows:

Consolidated unaudited pro forma information:

The following consolidated pro forma information assumes that the acquisition of HLDCO took place on January 1, 2023, for the statement of operations for the years ended 2024 and 2023. These amounts have been estimated after applying the Company’s accounting policies

Note 3. Contracts in Process

The net asset (liability) position for pool construction contracts in process consisted of the following as of December 31, 2024 are:

The net asset (liability) position for contracts in process is included in the accompanying consolidated balance sheets as of December 31, 2024 are:

Note 4. Concentrations of Risk

For the years ended December 31, 2024 and 2023, the Company had the follow customer concentrations:

As of December 31, 2023, one customer accounted for 28% of total accounts receivable and less than 10% of total revenue. As of December 31, 2024, the Company did not have any significant customer concentrations within its accounts receivable.

Note 5. Related Party Transactions

Executive Expense Reimbursements

During the years ended December 31, 2024 and 2023, the Company recognized expense reimbursements in the form of informal, undocumented due on demand advances to the Company made by its CEO using his personal finances. This includes cash infusions as well as paying expenses on behalf of the Company.

The Company repaid these advances as funds were available and in some instances remitted amounts in excess of the advances made which were applied to future expenses of the Company. The following tables detail the cash loaned, direct expenses paid and cash repayments made by the Company during the years ended December 31, 2024 and 2023.

As of December 31, 2024 and 2023, $190,579 and $170,616 was due to the Company’s CEO and is reflected in ‘accrued expenses and advances, related party’ in the accompanying consolidated balance sheets.

Advance to Affiliated Entity

During the year ended December 31, 2024, the Company advanced an entity controlled by the Company’s CEO $400,700. This advance is informal, due on demand, bears no interest and is unsecured. As of December 31, 2024 the balance remains outstanding and is included in ‘employee loans receivable, net’ on the accompanying consolidated balance sheets.

On March 11, 2025, this advanced was formalized into a promissory note receivable. Under the new terms, the note bears interest at 5% per annum, requires no monthly payments, is unsecured and is due on March 11, 2035. The Company classifies this 10-year note receivable as a held-to-maturity debt instrument under ASC 320, as it has the positive intent and ability to hold the note until its maturity date. The note is initially recognized at fair value, and is measured at amortized cost using the effective interest method subsequently. The note is presented on the balance sheet at its amortized cost, inclusive of accrued interest. The stated interest rate reflects the effective yield, resulting in a carrying value that equals the principal plus accumulated interest receivable.

Accrued Expenses, Related Party

As of December 31, 2024, the Company owed a related party $37,500 in the form of an advance. This advance was included in the acquisition of Reliant and has not been repaid. The advance is due on demand, bears no interest and unsecured. This advance is reflected in ‘accrued expenses, related party and advances, related party’ in the accompanying consolidated balance sheets.

Revenues and Accounts Receivable, related party

During the years ended December 2024 and 2023, the Company recognized revenues of approximately $82,000 and $606,000 to entities which share common management. As of December 31, 2024 and 2023, approximately $0 and $19,000 was due from these entities and is included in ‘Accounts receivables, related party’ on the accompanying consolidated balance sheets.

During the year ended December 31, 2024, as part of a settlement agreement, the Company received publicly listed securities as payment for the balance due from an affiliated entity. The Company recognized approximately $118,000 of the fair value of these securities as payment for approximately $363,000 due from this entity and recognized a loss on settlement of approximately $245,000.

Notes Payable

The Company has 5 notes payable due to a related party as described in Note 8. As of December 31, 2024 and 2023, accrued interest due under these notes was $-0- for both periods.

Note 6. Equity

Series A Preferred Stock

The Series A Preferred Stock (Series A Stock) consists of 1,000 shares. Each share of Series A Preferred Stock is redeemable, at the sole and complete option of the Company and then only with the consent of a majority of the holders of the Series A Preferred Stock for $1.00 per share. For so long as any shares of the Series A Preferred Stock remain issued and outstanding, the holders thereof, voting separately as a class, shall have the right to vote on all shareholder matters (including, but not limited to at every meeting of the stockholders of the Company and upon any action taken by stockholders of the Company with or without a meeting) equal to fifty-one percent (51%) of the total vote. For example, if there are 10,000 shares of the Company’s common stock issued and outstanding at the time of a shareholder vote, the holders of the Series A Preferred Stock, voting separately as a class, will have the right to vote an aggregate of 10,400 shares, out of a total number of 20,400 shares voting. For the sake of clarity and in an abundance of caution, the total voting shares outstanding at the time of any and all shareholder votes (i.e., the total shares eligible to vote on any and all shareholder matters) shall be deemed to include (a) the total Common Stock shares outstanding; (b) the voting rights applicable to any outstanding shares of preferred stock, other than the Series A Preferred Stock, if any; and (c) the voting rights attributable to the Series A Preferred Stock, as described herein, whether such Series A Preferred Stock shares are voted or not.

On June 13, 2024 Claude Zdanow purchased 1,000 shares of Series A Preferred Stock directly from Elijah May. As a result of the transaction there was a change in control of the Company as further described in Note 2.

Series B Preferred Stock

The Series B Preferred Stock (Series B Stock) consists of 3,545 shares having a “Face Value” of $1,000 per share. Each share of Series B Preferred Stock converts into common stock at a conversion price equal to 90% of the Volume Weighted Average Price of the Company’s common stock for the 10 days prior to any conversion. In addition, holders of the Series B Preferred Stock shall receive a quarterly dividend equal to 2% of the total value of the Series B Preferred Stock, on a pro rata basis, issued and outstanding determined by multiplying the number of shares of Series B Preferred Stock times the Face Value. Dividends may be paid in cash, common stock or Series B Preferred Stock at that discretion of the holder. The Series B Preferred Stock also have preference in liquidation to all other classes unless otherwise waived by the Holders. The Series B Preferred Stock have no voting rights. Additional rights and obligations are described in the exhibit attached hereto.

On December 30, 2024 and December 31, 2024, the holders of the Series B Stock converted 420 shares of the Series B Stock into 9,132,420 shares of common stock under contract terms and no gain or loss was recognized.

Series C Preferred Stock

The Series C Preferred Stock (Series C Stock) consists of 6,570 shares, having a “Face Value” of $1,000 per share. Each share of Series C Preferred Stock converts into common stock at a conversion rate equal to 33,334 shares of common stock per share of Series B Preferred Stock. However, in the event of a Liquidation Event(1) the Series C Preferred Stock shall, in total, convert into exactly 51% of the sum of a) all Common Stock issued and outstanding; plus b) all the aggregate of all shares of Common Stock that would be issued upon the exercise of warrants or options, conversion of any convertible promissory notes, conversion of all other preferred shares, and any other instruments having vested rights to convert into Common Stock; plus c) the total of aggregate of all Series C Preferred Stock such that all Holders of Series C Preferred Stock shall hold exactly fifty-two percent (52%) of all issued and outstanding Common Stock, on a pro-rata basis, subject to the liquidation, merger, dissolution, winding up, or acquisition on a fully diluted basis. The Series C Preferred Stock shall be paid no dividends and have no voting rights. Additional rights and obligations are described in the exhibit attached hereto.

Series D Preferred Stock

The Series D Preferred Stock (Series D Preferred Stock) consisted of 100 shares having a “Face Value” of $1,000 per share. The Certificate of Designations of the Series D Preferred Stock provided that Each share of Series D Preferred Stock would automatically convert into 750,000 shares of common stock, effective at such time that the Company had taken such steps to increase the authorized number of shares of common stock sufficient to honor the conversion of all shares of Series D Preferred Stock, which occurred on December 23, 2024. Each share of Series D Preferred Stock had voting rights equal to 750,000 votes per share.

On December 23, 2024, all 100 shares of Series D Preferred Stock automatically converted into an aggregate of 75,000,000 shares of common stock under contract terms and no gain or loss was recognized. As a result, the Series D Preferred Stock ceased to be outstanding.

Common Shares

The Company is authorized to issue 450,000,000 shares of common stock, $0.001 par value. Each share of common stock is entitled to one vote on matters submitted to the shareholders for approval.

During the year ended December 31, 2024, the Company recognized the issuance of 11,462,629 shares of common stock to certain noteholders as a result of the extinguishment and replacement of their respective notes payable. See Note 8.

Note 7. Commitments and Contingencies

Leases

The Company leases approximately 1,000 square feet of office space in Austin, Texas. On March 8, 2024, the Company renewed the office lease for a term of 20 months through November 30, 2025. The monthly rental cost for the period from April 1, 2024 to April 1, 2025 is $2,320 and for the rental cost for the period from April 1, 2024 to November 30, 2025 is $2,400. The real property lease contains provisions requiring payment of property taxes, utilities, insurance, maintenance and other occupancy costs applicable to the leased premise. As the Company’s leases do not provide implicit discount rates, the Company uses an incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments.

On June 9, 2023, HLDCO entered into a one-year lease arrangement with a third party for apartment space in Los Angeles, California, for the Company’s Chief Executive Officer. This lease requires monthly minimum payments of $12,650. The Company determined this lease represented an operating type lease at inception and recognized right-of-use asset and related lease liability of approximately $179,000.

Initially, the Company measured the right of use asset and liability associated with this lease using the following inputs:

The Company records rent on straight-line basis over the terms of the underlying lease. Estimated future minimum lease payments under the lease as of December 31, 2024 are as follows:

Rent expense for the years ended December 31, 2024 and 2023 was approximately $90,000 and $73,000 respectively, and was included in ‘general and administrative’ expenses in the accompanying consolidated statements of operations. The Company paid approximately $90,000 and $74,000 respectively, in lease payments during the years ended December 31, 2024 and 2023 and are included in the Company’s operating cash flows for both periods.

Payroll tax liabilities

For the year ended December 31, 2023, the Company did not remit federal income tax, social security, Medicare or local and state income taxes which were withheld from the Company’s employees payroll. The Company has estimated and accrued fines and penalties associated with the amounts which have not been remitted and includes this amounts in accrued expenses in the accompanying consolidated balance sheets. As of December 31, 2024 and 2023, the balance due was $516,807 and $462,367, respectively.

Customer legal dispute

VMed Services, LLC a subsidiary of the Company, is a plaintiff in a lawsuit that was filed on April 22, 2024 against Meridian Diagnostics LLC in State Court of Fulton County, Georgia. The Company is seeking approximately $170,000 for claims related to the provision of marketing services to the defendant. In response to the filing of the complaint, Meridian Diagnostics filed a counterclaim against the Company and denies the allegations and seeks attorney's fees. This litigation is in the discovery phase, and as such, the Company is unable to estimate the range of potential loss.

Note 8. Debt

Notes payable

Replacement Notes

As a result of the acquisition of HLDCO (See Note 2), the Company became obligated to issue shares of common stock and replacement notes payable to holders of Integrum’s notes payable none of which were related parties. The Company was required to issue new notes with itself as borrower with such new notes being convertible six months after the closing of the HLDCO acquisition (the “Replacement Notes”). The Replacement Notes have substantially similar terms as the original notes payable except that six months after the Closing the Replacement Notes will become convertible into the common stock of the Company. The conversion price is determined after the six months has lapsed and is fixed after that date.

Additionally, three months after the closing of the HLDCO acquisition, the Company was required to issue common stock in settlement of accrued interest through the date of issuance plus a bonus equal to 25% of the outstanding principal of the related note payable.

The Company determined that the issuance of the Replacement Notes along with the shares of common stock represented an extinguishment of the original notes payable under US GAAP. Accordingly, the Company recognized a loss on extinguishment of $363,871 which was determined by reference to the difference between the fair value of the consideration transferred and the carrying value of the original notes payable.

Line of Credit

On July 28, 2022, The Company entered into a $225,000 line of credit agreement with a financial institution. The line of credit matures on July 28, 2024, has an interest rate of 10% per annum and requires monthly interest only payments with all principal and accrued interest due at maturity. As of December 31, 2024 and 2023, the outstanding principal totaled approximately $220,000 and $225,000, respectively.

Note 9. Intangible assets

The Company’s intangible assets as of December 31, 2024 are summarized as follows:

The Company’s intangible assets as of December 31, 2023, are summarized as follows:

Future amortization of the Company’s intangible assets as of December 31, 2024 are as follows:

**Note 10.**Employee Loans Receivable

Forgivable Loans

In order to attract and retain highly skilled professionals, the Company may issue forgivable loans to employees and non-employee experts. The principal amount of forgivable loans and accrued interest is forgiven by the Company over the term of the loans, so long as the employee or non-employee expert continues employment or affiliation with the Company and complies with certain contractual conditions.

On March 30, 2023, the Company entered into a forgivable loan agreement with an independent contractor in the amount of $250,000 with 8% per annum interest rate. The loan is to be repaid through services rendered by the independent contractor over the term of the loan which is 2 years. If the independent contractor’s services are not to the Company’s satisfaction, the Company has the right, in its sole discretion, to require repayment of the loan in cash from the independent contractor.

In order to reflect the services received through the issuance of these forgivable loans, the Company amortizes the balance of such loans as a component of ‘salaries and related expenses’ over the requisite service period of the loan. During the years ended December 31, 2024 and 2023, the Company recognized amortization related to forgivable loans of $125,000 and $94,178, respectively, which is included within ‘cost of revenues’ in accompanying consolidated statements of operations.

Other Loans

On June 20, 2023, the Company entered into a promissory note in the amount of $130,000 with the same independent contractor as the March 30, 2023, forgivable loan. The promissory note was due on June 20, 2024 and bared interest at 36% per annum. Any outstanding principal and accrued interest is due on the maturity date. The contractor also has the right to, in lieu of cash payments, to provide future services to the Company in reduction of principal or interest. The note is currently past due, the parties are in negotiations to extend the term of the note or settle the obligation for its original amount. The Company has not recognized any interest associated with this promissory note during the years ended December 31, 2024 or 2023.

Note 11. Segments

As a result of the Reliant acquisition, the Company determined that there are two reportable segments. These segments have different strategic and economic goals and are managed separately because they require different technology and marketing strategies.

The Company’s Chief Executive Officer is the chief operating decision maker and reviews the internal management reports for each segment at least quarterly. During the years ended December 31, 2024 and 2023, there were no significant inter-company revenues or expenses. The chief operating decision maker assesses performance for each segment and decides how to allocate resources based on segment operating losses that also is reported on the consolidated statement of operations. The measure of segment assets is reported on the balance sheet as total consolidated assets. The accounting policies of each segment are the same as those described in the summary of significant accounting policies.

Information regarding each reportable segment for the year ended December 31, 2024, is as follows:

Note 12 – Investment in Equities

The Company holds investments in equity securities of publicly listed companies. The Company remeasures any equity securities held at each reporting period and recognizes a gain or losses for any changes in the fair value of those equity securities. The Company determines the fair value of its equity securities using quoted market prices for markets which it can access. The following tables present the Company’s equity securities by class within the fair value hierarchy established in ASC 820.

As of December 31, 2024, the Company's investments were concentrated in the common stock of two entities comprising 76% and 24% of the total investment balance. Approximately 118,000 is an investment in the common stock of a related party.

Note 13 – Income Taxes

The Company accounts for income taxes in accordance with ASC 740,Income Taxes. Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the periods in which those temporary differences are expected to be recovered or settled.

Components of Income Tax Expense:

The reconciliation of the U.S. federal statutory income tax rate to the Company’s effective tax rate is as follows:

The Company’s effective tax rate was 0% for both 2024 and 2023 due to the full valuation allowance recorded against its deferred tax assets.

Components of deferred tax assets and liabilities are as follows:

As of December 31, 2024 and 2023, the Company maintained a full valuation allowance against its net deferred tax assets. Based on available evidence, including historical cumulative losses, the Company concluded it is more likely than not that the deferred tax assets will not be realized.

As of December 31, 2024, the Company had estimated federal and state net operating loss carryforwards (NOL) of approximately $1,950,406, are carried forward indefinitely subject to an 80% utilization limitation. These carryforwards are subject to limitations under Section 382 of the Internal Revenue Code due to any future changes in ownership occurs. The Company has not yet completed it federal income tax return for the year ended December 31, 2024 and therefore these NOLs may change as a result of the completion of the Company’s federal tax return. These amounts represent management’s best estimate with available information as of December 31, 2024.

The utilization of NOLs and other tax attributes may be subject to annual limitations under Section 382 of the Internal Revenue Code due to ownership changes that occurred, or may occur in the future, including as a result of the Company’s recent acquisition of Reliant Holdings. If a Section 382 limitation is triggered, the Company’s ability to utilize its NOLs and other deferred tax assets to offset future taxable income may be significantly limited or delayed, and some portion of the tax attributes could expire before being utilized. The Company is currently evaluating the extent to which any such limitations apply.

The Company has evaluated its tax positions in accordance with ASC 740-10,Accounting for Uncertainty in Income Taxes, and concluded that there were no uncertain tax positions requiring recognition or disclosure in the financial statements as of December 31, 2024 or 2023. The Company does not expect any significant changes to its uncertain tax positions within the next 12 months. The Company’s policy is to recognize interest and penalties related to income taxes, if any, in income tax expense. No such amounts were recognized in 2024 or 2023.

Note 14. Subsequent events

Between January 1, 2025 and April 10, 2025, holders of $325,000 in aggregate principal amount of the Company’s outstanding notes payable exchanged their notes payable for common stock at a price of $0.046 and $0.052 per share, resulting in the issuance of 7,090,745 shares of common stock.

The notes payable were previously issued to the holders in reliance on the exemption from registration under the Securities Act of 1933 provided by Section 4(a)(2). As a result of this transaction, the Company's outstanding debt has been reduced by the principal amount of the notes converted, and the equity capital of the Company has been increased by the issuance of the common shares. The conversion of the notes payable to equity is expected to improve the Company’s liquidity position by reducing its debt obligations.

This transaction was completed in accordance with the terms of the relevant debt agreements and does not have a material impact on the Company's financial position or results of operations as of the balance sheet date.