Onar Holding Corp

ONAR Holding Corporation

Notes to Unaudited Condensed 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. ONAR serves as the operating entity for the Company’s marketing and technology-enabled agency network. ONAR specializes in marketing solutions through a technology-enabled independent agency brand network, providing services across industries including performance digital marketing, healthcare marketing, and experiential marketing.

Going Concern

The accompanying condensed 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 net loss of $1,128,066 for the three month period ended March 31, 2026. The Company also has a working capital deficiency of $10,437,700 and a stockholders’ deficiency of $6,652,712 as of March 31, 2026. 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 has taken a series of concrete actions to address these conditions. During the first quarter of 2026 and through the date of this filing, the Company completed its exit from two non-core legacy businesses, allowing management to concentrate resources on its higher-margin marketing and technology operations; reduced total operating expenses by 66% and net cash used in operating activities by 40% compared to the prior-year period; and restructured a short-term financing obligation into a multi-year note payable with fixed payments; Management’s plans also include continuing to grow revenue through organic client acquisition and selective strategic acquisitions, maintaining disciplined cost management across the agency network, and reducing the Company’s reliance on short-term convertible financing. However, there can be no assurance that management will be successful in obtaining additional funding or in attaining profitable operations. The accompanying condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis of Presentation

The Company prepares its condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for interim financial information. The accompanying financial statements are unaudited. In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at March 31, 2026 and for the periods presented have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on June 11, 2026 (the “2025 Annual Report”). The results of operations for the three months ended March 31, 2026 are not necessarily indicative of the operating results for the full year.

Princi****ples of Consolidation

The condensed 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.

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.

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 condensed consolidated balance sheets.

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 3,659,944,576 and 596,572,331 potentially dilutive shares outstanding during the three months ended March 31, 2026 and 2025, respectively; these shares were excluded from the computation of diluted net loss per share because their effect would have been anti-dilutive.

Note 2. Acquisitions and Divestitures

On March 12, 2026, the Company acquired all of the outstanding equity interests of Scale Partners, a provider of technology-enabled marketing and sales solutions tailored specifically for the commercial real estate (CRE) sector, for total consideration of approximately $185,000, consisting of $85,000 of notes payable and $100,000 of Series E Preferred Stock, par value $0.001 per share, (the “Series E Preferred Stock”). The acquisition extends the Company’s AI-enabled marketing platform into the commercial real estate sector and adds complementary artificial intelligence and operational capabilities.

The Company accounted for the transaction as a business combination under ASC 805,Business Combinations. The provisional purchase price allocation resulted in the recognition of approximately $160,000 of goodwill, which is expected to be deductible for income tax purposes, and $25,000 of identifiable intangible assets consisting of a non-compete agreement. The purchase price allocation is provisional as of March 31, 2026 and remains subject to change as the Company finalizes its valuation of assets acquired and liabilities assumed. Measurement period adjustments, if any, will be recognized in the reporting period in which they are determined, not to exceed one year from the acquisition date.

The acquisition was not material to the Company's condensed consolidated financial statements, and the results of Scale Partner’s operations have been included in the Company’s condensed consolidated financial statements from the acquisition date. Accordingly, pro forma financial information and other disclosures required by ASC 805 for material business combinations have not been presented.

Note 3. Discontinued Operations

Through its wholly owned subsidiary Reliant Pools, the Company operated a legacy custom swimming pool construction business in the greater Austin, Texas market.

The pool business was non-core to ONAR’s strategic focus on marketing, technology, and AI-driven growth. On January 19, 2026, the Company entered into a Stock Purchase Agreement to divest 100% of the issued and outstanding shares of Reliant Pools, Inc. to Elijah May, effective as of December 31, 2025.

The results of the pool construction business are presented within income from discontinued operations in the condensed consolidated statements of operations, and the related cash flows are presented separately as discontinued operations in the condensed consolidated statements of cash flows, for the three months ended March 31, 2025.

Results of operation for Reliant Pools the three months ended March 31, 2025,

Note 4. Related Party Transactions

Advance to Affiliated Entity

During the year ended December 31, 2024 and prior to the acquisition of HLDCO the Company advanced to an entity controlled by the Company’s CEO an aggregate of $400,700. The purpose of this advance was to enable that entity to purchase the Company’s outstanding super-voting Series A Preferred Stock from the prior controlling shareholder, which facilitated the change of control and subsequent reverse-merger transaction described in the Company’s 2025 Annual Report. On March 11, 2025, this advance 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 loan receivable under ASC 310, 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.

As of March 31, 2026 the balance remains outstanding and is included in ‘Advance to affiliated entity’ on the accompanying condensed consolidated balance sheets.

Advances to related party

During the three months ended March 31, 2026, the Company made certain advances to an entity affiliated with the Company’s Chief Executive Officer totaling $99,416. These advances are unsecured, due on demand and do not bear interest. As of March 31, 2026, $99,416 remained outstanding.

Note 5. Notes Payable and Convertible Notes Payable

For the terms of debt outstanding at December 31, 2025 that has not changed significantly, refer to the Company’s 2025 Annual Report.

On January 10, 2026, the Company entered into a securities purchase agreement providing for the issuance of a convertible promissory note in the principal amount of $110,000 with an original issue discount of $8,800 and deferred financing fees of $9,000. The note matures on January 23, 2027 and bears interest at 12% per annum, subject to a guaranteed minimum amount of interest, resulting in an annualized effective interest rate of 196.5%. Principal and interest are due in monthly installments through maturity. The holder may convert outstanding principal and accrued interest into shares ofcommon stock at a conversion price equal to the lesser of $0.03 or 75% of the 10-day volume weighted average price of the Company's common stock.

The holder also received 2,200,000 warrants to purchase the Company’s common stock. The warrants had a fair value of $42,237 at issuance, of which $25,580 was allocated as a debt discount. Warrants issued in connection with the notes were allocated a portion of the note proceeds based on their relative fair value at issuance and recorded as a debt discount with a corresponding credit to additional paid-in capital.

On January 23, 2026, the Company entered into a securities purchase agreement providing for the issuance of a convertible promissory note in the principal amount of $543,478 with an original issue discount of $43,478. The note matures on January 23, 2027 and bears interest at 18% per annum, resulting in an annualized effective interest rate of 56.4%. Principal and interest are due in monthly installments through maturity. The holder may convert outstanding principal and accrued interest into shares ofcommon stock at a conversion price equal to the lesser of $0.03 or 75% of the 10-day volume weighted average price of the Company's common stock.

The holder also received 5,434,782 warrants to purchase the Company’s common stock. The warrants had a fair value of $87,820 at issuance, of which $69,555 was allocated as a debt discount. Warrants issued in connection with the notes were allocated a portion of the note proceeds based on their relative fair value at issuance and recorded as a debt discount with a corresponding credit to additional paid-in capital.

On March 4, 2026, the Company entered into a securities purchase agreement providing for the issuance of a convertible promissory note in the principal amount of $170,400 with an original issue discount of $28,400 and deferred financing fees of $7,000. The note matures on January 15, 2027 and bears interest at 12% per annum, subject to a guaranteed minimum amount of interest, resulting in an annualized effective interest rate of 99.2%. Principal and interest are due in monthly installments through maturity. The holder may convert outstanding principal and accrued interest into shares ofcommon stock at a conversion price equal to 65% of the lowest 10-day trading price of the Company's common stock.

Note 6. Equity

Common Shares

As of March 31, 2026, the Company was authorized to issue 1,000,000,000 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. On May 5, 2026, the holder of approximately 76.8% of the voting power of the Company’s outstanding common stock and the board of directors of the Company authorized an increase in the number of authorized shares of the Company’s common stock from 1,000,000,000 shares to 3,000,000,000 shares. The increase became effective on June 22, 2026 (see Note 8).

During the three months ended March 31, 2026, the Company issued approximately 15,084,793 shares of common stock for services with a fair value of approximately $58,488.

In addition, during the three months ended March 31, 2026, holders of convertible notes payable converted principal and accrued interest of $93,173 into 41,407,781 shares of common stock, and the Company recorded $82,918 within additional paid-in capital in respect of warrants issued with convertible notes payable (see Note 5).

Preferred Shares

During the three months ended March 31, 2026, the Company issued 100 shares of Series E Preferred Stock with a fair value of $100,000 as partial consideration for the acquisition of Scale Partners (see Note 2).

Note 7. Commitments and Contingencies

Except as described below, there have been no material changes during the three months ended March 31, 2026, to the information presented in the audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025.

Litigation

On November 7, 2025, Jeffrey L. Feinberg Personal Trust (“Feinberg”) filed a complaint against ONAR, LLC in the Superior Court of the State of Delaware, Case No. N25C-11-060 SPL. The complaint alleges breach of contract and unjust enrichment related to a Senior Secured Promissory Note originally issued by Integrum Group, LLC (the Company’s predecessor entity) dated March 18, 2024, in the principal amount of $1,500,000 (the “Note”). Feinberg alleges that the Note matured on March 18, 2025, and that the amounts due thereunder have not been repaid.

The Company has retained counsel and filed its Answer and Affirmative Defenses, vigorously denying the claims asserted and raising multiple affirmative defenses. The Company intends to defend itself vigorously against the claims brought by plaintiff in this matter. At this time, management does not believe the ultimate resolution of this matter will have a material adverse effect on the Company’s financial condition, results of operations, or cash flows

Payroll tax liabilities

During fiscal year 2023, the Company did not remit certain 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 amount in accrued expenses in the accompanying condensed consolidated balance sheets. As of March 31, 2026 and December 31, 2025, the balance due was $653,132 and $646,113, respectively. As of the date of this filing, no enforcement action has been initiated by any taxing authority in connection with these liabilities. The Company’s tax representatives are engaged in active discussions with the relevant taxing authorities to resolve this matter and negotiate a structured payment arrangement. Management believes it is possible that a portion of the accrued penalties and interest may be abated or forgiven through the negotiation process.

Note 8. Subsequent Events

ADI Funding LLC. On April 6, 2026, the Company received an additional $100,000 advance from ADI Funding LLC under the September 15, 2025 Securities Purchase Agreement, as amended, evidenced by a secured demand note. The note bears interest at 2% of principal per month, payable monthly beginning April 1, 2026, is non-convertible, is prepayable at par, and is secured pari passu with the existing ADI notes. Because principal is payable on demand, the note will be classified as a current liability.

On May 5, 2026, the holder of approximately 76.8% of the voting power of the Company’s outstanding common stock and the board of directors of the Company authorized an increase in the number of authorized shares of the Company’s common stock from 1,000,000,000 shares to 3,000,000,000 shares. The increase became effective on June 22, 2026.

Labrys Fund II, L.P. On June 9, 2026, the Company issued an unsecured promissory note to Labrys Fund II, L.P. with a principal amount of $53,700 ($40,000 net cash proceeds, $7,000 original issue discount, $6,700 issuance costs) and a one-time 12% interest charge ($6,444) earned in full at issuance. The note matures June 9, 2027, with monthly payments of $6,000 beginning September 9, 2026. Upon an event of default or missed payment, the note becomes convertible at 65% of the lowest VWAP during the ten trading days preceding conversion; the Company is required to reserve 161,000,000 shares for potential conversion.

Agile Capital. On July 3, 2026, the Company settled its dispute with Agile Capital concerning $525,000 of purchased receivables. The obligation was restructured into monthly payments over 32 months with no additional penalties or charges.