Balance Labs Inc

Three Months Ended September 30, 2024 Compared with Three Months Ended September 30, 2023.

Overview

We reported a net loss of $192,837 and $68,735 for the three months ended September 30, 2024 and 2023, respectively. This represents a difference of 124,102, or 4%, primarily due to an increase of approximately $30,000 in salary and an increase in unrealized losson available for sale securities of $24,496.

Revenues - Related Party

For the three months ended September 30, 2024 and September 30, 2023, we generated $0 and $0, respectively in revenue.

General and Administrative Expenses

General and administrative expenses were $4,557 and $8,005 for the three months ended September 30, 2024 and 2023, respectively, an decrease of $3,448 or 43% due to a decrease in printing and utilities expenses.

Professional Fees

Professional fees were $32,293 and $11,274 for the three months ended September 30, 2024 and 2023, respectively, a decrease of $21,019 or 286% due to decrease in accounting and legal fees for the quarter.

Other Income and Expense

Other expenses for the three months ended September 30, 2024 was $109,149. Other expense for the three months ended September 30, 2023 was $34,256. This represents a difference of $74,893 which was attributable to an unrealized loss from available for sale securities, and a slight increase in accrued interest expense on note payable.

Unrealized gain or loss on available for sale securities

Unrealized loss on available for sale securities for the three months ended September 30, 2024 was $47,746. Unrealized gain on available for sale securities for the three months ended September 30, 2023 was $23,250. This represents an increase of $70,996 or 305% attributable to an decrease in the stock price of the securities coupled with a reverse stock split of 2.5 to 1.

Net Loss allocated from Equity Method Investees

Net Loss allocated from Equity Method Investee for the three months ended September 30, 2024 and September 30, 2023 was $0 and $0, respectively.

Nine Months Ended September 30, 2024 Compared with Nine Months Ended September 30, 2023.

Overview

We reported a net loss of $410,480 and of $252,768 for the nine months ended September 30, 2024 and 2023, respectively. This represents a difference of $157,713, or 63%, primarily due to an increase in salary and wages and by an unrealized gain on available for sale securities of $

Revenues - Related Party

For the nine months ended September 30, 2024 and September 30, 2023, we generated $0 and $0, respectively in revenue.

General and Administrative Expenses

General and administrative expenses were $11,779 and $19,536 for the nine months ended September 30, 2024 and 2023, respectively, a decrease of $7,757 or 37% primarily due to an decrease in office expenses.

Professional Fees

Professional fees were $56,838 and $50,249 for the nine months ended September 30, 2024 and 2023, respectively, an increase of $6,589 or 12% due to an increase in accounting and legal fees for the quarter.

Other Income and Expense

Other expenses for the nine months ended September 30, 2024 was $203,204. Other expense for the nine months ended September 30, 2023 was $140,842. This represents a difference of $62,362 or 31% which was attributable to an unrealized loss from available for sale securities and interest expense,.

Unrealized gain or loss on available for sale securities

Unrealized loss on available for sale securities for the nine months ended September 30, 2024 was $27,976. Unrealized gain on available for sale securities for the nine months ended September 30, 2023 was $29,894. This represents an increase of $57,870 or 194% attributable to an increase in the stock price of the securities and a reverse stock split.

Net Loss allocated from Equity Method Investee

Net Loss allocated from Equity Method Investee for the nine months ended September 30, 2024 and September 30, 2023 was $0 and $0, respectively.

Liquidity and Capital Resources

We measure our liquidity in a number of ways, including the following:

Availability of Additional Funds

Except for the monthly consulting fee to our CEO and Chairman of the Board and the monthly lease of our virtual office, as described elsewhere in this report, we currently do not have any material commitments for capital expenditures. We are actively pursuing new client relationships. Even if we were to add a new client(s), due to our current lack of a diversified client base, there could be temporary imbalances between cash receipts and cash operating expenditures, which means that we may need additional capital. The engagement revenues associated with most client engagements will self-fund the in-house and sub-contractor services we need in order to supply products and services to our clients.

As of September 30, 2024, the Company had a working capital deficiency of $4,953,363 and used cash in operations of $112,402. In addition, the Company is working to manage its current liabilities while it continues to make changes in operations to further improve its cash flow and liquidity position.

Net Cash Used in Operating Activities

We experienced negative cash flows from operating activities for the nine months ended September 30, 2024 and September 30, 2023, in the amount of $112,402 and $89,693, respectively.

Net Cash Used in Investing Activities

Net cash used in investing activities during the nine months ended September 30, 2024 and September 30, 2023 was $0 and $0, respectively.

Net Cash Provided by Financing Activities

Net cash provided by financing activities during the nine months ended September 30, 2024 and September 30, 2023 was $30,000 and $0, respectively.

Our Auditors Have Issued a Going Concern Opinion

The Company’s independent registered public accounting firm has expressed substantial doubt as to the Company’s ability to continue as a going concern as of September 30, 2024. The unaudited condensed consolidated financial statements in this report on Form 10-Q have been prepared assuming that the Company will continue as a going concern. As discussed in the notes to the unaudited condensed consolidated financial statements, these conditions raise substantial doubt from the Company’s ability to continue as a going concern. The Company’s plans in regard to these matters are also described in the notes to the Company’s unaudited condensed consolidated financial statements. The unaudited condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should the Company be unable to continue as a going concern.

The Company anticipates the receipt of funding within such period, but there can be no assurance that it will occur. If the Company is unable to meet its internal revenue forecasts or obtain additional financing on a timely basis, it may have to delay vendor payments and/or initiate cost reductions, which would have a material adverse effect on the Company’s business, financial condition and results of operations, and ultimately it could be forced to discontinue the Company’s operations, liquidate, and/or seek reorganization under the U.S. bankruptcy code. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, it may contain restrictions on our operations, in the case of debt financing or cause substantial dilution for our stockholders, in case of equity financing.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Critical Accounting Policies and Estimates

Use of Estimates

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires us 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 periods. Estimates may include those pertaining to accruals, stock-based compensation and income taxes. Actual results could materially differ from those estimates.

Revenue Recognition

The Company accounts for revenues under FASB ASC 606, which is a comprehensive new revenue recognition model that requires revenue to be recognized in a manner to depict the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. The Company considers revenue realized or realizable and earned when all the five following criteria are met: (1) Identify the Contract with a Customer, (2) Identify the Performance Obligations in the Contract, (3) Determine the Transaction Price, (4) Allocate the Transaction Price to the Performance Obligations in the Contract, and (5) Recognize Revenue When (or As) the Entity Satisfies a Performance Obligation.

Fair Value of Financial Instruments

The Company measures its financial assets and liabilities in accordance with GAAP. For certain of our financial instruments, including cash, accounts payable, and the short-term portion of long-term debt, the carrying amounts approximate fair value due to their short maturities.

We adopted accounting guidance for financial and non-financial assets and liabilities (ASC 820). This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements. This guidance does not apply to measurements related to share-based payments. This guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

Recent Accounting Standards

We have implemented all new accounting standards that are in effect and may impact our consolidated financial statements and do not believe that there are any other new accounting standards that have been issued that might have a material impact on our financial position or results of operations.

In August 2020, FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity; Own Equity (“ASU 2020-06”), as part of its overall simplification initiative to reduce costs and complexity of applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial statements. Among other changes, the new guidance removes from GAAP separation models for convertible debt that require the convertible debt to be separated into a debt and equity component, unless the conversion feature is required to be bifurcated and accounted for as a derivative or the debt is issued at a substantial premium. As a result, after adopting the guidance, entities will no longer separately present such embedded conversion features in equity and will instead account for the convertible debt wholly as debt. The new guidance also requires use of the “if-converted” method when calculating the dilutive impact of convertible debt on earnings per share, which is consistent with the Company’s current accounting treatment under the current guidance. The guidance is effective for financial statements issued for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years, with early adoption permitted, but only at the beginning of the fiscal year. The Company has adopted this standard.

Not applicable.