Balance Labs, Inc.
For the period ended Mar 31, 2026. Filed May 15, 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.
Mar 31, 2026 · Filed May 15, 2026
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What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-13.
0001493152-25-022345
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-15.
0001493152-26-023451
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 62 previous paragraphs and 47 current paragraphs.
22 unchanged; 4 reworded; 20 added; 35 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 4 previous and 2 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 (20)
Current report
We were incorporated on June 5, 2014, under the laws of the State of Delaware. We are a digital asset advisory firm providing consulting services to institutions navigating the digital asset economy. Our advisory services include strategic guidance on digital asset adoption, treasury strategy, and related operational and market considerations, and are delivered through both retainer-based and project-based engagements. We also intend to establish a rules-based digital asset corporate treasury, subject to the availability of sufficient capital.
Current report
Our plan is to leverage our advisory expertise to support institutional clients evaluating, deploying, or operationalizing digital asset strategies. We expect to expand our client base through professional referrals, conference participation, and direct outreach to institutional decision-makers. We intend to formalize relationships with subcontracted professionals and service providers to support our advisory engagements as our client base grows.
Current report
Our primary requirement for funding is for working capital in order to accommodate temporary negative cash flows from operations (see “Liquidity and Capital Resources”).
Current report
Revenue.
Current report
During the three months ended March 31, 2026, we generated $32,667 of consulting revenue from advisory services, all of which was unbilled at quarter-end. We did not generate any revenue during the three months ended March 31, 2025.
Current report
Operating Expenses.
Current report
Total operating expenses for the three months ended March 31, 2026 were $520,754, an increase of $441,915 from $78,839 for the three months ended March 31, 2025. The increase was driven primarily by salaries and wages, which increased from $49,542 to $471,577. The Q1 2026 salaries and wages line includes $329,153 of non-cash stock-based compensation expense related to the vesting of the equity award granted to the Company’s Chief Executive Officer in August 2025, in addition to cash salaries, wages, and payroll taxes incurred during the quarter. Professional fees increased from $25,035 to $43,199 as the Company incurred additional accounting and legal costs in connection with its quarterly reporting obligations and equity-related matters. General and administrative expenses increased modestly from $4,262 to $5,978.
Current report
Other Income (Expense).
Current report
Total other income (expense), net was income of $665,890 for the three months ended March 31, 2026, compared to income of $72,433 for the three months ended March 31, 2025. The change was primarily driven by a non-cash gain of $706,056 on remeasurement of the derivative liability associated with the Chief Executive Officer’s anti-dilution provision, partially offset by an unrealized loss of $27,901 on our holdings of NextNRG Inc. common stock and interest expense of $12,265. The three months ended March 31, 2025 included a one-time non-recurring gain of $127,579 on settlement of accounts payable and interest expense of $56,740 (substantially higher than the current period due to the November 2025 conversion of legacy debt into equity).
Current report
Net Income (Loss).
Current report
As a result of the foregoing, we recognized net income of $177,803 for the three months ended March 31, 2026, compared to a net loss of $6,406 for the three months ended March 31, 2025. The current period net income was driven by the non-cash gain of $706,056 on remeasurement of the derivative liability, which more than offset the loss from operations of $488,087 (which itself includes $329,153 of non-cash stock-based compensation expense). Excluding the non-cash gain on derivative remeasurement and stock-based compensation expense, the Company’s underlying operating performance reflects ongoing operating cash needs.
Current report
Reported net income for the three months ended March 31, 2026 reflects the impact of significant non-cash items. The following table summarizes these non-cash items recorded during the period and their effect on reported net income:
Current report
In the aggregate, the non-cash items above contributed $349,002 of net income during the three months ended March 31, 2026. Excluding these non-cash items, the Company’s cash-basis operating loss for the three months ended March 31, 2026 was approximately $171,199, which management believes is more representative of the Company’s underlying operating performance. Management believes the gain on remeasurement of the derivative liability reflects period-over-period changes in the estimated fair value of an anti-dilution obligation embedded in the Chief Executive Officer’s employment agreement and does not reflect the Company’s ongoing operational performance or cash requirements.
Current report
Net cash used in operating activities for the three months ended March 31, 2026 was $142,609, compared to net cash used of $22,659 for the three months ended March 31, 2025. Although the Company reported net income of $177,803 for the current quarter, the result includes a $706,056 non-cash gain on remeasurement of the derivative liability and $329,153 of non-cash stock-based compensation expense. Adjusting for these and other non-cash items, and for changes in operating assets and liabilities (most notably an increase in accounts payable and accrued expenses), produced a net cash outflow consistent with the underlying operating cost structure.
Current report
Net Cash Provided by Investing Activities
Current report
There was no cash provided by or used in investing activities during the three months ended March 31, 2026 or March 31, 2025.
Current report
Net Cash Provided by Financing Activities
Current report
There was no cash provided by financing activities during the three months ended March 31, 2026. During the three months ended March 31, 2025, financing activities provided $12,500 in proceeds from short-term advances from related parties.
Current report
Derivative Liability
Current report
The Company accounts for the anti-dilution provision contained in the Chief Executive Officer’s August 2025 employment agreement as a derivative liability under ASC 815, Derivatives and Hedging. The derivative liability is initially recognized at fair value and is remeasured to fair value at each reporting date, with changes in fair value recorded in earnings. Fair value is estimated using a Monte Carlo simulation model. As of March 31, 2026, the derivative liability was $1,238,750.
Removed paragraphs (35)
Previous report
We were incorporated on June 5, 2014, under the laws of the State of Delaware. We are a consulting firm that provides business development and consulting services to start-up and development-stage companies. Our business model is to provide businesses in various industries with customized consulting services to meet their business needs and help them improve their business models, sales and marketing plans and internal operations, as well as introduce these businesses to experienced professional contacts that would be vital to the success of these companies.
Previous report
Additionally, in accordance with the 1940 Act, Section 3(c)(1), the Company is not an Investment Company as defined by the 1940 Act because the Company does not have outstanding securities beneficially owned by more than one hundred persons and, at this time, the Company is not making and does not presently propose to make a public offering of its securities. Additionally, the Company has not and has no plans to purchase or acquire any securities issued by any registered investment company.
Previous report
Our business focuses on providing advisement services to entrepreneurs and assisting business owners so that their ideas can be fully developed and implemented. Due to limited resources, lack of experienced management and competing priorities, start-up and developmental stage companies are not operating as efficiently as they can be, and therefore would, benefit from an outside party that could assist in developing and executing certain strategies. We utilize our knowledge in developing businesses, share practical experiences with our clients and introduce the business owners to experienced professionals who could help these inexperienced entrepreneurs further implement their ideas. Start-ups and development stage businesses across all industries commonly experience these certain “growing pains”.
Previous report
Balance Labs, Inc. operates as a digital asset corporate treasury company. Our principal business is acquiring, holding, and managing a diversified portfolio of digital assets, primarily liquid, large-capitalization cryptocurrencies. Where feasible, we intend to generate yield through staking, validator participation, or other on-chain activities.
Previous report
Over the next twelve months, we plan to:
Previous report
We do not currently generate operating revenues and do not expect material revenues until our treasury scale supports consistent yield activities. Operating expenses consist primarily of custody fees, professional services, compliance costs, and general overhead
Previous report
We may require additional capital to grow our digital asset holdings or fund operations. Such capital, if pursued, may be raised through equity, debt, or digital asset-backed instruments, subject to market conditions. There can be no assurance that financing will be available on acceptable terms, or at all.
Previous report
Overview
Previous report
We reported a net loss of $3,594,664 and of $192,837 for the three months ended September 30, 2025 and 2024, respectively. This represents an increase of $3,396,827, or 1,716%, primarily due to expenses related to the issuance of stock to CEO Alan Campbell and the expense related to the recognition of a derivative liability from the ant-dilution provision in Mr. Campbell’s employment agreement.
Previous report
General and Administrative Expenses
Previous report
General and administrative expenses were $4,320 and $4,557 for the three months ended September 30, 2025 and 2024, respectively, a decrease of $237 or 5%.
Previous report
Professional Fees
Previous report
Professional fees were $23,975 and $32,293 for the three months ended September 30, 2025 and 2024, respectively, a decrease of $8,318 or 26% due primarily to a decrease in accounting fees.
Previous report
Other Income and Expense
Previous report
Other expenses for the three months ended September 30, 2025 was $3,383,530. Other expenses for the three months ended September 30, 2024 was $109,149 due to an unrealized loss of $24,978 on available for sale securities during the three months ended September 30, 2025, as compared to an unrealized loss of $47,746 in the same period for 2024. This represents a decrease in unrealized loss on available for sale securities of $23,301 attributable to changes in the stock price of the securities than in prior periods. Additionally, the Company realized a loss on derivative of 3,425,796 and a $128,101 gain on change in derivative liability.
Previous report
Nine Months Ended September 30, 2025 Compared with Nine Months Ended September 30, 2024.
Previous report
Overview
Previous report
We reported a net loss of $3,747,212 and of $410,480 for the nine months ended September 30, 2025 and 2024, respectively. This represents an increase of $3,336,732 or 1,731%, primarily due to expenses related to the issuance of stock to CEO Alan Campbell and the expense related to the recognition of a derivative liability from the ant-dilution provision in Mr. Campbell’s employment agreement.
Previous report
General and Administrative Expenses
Previous report
General and administrative expenses were $14,427 and $11,779 for the nine months ended September 30, 2025 and 2024, respectively, an increase of $2,648 or 22% primarily due to an increase in dues and subscriptions.
Previous report
Professional Fees
Previous report
Professional fees were $75,691 and $56,838 for the nine months ended September 30, 2025 and 2024, respectively, an increase of $18,853 or 33% due to an increase in legal and accounting fees.
Previous report
Other Income and Expense
Previous report
Other income for the nine months ended September 30, 2025 was $3,377,980, as compared to other expense for the nine months ended September 30, 2024 of $203,204. This change is primarily attributable to the settlement of accounts payable, a loss on derivative and a gain on change in derivative liability.
Previous report
Unrealized gain or loss on available for sale securities
Previous report
Unrealized loss on available for sale securities for the nine months ended September 30, 2025 was $33,747. Unrealized loss on available for sale securities for the nine months ended September 30, 2024 was $27,976. This represents an increase in unrealized loss on available for sale securities of $5,771 attributable to changes in the stock price of the securities.
Previous report
Availability of Additional Funds
Previous report
Except for the monthly consulting fee to our President and Chairman of the Board and the monthly lease of our virtual office, as described elsewhere in this annual 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.
Previous report
As of September 30, 2025, the Company had a working capital deficiency of $8,675,685. The Company used cash in operations of $236,121. 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.
Previous report
We experienced negative cash flows from operating activities for the nine months ended September 30, 2025 and 2024, in the amount of $93,487 and $112,402, respectively. This was primarily due to a net loss of $3,747,212, largely offset by a loss on derivative of $3,425,796 partially offset by a gain on change in derivative liability of $(128,101) due to remeasurement during the period.
Previous report
Our Auditors Have Issued a Going Concern Opinion
Previous report
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 is still evaluating the impact of this standard on its financial statements
Previous report
Recent Developments
Previous report
On August 22, 2025, the Company appointed Alan Campbell as its Chief Executive Officer, effective immediately, succeeding Michael D. Farkas, who continues to serve as Chairman of the Board and President. Mr. Campbell brings more than 20 years of experience in financial-data and index-management businesses, having served in senior leadership roles at CoinDesk Indices and Bloomberg L.P.
Previous report
In connection with his appointment, the Company and Mr. Campbell entered into a CEO Employment Agreement providing for, among other terms, (i) an annual base salary of $350,000 (subject to activation following a capital raise or 75 days from appointment), (ii) a target annual performance bonus of 65% of base salary, and (iii) a one-time equity award equal to 3.6% of the Company’s outstanding shares of common stock, vesting in equal annual installments over three years.
Reworded paragraphs (4)
Previous wording
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, 2025. 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.
Current wording
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, the Company used $142,609 of cash in operating activities during the three months ended March 31, 2026, had $216,366 in cash as of March 31, 2026, had an accumulated deficit of $37,473,843 and a working capital deficit of $2,869,383 at March 31, 2026, and there is substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months from the date the financial statements were available to be issued. 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.
Previous wording
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.
Current wording
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 the fair value of the derivative liability, accruals, stock-based compensation and income taxes. Actual results could materially differ from those estimates.
Previous wording
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:
Current wording
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. The guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels.
Previous wording
In November 2023, the FASB issued ASU 2023-07, which introduces enhancements to the disclosure requirements for reportable segments. The update mandates:
Current wording
In November 2023, the FASB issued ASU 2023-07, which introduces enhancements to the disclosure requirements for reportable segments. The Company adopted ASU 2023-07 effective January 1, 2024. This adoption did not have a material impact on the Company’s consolidated financial statements.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Substantial Doubt Exists About Our Ability to Continue as a Going Concern
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
This adoption did not have a material impact on the Company’s consolidated financial statements.