Eva Live Inc
For the period ended Jun 30, 2026. Filed Aug 3, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 3, 2026
GOAI$0.61+1.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-15.
0001493152-26-023770
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-03.
0001493152-26-035818
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 96 previous paragraphs and 98 current paragraphs.
49 unchanged; 22 reworded; 25 added; 25 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 10 previous and 11 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 (25)
Current report
Total assets increased by $8,059,262, from $16,315,862 at December 31, 2025, to $24,375,124 at June 30, 2026. The increase reflects $2,035,692 of cash generated principally from financing activities, the $3,000,000 equity interest in PSQUARED Inc. received in settlement of a receivable, $1,209,005 of marketable securities received as customer consideration and remeasured to fair value, $1,458,391 of growth in net accounts receivable, and $311,852 of capitalized website development costs.
Current report
Cash and cash equivalents increased by $2,035,692, from $202,524 at December 31, 2025, to $2,238,216 at June 30, 2026. The increase was funded by financing activities rather than by operations; operating activities used cash of $5,229,216 during the six months ended June 30, 2026.
Current report
Accounts receivable, net increased by $1,458,391, from $16,006,624 at December 31, 2025, to $17,465,015 at June 30, 2026, net of an allowance for doubtful accounts of $1,379,519 at each date. Realization of this balance in cash is central to funding operations. Balances aged more than 90 days from invoice date were $15,408,659, or approximately 88% of the net balance, net of the $(3,000,000) credit arising from the settlement of Psquared Inc. receivables in equity; balances aged 90 days or less totaled $2,056,356. See Note 2 — Summary of Significant Accounting Policies for the full aging schedule.
Current report
The Company recorded marketable securities of $1,209,005 at June 30, 2026 (none at December 31, 2025). The marketable securities represent common shares of customers received as non-cash consideration under investor relations services contracts, carried at fair value. The Company recognized an unrealized gain of $495,405 on these securities for the six months ended June 30, 2026. In addition, the Company holds a $3,000,000 non-marketable equity interest in PSQUARED Inc. received in settlement of accounts receivable, which is classified as a non-current asset.
Current report
Original issue discount, net increased by $49,997, from $73,482 at December 31, 2025, to $123,479 at June 30, 2026, and deferred financing costs, net decreased by $5,181, from $18,044 to $12,863, in each case reflecting discounts and costs added on notes issued during the period less amortization and amounts written off on conversion. These balances are presented as separate current assets and are not netted against the related notes payable.
Current report
Accounts payable and payroll liabilities decreased by $2,933,844, from $2,933,844 at December 31, 2025, to nil at June 30, 2026. The balance was settled substantially in common stock rather than cash, including $4,532,974 of shares issued in settlement of accounts payable during the six months ended June 30, 2026.
Current report
Accrued expenses decreased by $2,633,885, from $2,633,885 at December 31, 2025, to nil at June 30, 2026, reflecting the June 10, 2026, settlement of accrued compensation owed to officers, directors and the spouse of the Chief Executive Officer through the issuance of 825,483 shares of common stock valued at $1,882,094, together with cash payments made during the period.
Current report
Accrued interest increased by $215,331, from $68,601 at December 31, 2025, to $283,932 at June 30, 2026, principally reflecting stated interest on the Streeterville Initial Note that accretes to the outstanding balance rather than being paid in cash.
Current report
Notes payable (current) increased by $340,021, from $985,330 at December 31, 2025, to $1,325,351 at June 30, 2026, comprising Diagonal of $913,211, Boot of $202,140, the D. Allison Note of $100,000 and the Global Alliance Note of $110,000. These are face amounts; unamortized original issue discount of $123,479 and deferred financing costs of $12,863 are presented as separate current assets and are not netted against the notes. The change comprised:
Current report
Cash movements during the period:
Current report
Non-cash movements during the period:
Current report
The contract liability of $549,803 at March 31, 2026, was fully recognized as revenue during the three months ended June 30, 2026, and no deferred revenue remained at June 30, 2026 (none at December 31, 2025).
Current report
The Company recorded a convertible note payable, net of unamortized discount, of $1,099,862 at June 30, 2026 (none at December 31, 2025), representing the $6,475,000 face value of the Streeterville Initial Note outstanding at that date less unamortized discount of $5,375,138. The note matures February 26, 2028, and is classified as a long-term liability.
Current report
The Company recorded a derivative liability of $4,562,001 at June 30, 2026 (none at December 31, 2025). The derivative liability represents the compound embedded derivative bifurcated from the Streeterville Initial Note under ASC 815-15, initially recognized at $6,662,000 on February 26, 2026, reduced by $706,541 reclassified to additional paid-in capital on conversions during the second quarter and remeasured to fair value at each reporting date. It is classified within Level 3 of the fair value hierarchy.
Current report
The Company’s working capital increased from $9,679,283 at December 31, 2025, to $19,439,564 at June 30, 2026, an increase of $9,760,281, reflecting total current assets of $21,048,847 and total current liabilities of $1,609,283. Working capital is composed principally of non-cash assets: net accounts receivable of $17,465,015 represented approximately 83% of total current assets and marketable securities a further $1,209,005, while cash represented approximately 11%. See Note 3 — Going Concern.
Current report
Total revenue was $4,204,390 for the three months ended June 30, 2026, compared to $4,138,712 for the three months ended June 30, 2025, an increase of $65,678, or 1.6%. For the six months ended June 30, 2026, total revenue was $8,107,621, compared to $7,820,232 for the six months ended June 30, 2025, an increase of $287,389, or 3.7%. While total revenue was substantially flat between periods, the composition of revenue changed materially. Brand marketing revenue was $4,204,390 for the three months ended June 30, 2026, compared to $48,000 in the comparative quarter, and $6,781,329 for the six months ended June 30, 2026, compared to $142,074 for the six months ended June 30, 2025. XML revenue was nil for the three months ended June 30, 2026, compared to $4,090,712 in the comparative quarter, and $1,326,292 for the six months ended June 30, 2026, compared to $7,678,158 for the six months ended June 30, 2025. The Company’s revenue base has therefore shifted almost entirely from XML syndication to brand marketing and customer acquisition campaigns, and the Company generated no XML revenue during the second quarter of fiscal 2026. Presented on the disaggregated basis in Note 4, digital advertising and media monetization revenue — comprising all revenue other than the Jet.AI and Braiin arrangements — was $3,042,487 and $6,294,021 for the three and six months ended June 30, 2026, compared with $4,138,712 and $7,820,232 in the prior-year periods, while AI-driven marketing services revenue, comprising solely those two customers, was $1,161,903 and $1,813,600, with no comparable prior-year revenue. Revenue is generated primarily from media buying, customer acquisition campaigns, and investor relations services. A portion of revenue was settled in non-cash consideration: equity securities with a fair value at receipt of $713,600 were received under customer contracts during the six months ended June 30, 2026.
Current report
General and administrative expense was $2,017,316 for the three months ended June 30, 2026, compared to $331,451 for the three months ended June 30, 2025, an increase of $1,685,865, or 508.6%. For the six months ended June 30, 2026, general and administrative expense was $11,297,250, compared to $708,836 for the six months ended June 30, 2025, an increase of $10,588,414, or 1,493.8%. The prior-year amounts group professional fees with general and administrative expense to conform to the current-period caption.
Current report
The six-month increase is predominantly non-cash. It includes $7,611,669 of stock-based compensation recognized on the January 1, 2026, vesting of the first tranche of the Chief Executive Officer’s option award. Excluding that charge, general and administrative expense for the six months ended June 30, 2026, was $3,685,581, comprising principally professional and consulting fees of approximately $2,529,686 (consulting fees of $1,491,647, professional fees of $799,864, legal fees of $189,801 and review and audit fees of $48,375), advertising and promotion of $624,208, salaries and wages of $411,000, payroll expenses of $46,380, insurance of $30,351, office supplies of $18,809 and rent of $8,887, with the balance comprising bank service charges, server fees and other administrative costs.
Current report
For the three months ended June 30, 2026, no stock-based compensation was recognized in respect of the option award, and general and administrative expense of $2,017,316 comprised principally professional and consulting fees of approximately $1,202,525 (consulting fees of $573,610, professional fees of $428,364, legal fees of $189,801 and review and audit fees of $10,750), advertising and promotion of $509,733 and salaries and wages of $205,500. Sequentially, general and administrative expense declined from $9,279,934 in the first quarter of fiscal 2026 to $2,017,316 in the second quarter, principally reflecting the non-recurrence of the option-award charge and of the professional and consulting fees associated with the fiscal 2025 Annual Report on Form 10-K and the Streeterville Note placement.
Current report
Media Traffic Purchase
Current report
Operating Income (Loss)
Current report
Interest expense was $1,178,007 for the three months ended June 30, 2026, compared to $6,000 for the three months ended June 30, 2025. For the six months ended June 30, 2026, interest expense was $1,677,089, compared to $13,268 for the six months ended June 30, 2025, an increase of $1,663,821. Of the six-month amount, $1,388,768 represents amortization of debt discount, original issue discount and deferred financing costs, including accelerated amortization recognized on notes converted during the period, consistent with the add-backs presented in the condensed consolidated statements of cash flows, and $288,321 represents stated and other interest, of which $201,670 relates to the senior secured convertible promissory note issued to Streeterville Capital, LLC that accretes to the outstanding balance rather than being paid in cash. Only a small portion of interest expense for the period was paid in cash. See Note 9 — Debt Financing for further details.
Current report
The Company recognized a net loss of $1,749,757, or $(0.05) per basic and diluted share, for the three months ended June 30, 2026, compared to net income of $2,625,101, or $0.08 per basic and diluted share, for the three months ended June 30, 2025. For the six months ended June 30, 2026, the Company recognized a net loss of $10,313,833, or $(0.28) per basic and diluted share, compared to net income of $4,620,795, or $0.15 per basic and diluted share, for the six months ended June 30, 2025. The change from net income to net loss is driven predominantly by non-cash charges rather than cash costs: $11,269,169 of stock-based compensation and shares issued for services recognized within general and administrative expense, and $1,388,768 of debt discount, original issue discount and deferred financing cost amortization within interest expense. Cash used in operating activities for the six months was $5,229,216. The weighted-average number of common shares outstanding, basic and diluted, was 37,331,301 for the three months and 36,676,809 for the six months ended June 30, 2026, compared to 31,341,436 in each of the prior-year periods.
Current report
Net cash used in investing activities was $311,852 for the six months ended June 30, 2026, compared to $7,581 for the six months ended June 30, 2025.
Current report
Net cash provided by financing activities was $7,576,760 for the six months ended June 30, 2026, compared to $189,963 for the six months ended June 30, 2025. Financing activities comprised $6,970,000 of net proceeds from the Streeterville Initial Note, $1,043,000 of proceeds from other promissory notes and $456,166 of net proceeds from the at-the-market equity program, less $327,406 of note repayments and $565,000 of debt issuance costs paid. Net cash increased $2,035,692 during the six months ended June 30, 2026, to $2,238,216 at period end, compared to an increase of $184,723 to $261,079 in the prior-year period.
Removed paragraphs (25)
Previous report
Total assets increased by $8,401,719, from $16,315,862 at December 31, 2025, to $24,717,581 at March 31, 2026. The increase was driven primarily by the issuance of the Streeterville Capital senior secured convertible note in February 2026, which generated net cash proceeds of approximately $6,415,000, and by an increase in accounts receivable reflecting brand marketing and IR services revenue recognized during the period.
Previous report
Cash and cash equivalents increased by $5,566,745, from $202,524 at December 31, 2025, to $5,769,269 at March 31, 2026. The increase reflects net cash provided by financing activities of approximately $6.85 million (primarily the Streeterville Capital convertible note proceeds), partially offset by net cash used in operating activities of approximately $1.28 million. See “Liquidity and Capital Resources” below for further discussion of the Company’s cash flows.
Previous report
Accounts receivable, net increased by $2,429,406, from $16,006,624 at December 31, 2025, to $18,436,030 at March 31, 2026. The increase reflects revenue recognized during the period that has not yet been collected, partially offset by cash receipts from existing customers, including PSQUARED, Inuvo, RARE HAVEN Holdings, and Allison Professional Law. Management continues to monitor collectability and believes the recorded allowance for doubtful accounts is adequate.
Previous report
The Company recorded marketable securities of $360,900 at March 31, 2026 (none at December 31, 2025). The marketable securities consist of common shares of Jet.AI Inc. and Braiin Limited received as non-cash consideration in connection with investor relations services contracts entered into during the first quarter of 2026. The securities were initially recorded at fair value on the contract inception dates of $501,500 (representing $97,500 for the Jet.AI shares and $404,000 for the Braiin shares), with an offsetting credit to deferred revenue. The Company recognized an unrealized loss of $140,600 during the three months ended March 31, 2026, reflecting the mark-to-market adjustment to fair value at the balance sheet date.
Previous report
Original issuance discount, net increased by $44,684, from $73,482 at December 31, 2025, to $118,166 at March 31, 2026, and deferred financing costs, net increased by $233, from $18,044 to $18,277. The increases reflect newly recognized discount and financing costs associated with the four convertible promissory notes issued during the first quarter of 2026 by 1800 Diagonal Lending, LLC and Boot Capital LLC (aggregate discount additions of $128,814), partially offset by amortization of $83,892 to interest expense over the contractual term of each note, and accelerated relief of $28,534 (OID) and $4,900 (DFC) upon the conversion of four notes to common stock during the period.
Previous report
Accounts payable and payroll liabilities increased by $49,130, from $2,933,844 at December 31, 2025, to $2,982,974 at March 31, 2026. The change reflects normal trade payable activity during the period, including the non-cash settlement of $1,550,000 of accounts payable to Hottest Media LLC through the issuance of 500,000 shares of common stock in February 2026, partially offset by an increase in other vendor obligations.
Previous report
Accrued expenses decreased by $257,625, from $2,633,885 at December 31, 2025, to $2,376,260 at March 31, 2026, reflecting payments made on previously accrued obligations during the period.
Previous report
Accrued interest decreased by $16,800, from $68,601 at December 31, 2025, to $51,801 at March 31, 2026. The decrease primarily reflects cash interest payments made during the period in connection with scheduled installment payments on the 1800 Diagonal Lending and Boot Capital notes.
Previous report
Notes payable (current) increased by $99,163, from $985,330 at December 31, 2025, to $1,084,493 at March 31, 2026. The change reflects a combination of cash transactions and significant non-cash activity during the quarter, summarized below.
Previous report
Cash transactions during the period contributed a net increase of $452,126, consisting of:
Previous report
Non-cash transactions during the period reduced notes payable by a net of $352,964, consisting of:
Previous report
The Company recorded deferred revenue of $549,803 at March 31, 2026 (none at December 31, 2025). The deferred revenue balance consists of $48,303 of cash advances received from customers under contracts where revenue recognition criteria had not been satisfied as of the balance sheet date, plus $501,500 representing the fair value of marketable securities received as non-cash consideration under investor relations services contracts with Jet.AI Inc. and Braiin Limited that have not yet been earned. Revenue will be recognized over the service periods specified in the underlying contracts.
Previous report
The Company recorded a convertible note payable, net of unamortized discount, of $396,434 at March 31, 2026 (none at December 31, 2025). The balance reflects the issuance on February 26, 2026, of a senior secured convertible promissory note to Streeterville Capital, LLC with a face value of $7,560,000, less aggregate unamortized debt discount of $7,163,566 (consisting of original issue discount, closing fees, placement agent fees, legal fees, and the bifurcated value of the embedded derivative). The discount is being amortized to interest expense over the 24-month contractual term of the note using a straight-line approximation of the effective interest method. The Company received net cash proceeds of approximately $6,415,000 from the note issuance. See Note [X] — Senior Secured Convertible Promissory Note for further information regarding the terms of the note, the embedded derivative, and the related conversion features.
Previous report
The Company recorded a derivative liability of $4,923,000 at March 31, 2026 (none at December 31, 2025). The derivative liability represents the compound embedded derivative bifurcated from the host debt instrument of the Streeterville Capital convertible note pursuant to ASC 815-15. The derivative was initially recognized at a fair value of $6,662,000 on the issuance date, with $6,415,000 recorded as a debt discount and $247,000 recognized as a loss on issuance reflecting the excess of the embedded derivative’s fair value over the available debt discount allocation. The Company recognized a mark-to-market gain of $1,739,000 during the three months ended March 31, 2026, reflecting the change in fair value at the balance sheet date.
Previous report
The Company’s working capital improved significantly during the period, from $9,679,283 at December 31, 2025, to $17,657,580 at March 31, 2026, an increase of approximately $7,978,297. The improvement primarily reflects the cash proceeds received from the Streeterville Capital convertible note issuance in February 2026, partially offset by working capital changes in operating assets and liabilities during the period.
Previous report
Total revenue for the three months ended March 31, 2026, was $3,903,231, compared to $3,681,520 for the three months ended March 31, 2025, an increase of $221,711, or 6.0%. The increase in revenue reflects continued growth in the Company’s brand marketing and digital media services to existing customers, partially offset by timing differences in customer order flow between quarters. Revenue is generated primarily from media buying, customer acquisition campaigns, and investor relations services. The Company also recognized revenue during the first quarter of 2026 from new investor relations services contracts with Jet.AI Inc. and Braiin Limited under which consideration was received in the form of common stock of the customer (recorded as marketable securities at fair value on the contract inception date).
Previous report
Stock-Based Compensation
Previous report
Stock-based compensation expense was $0 for both the three months ended March 31, 2026, and March 31, 2025, as classified in operating expenses on the consolidated statements of operations. Stock-based compensation activity incurred during the first quarter of 2026 (totaling approximately $9.2 million) is reflected in other operating expense classifications, including General and Administrative expense, in accordance with the Company’s expense classification policy and the nature of services rendered. See Note 7 - Stock-Based Compensation for further information regarding the components and recipients of stock-based compensation expense recognized during the period.
Previous report
Media traffic
Previous report
General and administrative expense was $9,279,934 for the three months ended March 31, 2026, compared to $377,385 for the three months ended March 31, 2025, an increase of $8,902,549, or 2,359.0%. The substantial increase reflects equity-based compensation arrangements entered into during the first quarter of 2026, including: (i) a stock option grant to David Boulette, Chief Executive Officer, under his employment agreement (4,000,000 options, Tranche 1 of 5) with a grant-date fair value of $7,611,669; (ii) a 4,000,000 common stock grant to Mr. Boulette under his employment agreement at $0.10 per share ($400,000); (iii) a restricted common stock grant to Global Alliance Consulting Group under a 36-month consulting arrangement (300,000 shares with grant-date fair value of $2,250,000, of which $187,500 was recognized during the period); and (iv) common stock issued to Maxim Advisory for advisory services (250,000 shares at $4.03 per share, $1,007,500). The remainder of the increase reflects higher professional, legal, audit, and consulting fees incurred in connection with the Company’s continued public company readiness, acquisition activities, and capital-raising transactions completed during the period.
Previous report
Operating Loss
Previous report
Interest expense was $499,082 for the three months ended March 31, 2026, compared to $7,268 for the three months ended March 31, 2025, an increase of $491,814. The increase primarily reflects (i) interest expense, original issue discount amortization, and deferred financing cost amortization on the senior secured convertible promissory note issued by Streeterville Capital, LLC in February 2026 (aggregate of $396,434, consisting of $341,753 of discount amortization and $54,681 of stated interest accreted to the outstanding balance), and (ii) interest expense, original issue discount amortization, and deferred financing cost amortization on the eight convertible promissory notes issued by 1800 Diagonal Lending, LLC and Boot Capital LLC during 2025 and 2026 (aggregate of $95,314 across stated interest, accelerated discount on the four converted notes, and Q1 amortization on the active notes). See Note 9 – Debt Financing for further details.
Previous report
The Company recognized a net loss of $8,564,076, or $(0.24) per basic and diluted share, for the three months ended March 31, 2026, compared to net income of $1,995,694, or $0.06 per basic and diluted share, for the three months ended March 31, 2025. The change from net income to net loss principally reflects the non-cash equity-based compensation expense incurred during the first quarter of 2026 in connection with executive and consulting arrangements, partially offset by the gain on the change in fair value of the derivative liability associated with the Streeterville Capital convertible note. Excluding the impact of equity-based compensation and the derivative remeasurement, the Company’s underlying operating performance reflects continued revenue growth and corresponding investment in customer acquisition activity. The weighted-average number of common shares outstanding increased from 31,342,285 in the prior-year period to 36,015,045 in the current period, reflecting common stock issuances during 2025 and 2026.
Previous report
Net cash used in investing activities was $0 for the three months ended March 31, 2026, compared to $(3,230) for the three months ended March 31, 2025 (which represented fixed asset purchases). The Company did not acquire or dispose of significant property and equipment during the first quarter of 2026.
Previous report
Net cash provided by financing activities was $6,850,938 for the three months ended March 31, 2026, compared to $133,910 for the three months ended March 31, 2025. The increase principally reflects the issuance of the Streeterville Initial Note in February 2026 (net cash proceeds of $6,415,000), supplemented by net cash proceeds from the new Diagonal Lending and Boot Capital convertible notes of $452,126 (gross cash proceeds of $650,000 less cash principal repayments of $197,874).
Reworded paragraphs (22)
Previous wording
The Company’s near-term plan of operations focuses on: (i) continued execution of the Eva Platform digital advertising business, including the brand marketing campaigns introduced in late 2025 that drove the substantial growth in the 4001b Brand Marketing revenue category from $94,074 in the three months ended March 31, 2025 to $2,576,939 in the three months ended March 31, 2026; (ii) growth of the an AI-driven marketing services line of business introduced in the first quarter of 2026 under the Jet.AI, Inc. and Braiin Limited service contracts described in Note 4; (iii) deployment of the cash proceeds received from the Streeterville Initial Note ($6,415,000 net of debt issuance costs) toward working capital and growth initiatives; and (iv) continued reduction of legacy convertible note obligations through scheduled cash repayments and holder-elected conversions, as described in Note 9.
Current wording
The Company’s near-term plan of operations focuses on: (i) continued execution of the Eva Platform digital advertising and media monetization business, which comprises all revenue other than the AI-driven marketing services described below and generated revenue of $3,042,487 and $6,294,021 for the three and six months ended June 30, 2026, compared with $4,138,712 and $7,820,232 for the comparative prior-year periods; (ii) growth of the AI-driven marketing services line of business introduced in the first quarter of 2026, which comprises solely the Jet.AI, Inc. and Braiin Limited service contracts described in Note 4 and generated revenue of $1,161,903 and $1,813,600 for the three and six months ended June 30, 2026, with no comparable revenue in either prior-year period; (iii) deployment of the cash proceeds received from the Streeterville Initial Note ($6,405,000 net of debt issuance costs) toward working capital and growth initiatives; and (iv) continued reduction of legacy convertible note obligations through scheduled cash repayments and holder-elected conversions, as described in Note 9.
Previous wording
As of March 31, 2026, the Company had 36,535,389 shares of common stock issued and outstanding and approximately $5,769,269 of unrestricted cash. The Company entered into an Equity Distribution Agreement with Maxim Group LLC on April 14, 2026, supporting an at-the-market offering of up to $100,000,000 in common stock under the Company’s effective Form S-3 shelf registration statement (Registration No. 333-294416, declared effective March 24, 2026). Sales under the Equity Distribution Agreement are at the Company’s discretion and may be used to fund operations, working capital needs, and other general corporate purposes.
Current wording
As of June 30, 2026, the Company had 39,252,186 shares of common stock issued and outstanding and approximately $2,238,216 of unrestricted cash. The Company entered into an Equity Distribution Agreement with Maxim Group LLC on April 14, 2026, supporting an at-the-market offering of up to $100,000,000 in common stock under the Company’s effective Form S-3 shelf registration statement (Registration No. 333-294416, declared effective March 24, 2026). Sales under the Equity Distribution Agreement are at the Company’s discretion and may be used to fund operations, working capital needs, and other general corporate purposes.
Previous wording
Property and equipment, net decreased by $249, from $14,919 at December 31, 2025, to $14,670 at March 31, 2026, reflecting depreciation recognized during the period. No additions or dispositions of property and equipment occurred during the quarter.
Current wording
Property and equipment, net decreased by $494, from $14,919 at December 31, 2025, to $14,425 at June 30, 2026, reflecting depreciation for the period. The Company did not acquire or dispose of significant property and equipment during the period.
Previous wording
Total stockholders’ equity increased by $2,658,614, from $9,694,202 at December 31, 2025, to $12,352,816 at March 31, 2026. The increase primarily reflects the issuance of equity instruments during the period, partially offset by the net loss recognized for the quarter:
Current wording
Total stockholders’ equity increased by $7,409,776, from $9,694,202 at December 31, 2025, to $17,103,978 at June 30, 2026.
Previous wording
Media traffic purchase expense was $3,729,442 for the three months ended March 31, 2026, compared to $1,300,766 for the three months ended March 31, 2025, an increase of $2,428,676, or 186.7%. The increase reflects an expansion in media buying and customer acquisition activity through Hottest Media LLC, Advertala PTE, Wise Ltd., and other media partners, consistent with the Company’s revenue growth strategy and increased volume of customer acquisition campaigns during the period. Media traffic purchase expense generally moves directionally with revenue, and changes also influence the year-over-year increase in the mix of customer acquisition channels.
Current wording
Media traffic purchase expense was $3,049,042 for the three months ended June 30, 2026, compared to $1,175,780 for the three months ended June 30, 2025, an increase of $1,873,262, or 159.3%. For the six months ended June 30, 2026, media traffic purchase expense was $6,778,484, compared to $2,476,546 for the six months ended June 30, 2025, an increase of $4,301,938, or 173.7%. The increase reflects an expansion in media buying and customer acquisition activity through Hottest Media LLC, Advertala PTE, Wise Ltd., and other media partners in support of the higher revenue base. Media traffic purchase expense generally moves directionally with revenue, and the year-over-year increase also reflects a change in the mix of customer acquisition channels.
Previous wording
Amortization and depreciation expense were $249 for the three months ended March 31, 2026, compared to $407 for the three months ended March 31, 2025, a decrease of $158, or 38.8%. The decrease reflects the continuing depreciation of property and equipment that is approaching the end of its useful life. The Company did not acquire or dispose of significant property and equipment during the period.
Current wording
Amortization and depreciation expense was $245 for the three months ended June 30, 2026, compared to $380 for the three months ended June 30, 2025, a decrease of $135, or 35.5%. For the six months ended June 30, 2026, amortization and depreciation expense was $494, compared to $787 for the six months ended June 30, 2025, a decrease of $293, or 37.2%. The decrease reflects the continuing depreciation of property and equipment that is approaching the end of its useful life. The Company did not acquire or dispose of significant property and equipment during the period.
Previous wording
The Company recognized an operating loss of $9,106,394 for the three months ended March 31, 2026, compared to operating income of $2,002,962 for the three months ended March 31, 2025, an unfavorable variance of $11,109,356. The reduction in operating results primarily reflects the substantial increase in General and Administrative expense driven by equity-based compensation grants entered into during the first quarter of 2026, as well as higher media traffic purchase expense supporting revenue growth, partially offset by a modest year-over-year increase in revenue.
Current wording
The Company recognized an operating loss of $862,213 for the three months ended June 30, 2026, compared to operating income of $2,631,101 for the three months ended June 30, 2025, an unfavorable variance of $3,493,314. For the six months ended June 30, 2026, the Company recognized an operating loss of $9,968,607, compared to operating income of $4,634,063 for the six months ended June 30, 2025, an unfavorable variance of $14,602,670. The change in operating results primarily reflects the non-cash equity-based compensation recognized within general and administrative expense in the first quarter of 2026, together with higher media traffic purchase expense supporting the revenue base, partially offset by a modest increase in revenue.
Previous wording
Unrealized Loss on Marketable Securities
Current wording
Unrealized Gain (Loss) on Marketable Securities
Previous wording
The Company recognized an unrealized loss on marketable securities of $140,600 for the three months ended March 31, 2026 (no comparable amount for the three months ended March 31, 2025). The unrealized loss reflects the mark-to-market adjustment of common shares of Jet.AI Inc. and Braiin Limited received as non-cash consideration under investor relations services contracts entered into during the first quarter of 2026. The securities were initially recorded at a fair value of $501,500 on the contract inception dates and declined to a fair value of $360,900 at March 31, 2026.
Current wording
The Company recognized an unrealized gain on marketable securities of $636,005 for the three months ended June 30, 2026, and an unrealized gain of $495,405 for the six months ended June 30, 2026 (no comparable amounts in the prior-year periods). The amounts reflect the mark-to-market adjustment of common shares of Jet.AI Inc. and Braiin Limited received as non-cash consideration under investor relations services contracts.
Previous wording
The Company recognized a gain on the change in fair value of derivative liability of $1,739,000 for the three months ended March 31, 2026 (no comparable amount for the three months ended March 31, 2025). The gain reflects the mark-to-market adjustment of the compound embedded derivative bifurcated from the senior secured convertible promissory note issued to Streeterville Capital, LLC in February 2026. The derivative was initially recognized at a fair value of $6,662,000 on the issuance date and was remeasured to a fair value of $4,923,000 at March 31, 2026. The fair value measurement of the derivative is sensitive to changes in the Company’s common stock price, volatility, and the conversion-trigger probability. See Note 2 - Fair Value Measurements for further detail.
Current wording
The Company recognized a loss on the change in fair value of derivative liability of $345,542 for the three months ended June 30, 2026, and a net gain of $1,393,458 for the six months ended June 30, 2026 (no comparable amounts in the prior-year periods). The amounts reflect the mark-to-market remeasurement of the compound embedded derivative bifurcated from the senior secured convertible promissory note issued to Streeterville Capital, LLC in February 2026. The derivative was initially recognized at a fair value of $6,662,000 on the issuance date, was remeasured to $4,923,000 at March 31, 2026 and to $4,562,001 at June 30, 2026, and was reduced by $706,541 reclassified to additional paid-in capital on conversions during the second quarter. The fair value measurement is sensitive to changes in the Company’s common stock price, volatility, and the conversion-trigger probability. See Note 2 — Summary of Significant Accounting Policies for further detail.
Previous wording
The Company recognized a loss on settlement of payable of $310,000 for the three months ended March 31, 2026 (no comparable amount for the three months ended March 31, 2025). The loss reflects the issuance of 500,000 shares of common stock to Hottest Media LLC in February 2026 in settlement of outstanding trade accounts payable. The shares were issued at 80% of the closing price of the Company’s common stock on February 5, 2026; the loss reflects the difference between the carrying value of the settled payable ($1,240,000) and the fair value of the common stock issued ($1,550,000).
Current wording
The Company recognized a loss on settlement of payable of $310,000 for the six months ended June 30, 2026, and no such loss for the three months ended June 30, 2026 (no comparable amounts in the prior-year periods). The loss reflects the issuance of 500,000 shares of common stock to Hottest Media LLC in February 2026 in settlement of outstanding trade accounts payable. The shares were issued at 80% of the closing price of the Company’s common stock on February 5, 2026; the loss reflects the difference between the carrying value of the settled payable ($1,240,000) and the fair value of the common stock issued ($1,550,000).
Previous wording
The Company recognized a loss on issuance of convertible note of $247,000 for the three months ended March 31, 2026 (no comparable amount for the three months ended March 31, 2025). The loss reflects the excess of the initial fair value of the compound embedded derivative bifurcated from the Streeterville Capital senior secured convertible promissory note ($6,662,000) over the available debt discount allocation ($6,415,000) on the issuance date of February 26, 2026. See Note 9 - Debt Financing for further details.
Current wording
The Company recognized a loss on issuance of convertible note of $247,000 for the six months ended June 30, 2026, and no such loss for the three months ended June 30, 2026 (no comparable amounts in the prior-year periods). The loss reflects the excess of the initial fair value of the compound embedded derivative bifurcated from the Streeterville Capital senior secured convertible promissory note ($6,662,000) over the available debt discount allocation ($6,415,000) on the issuance date of February 26, 2026. See Note 9 — Debt Financing for further details.
Previous wording
As of March 31, 2026, the Company had cash and cash equivalents of $5,769,269, compared to $202,524 at December 31, 2025, and working capital of $17,657,580, compared to $9,679,283 at December 31, 2025. The principal source of liquidity during the three months ended March 31, 2026, was the senior secured convertible promissory note issued to Streeterville Capital, LLC in February 2026 (the “Streeterville Initial Note”), which generated net cash proceeds of approximately $6,415,000. The Streeterville Initial Note has a face value of $7,560,000; cash proceeds at issuance were reduced by an original issue discount of $560,000, an investor closing expense reimbursement of $30,000, placement agent fees of $402,500 paid to Maxim Group LLC, and legal fees of $152,500 paid to Sichenzia Ross Ference Carmel LLP, in each case netted from the wire at closing or paid promptly thereafter. The Company also received gross cash proceeds of $650,000 from the issuance of four new convertible promissory notes during the period, comprising $450,000 from 1800 Diagonal Lending, LLC (Note #6 on January 15, 2026 with cash proceeds of $100,000 and Note #7 on January 29, 2026 with cash proceeds of $350,000) and $200,000 from Boot Capital LLC (Note #3 on January 15, 2026 with cash proceeds of $50,000 and Note #4 on January 30, 2026 with cash proceeds of $150,000). The face values of these new notes aggregate approximately $778,814 (cash proceeds of $650,000 plus $128,814 of original issue discount and deferred financing costs netted at issuance). See Note 9 — Debt Financing for further information regarding the terms of these notes.
Current wording
As of June 30, 2026, the Company had cash and cash equivalents of $2,238,216, compared to $202,524 at December 31, 2025. At June 30, 2026, the Company had total current assets of $21,048,847, total current liabilities of $1,609,283 and working capital of $19,439,564. Accounts receivable, net of an allowance for doubtful accounts of $1,379,519, was $17,465,015, and realization of that balance is central to funding operations. The principal source of liquidity during the six months ended June 30, 2026, was the senior secured convertible promissory note issued to Streeterville Capital, LLC in February 2026 (the “Streeterville Initial Note”), which generated net cash proceeds of approximately $6,970,000. The Streeterville Initial Note has a face value of $7,560,000; cash proceeds at issuance were reduced by an original issue discount of $560,000, an investor closing expense reimbursement of $30,000, placement agent fees of $402,500 paid to Maxim Group LLC, and legal fees of $152,500 paid to Sichenzia Ross Ference Carmel LLP, in each case netted from the wire at closing or paid promptly thereafter. The Company also received $1,043,000 of proceeds from other promissory notes and $456,166 of net proceeds from at-the-market sales of common stock during the period. See Note 9 — Debt Financing for further information regarding the terms of these notes.
Previous wording
Net cash used in operating activities was $(1,284,193) for the three months ended March 31, 2026, compared to net cash provided by operating activities of $109,542 for the three months ended March 31, 2025. The increase in operating cash usage primarily reflects the $2,429,406 increase in accounts receivable arising from the timing of customer collections, the $257,625 reduction in accrued expenses as previously accrued obligations were settled in cash, and the $16,800 reduction in accrued interest reflecting cash interest payments made on the 1800 Diagonal Lending and Boot Capital notes during the period. Non-cash add-backs partially offset these uses of operating cash to net loss in the reconciliation to operating cash flow totaling approximately $9.7 million, including stock-based compensation expense of $8,011,669, shares issued for services of $3,257,500, and amortization of debt discount and accrued interest on convertible notes of $396,434, less deferred stock-based compensation of $2,062,500 representing the unvested portion of equity awards granted during the period.
Current wording
Net cash used in operating activities was $5,229,216 for the six months ended June 30, 2026, compared to net cash provided by operating activities of $2,341 for the six months ended June 30, 2025. The increase in operating cash usage primarily reflects the increase in accounts receivable arising from the timing of customer collections and the settlement of previously accrued obligations, partially offset by non-cash add-backs in the reconciliation of net loss to operating cash flow, including stock-based compensation of $8,011,669, shares issued for services of $3,257,500, amortization of debt discount, original issue discount and deferred financing costs of $1,388,768 and stated interest accreted to the Streeterville Initial Note of $201,670, less the $1,393,458 net gain on remeasurement of the compound embedded derivative and $1,209,005 of marketable securities received as consideration.
Previous wording
Approximately 79% of the Company’s gross accounts receivable balance at March 31, 2026, was outstanding for more than 90 days from the invoice date. Management is actively engaged with the Company’s largest counterparties regarding the collection of these balances and, based on counterparty confirmations received to date, the Company’s historical collection experience with these counterparties, and the absence of disputes regarding amounts owed, management expects substantially all of these balances to be collected within the look-forward period.
Current wording
Approximately 88% of the Company’s net accounts receivable balance at June 30, 2026, was outstanding for more than 90 days from the invoice date. Management is actively engaged with the Company’s largest counterparties regarding the collection of these balances and, based on counterparty confirmations received to date, the Company’s historical collection experience with these counterparties, and the absence of disputes regarding amounts owed, management expects substantially all of these balances to be collected within the look-forward period.
Previous wording
On April 14, 2026, the Company entered into an Equity Distribution Agreement with Maxim Group LLC providing for the offer and sale, from time to time and at the Company’s discretion, of shares of the Company’s common stock having an aggregate offering price of up to $100,000,000 in transactions deemed to be “at-the-market offerings” under Rule 415 promulgated under the Securities Act of 1933 (see Note 12 — Subsequent Events). Sales under the Equity Distribution Agreement are conducted under the Company’s effective Form S-3 shelf registration statement (Registration No. 333-294416). Maxim is entitled to a fixed commission of 3.0% of the gross sales price of shares sold. The Equity Distribution Agreement has a term of twelve months from execution. As of the date of this report, no sales have been made under the Equity Distribution Agreement.
Current wording
On April 14, 2026, the Company entered into an Equity Distribution Agreement with Maxim Group LLC providing for the offer and sale, from time to time and at the Company’s discretion, of shares of the Company’s common stock having an aggregate offering price of up to $100,000,000 in transactions deemed to be “at-the-market offerings” under Rule 415 promulgated under the Securities Act of 1933. Sales under the Equity Distribution Agreement are conducted under the Company’s effective Form S-3 shelf registration statement (Registration No. 333-294416). Maxim is entitled to a fixed commission of 3.0% of the gross sales price of shares sold. The Equity Distribution Agreement has a term of twelve months from execution. From execution through June 30, 2026, the Company sold 114,384 shares under the agreement for gross proceeds of approximately $470,274 and net proceeds of $456,166. Because the Company’s public float is below $75,000,000, sales under the Form S-3 are limited by General Instruction I.B.6 thereto; see Note 3 — Going Concern.
Previous wording
Although the accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, management has evaluated, in accordance with FASB Accounting Standards Codification 205-40, whether the conditions and events described in Note 3 — Going Concern, considered in the aggregate, raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date these financial statements are issued. Management has concluded that the conditions and events described in Note 3 (recurring net losses, accumulated deficit of $28,906,438 at March 31, 2026, elevated media traffic purchase costs as a percentage of revenue in the current quarter, and the contingent redemption right of the Streeterville Initial Note) raise substantial doubt; however, management believes that its plans, including the Maxim Equity Distribution Agreement, the expected normalization of media traffic purchase costs, the expected collection of outstanding accounts receivable balances, and the share-settled (rather than cash-settled) nature of conversions of the Streeterville Initial Note, are probable of being effectively implemented and, if implemented, are sufficient to alleviate the substantial doubt. See Note 3 — Going Concern for the full going-concern discussion.
Current wording
Although the accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, management has evaluated, in accordance with FASB Accounting Standards Codification 205-40, whether the conditions and events described in Note 3 — Going Concern, considered in the aggregate, raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date these financial statements are issued. Management has concluded that the conditions and events described in Note 3 — including the operating loss and negative operating cash flow for the six months ended June 30, 2026, an accumulated deficit of $30,656,195 at June 30, 2026, the concentration of working capital in aged accounts receivable, elevated media traffic purchase costs as a percentage of revenue, and the contingent redemption right of the Streeterville Initial Note — raise substantial doubt, and that management’s plans do not alleviate that substantial doubt. See Note 3 — Going Concern for the full going-concern discussion.
Previous wording
We have based our management’s discussion and analysis of our financial condition and results of operations on our financial statements, prepared in accordance with U.S. generally accepted accounting principles. In preparing our financial statements, we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenues and expenses for the reporting periods. Our actual results may differ from these estimates, and such differences could be material and uncertain, particularly in the current economic environment, given the impact of COVID-19.
Current wording
We have based our management’s discussion and analysis of our financial condition and results of operations on our financial statements, prepared in accordance with U.S. generally accepted accounting principles. In preparing our financial statements, we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenues and expenses for the reporting periods. Our actual results may differ from these estimates, and such differences could be material and uncertain, particularly in the current economic environment.
Previous wording
In more detail, we have described significant accounting policies in Note 2 of our annual financial statements included in our 10-K for the fiscal year ended December 31, 2024, filed with the SEC on October 27, 2023. We evaluate our critical accounting estimates and judgments, as required by our policies, on an ongoing basis and update them as necessary in response to changing conditions.
Current wording
In more detail, we have described significant accounting policies in Note 2 of our annual financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. We evaluate our critical accounting estimates and judgments, as required by our policies, on an ongoing basis and update them as necessary in response to changing conditions.
Previous wording
We are an “emerging growth company,” as defined in the JOBS Act. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued after the enactment of the JOBS Act until those standards apply to private companies. As an emerging growth company, we have applied for an exemption; as a result, the Company may delay the adoption of certain accounting standards until the standards apply to private companies.
Current wording
We are an “emerging growth company,” as defined in the JOBS Act. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued after the enactment of the JOBS Act until those standards apply to private companies. As an emerging growth company, we have elected to use the extended transition period; as a result, the Company may delay the adoption of certain accounting standards until the standards apply to private companies.
Previous wording
We have not engaged in any off-balance sheet arrangements as defined in Item 303(c) of the SEC’s Regulation S-B. We did not have any relationships with unconsolidated organizations or financial partnerships, such as structured finance or special purpose entities that would have been established to facilitate off-balance sheet arrangements or other contractually narrow or limited purposes.
Current wording
We have not engaged in any off-balance sheet arrangements as defined in Item 303(b) of the SEC’s Regulation S-K. We did not have any relationships with unconsolidated organizations or financial partnerships, such as structured finance or special purpose entities that would have been established to facilitate off-balance sheet arrangements or other contractually narrow or limited purposes.
Previous wording
The amendments in the ASU are effective for fiscal years beginning after January 1, 2020, including interim periods within those fiscal years. Early adoption of the standard is permitted, including adoption in interim or annual periods for which financial statements have not yet been issued. We have adopted this ASU as of January 1, 2020, for ASC 606, Revenue Recognition, and Amended ASU 2016-02, Leases (Topic 840). The ASU is currently not expected to have a material impact on our consolidated financial statements. While we have described significant accounting policies in more detail in Note 2 of our annual financial statements included in our S-1/A for the fiscal year ended December 31, 2024, filed with the SEC on October 27, 2023, we believe the accounting policies as described in Note 2 to be critical to the judgments and estimates used in the preparation of our financial statements.
Current wording
The amendments in the ASU are effective for fiscal years beginning after January 1, 2020, including interim periods within those fiscal years. Early adoption of the standard is permitted, including adoption in interim or annual periods for which financial statements have not yet been issued. We have adopted this ASU as of January 1, 2020, for ASC 606, Revenue Recognition, and Amended ASU 2016-02, Leases (Topic 840). The ASU is currently not expected to have a material impact on our consolidated financial statements. While we have described significant accounting policies in more detail in Note 2 of our annual financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, we believe the accounting policies as described in Note 2 to be critical to the judgments and estimates used in the preparation of our financial statements.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Six Months Ending June 30, 2026 and 2025
Current report — wording carried from elsewhere
The following table summarizes the Company’s results of operations for the six months ended June 30, 2026, compared to the six months ended June 30, 2025: