Balance Labs, Inc.
For the period ended Jun 30, 2026. Filed Aug 14, 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 14, 2026
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What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-15.
0001493152-26-023451
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-14.
0001493152-26-038265
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 47 previous paragraphs and 48 current paragraphs.
22 unchanged; 14 reworded; 11 added; 10 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 2 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 (11)
Current report
During the three months ended June 30, 2026, we generated $7,333 of consulting revenue from advisory services, compared with no revenue during the three months ended June 30, 2025. The advisory engagement that generated this revenue concluded during the quarter and was invoiced and collected in full.
Current report
Net Loss.
Current report
Six Months Ended June 30, 2026 Compared with Six Months Ended June 30, 2025
Current report
Revenue.
Current report
Operating Expenses.
Current report
Total operating expenses for the six months ended June 30, 2026 were $1,028,644, an increase of $870,546 from $158,098 for the six months ended June 30, 2025. Salaries and wages increased from $96,275 to $935,412, of which $661,963 represents non-cash stock-based compensation expense. Professional fees increased from $51,716 to $82,086, and general and administrative expenses increased from $10,107 to $11,146.
Current report
Other Income (Expense).
Current report
Net Loss.
Current report
As a result of the foregoing, we recognized a net loss of $59,038 for the six months ended June 30, 2026, compared to a net loss of $152,548 for the six months ended June 30, 2025. The reduction in the reported loss is attributable to the non-cash gain on remeasurement of the derivative liability and does not reflect an improvement in operating results; the loss from operations increased from $158,098 to $988,644.
Current report
Maturity of Related-Party Promissory Notes
Current report
Our two promissory notes payable to The Farkas Group, Inc., a related party, in the aggregate principal amount of $500,000, reached their stated maturities on May 3, 2026 and May 11, 2026 and were not repaid at maturity. The principal, together with accrued interest of $25,753, remains outstanding as of June 30, 2026. The lender has not delivered a notice of acceleration or a demand for payment as of the date of this report. We anticipate that we will either repay the notes or negotiate an extension of the maturity dates with the lender; however, no agreement has been reached and the lender retains its contractual right to demand payment at any time. Any demand for payment would have a material adverse effect on our liquidity. See Note 6.
Removed paragraphs (10)
Previous report
The Company is not a registered investment company under the Investment Company Act of 1940, as amended (the “1940 Act”) and does not engage primarily in the business of investing, reinvesting, or trading in securities. The Company is not managed like an active investment vehicle, is not an investment company registered under the 1940 Act and is not required to register under the 1940 Act.
Previous report
Net Income (Loss).
Previous report
Use of Estimates
Previous report
Revenue Recognition
Previous report
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.
Previous report
Derivative Liability
Previous 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.
Previous report
Fair Value of Financial Instruments
Previous report
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.
Previous report
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.
Reworded paragraphs (14)
Previous wording
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 wording
Our primary requirement for funding is for working capital in order to accommodate negative cash flows from operations (see “Liquidity and Capital Resources”).
Previous wording
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 wording
Total operating expenses for the three months ended June 30, 2026 were $507,890, an increase of $428,631 from $79,259 for the three months ended June 30, 2025. The increase was driven primarily by salaries and wages, which increased from $46,733 to $463,835. The 2026 salaries and wages line includes $332,810 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, together with cash salaries, wages, and payroll taxes incurred during the quarter under the employment arrangements entered into in the second half of 2025. Professional fees increased from $26,681 to $38,887 as the Company incurred additional accounting, legal, transfer agent and market-related costs in connection with its reporting obligations. General and administrative expenses decreased slightly from $5,845 to $5,168.
Previous wording
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 wording
As a result of the foregoing, we recognized a net loss of $236,841 for the three months ended June 30, 2026, compared to a net loss of $146,142 for the three months ended June 30, 2025.
Previous wording
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 wording
During the six months ended June 30, 2026, we generated $40,000 of consulting revenue from advisory services. We did not generate any revenue during the six months ended June 30, 2025.
Previous wording
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 wording
Total other income (expense), net was income of $929,606 for the six months ended June 30, 2026, compared to income of $5,550 for the six months ended June 30, 2025. The 2026 amount was driven primarily by a net non-cash gain of $982,505 on remeasurement of the derivative liability, partially offset by an unrealized loss of $29,225 on our holdings of NextNRG Inc. common stock and interest expense of $23,674. The 2025 amount included a one-time non-recurring gain of $127,579 on settlement of accounts payable and interest expense of $113,260.
Previous wording
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 wording
Reported results for the three and six months ended June 30, 2026 reflect the impact of significant non-cash items. The following table summarizes these non-cash items and their effect on the reported net loss:
Previous wording
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 wording
Management believes the 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. The derivative liability is settled by the issuance of additional shares of common stock and is not an obligation that will be settled in cash; its settlement would, however, dilute existing holders.
Previous wording
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 wording
Net cash used in operating activities for the six months ended June 30, 2026 was $241,510, compared to net cash used of $57,574 for the six months ended June 30, 2025. The 2026 net loss of $59,038 is stated after a $982,505 non-cash net gain on remeasurement of the derivative liability and $661,963 of non-cash stock-based compensation expense. Adjusting for these and other non-cash items, and for changes in operating assets and liabilities, produced a net cash outflow consistent with the underlying operating cost structure, which is materially higher than in the comparable 2025 period as a result of the executive employment arrangements entered into in the second half of 2025.
Previous wording
There was no cash provided by or used in investing activities during the three months ended March 31, 2026 or March 31, 2025.
Current wording
There was no cash provided by or used in investing activities during the six months ended June 30, 2026 or June 30, 2025.
Previous wording
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 wording
There was no cash provided by financing activities during the six months ended June 30, 2026. During the six months ended June 30, 2025, financing activities provided $48,000 in proceeds from short-term advances from related parties.
Previous 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.
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 $241,510 of cash in operating activities during the six months ended June 30, 2026, had $117,465 in cash as of June 30, 2026, had an accumulated deficit of $37,710,684 and a working capital deficit of $2,773,414 at June 30, 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 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.
Current wording
The Company intends to seek additional capital within such period. The Company has no committed financing arrangement in place, and no assurance can be given that financing will be available or, if available, that it will be on terms acceptable to the Company. 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.
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 the fair value of the derivative liability, accruals, stock-based compensation and income taxes. Actual results could materially differ from those estimates.
Current wording
Our critical accounting policies and estimates, including the use of estimates, revenue recognition, the derivative liability, stock-based compensation, and the fair value of financial instruments, are described in Note 3 to the unaudited condensed consolidated financial statements and in our Annual Report on Form 10-K for the year ended December 31, 2025. The preparation of the financial statements in conformity with U.S. 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. Actual results could materially differ from those estimates.
Previous wording
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.
Current wording
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 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
Total other income (expense), net was income of $263,716 for the three months ended June 30, 2026, compared to an expense of $66,883 for the three months ended June 30, 2025. The change was driven primarily by a non-cash gain of $276,449 on remeasurement of the derivative liability associated with the Chief Executive Officer’s anti-dilution provision. Interest expense decreased from $56,520 to $11,409 following the November 2025 conversion of legacy debt into equity, and the unrealized loss on our holdings of NextNRG Inc. common stock decreased from $10,363 to $1,324.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
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.