Balance Labs, Inc.

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, which could materially affect our business, financial condition or future results. The risks described in our Annual Report on Form 10-K may not be the only risks facing the Company. Additional risks and uncertainties not currently known to the Company or that the Company currently deems to be immaterial also may materially adversely affect the Company’s business, financial condition and/or operating results.

Other than as described below, there were no material changes to the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.

Our failure to repay matured promissory notes payable to a related party could adversely affect our liquidity and operations.

Two of our promissory notes payable to a related party, in the aggregate principal amount of $500,000, have matured and remain unpaid, and the holder may demand payment at any time. Our two promissory notes payable to The Farkas Group, Inc., an entity controlled by our Chairman, in the aggregate principal amount of $500,000, reached their stated maturities on May 3, 2026 and May 11, 2026 and were not repaid. As of June 30, 2026 the principal, together with accrued interest of $25,753, remains outstanding. Under the terms of the notes, upon our failure to tender payment on the maturity date the lender has the right, upon notice to us, to declare all outstanding principal and accrued interest immediately due and payable. As of the date of this report the lender has not delivered a notice of acceleration or a demand for payment, and given the related-party nature of the notes we anticipate that we will either repay them or negotiate an extension of the maturity dates. No agreement has been reached, however, and the lender retains its contractual right to demand payment at any time. We had $117,465 of cash at June 30, 2026 and no committed financing arrangement. If the lender were to demand payment we would not be able to satisfy the obligation from existing cash resources, which would have a material adverse effect on our liquidity, could require us to delay vendor payments or curtail operations, and could result in the exercise of remedies against us.

Our Chief Executive Officer’s anti-dilution right may result in substantial dilution to existing stockholdersand volatility in our reported results.

Pursuant to his August 2025 employment agreement, our Chief Executive Officer, Alan Campbell, is entitled to receive additional shares of common stock to maintain a fixed ownership percentage until we have raised an aggregate of $1 billion in total capital. Any future equity issuance — whether for financing, debt conversion, acquisition, or compensation — will trigger additional issuances to Mr. Campbell, compounding the dilution to other stockholders. Because the $1 billion threshold has not been reached, the provision is expected to remain operative for the foreseeable future and may be triggered multiple times as we seek the additional capital necessary to continue operations. We account for this provision as a derivative liability under ASC 815, measured at fair value using a Monte Carlo simulation model. At June 30, 2026, the derivative liability was $962,301. Remeasurement of this liability resulted in a net gain of $982,505 for the six months ended June 30, 2026, which substantially offset our $988,644 loss from operations but does not reflect operational improvement. Future remeasurement may produce material non-cash gains or losses that cause significant volatility in our reported results. The liability is settled exclusively through share issuances, not cash, but its settlement will dilute existing stockholders.