NOTE 2 – GOING CONCERN

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has concluded that substantial doubt exists regarding its ability to continue as a going concern within one year after the date that these financial statements are issued. The principal conditions giving rise to substantial doubt include the Company’s history of recurring net losses and continued working capital deficiencies. As of December 31, 2025, the Company reported an accumulated deficit of $102,347,578, including a net loss of $20,673,058 for the year ended December 31, 2025, and a working capital deficit of approximately $1.4 million.

Management has evaluated the conditions that contributed to substantial doubt. The historical net losses and accumulated deficit are primarily attributable to non-cash or one-time, non-recurring expenses, including goodwill impairment, stock-based compensation, fair value share adjustment losses, and acquisition-related transaction costs.

As of December 31, 2025, total debt was approximately $8.1 million, which includes $3,472,500 in notes payable to Ross Sklar (“Sklar”), a significant minority shareholder. Of this amount, $1.0 million was funded in July and August 2025 in response to requests from the Company’s lender. Mr. Sklar’s ownership interest and operational role provide an incentive for him to be supportive of the Company regarding repayment of these notes, consistent with prior periods (see Note 9).

On July 18, 2025, the Company and its lender entered into a forbearance agreement (the “Forbearance Agreement”) related to its revolving loan facility. On November 24, 2025, the parties executed Amendment No. 1, which added additional Events of Default related to delayed financial reporting and extended the forbearance period, subject to specified conditions, through December 31, 2025. In December 2025, the Company paid off in full all outstanding obligations under the revolving loan facility, and the facility and related forbearance arrangements are no longer in effect.

On December 22, 2025, the Company entered into a Bridge Term Loan Promissory Note with The Starco Group, Inc., an entity wholly owned by Sklar, providing for up to $5,000,000 in borrowing capacity, including an initial disbursement of $4,500,000 (the “Bridge Loan”). The proceeds were used to repay the revolving loan facility in full and to provide additional working capital. The Bridge Loan bears interest at a variable rate based on the Prime Rate plus an applicable margin, requires monthly interest payments beginning January 1, 2026, and provides for scheduled principal amortization beginning January 1, 2027. The Bridge Loan includes customary covenants and events of default, and may be prepaid without penalty.

Management is pursuing additional financing sources to enhance liquidity, provide working capital, and support repayment of existing obligations, if necessary. Management is also focused on strategic initiatives intended to increase revenue in the most profitable sales channels and reduce overall expenses as a percentage of revenue. Operational synergies from the Company’s shared services model and continued emphasis on profitable channels have contributed to improvements to date and are expected to continue.

While the payoff of the revolving loan facility and the execution of the Bridge Loan have provided near-term liquidity, these actions do not eliminate the conditions that raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s plans are not entirely within its control, and there can be no assurance that additional financing or operational improvements will be achieved as contemplated. The consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.