UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: June 30, 2026

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________

Commission File Number: 333-294940

RMX INDUSTRIES, INC.

(Exact name of registrant as specified in its charter)

(866) 706-4276

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ☐ No ☒

As of August 12, 2026, there were a total of 10,015,190 shares of the registrant’s Class A Common Stock, $0.001 par value per share, outstanding, and 333,334 shares of the registrant’s Class B Common Stock, $0.001 par value per share, outstanding.

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

RMX Industries, Inc.

Unaudited Condensed Consolidated Financial Statements

RMX INDUSTRIES, INC.

Condensed Consolidated Balance Sheets

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

RMX INDUSTRIES, INC.

Condensed Consolidated Statements of Operations

(Unaudited)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

RMX INDUSTRIES, INC.

Condensed Consolidated Statements of Stockholders’ Equity (Deficit)

(Unaudited)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

RMX INDUSTRIES, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

RMX INDUSTRIES, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis provides information that our management believes is relevant to an assessment and understanding of the Company’s condensed consolidated results of operations and financial condition. The discussion should be read together with the unaudited condensed consolidated financial statements and the accompanying notes to those statements that are included elsewhere in this Quarterly Report on Form 10-Q and the audited financial statements and related notes for the year ended December 31, 2025, included in our Annual Report on Form 1-K filed with the Securities and Exchange Commission (the “SEC”) on February 11, 2026. This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties.

Use of Terms

Except as otherwise indicated by the context, references in this Quarterly Report on Form 10-Q to “we”, “us”, “our”, “RMX Industries”, “RMX”, “our company” and the “Company” refer to RMX Industries, Inc., a Nevada corporation, including its wholly-owned subsidiaries, EdWare LLC, a Delaware limited liability company, and RMX Industries Inc., a Texas corporation. “Class A Common Stock” refers to the Company’s Class A Common Stock, $0.001 par value per share. “Class B Common Stock” refers to the Company’s Class B Common Stock, $0.001 par value per share. “Preferred Stock” refers to the Company’s Preferred Stock, $0.001 par value per share. “Series X Preferred Stock” refers to the Company’s Series X Convertible Preferred Stock, $0.001 par value per share. Unless otherwise noted, all amounts are expressed in United States dollars (“USD”).

Reverse Stock Split

Unless otherwise noted, the share and per share information in this report have been adjusted to give effect to the one-for-three (1-for-3) reverse stock split of each of the Company’s authorized and issued and outstanding Class A Common Stock and the Company’s authorized and issued and outstanding Class B Common Stock, which became effective as of 5:00 p.m. Eastern Time on July 24, 2026 (the “Reverse Stock Split”).

Note Regarding Trademarks, Trade Names and Service Marks

We use various trademarks, trade names and service marks in our business, including “VAST™”, “QuantrusX™”, and associated marks. For convenience, we may not include the SM, ® or ™ symbols, but such omission is not meant to indicate that we would not protect our intellectual property rights to the fullest extent allowed by law. Any other trademarks, trade names or service marks referred to in this Quarterly Report on Form 10-Q are the property of their respective owners.

Special Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements that are based on management’s beliefs and assumptions and on information currently available to management. All statements other than statements of historical facts are forward-looking statements. These statements involve risks, uncertainties and other factors that may cause actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. Forward-looking statements include, but are not limited to, statements about:

In some cases, you can identify these statements by terms such as “anticipate,” “believe,” “could,” “estimate,” “expects,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would” or the negative of these terms or other comparable expressions that convey uncertainty of future events or outcomes, although not all forward-looking statements contain these terms. These statements are only predictions. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which are, in some cases, beyond our control and which could materially affect results. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under “Risk Factors” in our Form S-1 filed with the SEC on April 9, 2026. If one or more of these risks or uncertainties occur, or if our underlying assumptions prove to be incorrect, actual events or results may vary significantly from those implied or projected by the forward-looking statements. No forward-looking statement is a guarantee of future performance.

In addition, statements that include terms such as “we believe” and similar terms reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this filing, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely upon these statements.

Also, forward-looking statements represent our management’s beliefs and assumptions only as of the date of this Quarterly Report on Form 10-Q. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Overview

RMX operates a proprietary on-site intelligence platform for customers running physical operations who need to understand what is happening at their location as it happens. Our proprietary platform, QuantrusX™, is designed to ingest video, sensor, and access data generated at the customer’s site and turn it into a continuous, operator-usable picture of that site, delivered as a subscription service supported by Company-owned distributed data center hardware installed at each customer location. Because our platform runs on-site rather than in a remote cloud, we believe it addresses constraints that off-site systems handle poorly: bandwidth limits on transporting video and sensor data at scale, latency requirements for time-sensitive detections, and privacy and continuity expectations for information that customers prefer to keep on their own premises. We refer to the category of intelligence produced by our platform as Real-World Intelligence™, and we believe it addresses a significant and underserved need across sectors that operate physical sites at meaningful scale.

Our foundational technology originated in high-efficiency video compression and transport, developed under the Video Adaptive Systems Technology (VAST™) platform. VAST was originally built to move high-quality video across constrained, low-bandwidth networks — an environment that required extreme efficiency, resilience, and edge-side operation. Through extended field validation across a range of operational environments and network conditions from 2023 through 2025, VAST demonstrated the ability to deliver HD video at bandwidths as low as 200 Kbps, SD video at rates as low as 10 Kbps, direct point-to-point streaming across IP networks, and operation on low size, weight, power, and cost (SWaP-C) hardware. We believe that work established the Company’s technical provenance in edge-oriented data handling and low-latency, resource-constrained operation.

Building on that provenance, we have evolved from a video compression company into a Real-World Intelligence company. In May 2026, we acquired from Apollo Group Enterprises, LLC certain intellectual property assets relating to two software platforms (1) ODIN, AI video intelligence/surveillance system and (2) VSDD/Semaphore-X, AI meeting agent and infrastructure, which accelerated the development of QuantrusX and shifted our business focus from defense environments to enterprise and commercial environments. The demands that exist at the tactical edge — bandwidth scarcity, unreliable connectivity, the need for local decisioning, and the requirement to move only meaningful information back to central systems — we believe are now appearing at scale across enterprise and commercial environments as artificial intelligence (AI), computer vision, and sensor networks proliferate. Our current focus is on translating that capability into a broadly deployable enterprise and commercial platform, delivered through QuantrusX.

QuantrusX is RMX’s Real-World Intelligence platform designed to bring intelligence to the customer’s site — the campuses, facilities, and operational environments where the data is created — and to deliver that intelligence continuously. QuantrusX incorporates VAST as an underlying video and data-transport capability rather than as a separately marketed product line, alongside proprietary internal intelligence assets that support model refinement and low-latency reasoning at the site.

As we scale QuantrusX deployments across our customer base, they are designed to collectively form a Company-operated distributed data center — a network of computing hardware physically located at each customer’s site rather than in a remote cloud facility. We refer to the architectural layer that binds these deployments together as the “Intelligence Fabric”. Each QuantrusX deployment is expected to produce a strand of Real-World Intelligence at the customer’s location; the Intelligence Fabric is meant to weave those strands together at aggregate scale. We believe the Intelligence Fabric is more valuable than the sum of the individual strands, because it is designed to strengthen through use across the entire deployed base.

In June 2026, the Company completed its inaugural QuantrusX deployment at a training and operations facility in Texas, generating the Company’s first commercial platform revenue. We intend to build from that reference deployment into additional enterprise and commercial Real-World Intelligence environments.

In 2024, the Company achieved quotation on the OTCQB® Venture Market of OTC Markets Group, Inc. under the symbol “RMXI,” with trading beginning in January 2025. The Company is preparing for a planned senior exchange uplisting.

Our Historical Performance

As of June 30, 2026, the Company had an accumulated deficit of $57,916,272 and cash of $2,161,653 (including $1,913,320 of restricted cash). During the three months ended June 30, 2026 and 2025, we had a net loss of $11,049,252 and $3,130,592, respectively. The Company has applied for an uplisting of its Class A Common Stock on NYSE American, upon approval of which certain restricted cash and additional committed capital would become available to fund operations. In addition, the Company maintains a Credit Facility providing up to $45.0 million of additional financing, subject to the terms and conditions thereof. Management believes that these sources, together with expected cash proceeds from executed and prospective QuantrusX subscription agreements, will be sufficient to fund planned operations for at least the next twelve months. However, availability of the listing-related amounts and the Credit Facility is subject to conditions not entirely within the Company’s control, and substantial doubt about the Company’s ability to continue as a going concern has not been alleviated. We will seek to fund our operations through public offerings, accessing the Credit Facility, private equity offerings, debt financings, and government or other third-party funding. However, the Company may not be able to raise adequate funds for capital expenditure, working capital and other cash requirements from capital markets on acceptable terms, or at all. Advances from an officer or stockholder may likewise be unavailable. The Company’s failure to raise capital as and when needed and generate significantly higher revenues than operating expenses to achieve profitability would impact its going concern status and would have a negative impact on its financial condition and its ability to pursue its business strategy and continue as a going concern. For further discussion, see “—Liquidity and Capital Resources”.

Recent Developments

On July 22, 2026, the Company conducted a closing of a private placement of units, with each unit consisting of an unsecured 18% promissory note and a five-year warrant to purchase shares of Class A Common Stock, and entered into a subscription agreement with an accredited investor as defined in Section 2(a)(15) of the Securities Act, and Rule 501 promulgated thereunder, in reliance upon the exemption contained in Section 4(a)(2) of the Securities Act, and Rule 506(b) of Regulation D promulgated thereunder, and applicable state securities laws. Pursuant to the agreement, we sold 1 unit at a price of $25,000 per unit for gross proceeds of $25,000 and issued 16,667 warrants with an exercise price of $1.50 per share.

On July 24, 2026, the Company executed the Reverse Stock Split. Unless otherwise noted, the share and per share information in this report have been adjusted to give effect to the Reverse Stock Split.

Results of Operations

Comparison of the Three Months Ended June 30, 2026 and 2025

Revenue

Our revenue was $1,440 and $12,592 for the three months ended June 30, 2026 and 2025, respectively, representing a decrease of 89%. For the three months ended June 30, 2026, revenue activity reflected the early commercialization of QuantrusX: the Company invoiced $28,064 to customers, recognized $1,440 as revenue during the period, and deferred the remaining $26,624 for future recognition ($9,128 current, $17,496 long-term) as the related performance obligations under the deployment are satisfied. For the three months ended June 30, 2025, revenue was derived from limited historical software and service activity under the Company’s prior positioning.

Operating Expenses

Our operating expenses were $2,667,286 and $3,248,188 for the three months ended June 30, 2026 and 2025, respectively, representing a decrease of 18%. The decrease was due to employee compensation including options, research and development expenses, marketing expenses and professional services provided to the Company.

Net Loss

Our net loss was $11,049,252 and $3,130,592 for the three months ended June 30, 2026 and 2025, respectively, representing an increase of 253%. The increase in net loss was mainly due to conversion of warrants, debt discount amortization, derivative expenses and loss from operations.

Comparison of the Six Months Ended June 30, 2026 and 2025

Revenue

Our revenue was $1,440 and $38,792 for the six months ended June 30, 2026 and 2025, respectively, representing a decrease of 96%. For the six months ended June 30, 2026, revenue activity reflected the early commercialization of QuantrusX: the Company invoiced $28,064 to customers, recognized $1,440 as revenue during the period, and deferred the remaining $26,624 for future recognition ($9,128 current, $17,496 long-term) as the related performance obligations under the deployment are satisfied. For the six months ended June 30, 2025, revenue was derived from limited historical software and service activity under the Company’s prior positioning.

Operating Expenses

Our operating expenses were $3,694,220 and $5,921,491 for the six months ended June 30, 2026 and 2025, respectively, representing a decrease of 38%. The decrease was due to employee compensation including options, research and development expenses, marketing expenses and professional services provided to the Company.

Net Loss

Our net loss was $17,078,045 and $7,664,237 for the six months ended June 30, 2026 and 2025, respectively, representing an increase of 123%. The increase was mainly due to conversion of warrants, debt discount amortization, derivative expenses and loss from operations.

Liquidity and Capital Resources

As of June 30, 2026, the Company had an accumulated deficit of $57,916,272 and cash of $2,161,653 (including $1,913,320 of restricted cash). During the three months ended June 30, 2026 and 2025, we had a net loss of $11,049,252 and $3,130,592, respectively. To date, we have financed our operations primarily through revenue generated from sales of our securities.

Management has prepared estimates of operations and believes that sufficient funds will be generated from operations and equity financings to fund our operations and to service our debt obligations for at least the next twelve months. The Company has applied for an uplisting of its Class A Common Stock on NYSE American, upon approval of which certain restricted cash and additional committed capital would become available to fund operations. In addition, the Company maintains a Credit Facility providing up to $45.0 million of additional financing, subject to the terms and conditions thereof. Management believes that these sources, together with expected cash proceeds from executed and prospective QuantrusX subscription agreements, will be sufficient to fund planned operations for at least the next twelve months. However, availability of the listing-related amounts and the Credit Facility is subject to conditions not entirely within the Company’s control, and substantial doubt about the Company’s ability to continue as a going concern has not been alleviated. In the future, we may require additional cash resources due to changing business conditions, implementation of our strategy to expand our business, or other investments or acquisitions we may decide to pursue. If our own financial resources are insufficient to satisfy our capital requirements, we may seek to sell additional equity or debt securities or obtain additional credit facilities. The sale of additional equity securities could result in dilution to our stockholders. The incurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating and financial covenants that would restrict our operations. Financing may not be available in amounts or on terms acceptable to us, if at all. Any failure by us to raise additional funds on terms favorable to us, or at all, could limit our ability to expand our business operations and could harm our overall business prospects.

The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis under which we are expected to be able to realize our assets and satisfy our liabilities in the normal course of business.

Going Concern

The accompanying unaudited condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

While we had cash of $2,161,653 (including $1,913,320 of restricted cash) as of June 30, 2026, we had revenue of $1,440 and $38,792, a net loss of $17,078,045 and $7,664,237, and net cash used in operating activities of $1,812,972 and $2,278,896 for the six months ended June 30, 2026 and 2025, respectively. We have incurred losses since our inception, resulting in an accumulated deficit of $57,916,272 as of June 30, 2026, and further losses are anticipated in the development of our business.

The Company estimates that it will require approximately $4.0 million to fund operations for the twelve months following the issuance of these financial statements. These conditions raise substantial doubt about the Company’s ability to continue as a going concern within one year after the financial statements are issued. Management has evaluated whether these conditions 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, as discussed below.

Management’s Plans

The Company has applied for an uplisting of its Class A Common Stock on NYSE American. Upon approval of such uplisting, a total of approximately $5.0 million will become available to the Company, consisting of (i) the release of the $1.9 million of restricted cash currently reflected on the Company’s balance sheet, and (ii) an approximate $3.0 million deposit to be made by an institutional investor (the “Investor”) pursuant to the executed securities purchase agreement between the Company and the Investor. Of the approximately $5.0 million, approximately $3.0 million will be immediately unrestricted and available for general corporate purposes, with the remainder becoming available upon satisfaction of the conditions set forth in the Investor agreements. In addition, the Company maintains a contingent financing facility with the Investor providing for up to $45.0 million of additional financing (the “Credit Facility”), pursuant to the securities purchase agreement and subject to the terms and conditions thereof, which management believes would be available to fund any shortfall in the Company’s working capital requirements.

In June 2026, the Company commenced commercial deployment of its QuantrusX edge intelligence platform. The Company’s commercial model provides for fixed-fee, prepaid multi-year subscription arrangements, under which contract consideration is collected at or near contract inception and recognized as revenue ratably over the subscription term. Accordingly, executed customer agreements generate cash proceeds in advance of revenue recognition. The Company executed its initial multi-year prepaid QuantrusX subscription agreement in June 2026 and maintains an active pipeline of prospective customers, which management expects to contribute to liquidity over the next twelve months.

The amounts becoming available upon uplisting are conditioned upon approval of the Company’s NYSE American listing application, which is not within the Company’s control, and availability under the Credit Facility is subject to conditions that may not be satisfied. There can be no assurance that the Company’s listing application will be approved, that amounts under the Credit Facility will be available when needed or on acceptable terms, or as to the timing or volume of future customer agreements. Accordingly, management has concluded that these plans do not alleviate the substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Our ability to execute our business plan and achieve profitability is dependent upon our success in: (i) accessing the Credit Facility as planned, (ii) continuing to scale revenue growth, (iii) achieving operational efficiencies, and (iv) accessing additional capital as needed through securities offerings, private equity offerings, debt financings, strategic partnerships, and government or other third-party funding. These plans, if successful, will mitigate the factors which raise substantial doubt about our ability to continue as a going concern.

While we anticipate potential dilution from equity financings, management is committed to balancing growth capital needs with stockholder value creation. The Company maintains flexibility to optimize its capital structure through various financing alternatives based on market conditions and strategic priorities. Any failure by us to raise additional funds on terms favorable to us, or at all, could limit our ability to expand our business operations and could harm our overall business prospects.

There are uncertainties surrounding these issues, and the unaudited condensed consolidated financial statements do not reflect any changes regarding the recoverability or classification of asset values, nor do they address potential adjustments to the amounts or classification of liabilities that could arise if the Company cannot continue operating as a going concern.

Summary of Cash Flow

The following table provides detailed information about our net cash flow for the periods presented:

Net cash used in operating activities was $1,812,972 and $2,278,896 for the six months ended June 30, 2026 and 2025, respectively. For the six months ended June 30, 2026, net cash used in operating activities resulted from a net loss of $17,078,045, stocks, options and warrants issued for various services of $1,917,290, notes payable discount amortization and loss on conversion of notes payable of $13,468,479, depreciation and amortization of $122,945, an increase in accounts receivable of $28,064, an increase in deferred revenue of $26,624, an increase in prepaid expenses of $849, an increase in ROU asset, net of $66,694, an increase in accounts payable and accrued expenses of $21,180, an increase in ROU liabilities of $67,870, and an increase in interest payable of $339,394. For the six months ended June 30, 2025, net cash used in operating activities resulted from a net loss of $7,664,236, stocks, options and warrants issued for various services of $3,667,533, notes payable discount amortization of $1,615,738, depreciation and amortization of $30,725, a decrease in prepaid expenses of $15,210, a decrease in accounts payable and accrued expenses of $95,595, and an increase in interest payable of $151,729.

Net cash provided by (used in) investing activities was $0 and $0 for the six months ended June 30, 2026 and 2025, respectively.

Net cash provided by financing activities was $1,951,553 and $2,027,932 for the six months ended June 30, 2026 and 2025, respectively. For the six months ended June 30, 2026, financing activities consisted of $1,980,000 in proceeds from notes payable, partially offset by $28,447 of principal and interest repayments on notes payable. For the six months ended June 30, 2025, financing activities consisted of $1,900,000 in proceeds from notes payable and $127,932 in proceeds from the Company’s Regulation A offering.

Contractual Obligations

During the six months ended June 30, 2026 and 2025, we had contractual obligations associated with management consultants in which we paid out $625,000 and $580,000, respectively.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

Critical Accounting Policies and Estimates

This discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. While our significant accounting policies are described in more detail in the notes to our financial statements included elsewhere in this prospectus, we believe that the following accounting policies are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates. We believe our most critical accounting policies and estimates relate to the following:

Principles of Consolidation

The Company’s unaudited condensed consolidated financial statements and related notes include all the accounts of the Company and its wholly owned subsidiaries. They have been prepared in accordance with U.S. GAAP. All intercompany transactions have been eliminated in consolidation.

Share-Based Compensation

ASC 718, “Compensation – Stock Compensation”, prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the unaudited condensed consolidated financial statements based on their grant date fair values. That expense is recognized over the period when an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period) or the straight-line attribution method. Under 718-10-30-20D the determination of whether a valuation method is reasonable, or whether an application of a valuation method is reasonable, shall be made based on the facts and circumstances as of the measurement date.

Goodwill

We allocate goodwill to reporting units based on the reporting unit expected to benefit from the business combination. We evaluate our reporting units on an annual basis and, if necessary, reassign goodwill using a relative fair value allocation approach. Goodwill is tested for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. These events or circumstances could include a significant change in the business climate, legal factors, operating performance indicators, competition, or sale or disposition of a significant portion of a reporting unit.

Application of the goodwill impairment test requires judgment, including the identification of reporting units, assignment of assets and liabilities to reporting units, assignment of goodwill to reporting units, and determination of the fair value of each reporting unit. The fair value of each reporting unit is estimated primarily through the use of a discounted cash flow methodology. This analysis requires significant judgments, including estimation of future cash flows, which is dependent on internal forecasts, estimation of the long-term rate of growth for our business, estimation of the useful life over which cash flows will occur, and determination of our weighted average cost of capital.

The estimates used to calculate the fair value of a reporting unit change from year to year based on operating results, market conditions, and other factors. Changes in these estimates and assumptions could materially affect the determination of fair value and goodwill impairment for each reporting unit.

Revenue Recognition

The Company has adopted revenue recognition policies for its principal revenue types, including subscription and license fees, usage-based fees, professional and other services, and hardware. Prior to fiscal year 2026, the Company's revenue was derived from software license, hardware, and professional services activity. Beginning in the second quarter of 2026, the Company introduced QuantrusX, an edge intelligence platform, and revenue has since primarily consisted of QuantrusX subscription fees; other revenue streams described below have not been material during the periods presented. See Note 2 to the unaudited condensed consolidated financial statements.

Deferred revenue represents amounts invoiced or received from customers in advance of the Company satisfying its related performance obligations under ASC 606, Revenue from Contracts with Customers. Deferred revenue is recognized as revenue as the Company transfers control of the promised products or services to the customer. The current portion of deferred revenue represents amounts expected to be recognized as revenue within twelve months of the balance sheet date; the long-term portion represents amounts expected to be recognized beyond twelve months, based on the performance and delivery terms of the underlying contracts.

The Company determines the amount of revenue to be recognized through the application of the following steps:

Recently Issued Accounting Pronouncements

Management does not believe any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying unaudited condensed consolidated financial statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

As a “smaller reporting company,” we are not required to provide the information required by this Item.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (“Exchange Act”), as of the end of the period covered by this Quarterly Report on Form 10-Q. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable and not absolute assurance of achieving the desired control objectives and management necessarily applies its judgment in evaluating the cost benefit relationship of possible controls and procedures. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2026.

Changes in Internal Control Over Financial Reporting

During the period covered by this report there were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on the Effectiveness of Controls

Control systems, no matter how well conceived and operated, are designed to provide a reasonable, but not an absolute, level of assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Because of the inherent limitations in any control system, misstatements due to error or fraud may occur and not be detected.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we may be involved in various claims and legal proceedings relating to claims arising out of our operations. We are not currently a party to any legal proceedings that, in the opinion of our management, are likely to have a material adverse effect on our business, financial condition, and results of operations. Regardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

Item 1A. Risk Factors

As a “smaller reporting company,” we are not required to provide the information required by this Item.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Unregistered Sales of Equity Securities

During the three months ended June 30, 2026, we have conducted closings of an ongoing private placement of units, with each unit consisting of an unsecured 18% promissory note and a five-year warrant to purchase shares of Class A Common Stock, and entered into certain subscription agreements with a number of accredited investors as defined in Section 2(a)(15) of the Securities Act, and Rule 501 promulgated thereunder, in reliance upon the exemption contained in Section 4(a)(2) of the Securities Act, and Rule 506(b) of Regulation D promulgated thereunder, and applicable state securities laws. Pursuant to the agreements, we sold 56.4 units at a price of $25,000 per unit for gross proceeds of $1,410,000 and issued 940,016 warrants with an exercise price of $1.50 per share.

Purchases of Equity Securities

No repurchases of our common stock were made during the three months ended June 30, 2026.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not Applicable.

Item 5. Other Information

We have no information to disclose that was required to be disclosed in a Current Report on Form 8-K during the three months ended June 30, 2026, but was not reported.

During the three months ended June 30, 2026, none of our directors or officers, as defined in Rule 16a-1(f), adopted and/or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as defined in Item 408 of Regulation S-K.

Item 6. Exhibits

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.