SOBR Safe, Inc.: Form 10-Q for the period ended Jun 30, 2025

Disclaimer Regarding Forward Looking Statements

Our Management’s Discussion and Analysis or Plan of Operations contains not only statements that are historical facts, but also forward-looking statements within the meaning of the Exchange Act. Forward-looking statements include statements in which words such as “may,” “if,” “will,” “should,” “intend,” “expect,” “anticipate,” “plan,” “believe,” “estimate,” “project,” “consider,” or similar expressions are used. Forward-looking statements are, by their very nature, uncertain and risky. These risks and uncertainties include international, national and local general economic and market conditions; demographic changes; our access to capital to fund our continuing operations, our ability to sell our products and services and to sustain, manage, or forecast growth; our ability to successfully make and integrate acquisitions; raw material costs and availability; new product development and introduction; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; the loss of significant customers or suppliers; fluctuations and difficulty in forecasting operating results; changes in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; the ability to protect technology; and other risks that might be detailed from time to time in our filings with the Securities and Exchange Commission (“SEC”).

Although the forward-looking statements in this Quarterly Report reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by them. Consequently, and because forward-looking statements are inherently subject to risks and uncertainties, the actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. You are urged to carefully review and consider the various disclosures made by us in this report and in our other reports as we attempt to advise interested parties of the risks and factors that may affect our business, financial condition, and results of operations and prospects.

Reverse Stock Split

At the open of the market on April 4, 2025, our 1-for-10 reverse split of our common stock went effective with Nasdaq Capital Markets (“Nasdaq”). As a result, all common stock share amounts, as well as share amounts and exercise and conversion prices have been adjusted to reflect the reverse stock split.

Corporate Overview

On September 19, 2011, we, as Imagine Media, Ltd., a Delaware corporation, acquired approximately 52% of the outstanding shares of TransBiotec, Inc. (“TBT”), a California corporation, from TBT’s directors in exchange for 124,439 shares of our common stock. In January 2012, our Board of Directors (the “Board”) amended our Certificate of Incorporation, changing our name from Imagine Media, Ltd. to TransBiotec, Inc., and we acquired approximately 45% of the remaining outstanding shares of TBT in exchange for 109,979 shares of our common stock. With the acquisitions in September 2011 and January 2012 of TBT common stock, we own approximately 99% of the outstanding shares of TBT. As a result of the acquisitions, TBT’s business is our business, and, unless otherwise indicated, any references to “we” or “us” include the business and operations of TBT.

On March 9, 2020, our Board approved the amendment to our Certificate of Incorporation and stockholders holding 52% of our then outstanding voting stock approved an amendment to our Certificate of Incorporation. The Certificate of Amendment to our Certificate of Incorporation was for the purpose of, among other things, changing our name from “TransBiotec, Inc.” to “SOBR Safe, Inc.” The Certificate of Amendment to our Certificate of Incorporation became effective with the State of Delaware on April 24, 2020.

Pursuant to approval of an application with the Nasdaq Capital Market (“Nasdaq”) to uplist our common stock to their exchange under the ticker symbol “SOBR,” our common stock began trading and quoted on the Nasdaq on May 16, 2022. Prior to this uplist to the Nasdaq exchange, our common stock was quoted on the “OTCQB” tier of the OTC Markets under the ticker symbol “SOBR.”

Our corporate offices are located at 6400 South Fiddlers Green Circle, Suite 1400, Greenwood Village, Colorado 80111, telephone number (844) 762-7723.

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The following discussion:

• summarizes our plan of operation; and
• analyzes our financial condition and the results of our operations for the six months ended June 30, 2025.

This discussion and analysis should be read in conjunction with our financial statements included as part of this Quarterly Report on Form 10-Q, as well as our financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024.

Business Operations, Outlook and Challenges

We provide non-invasive technology to quickly and discreetly monitor, detect and identify the presence of alcohol in individuals. Our mission is to save lives, positively impact behavioral outcomes and individual wellness, increase workplace safety and productivity, and create significant economic benefits. Our non-invasive technologies are integrated within our scalable and patent-pending software platform, SOBRsafeTM, producing statistical, measurable business and user data. We operate as a single segment designed to enable customers to purchase products directly through channel partners, sales agents or through our digital enterprise and consumer channels. To that end, our SOBRsafe software platform, along with our integrated hardware devices, SOBRcheck™ and SOBRsure™, used to provide non-invasive alcohol monitoring, detection and identity verification, combine to create a robust solution that has current and potential applications in:

• Behavioral health and wellness
• Judicial administrative applications
• Licensing and integration
• Commercial environments, including but not limited to oil and gas, fleet management, telematics, ride share programs, and general workplace safety
• Individual consumer use, including co-parenting trust, personal accountability, and adolescent driver safety

Our SOBRcheck device is a patent-pending, touch-based identity verification and alcohol detection solution. Users place two fingers on the device sensors, one compares biometric data points from the finger to confirm identity, while the other senses alcohol contained in perspiration emitted through the pores of the fingertip. The touch-based device connects to the SOBRsafe software solution to collect, present and communicate data collected to subscribed parties.

Our SOBRsure device is a patent-pending, fitness-style wearable band with an alcohol monitoring and detection solution intended for discrete, low-profile and voluntary use providing qualified, real-time alcohol monitoring and GPS tracking. The wearable band is a device which includes a contained sensor which senses alcohol contained in perspiration released through the pores of the skin. The wearable band connects to a mobile device via Bluetooth communication where the SOBRsafe mobile application collects and transmits data to the SOBRsafe software solution. The SOBRsure device provides passive, qualified, real-time alcohol insights to administrators, clinicians, parents and more, and also includes device removal and service interruption notifications.

Our SOBRsafe technology can also be deployed across numerous additional devices for various uses. We are currently exploring possible integrations with existing systems and licensing by non-competitive third parties.

We believe our device portfolio approach could yield a substantial repository of user data – a potentially monetizable asset for statistical analytics. The opportunity to collect data points over time could enable the development of business and insurance liability benchmarking, through artificial intelligence (“AI”), powerful guidance for perpetual safety improvement and associated economic cost savings capture. By demonstrating substance-free environments, organizations could deliver a data-driven argument for a reduction in annual insurance premiums. We could potentially partner with insurance providers to encourage use of the SOBRsafe devices and/or technology.

Continuing in fiscal 2025, and as in prior years, the design, manufacturing, quality testing and distribution for all SOBRsafe integrated devices take place in the United States.

Our brand, products and software services continue to gain awareness and recognition through a robust marketing platform, trade shows, media exposure, social media and product demonstrations. To generate sales, we have a three-part strategy: 1) direct sales to enterprise businesses and consumers, 2) enter into agreements with channel partners and 3) enter into licensing and integration agreements. We currently employ four highly experienced sales professionals facilitating direct sales and channel partner relationships. Licensing and integration opportunities with third parties continue in preliminary stages.

Since inception we have generated significant losses from operations and anticipate that we will continue to generate significant losses for the foreseeable future. Our success is dependent on our ability to access additional capital. Additional capital will be required under the following circumstances: 1) to offset negative cash flows from operations, 2) to accelerate customer acquisition, thereby increasing capital outlay, 3) for advanced purchasing of materials, 4) for the acquisition of new technology, 5) for potential acquisition of a key asset, and 6) for sales expansion.

Alcohol Use Disorder and Its Effects

SOBR Safe is committed to addressing the increasing diagnosis of Alcohol Use Disorder (“AUD”) which is a medical condition characterized by an inability to control or stop the use of alcohol despite the adverse effects and consequences. Approximately 29 million individuals in the United States and 283 million globally suffer from this diagnosis where the problematic use of alcohol can result in both short- and long-term health issues including effects on behavioral wellness and overall physical health. According to the National Institute on Alcohol Abuse and Alcoholism, AUD increased by 38% during the COVID pandemic creating a surge in diagnoses and untreated cases.

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In the United States, alcohol consumption and AUD can be linked to more than 200 diseases including 50% of all liver disease and 25% of pancreatitis cases and contributes to 5% of cancer related deaths. Approximately 178,000 alcohol related deaths occurred in the United States during 2022 and continue to increase annually.

Further attributing to the ongoing and ever-increasing AUD epidemic, less than 10% of those affected have available or receive treatment leaving approximately 26 million in the United States without traditional medical treatment options. The demographics of the 26 million untreated individuals cover a wide range including 17 million men and 12 million women with 1.5 million under the age of 21. Those who are not able to receive medications or clinical behavioral treatments must work to find alternative solutions to address and recover from AUD such as the SOBR Safe monitoring and detection solutions. We continue ongoing efforts to identify the wide-ranging demographics of the AUD epidemic in an effort to provide solutions defined for each group according to their treatment needs and journeys.

Marketing

We have developed a marketing plan that includes:

• consumer and enterprise e-commerce web-solutions,
• search engine optimization (SEO) and search engine marketing (SEM),
• integrated digital and traditional media campaigns,
• brand ambassadors, affiliate partners and social media influencers,
• public relations initiatives and trade shows,
• business to business targeted digital campaigns,
• alcohol detection/testing channel partners,
• territorial sales agents,
• advocacy group alignment,
• ongoing brand development, and
• continuous pursuit of cutting-edge technologies for future integration.

As of June 30, 2025, we have retained six channel partners to augment our sales and marketing efforts, serving business customers with SOBRsafe technology solutions, including the SOBRcheck and SOBRsure devices.

Recent Developments

During the six-months ended June 30, 2025, the following developments occurred:

• Achieved an increase in revenue of 87% from the prior year six-month period coupled with an improving gross margin of 58%.
• Net proceeds of approximately $3.3M were received from the exercise of outstanding warrants during the quarter ended March 31, 2025, which were issued in conjunction with the 2024 PIPE Financing completed in October 2024.
• We effected and completed a 1-for-10 reverse stock split of the Company’s common stock on April 4, 2025, a Share Combination Event, reducing the total number of outstanding shares from approximately 15.2 million to 1.5 million. Fractional shares as a result of the reverse stock split were rounded up to one full share of common stock. Following the reverse stock split, the exercise price of the Series A Warrants issued in conjunction with the 2024 PIPE Financing was reduced to the Floor Price of $7.60 per common share. Further, the Share Combination Event resulted in the calculation of a True-up Payment due to the remaining holders limited to a ceiling of $1,640,000.
• Enhanced SOBRsafe's patent-pending software technology solutions with improvements to the mobile application including streamlined administration application and notification protocols and introduced new user interface elements.
• Completed third-party hardware product validation tests in the first quarter of 2025 and a corresponding third-party product sensor validation test.
• Collaborated with a national marketing firm providing solutions to and for the largest U.S. newspaper publisher and the largest local-to-national publishing and digital media organization in the United States, launching both business-to-consumer and business-to-business marketing initiatives building brand recognition and support 2025 sales efforts. The effort has generated improved brand awareness and stimulated market adoption through the multi-channel, multi-disciplined national marketing campaigns.
• Initiated a robust marketing campaign in March 2025 which was executed in April 2025 to correspond with the National Council on Alcohol and Drug Dependence Alcohol Awareness Month.
• Broadened the global reach of SOBRsafe users and subscribers across 43 U.S. states, Canada, Australia, and New Zealand, while launching an alcohol detection and testing program for airport personnel and pilots outside of the U.S., building upon the Company's global footprint.
• Expanded business-to-business sales in the first quarter of 2025 into the family law market to address the approximate 450,000 individuals undergoing domestic monitoring.
• Converted the Company’s website presence to an ecommerce platform supporting both business to business and business to consumer channels facilitating hardware and software subscription sales creating a scalable mechanism for future sale growth.
• Launched a comprehensive customer service support center to provide broader range of service including inbound and outbound communication capabilities.
• Partnering with a leading university in the United States to support their research and development of a transdermal alcohol analytics platform utilizing SOBRsure devices for essential data acquisition.

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Subsequent to the six-months ended June 30, 2025, the following developments occurred as detailed below:

• In July 2025, the Company remitted payments in the aggregate amount of $1,640,000 to remaining holders of the Series A Warrants issued on October 9, 2024 in conjunction with the 2024 PIPE Financing. The payments were made to satisfy the determined True-Up Payment obligation accrued as of June 30, 2025 and will not have an impact on the Company’s ability to continue as a going concern.
• On July 17, 2025, the Company’s stockholders approved and ratified an amendment to increase the number of shares authorized under the 2019 Equity Incentive Plan to 350,000 shares.

Summary of Results of Operations

Results of Operations for Three Months Ended June 30, 2025, Compared to Three Months Ended June 30, 2024

Revenue

Revenues of $104,228 for the three-month period ended June 30, 2025, have increased by $50,037, or an increase of 92.3%, as compared to the prior year period of $54,191. This increase is primarily driven by increased sales of our SOBRsure device of $29,244, or 133.0%; an increase in sales of our SOBRsure software subscriptions of $25,177, or 342.7%; and an increase in our SOBRcheck software subscriptions of $5,009. These increases have been offset by decreased sales of our SOBRcheck device of $7,365 and an increase in sales discounts of $2,312. During the three months ended June 30, 2025, the Company sold 161 unique SOBRsure 2nd generation devices after being launched in the fourth quarter of 2024. This represents an increase of 8.8% from the prior quarter unique sales of 148 SOBRsure 2nd generation devices.

Gross Profit

The cost of goods and services for the three months ended June 30, 2025, was $44,344 resulting in a gross profit of $59,884 and a gross margin of 57.5%. The cost of goods and services for the three months ended June 30, 2024 was $41,156 resulting in a gross profit of $13,035. The prior period cost of goods and services included an inventory cost adjustment of $17,434 for SOBRcheck inventory resulting in an adjusted gross margin of 53.7%.

General and Administrative Expenses

General and administrative expenses increased by $419,095, from $1,395,933 for the three-month period ended June 30, 2024, to $1,815,028 for the three-month period ended June 30, 2025. This increase is primarily attributable to an increase in professional services spend of $376,204, an increase in payroll costs of $130,938, offset by a decrease in business development expense of $60,380 and insurance spend of $23,244.

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Stock-Based Compensation Expense

The Company had stock-based compensation expense of $115,252 for the three months ended June 30, 2025, compared to $185,910 for the three months ended June 30, 2024. The reduction in stock-based compensation expense is due to previously issued equity compensation awards becoming fully vested and no issuance of new awards in 2025.

Research and Development

Research and development expenses decreased by $109,752, or 35.6%, to $198,675 for the three months ended June 30, 2025, compared to $308,427 for the three months ended June 30, 2024. The decrease in research and development is due to the Company’s making improvements to its existing SOBRsafe software platform and enhancements to its mobile application, whereas the prior year spend was primarily driven by more expensive hardware development initiatives including the second generation of the SOBRsure device.

Other Income, net

Other income, net increased by $62,556 from $13,157 for the three months ended June 30, 2024, to $75,713 for the three months ended June 30, 2025. Other income consists primarily of interest income earned on cash deposits. The increase is due to more cash on hand during 2025 when compared to the same period in 2024 as a result of cash proceeds from the 2024 PIPE Financing in October 2024, and the Series A Warrant exercises completed in the fourth quarter of 2024 and the first quarter of 2025.

Interest Expense

Interest expense decreased by $211,169 from $213,296 for the three-month periods ended June 30, 2024, to $2,127 for the three months ended June 30, 2025. This decrease was due to make-whole interest related to outstanding convertible debt as the conversion of debt to common stock was completed in the prior year.

Operating Loss; Net Loss

Our operating loss increased by $191,836 from $1,877,235 for the three-month period ended June 30, 2024, compared to $2,069,071 for the three-month period ended June 30, 2025. The change in our operating loss for the three months ended June 30, 2024, compared to the same prior year period, is primarily a result in an increase in general and administrative expense as detailed above, offset by decreases in stock-based compensation and research and development expenses.

Our net loss decreased by $81,890 from $2,077,374 for the three-month period ended June 30, 2024, to $1,995,480 for the three-month period ended June 30, 2025. The change in our net loss for the three months ended June 30, 2024, compared to the same prior year period, is primarily a result in an increase our operating loss as detailed above, offset by an increase in interest income and a decrease in interest expense.

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Results of Operations for Six Months Ended June 30, 2025, Compared to Six Months Ended June 30, 2024

Revenue

Revenues of $190,845 for the six-month period ended June 30, 2025, have increased by $88,664, or 86.8%, as compared to the prior year period of $102,181. This increase from the prior year period is primarily driven by increased sales of our SOBRsure device of $53,045, or 150.5%; an increase in sales of our SOBRsure subscriptions of $47,534, or 468.8%; an increase in our SOBRcheck subscriptions of $7,035, or 17.8%. These increases are offset by decreased sales of our SOBRcheck device of $16,787 and an increase in discounts of $2,312. During the first six-months of 2025, the Company sold 309 unique SOBRsure 2nd generation devices after being launched in the fourth quarter of 2024.

Gross Profit

The cost of goods and services for the six months ended June 30, 2025 was $79,997 resulting in a gross profit of $110,848 and a gross margin of 58.1%. The cost of goods and services for the six months ended June 30, 2024 was $65,937 resulting in a gross profit of $36,244. The prior period cost of goods and services included an inventory cost adjustment of $23,410 resulting in an adjusted gross margin of 58.4%.

General and Administrative Expenses

General and administrative expenses increased by $827,002, or 29.4%, from $2,811,495 for the six-month period ended June 30, 2024, to $3,638,497 for the six-month period ended June 30, 2025. This increase is primarily attributable to an increase in professional services spend of $696,752 principally in marketing efforts, an increase in payroll costs of $261,095, offset by a decrease in business development expense of $75,509 and related travel spend of $11,545 which is delayed to the second half of 2025, and decrease in insurance spend of $32,229.

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Stock-Based Compensation Expense

The Company had stock-based compensation expense of $254,930 for the six months ended June 30, 2025, compared to $400,308 for the six months ended June 30, 2024. The reduction in stock-based compensation expense is due to previously issued equity compensation awards becoming fully vested and no issuance of new awards in 2025.

Research and Development

Research and development expenses for the six months ended June 30, 2025, and 2024, decreased by $170,862, or 41.6%, from $410,461 for the six months ended June 30, 2024, to $239,599 for the six months ended June 30, 2025. The decrease in research and development is due to the Company’s making improvements to its existing SOBRsafe software platform and enhancements to its mobile application, whereas the prior year spend was primarily driven by more expensive hardware development initiatives including the second generation of the SOBRsure device.

Other Income, net

Other income, net increased by $119,018 from $34,412 for the six months ended June 30, 2024 to $153,430 for the six months ended June 30, 2025. Other income consists primarily of interest income earned on cash deposits. The increase is due to more cash on hand during 2025 when compared to the same period in 2024 as a result of cash proceeds from the 2024 PIPE Financing in October 2024, and the Series A Warrant exercises completed in the fourth quarter of 2024 and the first quarter of 2025.

Interest Expense

Interest expense decreased by $440,020 from $445,812 for the six months ended June 30, 2024, to $5,792 for the six months ended June 30, 2025. This decrease was due to make-whole interest related to outstanding convertible debt as the conversion of debt to common stock was completed in the prior year.

Operating Loss; Net Loss

Our operating loss increased by $436,158, from $3,586,020 for the six-month period ended June 30, 2024, compared to $4,022,178 for the six-month period ended June 30, 2025. The change in our operating loss for the three months ended June 30, 2025, compared to the same prior year period, is primarily a result in an increase in general and administrative expense as detailed above offset by decreases in stock-based compensation and research and development expenses.

Our net loss decreased by $708,755 from $4,583,295 for the six-month period ended June 30, 2024, compared to $3,874,540 for the six-month period ended June 30, 2025. The change in our net loss for the three months ended June 30, 2025, compared to the same prior year period, is primarily a result of notes payable conversion expense not experienced in 2025 and a decrease in interest expense for make-whole interest, and an increase in interest income. These decreases were offset by the increase in our operating loss as compared to the prior period detailed above.

Liquidity and Capital Resources for Six Months Ended June 30, 2025, Compared to December 31, 2024

Introduction

During the six-months ended June 30, 2025, and 2024, the Company has incurred recurring losses from operations. Future capital requirements will depend on many factors including the Company’s ability to sell and develop products, generate cash flow from operations, and assess competing market developments. The Company will need additional capital in the near term. Our cash on hand as of June 30, 2025, was $8,466,322 and our current normalized operating cash flow burn rate is approximately $550,000 per month.

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Management believes that cash balances and positive working capital at June 30, 2025 provide adequate operating capital for operating activities for the next twelve months after the date these financial statements are issued. Management anticipates additional revenue generation with the release of its second generation SOBRsure device and a comprehensive marketing plan. These plans are contingent upon the actions to be performed by the Company which have been implemented through the quarter and will continue into future periods, however, these conditions have not been met on or before June 30, 2025. The Company has acquired additional proceeds net of transactional costs from the exercise of outstanding warrants, net of transactional costs, of approximately $3,395,021 during the first quarter of 2025, increasing the Company’s cash balances. As such, Management believes despite limited revenue generation and positive operating cash flows being generated in the past, adequate cash balances and working capital are available to support ongoing operations for the next twelve months and the Company will continue as a going concern at June 30, 2026.

Our cash, current assets, total assets, current liabilities, and total liabilities as of June 30, 2025, and as of December 31, 2024, respectively, are as follows:

Our total current assets and total assets decreased as of June 30, 2025, as compared to December 31, 2024, primarily due to a decrease in prepaid expenses of approximately $100,000, amortization of SOBRsafe Intellectual Technology and Right-of-Use assets of approximately $242,000, lower inventory on hand of approximately $35,000, and collection of receivables of approximately $19,000, offset by an increase in cash on hand of approximately $82,000.

Our total current liabilities and total liabilities increased as of June 30, 2025, as compared to December 31, 2024. The increase was primarily due to the accrual for the Series A Warrant True-up Payment obligation of $1,640,000 during the period, offset by the decrease in accounts payable and accrued expenses of approximately $54,000, and payment of the balance of the insurance premium note payable and operating lease liabilities of approximately $155,000.

Sources and Uses of Cash

Operations

We had net cash used in operating activities of $3,313,203 for the six-month period ended June 30, 2025, as compared to net cash used in operating activities of $3,049,161 for the six-month period ended June 30, 2024. For the period in 2025, the net cash used in operating activities consisted primarily of our net loss of $3,874,540, offset by non-cash expense items including amortization of $192,732, stock-based compensation expense of $254,930, non-cash lease expense of $49,298, and changes in our assets and liabilities for accounts receivable of ($22,524), inventory of $35,112, prepaid expenses of $115,082, other assets of $41,918, accounts payable of $63,738, accrued expenses of ($133,086), and operating lease liabilities of ($53,794).

For the period in 2024, the net cash used in operating activities of $3,049,161 consisted primarily of our net loss of $4,583,295, offset by non-cash expense items including amortization of $192,732, amortization of debt discounts of $237,250, stock-based compensation expense of $400,307, non-cash interest expense of $336,510, non-cash lease expense of $44,284, non-cash conversion expense of $585,875 and changes in our assets and liabilities for accounts receivable of ($9,708), inventory of $60,844, prepaid expenses of $81,051, accrued expenses of ($208,212), accrued interest payable of ($128,214), and operating lease liabilities of ($46,872).

Investments

We had no cash provided by or used in investing activities during the six-month periods ended June 30, 2025, or June 30, 2024.

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Financing

Our net cash provided by financing activities for the six-months ended June 30, 2025, was $3,395,483. For the six-months ended June 30, 2025, our net cash from financing activities consisted of proceeds from the exercise of warrants of $3,680,411, offset by issuance costs of $184,021 and financing payments of $100,907 for annual insurance premiums.

Our net cash provided by financing activities for the six-months ended June 30, 2024, was $2,425,418. During the six-month period ended June 30, 2024, we received gross proceeds from the exercise of warrants of $2,786,174 which was offset by transactional costs of $360,756.

Contractual Obligations and Commitments

At June 30, 2025, the Company had contractual commitments to make payments under operating leases. Payments due under these commitments are as follows:

For additional information about our contractual commitments for these leases, see “Note 5 – Leases” included in our Notes to the Condensed Consolidated Financial Statements.

Off Balance Sheet Arrangements

We have no off-balance sheet arrangements as of June 30, 2025, and December 31, 2024.

Effects of Inflation

We do not believe that inflation has had a material impact on our business, revenue or operating results during the periods presented. However, continued increases in inflation could have an adverse effect on our results of future operations, financial position, and liquidity in 2025.

Recent Accounting Pronouncements

New pronouncements issued for future implementation are discussed in Note 1 to the financial statements.

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On December 28, 2010, we borrowed $11,810 from a related party. The note payable carries an interest rate of 0% and matured on December 31, 2012. As of June 30, 2025, this note was in default.

On February 20, 2012, we borrowed $3,750 from a non-related party. The note payable carries an interest rate of 12% and matured on February 19, 2013. As of June 30, 2025, this note was in default.

On March 20, 2012, we borrowed $5,433 from a non-related party. The note payable carries an interest rate of 12% and matured on March 19, 2013. As of June 30, 2025, this note was in default.

On September 27, 2013, we borrowed $15,000 from a non-related party. The note payable carries an interest rate of 9% and matured on December 25, 2013. As of June 30, 2025, this note was in default.

On July 31, 2015, we borrowed $2,500 from a non-related party. The note payable carries an interest rate of 10% and matured on November 28, 2015. As of June 30, 2025, this note was in default.

(a) Evaluation of Disclosure Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer (our Principal Executive Officer) and Chief Financial Officer (our Principal Accounting Officer), of the effectiveness of our disclosure controls and procedures as defined in Exchange Act Rules 13a – 15(c) and 15d – 15(e)). Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer, who are our Principal Executive Officer and Principal Financial Officer, respectively, concluded that, as of the quarter ended June 30, 2025, our disclosure controls and procedures were effective.

In designing and evaluating the disclosure controls and procedures, management recognizes that there are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their desired control objectives. Additionally, in evaluating and implementing possible controls and procedures, management is required to apply its reasonable judgment.

(b) Changes in Internal Controls over Financial Reporting

There have been no changes in our internal control over financial reporting during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Our process for evaluating controls and procedures is continuous and encompasses constant improvement of the design and effectiveness of established controls and procedures and the remediation of any deficiencies, which may be identified during this process.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

(c) Officer’s Certifications

Appearing as an exhibit to this quarterly report on Form 10-Q are “Certifications” of our Chief Executive and Financial Officer. The Certifications are required pursuant to Sections 302 of the Sarbanes-Oxley Act of 2002 (the “Section 302 Certifications”). This section of the quarterly report on Form 10-Q contains information concerning the Controls Evaluation referred to in the Section 302 Certifications. This information should be read in conjunction with the Section 302 Certifications for a more complete understanding of the topics presented.

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As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item. However, our current risk factors are set forth in our Annual Report on Form 10-K for the year ended December 31, 2024 as filed with the SEC on April 15, 2025.