{"url_path":"/sec/catg/10-k/2026/item-8","section_key":"item-8","section_title":"Item 8 Financial Statements and Supplementary Data.**","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-05-20","source_url":"https://www.sec.gov/Archives/edgar/data/1470129/0001753926-26-000917-index.html","accession_number":"0001753926-26-000917","cik":"0001470129","ticker":"VIIQ","issuer_name":"VisitIQ Corp.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1470129/0001753926-26-000917-index.html","primary_entity_key":"0001470129","primary_entity_name":"VisitIQ Corp."},"word_count":10649,"has_tables":true,"body_markdown":"**Item\n8. Financial Statements and Supplementary Data.**\n\n \n\n**INDEX\nTO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n[Report\nof Independent Registered Public Accounting Firm (PCAOB #0542)](#b001)\n \n59\n\n[Consolidated Balance Sheets as of August 31, 2025 and 2024](#b002)\n \n62\n\n[Consolidated Statements of Operations for the Years ended August 31, 2025 and 2024](#b003)\n \n63\n\n[Consolidated Statements of Stockholders’ Deficit for the Years Ended August 31, 2025 and 2024](#b004)\n \n64\n\n[Consolidated Statements of Cash Flows for the Years ended August 31, 2025 and 2024](#b005)\n \n65\n\n[Notes to Consolidated Financial Statements](#b006)\n \n66\n\n58\n\n \n\n \n\nREPORT\nOF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM\n\n \n\nTo\nthe Stockholders and the Board of Directors\n\nof VisitIQ Corp.\n\n \n\n**Opinion\non the Financial Statements**\n\n \n\nWe\nhave audited the accompanying consolidated balance sheets of VisitIQ Corp. and Subsidiary (the “Company”) as of August\n31, 2025 and 2024, and the related consolidated statements of operations, stockholders’ deficit and cash flows for each\nof the years in the two-year period ended August 31, 2025, and the related notes (collectively referred to as the financial statements).\nIn our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of\nAugust 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the two-year period ended\nAugust 31, 2025, in conformity with accounting principles generally accepted in the United States of America.\n\n \n\n**Basis\nfor Opinion**\n\n \n\nThese\nfinancial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on\nthe Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company\nAccounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance\nwith the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the\nPCAOB.\n\n \n\nWe\nconducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits\nto obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error\nor fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial\nreporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but\nnot for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.\nAccordingly, we express no such opinion.\n\n \n\nOur\naudits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to\nerror or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence\nregarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles\nused and significant estimates made by the Company, as well as evaluating the overall presentation of the financial statements.\nWe believe that our audits provide a reasonable basis for our opinion.\n\n \n\n**Critical\nAudit Matters**\n\n \n\nThe critical audit matters communicated\nbelow are matters arising from the current period audit of the financial statements that were communicated or required to be communicated\nto the Board of Directors and that: (1) relate to accounts or disclosures that are material to the financial statements and (2)\ninvolved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter\nin any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters\nbelow, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.\n\n \n\n59\n\n \n\n**Valuation\nof Series B Convertible Preferred Stock, Series C Convertible Preferred Stock, and Stock-Based Compensation**\n\n \n\nAs\ndescribed in Notes 8, 9, 12 and 13 to the financial statements, the Company recorded transactions during the year ended August\n31, 2025 that required valuations of Series B Convertible Preferred Stock, Series C Convertible Preferred Stock, options to purchase\ncommon stock, and related party consulting expense recorded as a component of stock-based compensation expense. These valuations\nalso affected the Company’s accounting for the exchange of convertible debt, and the related gain on exchange of convertible\ndebt recognized in the consolidated statement of operations, for the year ended August 31, 2025.\n\n \n\nWe\nidentified these valuations as a critical audit matter because auditing these valuations involved challenging, subjective and\ncomplex auditor judgment. In particular, the auditing involved evaluating complex agreements and the significant inputs and assumptions\nused in the valuation models, and the Company’s accounting for the related exchange of convertible notes payable and warrants\nfor Series B Convertible Preferred Stock transactions in conformity with accounting principles generally accepted in the United\nStates of America.\n\n \n\nThe\nprimary procedures we performed to address this critical audit matter included:\n\n \n\n \n●\nObtained an understanding\nof internal processes and controls related to the valuation of Series B Convertible Preferred Stock, Series C Convertible\nPreferred Stock, stock option awards, and the related party consulting arrangement recorded as a component of stock-based\ncompensation expense.\n\n \n\n \n●\nEvaluated the terms\nof the underlying agreements and assessed the appropriateness of the Company’s accounting for the exchange of convertible\nnotes for Series B Convertible Preferred Stock, and the related gain on the exchange, the conversion of Series B Convertible\nPreferred Stock into Series C Convertible Preferred Stock, and the related consulting expense recorded as a component of stock-based\ncompensation, and stock-based compensation expense in conformity with accounting principles generally accepted in the United\nStates of America.\n\n \n\n \n●\nAssessed the significant\ninputs and assumptions used in management’s valuation analyses and, with the assistance of our internal valuation specialist,\nevaluated the appropriateness of the valuation methodologies and models used by management.\n\n \n\n \n●\nVerified the mathematical\naccuracy of the valuation calculations and the resulting amounts recorded in mezzanine equity, stockholders’ deficit,\nstock-based compensation expense, and the gain on exchange of convertible debt.\n\n \n\n \n●\nEvaluated the adequacy\nof the Company’s disclosures in Notes 8, 9, 12 and 13 related to these items.\n\n \n\n**Impairment\nAnalysis of Internally Developed Software**\n\n \n\nAs\ndescribed in Note 3 to the financial statements, the Company evaluates its internally developed software intangible asset for\nimpairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. During the year\nended August 31, 2025, the Company identified impairment triggering events, including net losses and negative cash flows from\noperations, and performed a recoverability analysis using estimated undiscounted future cash flows. The Company concluded that\nno impairment existed as of August 31, 2025.\n\n \n\nWe\nidentified the impairment analysis of internally developed software as a critical audit matter as auditing management’s\nrecoverability analysis involved challenging, subjective and complex judgments related to the cash flow forecasts used in the\nanalysis, including assumptions regarding future revenues and operating expenses.\n\n \n\nThe\nprimary procedures we performed to address this critical audit matter included:\n\n \n\n \n●\nObtained an understanding\nof internal processes and controls related to the identification of impairment triggering events and the Company’s impairment\nanalysis.\n\n60\n\n \n\n \n\n \n●\nObtained and reviewed\nthe cash flow forecasts related to the asset group containing the internally developed software and assessed the reasonableness\nof the significant inputs and assumptions used in developing the cash flow forecasts.\n\n \n\n \n●\nVerified the mathematical\naccuracy of the analysis and evaluated the propriety of the Company’s conclusion that no impairment existed as of August\n31, 2025.\n\n \n\n \n●\nEvaluated the adequacy\nof the Company’s disclosures in Note 3 related to the impairment analysis, including the identified triggering events\nand the conclusion that no impairment was recorded.\n\n  \n\n \n\nWe\nhave served as the Company’s auditor since 2024.\n\nMinneapolis,\nMinnesota \n\nBoulay PLLP 542\n\nDecember\n29, 2025\n\n61\n\n \n\n**VISITIQ\nCORP.** \n\n**CONSOLIDATED\nBALANCE SHEETS**\n\n \n\n \n \n \n \n \n \n \n \n \n\n  \nAugust 31, \n\n  \n2025  \n2024 \n\nCurrent assets \n    \n   \n\nCash \n$107,561  \n$386,002 \n\nAccounts receivable, net of allowance for credit losses of approximately $121,000 and $47,000, respectively \n 209,758  \n 210,800 \n\nPrepaid expenses and other current assets \n 95,599  \n 19,186 \n\nNotes receivable \n —  \n 624,950 \n\nTotal current assets \n 412,919  \n 1,240,938 \n\n  \n    \n   \n\nInvestments \n    \n   \n\nEquity method investments \n 25,000  \n 25,000 \n\nEquity investments \n 84,000  \n 84,000 \n\nTotal investments \n 109,000  \n 109,000 \n\n  \n    \n   \n\nIntangible assets \n    \n   \n\nInternally developed software \n 5,235,648  \n 3,948,060 \n\nLess: accumulated amortization \n (3,127,273) \n (1,665,608)\n\nTotal intangible assets \n 2,108,375  \n 2,282,452 \n\nGoodwill \n 349,312  \n 349,312 \n\nTotal assets \n$2,979,606  \n$3,981,702 \n\n  \n    \n   \n\nCurrent liabilities \n    \n   \n\nAccounts payable \n$1,742,424  \n$1,157,164 \n\nAccrued expenses \n 240,872  \n 449,718 \n\nDeferred revenue \n 32,798  \n 109,000 \n\nAccrued interest (See Note 8) \n 63,416  \n 2,223,895 \n\nOther notes payable (See Note 3) \n —  \n 111,894 \n\nConvertible notes payable (See Note 8) \n 2,082,801  \n 19,456,679 \n\nTotal current liabilities \n 4,162,310  \n 23,508,349 \n\n  \n    \n   \n\nMezzanine equity - Series B convertible preferred stock \n 12,800,051  \n 4,271,157 \n\n  \n    \n   \n\nCommitments and contingencies \n —  \n — \n\n  \n    \n   \n\nStockholders’ deficit \n    \n   \n\nCommon stock \n 2,133  \n 5,466 \n\nSeries C convertible preferred stock \n 57,086  \n — \n\nAdditional paid-in capital \n 17,909,202  \n — \n\nAccumulated deficit \n (31,951,176) \n (23,509,336)\n\nTotal deficit attributable to VisitIQ Corp. \n (13,982,755) \n (23,503,870)\n\nNon-controlling interest \n —  \n (293,934)\n\nTotal stockholders’ deficit \n (13,982,755) \n (23,797,804)\n\nTotal liabilities and stockholders’ deficit \n$2,979,606  \n$3,981,702 \n\n \n\nThe\naccompanying notes are an integral part of these consolidated financial statements.\n\n \n\n62\n\n \n\n**VISITIQ\nCORP.**\n\n**CONSOLIDATED\nSTATEMENTS OF OPERATIONS**\n\n \n\nFor the Years Ended August 31, \n2025  \n2024 \n\n  \n   \n  \n\nData revenue \n$2,212,601  \n$2,059,174 \n\nMedia activation revenue \n 423,129  \n 938,797 \n\nTotal revenue \n 2,635,730  \n 2,997,971 \n\n  \n    \n   \n\nData cost of sales \n 1,058,993  \n 2,021,102 \n\nMedia activation cost of sales \n 148,368  \n 978,053 \n\nTotal cost of sales \n 1,207,361  \n 2,999,155 \n\n  \n    \n   \n\nGross profit (loss) \n 1,428,369  \n (1,184)\n\n  \n    \n   \n\nExpenses \n    \n   \n\nLegal and professional fees \n 417,010  \n 1,493,084 \n\nPersonnel expenses \n 3,119,626  \n 3,938,737 \n\nGeneral and administrative costs \n 540,366  \n 670,723 \n\nSales & marketing expenses \n 73,014  \n 93,153 \n\nDepreciation and amortization expense \n 1,461,665  \n 1,304,905 \n\nCredit losses expense \n 187,004  \n 220,293 \n\nStock-based compensation expense - primarily related party (see Notes 12 and 13) \n 2,947,578  \n — \n\nImpairment losses on equity investments \n —  \n 16,000 \n\nLoss on disposition of software assets \n —  \n 377,111 \n\nTotal operating expenses \n 8,746,262  \n 8,114,006 \n\n  \n    \n   \n\nOther income (expense) \n    \n   \n\nInterest expense \n (775,731) \n (2,609,918)\n\nInterest income \n —  \n 18,774 \n\nGain on exchange of convertible notes payable for Series B convertible preferred stock \n 442,638  \n — \n\nLoss recognized upon dissolution of DrivenIQ \n (481,717) \n — \n\nNet loss before allowance for income taxes \n (8,132,703) \n (10,706,334)\n\nIncome tax expense \n 19,890  \n — \n\nNet loss \n$(8,152,593) \n$(10,706,334)\n\nNet loss attributable to the non-controlling interest \n 187,783  \n 2,034,743 \n\nNet loss attributable to VisitIQ Corp. \n (7,964,810) \n (8,671,591)\n\nPreferred stock cumulative dividends \n (979,242) \n (459,900)\n\nNet loss attributable to common stockholders \n$(8,944,051) \n$(9,131,491)\n\nBasic net loss per share \n$(3.16) \n$(1.67)\n\nDiluted net loss per share \n$(3.16) \n$(1.67)\n\n  \n    \n   \n\nWeighted average number of shares used to compute net loss per share \n    \n   \n\nBasic \n 2,827,300  \n 5,466,569 \n\nDiluted \n 2,827,300  \n 5,466,569 \n\n \n\nThe\naccompanying notes are an integral part of these consolidated financial statements.\n\n63\n\n \n\n**VISITIQ\nCORP.**\n\n**CONSOLIDATED\nSTATEMENTS OF STOCKHOLDERS’ DEFICIT**\n\n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n  \n   \n   \nSeries C Convertible  \nAdditional  \n   \nNon  \nTotal \n\n  \nCommon Stock  \nPreferred Stock  \nPaid-in  \nAccumulated  \nControlling  \nStockholders’ \n\n  \nShares  \nPar Amount  \nShares  \nPar Amount  \nCapital  \nDeficit  \nInterest  \nDeficit \n\n  \n   \n   \n   \n   \n   \n   \n   \n  \n\nBalance at August 31, 2023 \n 5,466,569  \n$5,466  \n$—  \n$—  \n$—  \n$(14,127,780) \n$883,457  \n$(13,238,857)\n\n  \n    \n    \n    \n    \n    \n    \n    \n   \n\nIssuance of common stock warrants with convertible notes payable \n    \n —  \n    \n —  \n 147,387  \n —  \n —  \n 147,387 \n\nChange in non-controlling interest due to additional investment in DrivenIQ \n    \n —  \n    \n —  \n (147,387) \n (709,965) \n 857,352  \n — \n\nNet loss for the year ended August 31, 2024 \n    \n —  \n    \n —  \n —  \n (8,671,591) \n (2,034,743) \n (10,706,334)\n\n  \n    \n    \n    \n    \n    \n    \n    \n   \n\nBalance at August 31, 2024 \n 5,466,569  \n$5,466  \n —  \n$—  \n$—  \n$(23,509,336) \n$(293,934) \n$(23,797,804)\n\n  \n    \n    \n    \n    \n    \n    \n    \n   \n\nConversion of common stock to series B convertible preferred stock (See Note 10) \n (3,333,333) \n (3,333) \n —  \n —  \n —  \n (477,030) \n —  \n (480,363)\n\nConversion from Series B convertible preferred stock to Series C convertible preferred stock (see Note 9) \n —  \n —  \n 42,814,596  \n 42,815  \n 14,975,897  \n —  \n —  \n 15,018,711 \n\nStock-based compensation expense - primarily related party (see Notes 12 and 13) \n —  \n —  \n 14,271,665  \n 14,272  \n 2,933,305  \n —  \n —  \n 2,947,577 \n\nElimination of non-controlling interest upon dissolution of DrivenIQ \n —  \n —  \n —  \n —  \n —  \n —  \n 481,717  \n 481,717 \n\nNet loss for the year ended August 31, 2025 \n —  \n —  \n —  \n —  \n —  \n (7,964,810) \n (187,783) \n (8,152,593)\n\n  \n    \n    \n    \n    \n    \n    \n    \n   \n\nBalance at August 31, 2025 \n 2,133,236  \n$2,133  \n 57,086,261  \n$57,086  \n$17,909,202  \n$(31,951,176) \n$—  \n$(13,982,755)\n\n \n\nThe\naccompanying notes are an integral part of these consolidated financial statements. \n\n64\n\n \n\n**VISITIQ\nCORP.**\n\n**CONSOLIDATED\nSTATEMENTS OF CASH FLOWS**\n\n \n\nFor the Years Ended August 31, \n2025  \n2024 \n\nCash flows from operating activities \n    \n   \n\nNet loss \n$(8,152,593) \n$(10,706,334)\n\n  \n    \n   \n\nAdjustments to reconcile net loss to net cash used in operating activities: \n    \n   \n\nIncrease (decrease) in operating assets and liabilities: \n    \n   \n\nDepreciation and amortization expense \n 1,461,665  \n 1,304,905 \n\nAmortization of debt discount \n 314,993  \n 1,317,470 \n\nProvision for credit losses \n 74,303  \n 46,820 \n\nGain on debt exchange for series B convertible preferred stock \n (442,638) \n — \n\nLoss recognized upon dissolution of DrivenIQ \n 481,717  \n — \n\nStock-based compensation expense - primarily related party (see Notes 12 and 13) \n 2,947,578  \n — \n\nLoss on disposal of fixed assets \n —  \n 16,193 \n\nRealized and unrealized loss on equity investments \n —  \n 16,000 \n\nSettlement of lease liability with equity method investment \n —  \n 256,168 \n\nWrite-off of notes receivable \n —  \n 30,571 \n\nLoss on disposition of software asset \n —  \n 377,111 \n\n(Increase) decrease in accounts receivable \n (73,262) \n 309,249 \n\nDecrease in prepaid expenses and other current assets \n 7,625  \n 6,422 \n\nIncrease in accounts payable and accrued liabilities \n 376,415  \n 969,169 \n\nIncrease in accrued interest \n 460,738  \n 1,263,176 \n\nIncrease (decrease) in deferred revenue \n (76,202) \n 109,000 \n\nNet cash used in operating activities \n (2,619,662) \n (4,684,082)\n\n  \n    \n   \n\nCash flows from investing activities \n    \n   \n\nCapitalized software development costs \n (1,287,588) \n (1,073,242)\n\nPayments received on notes receivable \n 624,950  \n — \n\nIssuance of notes receivable \n —  \n (30,571)\n\nNet cash used in investing activities \n (662,638) \n (1,103,813)\n\n  \n    \n   \n\nCash flows from financing activities \n    \n   \n\nPayment on other notes payable \n (111,894) \n — \n\nIssuance of convertible notes payable \n 3,200,000  \n — \n\nPayments on insurance financing arrangement \n (84,247) \n — \n\nIssuance of convertible notes payable with common stock warrants \n —  \n 5,324,453 \n\nNet cash provided by financing activities \n 3,003,859  \n 5,324,453 \n\nNet decrease in cash \n (278,441) \n (463,441)\n\nCash at beginning of the year \n 386,002  \n 849,443 \n\nCash at end of the year \n$107,561  \n$386,002 \n\nNon-cash investing & financing activities: \n    \n   \n\nExchange of convertible notes payable and accrued interest for Series B convertible preferred stock \n$23,510,089  \n$— \n\nExchange of Series B convertible preferred stock for Series C convertible stock \n 15,018,711  \n$— \n\nExchange of common stock for Series B convertible preferred stock \n 480,363  \n$— \n\nInsurance financing agreement \n$101,862  \n$— \n\nEquity method investment used to settle lease liability \n$—  \n$256,168 \n\nIssuance of notes payable to settle accounts payable \n$—  \n$111,894 \n\n \n\nThe\naccompanying notes are an integral part of these consolidated financial statements.\n\n \n\n65\n\n \n\n \n\n**VISITIQ CORP.**\n\n**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**\n\n**August 31, 2025 and 2024**\n\n \n\n**Note 1 – Description of Business**\n\n \n\nVisitIQ Corp., a Nevada corporation, historically\ninvested in early-stage companies that were deemed to have the potential for high growth. VisitIQ Corp.’s main investment\nis in VisitIQ, LLC, a Delaware limited liability company, which provides an identity intelligence and activation solution for audience\ndata that enables marketing campaign personalization, higher sales conversions, and increased ROI of digital marketing initiatives.\nVisitIQ, LLC’s proprietary AI-driven platform includes solutions for audience identification, enrichment, expansion, and\nattribution, and is used by marketing agencies, major brands and enterprises across the globe to curb rising data costs, overcome\nrestrictive data monopolies, and meet demand for personalization of marketing content and messaging across marketing channels.\nVisitIQ LLC’s primary focus going forward will be on continued development of its proprietary audience management platform\nand uncovering new ways to incorporate AI-driven efficiencies into the marketing workflow.\n\n \n\n**Note 2 – Organizational Events**\n\n \n\nIn March 2025, VisitIQ Corp. changed its\nname from Capstone Technologies Group, Inc. (“Capstone”) by filing a certificate of amendment to its articles of incorporation\nwith the State of Nevada.\n\n \n\nIn October 2024, due to an event of default\nunder a secured loan made by Capstone to DrivenIQ Corporation (“DrivenIQ”), Capstone exercised its right under the\nsecurity agreement and held a UCC Article 9 public foreclosure sale of substantially all the assets of DrivenIQ. At the foreclosure\nsale, Capstone, via a newly established special purpose vehicle, VisitIQ, LLC, was the winning bidder for the assets of DrivenIQ\nand assumed approximately $2,570,000 of DrivenIQ liabilities.\n\n \n\nIn June 2025, DrivenIQ was dissolved and\ntherefore, has no assets or liabilities, no employees, and no ongoing operations.\n\n \n\n**Note 3 – Summary of Significant Accounting Policies**\n\n \n\n**Principles of consolidation**\n\nThe accompanying consolidated financial\nstatements include the accounts of VisitIQ, Corp., VisitIQ, LLC, and DrivenIQ (collectively “the Company”). The consolidated\nfinancial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”).\nThe Company’s fiscal year is September 1 to August 31.\n\n \n\nThe consolidated financial statements include\nthe accounts of a variable interest entity (“VIE”), DrivenIQ, in which the Company has determined that it is the primary\nbeneficiary of this VIE under the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards\nCodification (“ASC”) 810 – *Consolidation*. The operations of DrivenIQ were the primary operations of the\nCompany during the year ending August 31, 2024, and through the date of its foreclosure in October 2024, as described in Note 2\nabove. The non-controlling interest in DrivenIQ was 37% as of September 1, 2023 and 33% as of August 31, 2024. During the year\nended August 31, 2025, the Company recorded a loss of approximately $482,000 related to the dissolution of DrivenIQ and the elimination\nof non-controlling interest. All intercompany accounts and transactions have been eliminated in consolidation.\n\n \n\n66\n\n \n\n \n\nThe condensed standalone balance sheet\nof DrivenIQ, inclusive of inter-company balances, as of August 31, 2024 is presented below.\n\n \n\nSchedule of condensed standalone\nbalance of inter-company balances \nAugust 31, \n\n  \n2024 \n\n  \n  \n\nCurrent assets \n$593,322 \n\nOther assets \n 2,631,764 \n\nTotal assets \n$3,225,086 \n\n  \n   \n\nCurrent liabilities \n$4,138,675 \n\nStockholders’ equity (deficit) \n (913,589)\n\nTotal liabilities and stockholders’ deficit \n$3,225,086 \n\n \n\nAdditionally, DrivenIQ had total revenues\nof approximately $163,000 and $2,998,000 for the years ended August 31, 2025 and 2024, respectively, and incurred net losses of\napproximately $563,000 and $5,958,000 for the years ended August 31, 2025 and 2024, respectively.\n\n \n\n**Use of estimates**\n\nThe preparation of consolidated financial\nstatements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts of assets\nand liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported\namounts of revenues and expenses during the reporting period. Significant items subject to estimates and assumptions include, allowance\nfor credit losses, valuation of equity investments, valuation of warrants issued with convertible notes, Series B Convertible Preferred\nStock, Series C Convertible Preferred Stock, stock-based compensation, valuation allowance on deferred tax assets, and estimates\nand forecasts utilized in the Company’s intangible asset impairment analysis and going concern analysis (see Note 4). Estimates\nare based on management judgment and the best available information, as such actual results could differ from those estimates.\n\n \n\n**Net income (loss) per share attributable to common stockholders**\n\nBasic net income (loss) per share attributable\nto common stockholders is calculated by dividing the net loss attributable to common stockholders by the weighted-average number\nof shares of common stock outstanding during the period, without consideration of potentially dilutive securities. Diluted net\nincome (loss) per share available to common stockholders is calculated using the weighted average number of common shares outstanding\nplus the number of dilutive potential common shares outstanding for the applicable period. The dilutive common shares for warrants\nwas determined using the treasury stock method. As described in Note 8, all warrants were exchanged for Series B Convertible Preferred\nStock in November 2024. The dilutive effect for convertible notes payable is determined using the if-converted method. The Series\nB Convertible Preferred Stock and the Series C Convertible Preferred Stock are considered participating securities pursuant to\nthe two-class method. For periods in which the Company has reported net losses, diluted net loss per common share is the same as\nbasic net loss per common share, since dilutive common shares are not assumed to have been issued if their effect is anti-dilutive.\n\n \n\nThe following potential common share equivalents\nwere excluded from the calculation of diluted net loss per share available to common stockholders as of August 31, 2025 and 2024\nbecause their effect would have been anti-dilutive:\n\n \n\nSchedule of diluted net loss per share available to common stockholders \nAugust 31, 2025  \nAugust 31, 2024 \n\n  \n   \n  \n\nWarrants \n —  \n 876,974 \n\nConvertible notes payable \n 8,255,932  \n 19.722,815 \n\nTotal \n 8,255,932  \n 20,599,789 \n\n \n\nThe common share equivalents presented in the above table excludes\napproximately 8,552,000 warrants where the strike price of the warrants was above the per share fair value of the common stock\nduring the year ended August 31, 2024. The basic and diluted weighted average number of common shares outstanding for each of the\nyears ended August 31, 2025 and 2024 was 2,827,300 and 5,466,569, respectively.\n\n \n\n67\n\n \n\n \n\n**Revenue recognition** \n\nRevenues arise primarily from the Company’s\nproprietary AI-driven technology platform, which is named VisitIQ, via subscription fees, volume-based utilization fees, and fees\nfor media activation services designed to maximize the customers’ use of its proprietary technology platform. Revenues are\nrecognized when control of these services is transferred to the customers, in an amount that reflects the consideration the Company\nexpects to be entitled to in exchange for those services.\n\n \n\nThe Company determines revenue recognition\nthrough the following steps:\n\n \n\n \n●\nIdentification of the contract, or contracts, with a customer.\n\n \n●\nIdentification of the performance obligations in the contract.\n\n \n●\nDetermination of the transaction price.\n\n \n●\nAllocation of the transaction price to the performance obligations in the contract.\n\n \n●\nRecognition of revenue when performance obligations have been satisfied.\n\n \n\nAt contract inception, the Company assesses\nthe services promised in the contracts with customers and identifies a performance obligation for each promise to transfer to the\ncustomer a service (or bundle of services) that is distinct. To identify the performance obligations, the Company considers all\nthe services promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices.\n\n \n\nThe transaction price is the amount of\nconsideration that the Company is entitled to in exchange for transferring services to a customer. Further, for the contracts having\nmultiple performance obligations, the total transaction price for a contract is allocated amongst the various performance obligations\nbased on their relative stand-alone selling prices. The relative standalone selling price (“SSP”) is determined based\non the terms of the contract and requires judgment. The transaction price for a contract excludes any amounts collected on behalf\nof third parties, in cases where the Company acts as an agent. Payment terms are typically 30 days. As such, the Company does not\nhave any significant financing components.\n\n \n\nWhen the Company enters into multiple contracts\nwith a single counterparty, the Company will combine contracts and account for them as a single contract when one or more of the\nfollowing criteria are met: (i) the contracts are negotiated with a single commercial objective, (ii) consideration to be paid\nin one contract depends on the terms of the other contract, and (iii) services promised are a single performance obligation.\n\n \n\nData revenue relates to fees paid for use\nof the Company’s proprietary platform and includes subscription-based and usage-based service offerings. Subscriptions are\nrecognized as revenue ratably during the period that the customer has access to use the Company’s platform. Fees charged\nto customers based on usage of the Company’s platform are based on per-record charges and are recognized as revenue over\ntime based on actual usage in the period. The Company’s standard contract periods are for one year and are non-cancellable.\n\n \n\nMedia activation revenue relates to the\nfees charged for the Company’s management of media campaigns for customers, and the activation of the data to the related\nmedia campaign and are recognized at the point of delivery of the related performance obligation. The Company’s standard\ncontract periods are for one year and are non-cancellable.\n\n \n\nWhen customers pay fees in advance of the specified period of\nuse of the platform, those fees paid in advance are recorded as deferred revenue in the Company’s consolidated balance sheets\nand recognized as revenue when the performance obligation is satisfied. The opening balance of deferred revenue was $0 at September\n1, 2023. During the year ended August 31, 2024, the Company received fees paid in advance of approximately $109,000 and recognized\nno revenue related to these fees. During the year ended August 31, 2025, the Company recognized as revenue the full balance of\ndeferred revenue of $109,000 as of August 31, 2024. Fees paid in advance of revenue recognition are approximately $33,000 as of\nAugust 31, 2025.\n\n \n\nSales and other taxes collected from customers\nthat are remitted to governmental authorities are excluded from revenue.\n\n \n\n68\n\n \n\n \n\n**Cash**\n\nThe Company maintains its cash accounts\nat financial institutions without any restrictions. At times throughout the year, the Company’s cash balance may exceed amounts\ninsured by the Federal Deposit Insurance Corporation. The Company has not experienced any losses in such accounts and believes\nit is not exposed to any significant risk.\n\n \n\n**Accounts receivable**\n\nCredit terms are extended to customers\nin the normal course of business and the Company performs ongoing credit evaluations of its customers’ financial condition\nand generally requires no collateral. The Company maintains an allowance for expected credit losses on accounts receivable, which\nis recorded as an offset to accounts receivable. Changes in the allowance for credit losses are included as a component of operating\nexpenses in the consolidated statements of operations. The Company assesses credit losses on a collective basis where similar risk\ncharacteristics exist. Risk characteristics considered by the Company include customer type and size, credit risk, and the age\nof outstanding receivable. Receivables that do not share risk characteristics with other receivables, or where known collectability\nissues exist, are evaluated on an individual basis. In determining the allowance for credit losses, the Company considers historical\nloss rates, adjusted for current market conditions. The Company has adopted the practical expedient under Accounting Standards\nUpdate (“ASU”) No. 2025-05 to assume that the current conditions as of the balance sheet date will remain unchanged\nfor the remaining life of the asset when developing a reasonable and supportable forecast as part of estimating expected credit\nlosses on these assets. Accounts considered to be uncollectible are written off against the allowance for credit losses. Credit\nlosses were approximately $187,000 and $190,000 for the years ended August 31, 2025, and 2024, respectively. The allowance for\ncredit losses on accounts receivable was approximately $121,000 and $47,000 as of August 31, 2025 and 2024, respectively. The opening\nbalance of accounts receivable and the allowance for credit losses on accounts receivables was $566,869 and $0 at September 1,\n2023, respectively.\n\n \n\n**Prepaid expenses and other current\nassets**\n\nPrepaid expenses are largely comprised\nof prepaid insurance policies and subscriptions for software licenses.\n\n \n\n**Notes receivable**\n\nNotes receivable are reviewed periodically\nfor impairment based on the note holder’s financial situation, ability to pay amounts timely, and the likelihood of future\ncollections. During the years ended August 31, 2025 and 2024, the Company recorded credit losses on these notes receivable of approximately\n$0 and $31,000, respectively, and the note receivable with the $31,000 credit loss was written off during the year ended August\n31, 2024.\n\n \n\n**Equity investments and equity method\ninvestments**\n\nThe Company has elected the measurement\nalternative for non-marketable equity securities under ASC Topic 321 – *Investments – Equity Securities*. In accordance\nwith ASC 321, these investments are initially measured at cost and reviewed at year end for impairment and fair value changes.\nDuring the year ended August 31, 2024 the Company recorded an unrealized loss on its equity investment in Issuance Inc. of approximately\n$16,000.\n\n \n\nThe Company’s equity method investments\naccounted for under ASC Topic 323 – *Investments – Equity Method and Joint Ventures* consist of amounts invested\nin a fund and is carried at its original cost.\n\n \n\n**Internally developed software**\n\nThe Company capitalizes certain costs incurred\nduring the development of internal-use software in accordance with ASU 350-40. Costs are capitalized once the preliminary development\nstage is complete and it is probable that the project will be completed and will be used to perform the function intended. Capitalized\ncosts are amortized on a straight-line basis over their estimated useful life, which the Company has determined to be three years.\nThese costs are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount may not\nbe recoverable. During the years ended August 31, 2025 and 2024, the Company identified impairment triggering events due to recorded\nnet losses and negative cash flows from operations. In response, the Company performed impairment tests in each year comparing\nthe carrying amount of the asset group containing the internally developed software intangible asset to estimated undiscounted\nfuture cash flows. Based on these analyses, the Company determined that the carrying amount of the internally developed software\nwas recoverable and recorded no impairments of internally developed software for the years ended August 31, 2025 and 2024.\n\n \n\n69\n\n \n\n \n\n**Goodwill**\n\nGoodwill represents the excess of the purchase\nprice in a business combination over the fair value of net assets acquired. The Company’s recorded Goodwill relates to the\noriginal VIE consolidation of DrivenIQ in October 2021. The Company’s recorded goodwill was not impacted by the foreclosure\nof DrivenIQ and the assumption of the assets and certain liabilities of DrivenIQ by VisitIQ, LLC. Goodwill is not amortized but\nrather tested for impairment at least annually or more often if and when circumstances indicate that goodwill may not be recoverable.\nThe Company performs an annual goodwill impairment test each year by assessing qualitative factors to determine whether it is necessary\nto perform a more detailed quantitative impairment test for goodwill. Qualitative factors that are considered as part of this assessment\ninclude a change in the Company’s equity valuation and its implied impact on the fair value of the Company’s single\nreporting unit, a change in its weighted average cost of capital, industry and market conditions, macroeconomic conditions, trends\nin product costs and financial performance of the businesses. For the quantitative test, the Company generally uses a discounted\ncash flow method to estimate fair value.\n\n \n\nFor the years ended August 31, 2025 and\n2024, the Company concluded, based on its annual goodwill impairment tests, that there was no impairment loss because the fair\nvalue of the Company’s single reporting unit exceeded the negative carrying value of the Company as of each of the dates.\n\n \n\n**Operating leases**\n\nIn accordance with ASC Topic 842 –\n*Leases*, the Company determines if an arrangement is, or contains, a lease at inception, and whether lease and non-lease\ncomponents are combined or not. A contract is or contains a lease when; (1) the contract contains an identified asset and (2) the\ncustomer obtains substantially all of the economic benefits from the use of that underlying asset and directs how and for what\npurpose the asset is used during the term of the contract in exchange for consideration.\n\n \n\nRight-of-use assets and lease liabilities\nare initially recorded based on the present value of lease payments over the lease term, which includes the minimum unconditional\nterm of the lease, and may include options to extend or terminate the lease when it is reasonably certain at the commencement date\nthat such options will be exercised. The Company uses its incremental borrowing rate at the commencement date of the lease in determining\nthe present value of lease payments. Right-of-use assets also include any initial direct costs and any lease payments made prior\nto the lease commencement date and are reduced by any lease incentives received. Lease expense is recognized on a straight-line\nbasis over the term of the lease. The Company has elected to not apply the requirements of Topic 842 for short-term leases. Short-term\nleases are defined as leases that at the commencement date have lease terms of twelve months or less.\n\n \n\nThe Company leased office space from a\ngroup, Hedgemore Investors, LLC (“Hedgemore”), a group in which the Company invested until August 2024. The lease commenced\nin November 2022 and had an initial term of 10 years through November 2032 and was subsequently amended in January 2024 to extend\nthe lease through November 2033. Average monthly lease payments were approximately $9,000 for the year ended August 31, 2024. The\nCompany signed a modification agreement with Hedgemore in August 2024 which included an early termination on September 30, 2024\nand vacated the premises prior to August 31, 2024. In consideration for the early termination of the lease arrangement, the Company\nassigned the entirety of its membership interest in Hedgemore to one of the other existing members of Hedgemore. The carrying value\nof the disposed investment in Hedgemore of approximately $256,000 was recorded as a lease termination payment and is a component\nof operating lease expense for the year ended August 31, 2024. Operating lease expenses are included in general and administrative\nexpenses in the consolidated statements of operations. Due to the Company’s election to not apply the requirements of ASC\n842 for short-term leases, the Company has no operating leases under Topic 842 as of August 31, 2025 or 2024.\n\n \n\n**Other notes payable**\n\nOther notes payable outstanding as of August\n31, 2024 represents amounts owed to vendors that were transferred to a note payable with extended terms to allow the Company to\npay these amounts back over an extended period of time in exchange for agreeing to pay a market interest rate.\n\n \n\n**Warrants**\n\nWhen warrants are issued, the Company applies\nthe guidance in ASC Topic 815, *Derivative and Hedging* to determine if the warrants should be classified as equity instruments\nor as derivative instruments. Generally, warrants are indexed to the Company’s own stock and would therefore be classified\nas equity instruments and are not classified as derivative instruments under this guidance.\n\n \n\n70\n\n \n\n \n\n**Fair value of financial instruments**\n\nThe Company’s accounting for fair\nvalue measurements of assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements\non a recurring or nonrecurring basis adheres to the FASB fair value hierarchy that prioritizes the inputs to valuation techniques\nused to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical\nassets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs\n(Level 3 measurements). The three levels of the fair value hierarchy are as follows:\n\n \n\n \n●\nLevel 1 is defined as observable inputs such as quoted prices in active markets for identical assets;\n\n \n●\nLevel 2 is defined as observable inputs other than Level 1 prices such as quoted prices for similar assets; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and\n\n \n●\nLevel 3 is defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.\n\n \n\nThe level in the fair value hierarchy within\nwhich a fair measurement in its entirety falls is based on the lowest level input that is significant to the fair value measurement\nin its entirety.\n\n \n\nThe carrying amounts of cash, accounts\nreceivable, accounts payable, accrued expenses, and other financial working capital items approximate their fair value at August\n31, 2025 and 2024, due to the short maturity nature of these items.\n\n \n\n**Stock Compensation**\n\nThe Company compensates certain key employees,\ncontractors, Directors and Board advisors through incentive stock options (the “Option Awards”). Grants of Option Awards\nare measured at the grant-date fair value of the award. The Company estimates the grant-date fair value using the Black-Scholes-Merton\noption-pricing model. Option Awards have only time-based vesting criteria. The Company recognizes compensation expense for these\nOption Awards in the consolidated statements of operations over the vesting period. See Note 13 for further discussion.\n\n \n\n**Income taxes**\n\nThe Company accounts for income taxes in\naccordance with ASC 740, *Income Taxes*, which requires an asset and liability approach for the financial accounting and reporting\nof income taxes. Under this method, deferred tax assets and liabilities are determined based on temporary differences between the\nfinancial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences\nare expected to reverse. The effect on deferred tax assets and liabilities of a change in tax laws is recognized in the consolidated\nstatements of operations in the period that includes the enactment date. The Company recognizes the effect of income tax positions\nonly if those positions are more likely than not to be sustained. Recognized income tax positions are measured at the largest amount\nthat is greater than 50% likely to be realized. Changes in recognition or measurement are reflected in the period in which the\nchange in judgment occurs. A valuation allowance is established when the Company determines that it is more likely than not that\nsome portion or all of the deferred tax assets will not be realized. The Company has concluded that deferred tax assets are not\nrealizable on a more-likely-than-not basis and that a full valuation allowance is required as of August 31, 2025 and 2024.\n\n \n\n**Customer concentrations**\n\nDuring the year ended August 31, 2025,\nthree customers accounted for 29%, 15% and 11% of consolidated revenue. As of August 31, 2025, these three customers accounted\nfor 61% of consolidated accounts receivable, net.\n\n \n\nDuring the year ended August 31, 2024,\none customer accounted for 22% of consolidated revenue. As of August 31, 2024, three customers, inclusive of the customer with\nthe revenue concentration, accounted for 54% of consolidated accounts receivable, net.\n\n \n\n71\n\n \n\n \n\n**Reportable segments**\n\nThe Company’s operations consist\nof fees charged to customers for the use its proprietary technology platform and activation services designed to maximize the customers\nuse of the technology platform. The Company’s Chief Operating Decision Maker (“CODM”) is the Company’s\nChief Executive Officer. Because the Company’s operations have similar economic characteristics, the CODM evaluates operating\nperformance on an overall basis, which is consistent in all material respects with the amounts reported on the consolidated statements\nof operations and consolidated balance sheet. Therefore, the Company’s operations are classified as one reportable segment.\n\n \n\n**Subsequent events**\n\nThe Company has evaluated subsequent events\nfrom the consolidated balance sheet date through December 29, 2025, the date which the consolidated financial statements were available\nto be issued.\n\n \n\n**Recently adopted accounting pronouncements**\n\nIn November 2023, the FASB issued ASU 2023-07:\n*Improvements to Reportable Segment Disclosures*. This ASU, which amends Topic 280: *Segment Reporting*, improves disclosure\nrequirements for reportable segments and enhances disclosures for companies with single reportable segments. This standard was\neffective for the Company for the fiscal year ending August 31, 2025. The implementation of this pronouncement did not impact the\nCompany’s conclusion that the Company has a single reportable segment.\n\n \n\nIn July 2025, the FASB issued ASU No. 2025-05,\n*Financial Instruments—Credit Losses (Topic 326)—Measurement of Credit Losses for Accounts Receivable and Contract\nAssets*. This ASU aims to reduce the cost and complexity of estimating credit losses while maintaining decision-useful information\nfor financial statement users. The guidance allows all entities to elect a practical expedient related to developing forecasts\nas part of estimating expected credit losses that assumes the current conditions as of the balance sheet date do not change for\nthe remaining life of the asset. ASU 2025-05 is effective for fiscal years beginning after December 15, 2025, with early adoption\npermitted. The Company adopted the standard as of September 1, 2024, and the adoption did not have a material impact on the Company’s\nconsolidated financial statements.\n\n \n\n**Recently issued accounting pronouncements**\n\nIn December 2023, the FASB issued ASU No:\n*2023-09, Improvements to Income Tax Disclosures (Topic 740*). This ASU requires disaggregated information about a reporting\nentity’s effective tax rate reconciliation as well as additional information on income taxes paid. This standard is effective\non a prospective basis for annual periods beginning after December 15, 2024. This ASU will result in the required additional disclosures\nbeing included in the Company’s consolidated financial statements, once adopted. The Company will adopt this standard for\nthe year ending August 31, 2026 and is currently evaluating the impact adoption of the standard will have on its consolidated financial\nstatements, including any additional required disclosures.\n\n \n\nIn September 2025, the FASB issued ASU\nNo. 2025-06, *Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Targeted Improvements to\nthe Accounting for Internal-Use Software (ASU 2025-06).*This ASU, which modernizes the accounting for internal-use software,\nremoves all references to software development stages and requires capitalization of software costs when management has committed\nto the software project, and it is probable the software will be completed and perform to its intended use. In evaluating whether\nit is probable the project will be completed; management is required to consider whether there is significant uncertainty associated\nwith the development activities of the software. This guidance is effective for annual and interim periods beginning after December\n15, 2027. The guidance may be applied on a prospective basis, a modified basis for in-process projects, or a retrospective basis.\nThe Company is currently evaluating the timing, method of its adoption, and effect the adoption of this standard will have on its\nconsolidated financial statements.\n\n \n\n**Note 4 – Liquidity**\n\n \n\nThe accompanying consolidated financial\nstatements have been prepared assuming that the Company will continue as a going concern which contemplates continuation of operations,\nrealization of assets and payment of liabilities in the ordinary course of business. As shown in the accompanying consolidated\nfinancial statements, the Company has incurred a net loss of approximately $8,153,000 and negative cash flows from operations of\napproximately $2,620,000 for the year ended August 31, 2025. In addition, the Company has negative working capital of approximately\n$3,749,000 as of August 31, 2025. The Company’s ability to continue as a going concern is dependent on meeting various obligations\nas they become due with cash generated from operations and/or through raising capital and ultimately achieving sustained profitable\noperations. In November 2025, the Company signed a convertible note payable agreement with its majority stockholder in the total\namount of approximately $1,950,000. Approximately $750,000 has been advanced to the Company under this convertible note payable\nagreement as of the date of the issuance of these consolidated financial statements.\n\n \n\n72\n\n \n\n \n\nDuring its fiscal year ending August 31,\n2026, management is operating to a plan that includes an increase in bookings, revenue and gross margin sufficient to allow the\nCompany to fund operations. Management believes the Company will be able to continue to operate in its present form as a result\nof the additional investments received from investors and the increased gross profit and cash flows from operations. However, no\nassurance can be given that management’s actions will result in sustained profitable operations. If management is not successful\nwith its plan, anticipated hires can be delayed and other planned expenses can be removed from its plan to a level necessary to\nmaintain positive cash flow. If management is not successful with its plans, there is a possibility that the Company may need to\nsecure additional funding from its majority stockholder or other investors. The Company’s majority stockholder has represented\nin writing that it has the intent and ability to provide additional funding if necessary to allow the Company to continue normal\nbusiness operations for at least twelve months from the date of issuance of these consolidated financial statements.\n\n \n\n**Note 5 – Notes Receivable**\n\n \n\nIn November 2022, the Company advanced\nfunds under a note receivable to another entity of $624,950. The balance outstanding was $624,950 as of August 31, 2024 and the\nCompany received payment in full of the outstanding balance due from this entity during its year ended August 31, 2025. Additional\nnotes receivable extended to other entities were written off during the year ended August 31, 2024 due to the Company deeming these\namounts to be uncollectible (see Note 3).\n\n \n\n**Note 6 – Equity Investments\nand Equity Method Investments**\n\n \n\nInvestments consist of the following:\n\n \n\nSchedule of Equity investments and equity method investments \nAugust 31, 2025  \nAugust 31, 2024 \n\nEquity investments \n    \n   \n\nIssuance Inc. preferred stock (1) \n$84,000  \n$84,000 \n\n  \n    \n   \n\nEquity method investments \n    \n   \n\nBranded Hospitality Venture Fund 1 (2) \n$25,000  \n$25,000 \n\n \n\n \n1)\nOn November 1, 2022, the Company purchased preferred shares of Issuance Inc. for $100,000. During the year ended August 31, 2024, the Company determined there was a partial impairment of this investment and reduced the recorded amount to $84,000. The fair value of this investment was determined using unobservable inputs (Level 3) that was based on the underlying investment’s operating results and status of funding.\n\n \n2)\nBranded Hospitality Venture Fund 1 is a managed fund that specializes in investments related to the hospitality industry. The fund is not publicly traded, and the investment is shown at the Company’s original cost.\n\n \n\n**Note 7 – Internally Developed Software**\n\n \n\nThe Company’s internally developed\nsoftware costs relate to costs paid to an external party to develop the Company’s technology platform, and consisted of the\nfollowing:\n\n \n\nSchedule of internally developed software costs \nAugust 31, 2025  \nAugust 31, 2024 \n\nSoftware costs \n$5,125,500  \n$3,822,213 \n\nWork in progress \n 110,148  \n 125,847 \n\nCapitalized software costs \n 5,235,648  \n 3,948,060 \n\nLess: Accumulated amortization \n (3,127,273) \n (1,665,608)\n\nNet capitalized software costs \n$2,108,375  \n$2,282,452 \n\n \n\n73\n\n \n\n \n\nAmortization expense related to capitalized\nsoftware costs was approximately $1,462,000 and $1,299,000 for the years ended August 31, 2025 and 2024, respectively. The Company\namortizes capitalized software costs using the straight-line method over the estimated useful life of the software, which the Company\nhas determined is three years.\n\n \n\nDuring the years ended August 31, 2025\nand 2024, respectively, the Company capitalized $1,288,000 and $1,073,000 of software development costs, primarily consisting of\ncosts from a third-party technology development partner.\n\n \n\nDuring the year ended August 31, 2024,\nthe Company disposed of software that it was no longer using, resulting in a reduction in gross capitalized software costs of approximately\n$880,000, a reduction in accumulated amortization of approximately $503,000, and the recognition of a loss of approximately $377,000.\n\n \n\n**Note 8 – Convertible Notes Payable**\n\n \n\nSchedule of Convertible notes payable \nAugust 31, 2025  \nAugust 31, 2024 \n\n  \n   \n  \n\n2021 8.0% Notes (1) \n$—  \n$1,550,000 \n\n2022 and 2023 7.5% Notes (2) \n —  \n 12,308,750 \n\n2024 12.0% Notes (2) \n —  \n 2,150,000 \n\n2024 7.5% Notes (3) \n —  \n 3,714,065 \n\n2025 12.0% Notes (4) \n 2,222,222  \n — \n\n  \n 2,222,222  \n 19,722,815 \n\nLess: discount on convertible notes (5) \n (139,421) \n (266,136)\n\nConvertible notes payable \n$2,082,801  \n$19,456,679 \n\n \n\n \n1)\nThese notes were convertible into Common Stock at $.225 per $1.00 of converted notes per the note agreement. However, these notes were exchanged for 6,888,889 shares of Series B Convertible Preferred Stock during the year ended August 31, 2025.\n\n \n2)\nThese notes were convertible into Common Stock at $1.00 per $1.00 of converted notes per the note agreement. However, these notes, along with their associated warrants, were exchanged for 22,434,000 shares of Series B Convertible Preferred Stock during the year ended August 31, 2025.\n\n \n3)\nThese notes were convertible into Common Stock at approximately $.16 per share per the note agreement. However, these notes were exchanged for 24,032,533 shares of Series B Convertible Preferred Stock during the year ended August 31, 2025.\n\n \n4)\nThese notes are convertible into Series C Convertible Preferred Stock at $.75 per $1.00 of converted notes. See further discussion in Note 9.\n\n \n5)\nThe Company records a debt discount to represent the difference between the face value of the notes and the estimated fair value at the issuance date and amortizes the discount over the term of the related debt agreement. For notes that included warrants, the relative fair value of the warrants was included within the total original issue discount assigned to the notes and that total discount was amortized over the term of the note. The 2025 Note outstanding at August 31, 2025 does not include warrants. The unamortized discount balance as of August 31, 2025 and 2024 is approximately $139,000 and $266,000, respectively.\n\n \n\nAccrued interest as of August 31, 2025\nand 2024 was approximately $63,000 and $2,224,000, respectively.\n\n \n\nAs of August 31, 2025, the carrying value\nof the outstanding convertible notes payable approximates fair value.\n\n \n\nAs of August, 31, 2024, the fair value\nof the outstanding convertible notes payable was approximately $4,221,000, which approximates the fair market value of the Series\nB Convertible Preferred Stock that it was exchanged for in November of 2024 (see further discussion of exchange below).\n\n \n\n74\n\n \n\n \n\nIn October 2024, the Company entered into\na note purchase agreement with Arena Investors LP (“Arena”), pursuant to which the Company issued to Arena a convertible\npromissory note (the “October Note”) with a principal amount of $1,333,333. The October Note was issued with an original\nissue discount and resulted in gross proceeds to the Company of $1,200,000. In April 2025, the October Note, and the related accrued\ninterest, was converted into 3,903,065 shares of Series B Convertible Preferred Stock.\n\n \n\nIn November 2024, all convertible notes\nand warrants that were outstanding at that time were exchanged into Series B Convertible Preferred Stock. The exchange into Series\nB Convertible Preferred Stock was outside of the conversion specified within the underlying convertible note agreements, which\nallowed for a conversion into common shares. As such, the exchange of convertible notes payable for Series B Convertible Preferred\nStock has been accounted for under debt extinguishment rules. As part of the exchange, accrued interest of approximately $2,554,000\non the convertible notes as of the date of exchange was forgiven by the holders of the convertible notes.\n\n \n\n$20,572,398 of the exchanged convertible\nnotes payable, which was exchanged for 48,566,344 shares of Series B Convertible Preferred Stock, was held by significant stockholders\nof the Company, on an as converted basis. For this debt, under GAAP rules for exchanges with related parties, the difference between\nthe net carrying amount of the debt, inclusive of accrued interest and unamortized debt discount, and the fair value of the Series\nB Convertible Preferred Stock at the time of the exchange is accounted for within Preferred Stock – Mezzanine Equity in the\nconsolidated balance sheets. $483,750 of the exchanged debt was held by a non-significant stockholder of the Company. For this\ndebt, the difference between the net carrying amount of the debt, inclusive of accrued interest and unamortized debt discount,\nand the fair value of the Series B Convertible Preferred Stock at the time of the exchange is accounted for as Gain on debt forgiveness\nof $442,638 within the consolidated statements of operations.\n\n \n\nIn April 2025, the Company entered into\nnote purchase agreements with Arena, pursuant to which the Company issued to Arena convertible promissory notes (the “April\nNotes”) with a principal amount of $2,222,222. The April Notes were issued with an original issue discount and resulted in\ngross proceeds to the Company of $2,000,000. The April Notes are outstanding as of August 31, 2025 and are recorded net of original\nissue discount in Convertible notes payable on the consolidated balance sheet.\n\n \n\n**Note 9 – Preferred Stock**\n\n \n\nAs of August 31, 2024, the Company was\nauthorized to issue 10,750,000 shares of Series B Convertible Preferred Stock. There were 5,375,000 shares issued and outstanding\nas of August 31, 2024. During the year ending August 31, 2025, the Company increased the number of preferred shares it may issue,\nand as of August 31, 2025, the Company is authorized to issue 500,000,000 shares of preferred stock. 75,000,000 shares are designated\nfor issuance as Series B Convertible Preferred Stock and 150,000,000 shares are designated for issuance as Series C Convertible\nPreferred Stock. The remaining 275,000,000 shares of preferred stock have not been designated for issuance as of August 31, 2025.\n\n \n\n**Series B Convertible Preferred Stock\n– Mezzanine Equity**\n\n \n\nEach share of Series B Convertible Preferred\nStock has a stated value of $1.00 and is entitled to cumulative dividends of 7.5% per annum out of available capital. No dividends\nhave been declared or paid to date. At the option of holder, the Series B Convertible Preferred Stock is convertible into common\nstock at a rate of one share for each share of Series B Convertible Preferred Stock unit converted. Conversion is subject to a\nbeneficial ownership limitation of 9.99%. The original term of the Series B Convertible Preferred Stock was two years from the\noriginal issue date in May 2022. During the year ended August 31, 2025, the Company amended the outstanding Series B Convertible\nPreferred Stock to have a four-year term from the original issue date of May 2022. If the Series B Convertible Preferred Stock\nis not converted prior to this term, the holder may redeem the shares for value based on the amount the holder would be entitled\nto upon a liquidation, as described below. No Series B Convertible Preferred Stock was redeemed during the years ended August 31,\n2025 or 2024. There are no voting rights included in the Series B Convertible Preferred Stock. Cumulative and unpaid dividends\nof this Series B Convertible Preferred Stock were approximately $603,000 and $992,000 as of August 31, 2025 and 2024, respectively.\nAs of August 31, 2025 and 2024, there was 25,839,626 and 5,375,000 shares of Series B Convertible Preferred Stock outstanding,\nrespectively.\n\n \n\n75\n\n \n\n \n\nThe Series B Convertible Preferred Stock\ncontains a redemption feature which is in the control of the holder of the Series B Convertible Preferred Stock. Due to this redemption\nfeature, the Series B Convertible Preferred Stock is classified as mezzanine equity. The redemption price as of August 31, 2025\nand 2024 is below the Series B Convertible Preferred Stock’s carrying value.\n\n \n\nIn the event of a voluntary or involuntary\nliquidation, dissolution, or winding up of the Company, holders of Series B Convertible Preferred Stock are entitled to receive\nout of the assets, whether capital or surplus, a liquidation preference of 150% of the stated value per share ($1.00), plus then\nbe entitled to receive the same amount that a holder of common stock would receive if the preferred stock were fully converted,\nprior to any distribution to holders of common stock. The aggregate liquidation preference for Series B Convertible Preferred Stock\nas of August 31, 2025, was approximately $38,760,000.\n\n \n\n**Series C Convertible Preferred Stock**\n\n \n\nIn April 2025, the Company created an additional\nclass of preferred stock called Series C Convertible Preferred Stock. Series C Convertible Preferred Stock contains the same features\nas Series B Convertible Preferred Stock; except its conversion price is 75% of the Series B Convertible Preferred Stock conversion\nprice and the Series C Convertible Preferred Stock does not contain a redemption feature. As such, Series C Convertible Preferred\nStock is classified within Stockholders’ deficit in the consolidated balance sheets. Cumulative and unpaid dividends of this\nSeries C Convertible Preferred Stock were approximately $376,000 as of August 31, 2025. As further described in Note 12, in April\n2025, the Company’s largest investor entered into a consulting agreement with the Company. As payment under this consulting\nagreement, the investor was allowed to convert 42,814,596 shares of their Series B Convertible Preferred Stock into 57,086,261\nshares of Series C Convertible Preferred Stock. As of August 31, 2025, there were 57,086,261 shares of Series C Convertible Preferred\nStock outstanding.\n\n \n\nIn the event of a voluntary or involuntary\nliquidation, dissolution, or winding up of the Company, holders of Series C Convertible Preferred Stock are entitled to a liquidation\npreference of 150% of the stated value per share ($1.00), plus then be entitled to receive the same amount that a holder of common\nstock would receive if the preferred stock were fully converted, prior to any distribution to holders of Series B Convertible Preferred\nStock or holders of common stock. The aggregate liquidation preference for Series C Convertible Preferred Stock as of August 31,\n2025, was approximately $85,630,000.\n\n \n\n**Note 10 – Stockholders’\nDeficit**\n\n \n\nCommon Stock\n\n \n\nThe Company is authorized to issue 500,000,000\nshares of common stock with a par value of $0.001 per share. As of August 31, 2025 and 2024, there were 2,133,236 and 5,466,569\nshares of common stock outstanding. The decrease in common stock outstanding during the year ended August 31, 2025 is due to an\nexchange of common stock held by a significant stockholder (a related party) to Series B Convertible Preferred Stock in November\n2024. The exchange resulted in a reduction to Common stock (at par) of approximately $3,000, additional Accumulated deficit of\napproximately $477,000 and an increase in Mezzanine equity – Series B Convertible Preferred Stock of approximately $480,000.\n\n \n\n76\n\n \n\n \n\nWarrants\n\n \n\nAs of August 31, 2024, there were 10,702,000\nwarrants outstanding. These warrants were classified as equity in consolidated financial statements as of August 31, 2024, and\nconsisted of the following:\n\n \n\nSchedule of warrants outstanding\n \n \n \n \n \n \n \n \n \n \n\nDate Issued \nNumber of\nWarrants  \nExercise\nPrice  \nExpiration Date\n\n  \n   \n   \n \n\n03/01/2022 \n 1,075,000  \n$.225  \n03/01/2027\n\n03/03/2022 \n 1,075,000  \n$.225  \n03/03/2027\n\n04/04/2022 \n 134,375  \n$1.00  \n04/04/2027\n\n05/27/2022 \n 5,375,000  \n$1.00  \n05/27/2027\n\n06/29/2023 \n 268,750  \n$1.00  \n06/29/2028\n\n07/03/2023 \n 268,750  \n$1.00  \n07/03/2028\n\n08/10/2023 \n 268,750  \n$1.00  \n08/10/2028\n\n08/15/2023 \n 268,750  \n$1.00  \n08/15/2028\n\n08/17/2023 \n 107,500  \n$1.00  \n08/17/2028\n\n10/06/2023 \n 137,500  \n$1.00  \n10/06/2028\n\n10/13/2023 \n 137,500  \n$1.00  \n10/13/2028\n\n10/20/2023 \n 22,000  \n$1.00  \n10/20/2028\n\n10/26/2023 \n 412,500  \n$1.00  \n10/26/2028\n\n11/28/2023 \n 220,000  \n$1.00  \n11/28/2028\n\n12/01/2023 \n 220,000  \n$1.00  \n12/01/2028\n\n12/19/2023 \n 230,000  \n$1.00  \n12/19/2028\n\n12/27/2023 \n 230,000  \n$1.00  \n12/27/2028\n\n01/12/2024 \n 28,750  \n$1.00  \n01/12/2029\n\n01/26/2024 \n 86,250  \n$1.00  \n01/26/2029\n\n01/29/2024 \n 86,250  \n$1.00  \n01/29/2029\n\n02/22/2024 \n 14,375  \n$1.00  \n02/22/2029\n\n03/08/2024 \n 12,500  \n$1.00  \n03/08/2029\n\n03/22/2024 \n 10,000  \n$1.00  \n03/22/2029\n\n04/05/2024 \n 12,500  \n$1.00  \n04/05/2029\n\n  \n 10,702,000  \n    \n \n\n \n\nThese warrants were classified as equity\nin the consolidated financial statements. Assumptions used in calculating the fair value of the warrants at the issuance date in\nconjunction with applying the relative fair value method include the following:\n\n \n\nSchedule of fair value of the warrants \n2024 Warrants \n\n  \n  \n\nFair value of common stock \n$0.27 \n\nExpected term \n 5 years \n\nExpected volatility \n 68.7% - 83.4% \n\nDividend yield \n — \n\n  \n   \n\nRisk-free interest rate \n 3.78% - 4.86% \n\n \n\nDuring the year ended August 31, 2025,\nall outstanding warrants were exchanged into Series B Convertible Preferred Stock, as described in Note 8 above.\n\n \n\n**Note 11 – Income Taxes**\n\n \n\nSignificant components of the Company’s\ndeferred tax assets and liabilities are as follows:\n\n \n\nSchedule of deferred tax assets and liabilities \nAugust 31, 2025  \nAugust 31, 2024 \n\nDeferred tax assets \n    \n   \n\nCapital losses \n$3,621,000  \n$— \n\nNet operating losses \n 1,354,000  \n 5,375,000 \n\nSoftware \n 238,000  \n 194,000 \n\nEquity compensation \n 68,000  \n — \n\nAccruals and reserves \n 28,000  \n — \n\nGoodwill \n 18,000  \n — \n\nOther \n 19,000  \n 4,000 \n\nTotal deferred tax assets \n 5,346,000  \n 5,573,000 \n\nLess: valuation allowance \n (5,346,000) \n (5,573,000)\n\nNet deferred tax assets \n$—  \n$— \n\n \n\n77\n\n \n\n \n\nThe Company recorded income tax expense\nof $19,890 for the year ended August 31, 2025, which related to temporary differences. No provision for, or benefit from, income\ntaxes was recorded for the year ended August 31, 2024. As of August 31, 2025, the Company had approximately $6,445,000 of federal\nnet operating losses. The Company’s income tax expense for the years ended August 31, 2025 and 2024 are as follows:\n\n \n\nSchedule of income tax expense \nAugust 31, 2025  \nAugust 31, 2024 \n\nCurrent provision for income taxes \n    \n   \n\nFederal \n$—  \n$— \n\nState \n 19,890  \n — \n\nTotal current \n 19,890  \n — \n\nDeferred tax expense \n    \n   \n\nFederal \n —  \n — \n\nState \n —  \n — \n\nTotal deferred expense \n —  \n — \n\n  \n    \n   \n\nTotal provision for income taxes \n$19,890  \n$— \n\n \n\nThe significant differences between the\nU.S. Federal statutory rate and the effective rate for financial reporting purposes are as follows:\n\n \n\nSchedule of U.S. federal statutory rate and the effective rate \nAugust 31, 2025  \nAugust 31, 2024 \n\n  \n   \n  \n\nFederal statutory tax rate \n (21.00%) \n (21.00%)\n\nState tax rate, net of federal benefit \n (1.90%) \n (0.07%)\n\nPermanent items \n 45.05% \n (0.03%)\n\nAttribute reduction - CODI \n (25.55%) \n — \n\nCapital loss carryover \n (45.57%) \n — \n\nOther \n (0.06%) \n — \n\n Tax benefit \n (3.13%) \n (21.10%)\n\nValuation allowance \n 2.87% \n 21.10%\n\n Effective tax rate \n (0.25%) \n 0.00%\n\n \n\n**Note 12 – Related Party Transactions**\n\n \n\nFrom October 2022 through August 2024,\nthe Company leased office space from Hedgemore, an entity in which the Company had a 36% ownership stake.\n\n \n\nIn November 2024, $20,572,398 of convertible\nnotes payable held by significant stockholders of the Company was exchanged for 48,566,344 shares of Series B Convertible Preferred\nStock. Also in November 2024, 3,333,333 shares of common stock held by a significant stockholder of the Company was exchanged for\n3,333,333 shares of Series B Convertible Preferred Stock. In April 2025, a convertible note payable of $1,333,333, and the related\naccrued interest, held by significant stockholders of the Company was converted into 3,903,065 shares of Series B Convertible Preferred\nStock. See Note 8 and Note 10 for further discussion of the exchanges.\n\n \n\nIn April 2025, the Company’s majority\nstockholder entered into a consulting agreement with the Company. As payment under this consulting agreement, the stockholder was\nallowed to convert 42,814,596 shares of their Series B Convertible Preferred Stock into 57,086,261 shares of Series C Convertible\nPreferred Stock. The Company determined the fair value of the Series C Convertible Preferred Stock received as consideration under\nthe consulting agreement was approximately $2,528,000 greater than the fair value of the Series B Convertible Preferred Stock at\nthe conversion date and recorded this excess amount as Stock-based compensation expense in the consolidated statement of operations.\n\n \n\n78\n\n \n\n \n\nSubsequent to August 31, 2025, in November\n2025, the Company received a $391,000 investment from its main outsourced technology development partner into its Series C Convertible\nPreferred Stock. The investment was comprised of $80,000 of cash and cancellation of approximately $311,000 in outstanding payables\nto this vendor. During the years ended August 31, 2025 and 2024, the Company paid this technology development partner approximately\n$1,039,000 and $1,073,000 to develop the Company’s main technology platform.\n\n \n\n**Note 13 – Stock Compensation\nPlan**\n\n \n\nDuring the year-ended August 31, 2025,\nthe Company issued stock option awards to certain key employees, contractors, Board members and Board advisors. The terms of the\nstock option awards are governed by the VisitIQ Corp. 2025 Incentive Award Plan. The stock option awards granted during the year\nended August 31, 2025 have only time based vesting criteria, as well as accelerated vesting upon a Change in Control, as defined\nwithin the VisitIQ Corp. 2025 Incentive Award Plan. No Change in Control event occurred during either the year ended August 31,\n2025. Compensation expense for the stock option awards is recognized over the vesting period based on the grant date fair value\nof the awards. Compensation expense for the stock option awards recognized within the consolidated statements of operations was\napproximately $419,000 for the year-ended August 31, 2025. As of August 31, 2025, unrecognized compensation expense related to\nthe stock option awards is approximately $638,000 and will be recognized over a weighted average period of 2.6 years.\n\n \n\n**Vesting**\n\nThe stock option awards granted during\nthe year ended August 31, 2025 included a 25% vest on the date of grant, with the remaining vesting occurring monthly over the\nfollowing 36 months, with the exception of grants made to the board of directors and Board advisors, which were fully vested upon\ngrant. Upon the occurrence of a Change in Control, all stock option awards that have not vested at that time become fully vested\nif the employee is employed by the Company or any of its subsidiaries on the date of the Change in Control. Upon termination of\nemployment, the employee will forfeit all unvested Option Awards.\n\n \n\n**Activity**\n\nA total of 10,000,000 Option Awards are\nauthorized for issuance under the VisitIQ Corp. 2025 Incentive Award Plan. During the year ended August 31, 2025, 7,230,000 Option\nAwards were granted, all of which were outstanding as of August 31, 2025. The fair value of the Option Awards granted during the\nyear ranged from $0.13 to $0.15 per Option Award. During the year ended August 31, 2025 no Option Awards were forfeited.\n\n \n\nThe grant date fair value of each Option\nAwards award is estimated on the date of grant using the Black-Scholes-Merton option pricing model. The weighted average assumptions\nfor the grants in the year ended August 31, 2025 are provided in the following table:\n\n \n\nSchedule of fair value of each option awards  \n**2025 Stock Options** \n\n  \n  \n\nFair value of common stock \n$0.18 - $0.23 \n\nExpected term \n2.8 - 5.6 years \n\nExpected volatility \n96.8% - 113.0% \n\nDividend yield \n— \n\n  \n  \n\nRisk-free interest rate \n3.76% - 4.03% \n\n \n\n79\n\n \n\n \n\nAs the Company has insufficient historical\nexercise data to determine expected term, it uses the expected term of similar publicly traded entities. Volatility is estimated\nbased on the average historical volatility of its common shares. The risk-free rate for the expected term of the Option Awards\nis based on the U.S. Treasury yield curve at the date of grant.\n\n \n\n**Note 14 – Commitments and Contingencies**\n\n \n\nLiabilities for loss contingencies arising\nfrom claims, assessments, litigation, fines, and penalties and other sources are recorded when it is probable that a liability\nhas been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed\nas incurred.\n\n \n\nIn the ordinary course of the business,\nthe Company is subject to periodic legal or administrative proceedings. As of August 31, 2025 and 2024, the Company was not involved\nin any material claims or legal actions which, in the opinion of management, the ultimate disposition would have a material adverse\neffect on the Company’s consolidated financial position, results of operations, or liquidity."}