{"url_path":"/sec/skfg/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":"2026-06-02","source_url":"https://www.sec.gov/Archives/edgar/data/1794942/0001640334-26-000977-index.html","accession_number":"0001640334-26-000977","cik":"0001794942","ticker":"SKFG","issuer_name":"Stark Focus Group, Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1794942/0001640334-26-000977-index.html","primary_entity_key":"0001794942","primary_entity_name":"Stark Focus Group, Inc."},"word_count":4032,"has_tables":true,"body_markdown":"**Item 8. Financial Statements and Supplementary Data**\n\n \n\nThe Company’s Financial Statements required by Item 8, together with the reports thereon of the Independent Registered Public Accounting Firm, are set forth on pages F-1 through F12 of this report and are incorporated by reference in this Item 8.\n\n \n\n \n\n6\n\n*Table of Contents*\n\n  \n\n**STARK FOCUS GROUP, INC.**\n\n**Financial Statements**\n\n**For the years ended December 31, 2025 and 2024**\n\n** (Stated in US Dollars)**\n\n \n\n \n\n7\n\n*Table of Contents*\n\n \n\n**STARK FOCUS GROUP, INC.**\n\n \n\nFOR THE YEARS ENDED DECEMBER, 2025 AND 2024\n\n \n\nINDEX TO FINANCIAL STATEMENTS\n\n \n\n PAGE\n\n[Reports of Independent Registered Public Accounting Firm](#repo)\n\n \n\nF-1 to F-3\n\n[Balance Sheet](#bs)\n\n \n\nF-4\n\n[Statement of Operations](#soo)\n\n \n\nF-5\n\n[Statement of Change in Stockholders’ Deficit](#eqt)\n\n \n\nF-6\n\n[Statement of Cash Flows](#cf)\n\n \n\nF-7\n\n[Notes to the Audited Financial Statements](#notes)\n\n \n\nF-8 to F-11\n\n \n\n \n\n8\n\n*Table of Contents*\n\n  \n\n **Report of Independent Registered Public Accounting Firm**\n\n \n\nThe Board of Directors and Stockholders of\n\n \n\n**STARK FOCUS GROUP, INC.**\n\n \n\n Opinion on the Financial Statements\n\n \n\nWe have audited the accompanying balance sheets of Stark Focus Group, Inc (the ‘Company’) as of December 31, 2025, and the related statements of operations, changes in stockholders’ (deficit) and cash flows for the year ended December 31, 2025, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and the results of its operations and its cash flows for the year ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.\n\n \n\nGoing Concern\n\n \n\nThe accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3, the Company suffered an accumulated deficit of $(225,686), net loss of $(42,124) and a negative working capital of $(81,794). The Company is dependent on obtaining additional working capital funding from the sale of equity and/or debt securities to execute its plans and continue operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments that might result from the outcome of this uncertainty.\n\n \n\n Basis for Opinion\n\n \n\nThese financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\n\n \n\nWe conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.\n\n \n\nOur audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.\n\n \n\nCritical Audit Matters\n\n \n\nCritical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. Communication of critical audit matters does not alter in any way our opinion on the financial statements taken as a whole and we are not, by communicating the critical audit matters, providing separate opinions on the critical audit matter or on the accounts or disclosures to which they relate.\n\n \n\n \n\nF-1\n\n*Table of Contents*\n\n \n\n**Going Concern Uncertainty – See also Going Concern Uncertainty explanatory paragraph above:**\n\n \n\nAs described in Note 3 to the financial statements, the Company incurred significant operating losses and a working capital deficiency. The ability of the Company to continue as a going concern is dependent on obtaining additional working capital funding from the sale of equity and/or debt securities to execute its plans and continue operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.\n\n \n\nThe procedures performed to address the matter included.\n\n \n\n(i)\n\nWe inquired of executive officers, and key members of management, of the Company regarding factors that would have an impact on the Company’s ability to continue as a going concern,\n\n(ii)\n\nWe evaluated management’s plan for addressing the adverse effects of the conditions identified, including assessing the reasonableness of forecasted information and underlying assumptions by comparing to actual results of prior periods and actual results achieved to date, and utilizing our knowledge of the entity, its business and management in considering liquidity needs and the Company’s ability to generate sufficient cash flow,\n\n(iii)\n\nWe assessed the possibility of raising additional debt or credit,\n\n(iv)\n\nWe evaluated the completeness and accuracy of disclosures in the financial statements.\n\n \n\n**/s/ Boladale Lawal**\n\n**BOLADALE LAWAL & CO.**\n\n**(Chartered Accountants)**\n\n**(PCAOB ID 6993)**\n\nLagos, Nigeria\n\n \n\nWe have served as the Company’s auditor since 2025.\n\n \n\nJune 1, 2026\n\n \n\n \n\nF-2\n\n*Table of Contents*\n\n \n\n \n\n**Report of Independent Registered Public Accounting Firm**\n\n \n\nTo the Board of Directors and Shareholders \n\nof Stark Focus Group \n\n \n\n**Opinion on the Financial Statements **\n\n \n\nWe have audited the accompanying balance sheet of Stark Focus Group (the Company) as of December 31, 2024 and 2023, and the related statements of operations, stockholders’ equity, and cash flows for the years then ended and the related notes collectively referred to as the financial statements.  \n\n \n\nIn our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America. \n\n \n\n**Going Concern **\n\n \n\nThe accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has limited operations and has sustained operating losses resulting in a deficit. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. \n\n \n\n**Basis for Opinion **\n\n \n\nThese financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. \n\n \n\nWe conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of materia misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. \n\n \n\nOur audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. \n\n \n\n \n\nApril 11, 2025 \n\n \n\nWe have served as the Company’s auditor since 2023. \n\nLos Angeles, California\n\nPCAOB ID Number 6580\n\n \n\n \n\nF-3\n\n*Table of Contents*\n\n \n\n**STARK FOCUS GROUP INC.**\n\n**Balance Sheet**\n\n \n\n**ASSETS**\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**December 31,**\n\n \n\n \n\n**December 31,**\n\n \n\n \n\n \n\n**2025**\n\n \n\n \n\n**2024**\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**Current Assets**\n\n \n\n \n\n \n\n \n\n \n\n \n\nCash & cash equivalents\n\n \n$-\n \n\n \n\n \n-\n \n\n**TOTAL ASSETS**\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**LIABILITIES & STOCKHOLDERS' EQUITY**\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**Current Liabilities**\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nAccounts payable and accrued expenses\n\n \n$9,946\n \n\n \n\n \n2,400\n \n\nDemand loan payable due to related party – note 5 and 6\n\n \n\n \n71,848\n \n\n \n\n \n71,848\n \n\n \n\n \n\n \n81,794\n \n\n \n\n \n74,248\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**Long-term Liabilities**\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nPromissory note due to related party – note 5 and 6\n\n \n\n \n18,388\n \n\n \n\n \n16,828\n \n\nConvertible note – note 8\n\n \n\n \n82,630\n \n\n \n\n \n49,612\n \n\n**Total Liabilities**\n\n \n\n \n**182,812**\n \n\n \n\n \n140,688\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**Stockholders' Equity**\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nCommon stock, ($0.0001 par value, 100,000,000 shares authorized\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n9,948,330 as of Dec 31, 2025 and Dec 31, 2024\n\n \n\n \n995\n \n\n \n\n \n995\n \n\nAdditional paid in capital\n\n \n\n \n41,879\n \n\n \n\n \n41,879\n \n\nDeficit\n\n \n\n \n(225,686)\n \n\n \n(183,562)\n\n**Total Stockholders' Deficit**\n\n \n\n \n**(182,812****)**\n \n\n \n**(140,688****)**\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**TOTAL LIABILITIES & STOCKHOLDERS' EQUITY**\n\n \n**$****-**\n \n\n \n\n \n**-**\n \n\n \n\n*The annexed notes form an integral part of these financial statements.*\n\n \n\n \n\nF-4\n\n*Table of Contents*\n\n \n\n**STARK FOCUS GROUP INC.**\n\n**Statement of Operations**\n\n \n\n \n\n \n\n**For the year**\n\n \n\n \n\nFor the year\n\n \n\n \n\n \n\n**December 31,**\n\n \n\n \n\nDecember 31,\n\n \n\n \n\n \n\n**2025**\n\n \n\n \n\n2024\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**Expenses**\n\n \n\n \n\n \n\n \n\n \n\n \n\nGeneral and Administrative\n\n \n**$****34,659**\n \n\n \n\n \n43,158\n \n\n**Loss from operations**\n\n \n\n \n**(34,659****)**\n \n\n \n(43,158)\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**Other Items**\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nFinance costs\n\n \n\n \n**(7,465****)**\n \n\n \n(4,067)\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**Net Loss**\n\n \n**$****(42,124****)**\n \n\n \n(47,225)\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**Basic and diluted earnings per share**\n\n \n**$****(0.00****)**\n \n\n \n(0.00)\n\n**Weighted average number of ****common shares outstanding**\n\n \n\n \n**9,948,330**\n \n\n \n\n \n9,948,330\n \n\n \n\n*The annexed notes form an integral part of these financial statements.*\n\n \n\n \n\nF-5\n\n*Table of Contents*\n\n \n\n**STARK FOCUS GROUP INC.**\n\n**Statement of Changes in Stockholders' Equity**\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**Additional**\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**Common Stock**\n\n \n\n \n\n**Paid-in**\n\n \n\n \n\n**Retained**\n\n \n\n \n\n \n\n \n\n \n\n \n\n**Shares**\n\n \n\n \n\n**Amount**\n\n**($)**\n\n \n\n \n\n**Capital**\n\n**($)**\n\n \n\n \n\n**Earnings**\n\n**($)**\n\n \n\n \n\n**Total**\n\n**($)**\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**Balance, December 31, 2024**\n\n \n\n \n**9,948,330**\n \n\n \n\n \n**995**\n \n\n \n\n \n**41,879**\n \n\n \n\n \n**(183,562****)**\n \n\n \n**(140,688****)**\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nNet profit (loss)\n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n(42,124)\n \n\n \n(42,124)\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**Balance, December 31, 2025**\n\n \n\n \n**9,948,330**\n \n\n \n\n \n**995**\n \n\n \n\n \n**41,879**\n \n\n \n\n \n**(225,686****)**\n \n\n \n**(182,812****)**\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**Additional**\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**Common Stock**\n\n \n\n \n\n**Paid-in**\n\n \n\n \n\n**Retained**\n\n \n\n \n\n \n\n \n\n \n\n \n\n**Shares**\n\n \n\n \n\n**Amount**\n\n**($)**\n\n \n\n \n\n**Capital**\n\n**($)**\n\n \n\n \n\n**Earnings**\n\n**($)**\n\n \n\n \n\n**Total**\n\n**($)**\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**Balance, December 31, 2023**\n\n \n\n \n**9,948,330**\n \n\n \n\n \n**995**\n \n\n \n\n \n**41,879**\n \n\n \n\n \n**(136,337****)**\n \n\n \n**(93,463****)**\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nNet profit (loss)\n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n-\n \n\n \n\n \n(47,225)\n \n\n \n(47,225)\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**Balance, December 31, 2024**\n\n \n\n \n**9,948,330**\n \n\n \n\n \n**995**\n \n\n \n\n \n**41,879**\n \n\n \n\n \n**(183,562****)**\n \n\n \n**(140,688****)**\n\n \n\n*The annexed notes form an integral part of these financial statements.*\n\n \n\n \n\nF-6\n\n*Table of Contents*\n\n \n\n**STARK FOCUS GROUP INC.**\n\n**Statements of Cash Flows**\n\n \n\n \n\n \n\n**For the year**\n\n \n\n \n\nFor the year\n\n \n\n \n\n \n\n**December 31,**\n\n \n\n \n\nDecember 31,\n\n \n\n \n\n \n\n**2025**\n\n \n\n \n\n2024\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**CASH FLOWS FROM OPERATING ACTIVITIES**\n\n \n\n \n\n \n\n \n\n \n\n \n\nNet income (loss)\n\n \n**$****(42,124****)**\n \n\n \n(47,225)\n\nAdjustments to reconcile net loss to net cash provided by (used in) operating activities:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nFinance cost\n\n \n\n \n**7,465**\n \n\n \n\n \n4,067\n \n\nChanges in operating assets and liabilities:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nAccounts payable and accrued expenses\n\n \n\n \n**7,546**\n \n\n \n\n \n2,400\n \n\n**Net cash provided by (used in) operating activities**\n\n \n\n \n**(27,113****)**\n \n\n \n(40,758)\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**CASH FLOWS FROM FINANCING ACTIVITIES**\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nConvertible note\n\n \n\n \n**27,113**\n \n\n \n\n \n40,758\n \n\n**Net cash provided by (used in) financing activities**\n\n \n\n \n**27,113**\n \n\n \n\n \n40,758\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**Net increase (decrease) in cash**\n\n \n\n \n**-**\n \n\n \n\n \n**-**\n \n\n**Cash at beginning of period**\n\n \n\n \n**-**\n \n\n \n\n \n**-**\n \n\n**Cash at end of period**\n\n \n**$****-**\n \n\n \n\n \n**-**\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION**\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nCash paid during year for :\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nInterest\n\n \n**$****-**\n \n\n \n\n \n-\n \n\nIncome Taxes\n\n \n**$****-**\n \n\n \n\n \n-\n \n\n \n\n*The annexed notes form an integral part of these financial statements.*\n\n \n\n \n\nF-7\n\n*Table of Contents*\n\n \n\n** STARK FOCUS GROUP, INC.**\n\n**NOTES TO THE FINANCIAL STATEMENTS**\n\n**FOR THE YEAR ENDED DECEMBER 31, 2025**\n\n \n\n**NOTE 1.****ORGANIZATION AND DESCRIPTION OF BUSINESS**\n\n \n\nStark Focus Group, Inc. (the “Company”) was incorporated under the laws of the State of Nevada on July 3, 2018.\n\n \n\nOn September 27, 2019, Stark Focus Group acquired 100% interest of Common Design Limited of Hong Kong (“Common Design”) as its wholly owned subsidiary. Common Design is a start-up wholesale clothing supplier, established on April 10, 2019 in Hong Kong, specializing in the supply and trading of niche apparel for distribution to markets worldwide. With operating headquarter located in Hong Kong, Common Design designs, sources, and markets a diverse portfolio of dress up, casual and athletic apparel products to its global clients, while maintaining close relationships with its suppliers and manufacturers to ensure competitive pricing and quality management.\n\n \n\nOn August 9, 2021, the Company entered into a share purchase agreement with to sell its 10,000 shares of its wholly owned subsidiary, Common Design Limited of Hong Kong, for a consideration of Ten Thousand Hong Kong Dollars (HK$10,000.00). The 10,000 shares represent all of the issued and outstanding shares of Common Design Limited. The transaction was consummated on September 9, 2021.\n\n \n\nOn July 18, 2022, the Company announced that it is entering the Drone / Unmanned Aerial Vehicles market with the launch of its new brand, RevoluDrones. On July 20, 2022, the Company purchased 10-month licenses for 4 patents to assist in its drone business.\n\n \n\n**NOTE 2.****BASIS OF PRESENTATION**\n\n \n\nThe Corporation’s financial statements included herein are prepared under the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America.\n\nThe Company has a December 31, year-end.\n\n \n\nFunctional and Presentation Currency\n\n \n\nThe Company’s foreign operations are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The Company uses US Dollars as its functional and presentation currency.\n\n \n\nThese financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which assumes that the Corporation and its subsidiaries will be able to meet its obligations and continue its operations for next fiscal year. Realization values may be substantially different from carrying values as shown and these financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Corporation be unable to continue as a going concern.\n\n \n\n**NOTE 3. GOING CONCERN**\n\n \n\nAs of December 31, 2025, the Company had no cash and outstanding liabilities of $182,812. The stockholders’ deficit was $182,812 (increased from $140,688 at December 31, 2024) primarily due to the $42,124 net loss for the year.\n\n \n\nManagement does not believe that the company's current financial position is sufficient to cover the expenses they will incur during the next twelve months. This condition raises substantial doubt about the Company's ability to continue as a going concern. Management anticipates that the Company will be dependent, for the near future, on additional investment capital to fund operating expenses. The Company intends to position itself so that it will be able to raise additional funds through the capital markets.\n\n \n\nIn light of management's efforts, there are no assurances that the Company will be successful in this or any of its endeavors or become financially viable and continue as a going concern. These financial statements do not include any adjustments related to the recovery or classification of assets or the amounts and classifications of liabilities that might be necessary should the company be unable to continue as going concern.\n\n \n\n \n\nF-8\n\n*Table of Contents*\n\n \n\n**NOTE 4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**\n\n \n\n*a. Use of Estimates and Assumptions*\n\n \n\nThe preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.\n\n \n\nDue to the limited level of operations, the Company has not had to make material assumptions or estimates other than the assumption that the Company is a going concern.\n\n \n\n*b. Fair Value of Financial Instruments*\n\n \n\nASC 825, \"Disclosures about Fair Value of Financial Instruments\", requires disclosure of fair value information about financial instruments. ASC 820, \"Fair Value Measurements\" defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2025.\n\n \n\nThe carrying amounts of the Company’s financial instruments, including accounts payable, demand loan payable, promissory note, and convertible notes, approximate their fair values due to their short-term nature or market interest rates (Level 3 inputs for related-party instruments).\n\n \n\n*c. Earnings per Share*\n\n \n\nASC No. 260, “Earnings Per Share”, specifies the computation, presentation and disclosure requirements for earnings (loss) per share for entities with publicly held common stock. The Company has adopted the provisions of ASC No. 260.\n\n \n\nBasic net loss per share amounts is computed by dividing the net loss by the weighted average number of common shares outstanding. Diluted earnings per share are the same as basic earnings per share due to the lack of dilutive items in the Company.\n\n \n\n*d. Revenue Recognition*\n\n \n\nIn May 2014, the FASB issued guidance on the recognition of Revenue from Contracts with Customers. The core principle of the guidance is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration which the company expects to receive in exchange for those goods or services. To achieve this core principle, the guidance provides a five-step analysis of transactions to determine when and how revenue is recognized. The guidance addresses several areas including transfer of control, contracts with multiple performance obligations, and costs to obtain and fulfill contracts. The guidance also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs.\n\n \n\n \n\nF-9\n\n*Table of Contents*\n\n \n\n \n\n*e. Income taxes*\n\n \n\nThe Company follows the guideline under ASC Topic 740 Income Taxes, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates, applicable to the periods in which the differences are expected to affect taxable income.\n\n \n\nValuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. Since the Company is in the developmental stage and has losses, no deferred tax asset or income taxes have been recorded in the financial statements.\n\n \n\nThere are no uncertain tax positions as at December 31, 2025\n\n \n\n*f. Foreign Currency Translation and Balances*\n\n \n\nTransactions in foreign currencies are initially recorded by the Company at their respective functional currency rates prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rate of exchange at the reporting date. Exchange gains or losses arising from translation are recognized in the statement of operation.\n\n \n\nNon-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined.\n\n \n\n*g. Recently Issued Accounting Guidance*\n\n \n\nThe Company has evaluated all the recent accounting pronouncements through the date the financial statements were issued and filed with the Securities and Exchange Commission and believe that none of them will have a material effect on the company’s financial statements.\n\n \n\n**NOTE 5.****RELATED PARTY TRANSACTIONS**\n\n \n\nAs of December 31, 2025, the Company had a promissory note agreement with a related party that was used to finance patent license acquisitions in 2022 and a demand loan facility arrangement with a shareholder to provide working capital (Notes 6, 7 and 8).\n\n \n\n**NOTE 6.****PROMISSORY NOTE AND INTEREST**\n\n \n\nOn July 20, 2022, the Company entered into a 2-year promissory note of $13,000 with a related party to finance the acquisition of patent licenses used in its drone business. On July 20, 2024, the promissory note was extended with a maturity date of July 17, 2027. The promissory note bears interest of 12%.\n\n \n\nDuring the year ended December 31, 2025, interest expense on the promissory note was $1,560 (recorded as finance cost). The note remains non-amortizing, 12% interest, related-party, extended maturity July 17, 2027.\n\n \n\n**NOTE 7.****DEMAND LOAN PAYABLE**\n\n \n\nDuring the year ended December 31, 2021, the Company secured a loan facility from a shareholder to provide working capital. The loan is non-interest bearing and due upon demand.\n\n \n\nAs of December 31, 2025, the balance of the demand loan payable was $71,848 (December 31, 2024 - $71,848), unchanged from the prior period.\n\n \n\n \n\nF-10\n\n*Table of Contents*\n\n \n\n**NOTE 8.****CONVERTIBLE DEBT**\n\n \n\n**2025 Activity:**\n\n \n\nDuring 2025 the Company issued additional convertible notes for net cash proceeds of $27,113. The convertible notes are due to mature on December 31, 2028 unless earlier converted to common stock. The convertible notes will accrue interest at a rate of 10% per annum and have a conversion price of $0.04 per common stock.\n\n \n\nThe convertible notes are accounted for as conventional convertible debt in accordance with ASC 470-20 (as amended by ASU 2020-06). No beneficial conversion feature or derivative liability was required to be bifurcated.\n\n \n\nDuring the year ended December 31, 2025, related interest expense of $5,905 was recorded as finance cost.\n\n \n\nThe total carrying amount (principal plus accrued interest) increased from $49,612 at December 31, 2024 to $82,630 at December 31, 2025.\n\n \n\n**Prior Period Activity:**\n\n \n\nOn December 31, 2024, the Company issued a convertible note for a net proceed of $9,750. On September 30, 2024, the Company issued a convertible note for a net proceed of $5,136. On June 30, 2024, the Company issued a convertible note for a net proceed of $8,472. On March 31, 2024, the Company issued a convertible note for a net proceed of $17,400. On December 31, 2023, the Company issued a convertible note for a net proceed of $6,350. All convertible notes are due to mature on December 31, 2028 unless earlier converted to common stock, will accrue interest at a rate of 10% per annum and have a conversion price of $0.04 per common stock.\n\n \n\nThe convertible notes are governed by indentures dated as above. The Indentures do not contain any financial covenants or any restrictions on the payment of dividends, the incurrence of senior debt or other indebtedness or the issuance or repurchase of the Company's securities by the Company.\n\n \n\n**NOTE 9.****SHARE CAPITAL**\n\n \n\nOn December 3, 2021, the Board of Directors approved a plan with certain shareholders of the Company to repurchase an aggregate of 272,500 common shares for $15,871 (CAD$20,000). These shares were subsequently cancelled effective December 8, 2021.\n\n \n\nAs of December 31, 2025, the Company had 9,948,330 shares of common stock issued and outstanding.\n\n \n\nAs of December 31, 2025, the company did not have any warrants or options outstanding.\n\n \n\n**NOTE 10.****INCOME TAXES**\n\n \n\nIncome tax expense and recovery differs from that which would be expected from applying the effective tax rates to the net income (loss for the years ended December 31, 2025 and 2024 for the Company is as follows:\n\n \n\n \n\n \n\nDecember 31, 2025\n\n \n\n \n\nDecember 31, 2024\n\n \n\nNet income (loss)\n\n \n$(42,124)\n \n$(47,225)\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nStatutory and effective tax rate\n\n \n\n \n21%\n \n\n \n21%\n\nIncome tax expense (recovery) at the effective rate\n\n \n\n \n(8,846)\n \n\n \n(9,917)\n\nTax benefit (liability) deferred\n\n \n\n \n8,846\n \n\n \n\n \n9,917\n \n\nIncome tax expense (recovery)\n\n \n$-\n \n\n \n$-\n \n\n  \n\n \n\n \n\nDecember 31, 2025\n\n \n\n \n\nDecember 31, 2024\n\n \n\nTax losses carried forward\n\n \n$(225,686)\n \n\n \n(183,562)\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nStatutory and effective tax rate\n\n \n\n \n21%\n \n\n \n21%\n\nDeferred tax asset\n\n \n\n \n(47,394)\n \n\n \n(38,548)\n\nValuation allowance\n\n \n\n \n47,394\n \n\n \n\n \n38,548\n \n\nNet deferred asset\n\n \n$-\n \n\n \n$-\n \n\n \n\n**NOTE 11.****SUBSEQUENT EVENT**\n\n \n\nIn accordance with ASC 855-10 management has performed an evaluation of subsequent events from December 31, 2025 through the date the financial statements were issued and has determined that it does not have any material subsequent events to disclose in these financial statements.\n\n \n\n \n\nF-11\n\n*Table of Contents*"}