ADTI 10-K & 10-Q changes, risk factors and insider trading

An investment in our securities is highly speculative and involves a high degree of risk. In determining whether to purchase our securities, an investor should carefully consider all of the material risks described below, together with the other information contained in this report. Our business, financial condition and results of operations could be materially and adversely affected by any of these risks or uncertainties. In that case, the trading price of our common stock could decline, and you may lose all or part of your investment. An investor should only purchase our securities if he or she can afford to suffer the loss of his or her entire investment. These risks are not exclusive. Additional risks and uncertainties that are unknown to us, or that we currently deem immaterial, may impair our business operations. These risks may prevent us from achieving our business objectives, and may materially and adversely affect our business, financial condition, results of operations and prospects.

History of Operations — The Company has limited operating history upon which an Investor can base an investment decision.

The Company is an early-stage distribution company utilizing social media and its AI platform which might not be successful and therefore investors may lose their investment in the Company. Although the Company was formed on January 11, 2007, it has struggled to generate substantial sales and profitability and has tried to sell multiple products with limited success. It has been attempting to use social media and social media influencers to sell its products, but currently has had limited success and is unable to provide investors with significant data upon which an evaluation can be made of the Company’s prospects and an investment in its securities.

The Company cannot be certain that its business plan or the introduction of its AI based software for determining the best influencers to represent a product and/or the best products for a specific influencer to represent will be successful nor be able to generate substantial growth in sales. As an early-stage company, the Company will be particularly susceptible to the risks and uncertainties described in these risk factors and will be more likely to incur expenses associated with addressing them.

The Company cannot assure investors that it will be able to achieve any of its objectives, generate sufficient revenues to achieve or sustain profitability.

Actual Operating Results May Differ from Estimates — The Company’s actual operating results may differ from its initial estimates.

The Company’s operating results depend on marketing costs, public tastes, and promotional success. The Company expects to continue to generate revenues from the sale of its products through the use of social media promotions. The ability of the Company to generate revenues depends on the success of its promotions and its AI based software. Accordingly, the Company’s revenues are, and will continue to be, difficult to forecast. For the years ended March 31, 2025 and 2024, the Company only generated $4,894 and $13,672, respectively.

Acquisition Closing — There is no guarantee the announced acquisitions with the Ballengee Group and Matchpoint Connections will close.

The Company has executed a Membership Interest Purchase Agreement for the acquisition of the Ballengee Group and a Letter of Intent for Matchpoint Connections, a summary of each is set forth below in Note 14 “Subsequent Events” in the Notes to the Financial Statements for the years ended March 31, 2025 and March 31, 2024. Although the Membership Interest Purchase Agreement has been executed and announced, the Company is currently negotiating an amendment to the Membership Interest Purchase Agreement, which the Company anticipates will be entered into and the transaction will close in the Company’s second fiscal quarter (the quarter ending September 30, 2025). Notwithstanding, there can no assurances that the amendment to the Membership Interest Purchase Agreement will be agreed to or that the transaction will close. Additionally, although the Company executed a Letter of Intent with Matchpoint Connections, there can be no assurances that such transaction will close.

Acquisition Performance and Synergies — There is no guarantee the announced acquisition with the Ballengee Group will continue to perform or that the assumed synergies will emerge even if the acquisition closes.

Management believes that the acquisition of the Ballengee Group could be a transformative acquisition for the Company that management anticipates would bring over $10 million in annual revenues and $5 million in annual EBITDA to the Company. However, there is no guarantee that even if the acquisition closes, the combined company will be able to maintain its business operations or revenues and/or grow the business and revenues. It is also assumed that the AI based software product of the Company, Adapti, will be able to generate social media promotional opportunities for the athlete clients of Ballengee Group, potentially resulting in additional revenues and competitive advantages for the proposed combined businesses. However, given that Adapti is unproven in the market, there is no guarantee that such additional revenues or competitive advantages would be achieved.

Revenues — There is no guarantee revenues will remain consistent over time.

It is likely that revenues generated from the sale of our products and services, and the introduction of new products and services, will not remain consistent over time. Even if the Company is successful in selling and promoting a specific product or service, there are no guarantees that sales from such particular product or services will continue to grow nor whether sales from a newly introduced product or service will have any success. For the years ended March 31, 2025 and 2024, the Company only generated $4,894 and $13,672, respectively. While the acquisition of the Ballengee Group is anticipated to significantly increase revenue for the Company, there can be no assurances that the transaction will close or that the Company will be able to maintain the revenues of Ballengee Group post acquisition.

Fluctuations in Operations — The Company’s operating results may fluctuate significantly.

The Company expects that its future operating results will fluctuate significantly as a result of, among other factors:

As a result, the Company believes that its results of operations may fluctuate significantly, and it is possible that the Company’s operating results could be below the expectations of investors.

Diversification — The Company’s success depends on a small number of products and services.

A common way to diversify risk is to introduce multiple lines of products and services and offer and sell them through multiple channels. This diversification reduces the impact of the commercial success of a single product or service, or the impact of the failure of a product or service on Company’s overall financial health. Due to financial limitations, however, the Company is focused on a select group of products and services and are selling these products through the use of social media and the use of social media influencers. Although the Company plans to offer additional products and services, including the Adapti services and the agency services of the Ballengee Group upon the successful completion of the acquisition, if and when it occurs, it plans to concentrate its sales and promotional efforts of its products through this single sales channel so there will be a continued risk of a lack of diversification for investors.

Capital – Our business requires a substantial investment of capital, and we have limited working capital and limited access to financing.

The promotion and marketing of our products and services along with the continued development and improvement to our software requires additional capital. In addition, if and when we complete the acquisition of the Ballengee Group, we will require even more capital in order to continue running our current business, as well as the Ballengee Group. Our cash requirements, is expected to exceed the level of cash generated by operations for the foreseeable future. Accordingly, we may have limited working capital. Capital available for these purposes will be reduced to the extent that we are required to use funds otherwise budgeted for capital investment to fund our operations. Curtailed investment over a sustained period could have a material adverse effect on future operating results and cash flows. Further, a significant amount of time may elapse between our expenditure of funds and the receipt of revenues from our television programs or motion pictures. This time lapse requires us to fund a significant portion of our capital requirements from our operating cash flow and from other financing sources. We cannot assure you that we will not be subject to substantial financial risks relating to our business growth.

Our ability to obtain additional financing on satisfactory terms may be limited. With respect to equity financing, our ability to sell our equity securities depends on general market conditions, including the demand for our securities. We may be unable to raise capital through the sale of equity securities, and if we were able to sell equity, our existing stockholders could experience substantial dilution. If we raise additional funds through the issuance of equity, equity-linked or debt securities, those securities may have rights, preferences or privileges senior to the rights of our common stock, and our stockholders may experience dilution. If adequate financing is not available at all or is unavailable on acceptable terms, we may find we are unable to fund expansion, continue offering products and services, take advantage of acquisition opportunities, develop or enhance services or products, or respond to competitive pressures in the industry. Any of the foregoing could have a material adverse effect on our business, financial condition, operating results, liquidity and prospects.

Our AI based Social Media Software, Adapti, is critical for the marketing and growth of our products

We have spent the past 3 years developing our Adapti software to assist in locating and negotiating promotional arrangements with social media influencers, and the software has successfully completed beta testing and is ready for production launch. However, there is no guarantee that the software will operate as expected in a production environment or be able to provide us with the assistance in obtaining the correct influencer to successfully market our products. Further, in the event we complete the Ballengee acquisition, there is no assurance that the Adapti will be as valuable to the Ballengee Group business as we anticipate. If the software does not work as expected, the ability to sell our products and grow our business could be hampered.

In addition, if the software does not work as expected, we might be required to spend additional capital in software development. There are no guarantees that we will have the capital to spend in development or be able to get the software to work as desired even if we do spend additional capital. We also expect that we will need to spend additional capital in the future to further improve and maintain our software. There are no guarantees that we will have this capital to spend nor be able to successfully make the improvement as desired even if we do spend such capital.

Competition — There can be no assurance that the Company will be able to compete with substantially larger competitors.

There are numerous other companies selling products online through the use of social media influencers, and numerous other sports agencies representing athletes. The number of competitors and even very large competitors offering similar products and services in the market makes it difficult for the Company to succeed.

Reliance on Personnel — The Company depends on management to succeed.

To accomplish our objectives, we require a strong management team with expertise in both software development and product development and sales and marketing. Although we have entered into agreements with certain of our executive officers and contracts with our outsourced programming consultants, each of them may terminate its contract with us at any time. We do not maintain “key person” insurance for any of our executives or other employees. We may not be able to attract and retain these personnel on acceptable terms given the competition for personnel with similar qualifications. The loss of the services of any of our executive officers could impede our growth.

We owe significant accrued salary to our Chief Executive Officer and Chief Financial Officer, which may impact their continued service and create financial and reputational risks to the Company.

As of June 1, 2025, our (i) Chief Executive Officer, Adam Nicosia, is owed an aggregate of $110,000 in accrued but unpaid salary and (ii) Chief Financial Officer, Marilu Brassington, is owed an aggregate of $65,500 in accrued but unpaid salary. There is no assurance that Mr. Nicosia nor Ms. Brassington will continue to provide services to the Company in the event that there is continued delay in payment of their full compensation. As of the date of this Annual Report, the Company does not have sufficient capital to pay Mr. Nicosia’s and Ms. Brassington’s accrued but unpaid salary. If either officer were to resign or reduce his or her engagement due to the outstanding obligations, our operations, strategic direction, and ability to attract investors or key partners could be materially and adversely affected. Furthermore, our failure to pay accrued compensation may raise legal, accounting, and reputational concerns and may expose us to claims or liabilities under employment laws. We expect to attempt to satisfy the remaining balance of unpaid salaries once we achieve sufficient profitability or raise additional capital. However, there can be no assurance as to when or whether we will be able to do so.

Cybersecurity – Any significant disruption in or unauthorized access to our computer systems or those of third parties that we utilize in our operations, including those relating to cybersecurity or arising from cyber-attacks, could result in a loss or degradation of service, unauthorized disclosure of data, including corporate information, or theft of intellectual property, including digital content assets, which could adversely impact our business.

Our success is dependent upon the reliable performance and security of our computer systems and those of third parties that we utilize in our operations. These systems may be subject to damage or interruption from, among other things, earthquakes, adverse weather conditions, other natural disasters, terrorist attacks, rogue employees, power loss, telecommunications failures, and cybersecurity risks. Interruptions in these systems, or with the internet in general, could hinder our ability to produce and distribute the Series.

Our computer systems and those of third parties we use in our operations are subject to cybersecurity threats, including cyber- attacks such as computer viruses, denial of service attacks, physical or electronic break-ins and similar disruptions. These systems may experience directed attacks intended to lead to interruptions and delays in our service and operations as well as loss, misuse or theft of personal information (of third parties, employees, and our members) and other data, confidential information or intellectual property. Additionally, outside parties may attempt to induce employees, vendors, partners, or users to disclose sensitive or confidential information in order to gain access to data. Any attempt by hackers to obtain our data (including member and corporate information) or intellectual property (including digital content assets), or otherwise access our systems, or those of third parties we use, if successful, could harm our business, be expensive to remedy and damage our operations.

Smaller Reporting Company — We are a “smaller reporting company” and we cannot be certain if the reduced disclosure requirements applicable to smaller reporting companies will make our securities less attractive to investors.

We are a “smaller reporting company,” as defined in Rule 12b-2 under the Exchange Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies, including “emerging growth companies” such as, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Our status as a smaller reporting company is determined on an annual basis. We cannot predict if investors will find our securities less attractive or our Company less comparable to certain other public companies because we will rely on these exemptions. For example, if we do not adopt a new or revised accounting standard, our future financial results may not be as comparable to the financial results of certain other companies in our industry that adopted such standards.

Shareholder Approval — Two affiliated parties currently own 47.93% of the total shares issued and outstanding, and as a result, collectively. controls all matters requiring shareholder approval.

Market Group International (an entity controlled by Robert Van Boerum, a former director) Stuff International (an entity controlled by Adam Nicosia, our President / Chief Executive Officer and a director) and EcoScientific Labs (an entity controlled by Adam Nicosia, our President / Chief Executive Officer and a director) . together control the Company through the ownership approximately 47.93% of the Company’s issued and outstanding common stock. As a result, these controlling stockholders may have the ability to strongly influence the outcome of all decisions at the Company’s shareholder meetings, including electing our board of directors. The decisions of these stockholders on these matters may be contrary to your expectations or preferences, and they may take actions that could be contrary to your interests. So long as our controlling shareholder beneficially owns a sufficient number of shares of Common Stock, even if they beneficially own significantly less than 50% of our outstanding share capital, they will be able to effectively influence decisions that our shareholders vote on.

Notwithstanding, upon completion of the Ballengee acquisition, if and when it occurs, the owners of the Ballengee group may own a large portion of our outstanding common stock post transaction, which may be in excess of 50%, which would effectively give such holders voting control of the Company.

Potential Substantial Dilution and Change of Control Upon the Ballengee Group Acquisition

If we complete the proposed acquisition of Ballengee Group, the current holders of our common stock are likely to experience substantial dilution. The transaction, although still being negotiated, would likely result in the issuance of a significant number of shares of our common stock to the equity holders of Ballengee Group. Following the closing of the acquisition, the former equity holders of Ballengee Group are expected to own in excess of 50% of the outstanding shares of our common stock.

As a result, the transaction would constitute a change of control, and the former Ballengee equity holders would be able to exert substantial influence, if not control, over our company, including the election of directors, approval of significant corporate transactions, and other stockholder matters. This level of ownership concentration could delay or prevent a change in control of the Company, even if such a change of control would benefit our existing stockholders, and could limit your ability to influence corporate matters. Additionally, the market price of our common stock could be adversely affected if investors perceive the transaction as having a dilutive or adverse effect on the value of their holdings.

Unauthorized disclosure of cardholder and customer data or similar violations of applicable data privacy laws, whether through a security breach of our computer systems, our third-party processor’s computer systems or otherwise, or through our unauthorized use or transmission of such data could subjects us to costly fines, penalties, and legal claims.

We collect and store personally identifiable information about patrons, including names, addresses, and account numbers, and we maintain a database of customer data. We also rely on our third-party processor and certain other technology partners to process and store customer data. As a result, we, as well as our third-party processor, and certain of our other technology providers, are required to comply with various foreign, federal, and state privacy statutes and regulations. Compliance with these regulations and requirements, which are subject to change at any time, is often difficult and costly, and our failure, or the failure of these other third parties, to comply may result in significant fines or civil penalties, regulatory enforcement action, liability to our sponsor bank, and termination of our agreements with our customers, each of which could have a material adverse effect on our business, financial condition, operations, or cash flows. If our computer systems or those of our third-party processor or other technology providers suffer a security breach, we may be subject to liability, including claims for unauthorized transactions with misappropriated bank card information, impersonation, or similar fraud claims, as well as for any failure to comply with laws governing required notifications of such a breach, and these claims could result in protracted and costly litigation, penalties, or sanctions, and damage to our reputation, which could adversely impact our financial results.

Material Weakness - In prior periods we identified certain material weaknesses in our internal controls over financial reporting. If our internal controls are not effective, we may not be able to accurately report our financial results or prevent fraud.

While our internal controls over financial reporting are currently effective, we identified material weaknesses in our financial reporting in prior periods resulting from (i) an inability to segregate incompatible duties due to having a small finance group, and (ii) the failure to conduct an analysis relating to the consolidation of an acquired entity. In connection with these prior material weaknesses we implemented remediation measures including the hiring of an interim Chief Financial Officer and have made her in charge of the ongoing identification, design and implementation of internal control over financial reporting.

Notwithstanding our attempt to remediate prior material weaknesses, if we identify new material weaknesses in our internal control over financial reporting, we may be late with the filing of our periodic reports, investors may lose confidence in the accuracy and completeness of our financial reports and we may not be able to prevent fraud. As a result of such failures, we could also become subject to investigations by the SEC or other regulatory authorities, and become subject to litigation from investors and stockholders, which could harm our reputation, financial condition or divert financial and management resources from our core business, and would have a material adverse effect on our business, financial condition and results of operations.

Acquisition Risk

There is no guarantee that we will be able to negotiate the anticipated amendment to the Membership Interest Purchase Agreement or that the transaction will close. In the event that it does close, there are no assurances that post-acquisition, the Ballengee Group will continue to perform or that the assumed synergies will emerge between the two companies. While management anticipates that the acquisition would bring over $10 million in annual revenues and $5 million in annual EBITA, there is no guarantee that even if the acquisition closes, the combined company will be able to maintain such business and/or grow its operations and revenues. It is also anticipated that the AI based software product of the Company, Adapti, will be able to generate social media promotional opportunities for the athlete clients of Ballengee Group allowing for additional revenues and competitive advantages for the proposed combined businesses. However, there is no guarantee that such additional revenues or competitive advantages would be achieved.

The Company intends to utilize social media and its AI platform to distribute products which might not work and might cause investors to lose their investment. The Company also cannot assure investors that it will be able to achieve any of its objectives, generate sufficient revenues to achieve or sustain profitability.

The Company cannot be certain that its business plan or the introduction of its AI based software for determining the best influencers to represent a product and/or the best products for a specific influencer to represent will be successful nor be able to generate substantial growth in sales. As an early-stage company, the Company will be particularly susceptible to the risks and uncertainties described in these risk factors and will be more likely to incur expenses associated with addressing them.

Penny Stock Rules —If our shares become subject to the penny stock rules, it would become more difficult to trade our shares.

Our common stock is considered a “penny stock.” The principal result or effect of being designated a penny stock is that securities broker-dealers participating in sales of our common stock are subject to the penny stock regulations set forth in Rules 15g-2 through 15g-9 promulgated under the Exchange Act. For example, Rule 15g-2 requires broker-dealers dealing in penny stocks to provide potential investors with a document disclosing the risks of penny stocks and to obtain a manually signed and dated written receipt of the document at least two business days before effecting any transaction in a penny stock for the investor’s account. Moreover, Rule 15g-9 requires broker-dealers in penny stocks to approve the account of any investor for transactions in such stocks before selling any penny stock to that investor. This procedure requires the broker-dealer to (i) obtain from the investor information concerning his or her financial situation, investment experience and investment objectives; (ii) reasonably determine, based on that information, that transactions in penny stocks are suitable for the investor and that the investor has sufficient knowledge and experience as to be reasonably capable of evaluating the risks of penny stock transactions; (iii) provide the investor with a written statement setting forth the basis on which the broker-dealer made the determination in (ii) above; and (iv) receive a signed and dated copy of such statement from the investor, confirming that it accurately reflects the investor’s financial situation, investment experience and investment objectives. Compliance with these requirements may make it more difficult and time consuming for holders of our common stock to resell their shares to third parties or to otherwise dispose of them in the market or otherwise.

FINRA Rules—FINRA sales practice requirements may limit a stockholder’s ability to buy and sell our stock.

In addition to the “penny stock” rules described above, the Financial Industry Regulatory Authority, Inc. (“FINRA”), has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative, low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. The FINRA requirements may make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may have the effect of reducing the level of trading activity in our common stock. As a result, fewer broker-dealers may be willing to make a market in our common stock, reducing a stockholder’s ability to resell shares, as well as overall liquidity, of our common stock.

Our independent registered public accounting firm’s report states that there is substantial doubt that we will be able to continue as a going concern. Our possible inability to stay in business could result in a total loss on investment by our shareholders.

Our accompanying financial statements have been prepared assuming that we will continue as a “going concern.” As discussed in Note 2 to the Company’s March 31, 2025 consolidated financial statements, we had little revenues, have minimal business operations, have recurring losses and have negative working capital and a stockholders’ deficit. These issues raise substantial doubt about our ability to continue as a “going concern.” Our ability to stay in business will, in part, depend on our ability to raise additional funding or continue to make brand acquisitions. Our financial statements do not include any adjustment that might result from the outcome of this uncertainty.

The effectiveness of our disclosure controls and procedures and internal control over financial reporting

The Company has a limited number of personnel which may lead to a risk limited controls and procedures. As a result of the aforementioned reason there is a limit on the amount of internal controls during our financial reporting process, which may result in errors, omissions, or failures to timely complete our required SEC reports, including but not limited to annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K.

The Company’s Chief Executive Officer and Chief Financial Officer are currently the President and Chief Financial Officer of other companies.

The Company’s Chief Executive Officer and Chief Financial Officer, each work on a part time basis and currently also serves as President and the Chief Financial Officer, respectively of other entities that they perform part time services for. As a result, each may have limited time to work on our business and may experience time conflicts, which could negatively impact our operations.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the audited financial statements and the related notes included elsewhere herein. Our historical results do not necessarily reflect what our historical financial position and results of operations would have been had we been a stand-alone public company during the years presented. In addition, our historical results are not necessarily indicative of the results to be expected for any future period, and results for any interim period are not necessarily indicative of the results to be expected for the full year.

In addition to our financial statements, the following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. See “Cautionary Statement Concerning Forward-Looking Statements” and “Item 1A. Risk Factors” for a discussion of the uncertainties, risks and assumptions associated with these statements.

Results of Operations

Adapti, Inc (fka Scepter Holdings, Inc.). (the “Company”) was incorporated under the laws of the State of Nevada on January 11, 2007. The Company manages the sales and brand development of health and beauty products through the Dermacia product line. The Company seeks to acquire or license performing brands to add to the Company’s portfolio of products and brands sold online and through strategic retail relationships. The Company has expertise manufacturing, distributing, marketing, and selling online consumer packaged goods and seeks to leverage its expertise to grow additional acquired brands. For the years ended March 31, 2025 and 2024, the Company only generated $4,894 and $13,672, respectively.

The Company has no parent entity and does not own any wholly-owned or majority-owned subsidiaries. Upon the closing of the acquisition of the Ballengee Group, the Company will operate Ballengee Group LLC as a wholly-owned subsidiary.

The Company manages the sales and brand development of health and beauty products through its Dermacia product line. On or around the date of this filing the Company was actively selling Dermacia branded cosmetics through its related websites and other online marketplaces. The Company is actively developing line extensions under the established brands, and actively working to add new brands to its product portfolio.

See “Cautionary Statement Concerning Forward-Looking Statements” and “Item 1A. Risk Factors” for a discussion of the uncertainties, risks and assumptions associated with these statements.

In 2018, we began selling our own licensed products direct to consumers through the acquisition of the product formulation, inventory and customer list of Dermacia, a line of skin care and healthcare products (dermaciapro.com) In 2019, we began marketing to our customers through the use of social media such as Instagram, Facebook and other applications, and it became apparent that we needed to employ social media influencers that had specialization in marketing products similar to ours to our desired demographics– typically women who purchase high-end health and beauty products online. We quickly discovered that identifying the appropriate influencers and determining the proper amount to pay for this type of marketing proved to be extremely difficult.

In 2021, we decided that we would need to develop our own software system that would go out and scrape a number of social media applications and help us to determine the most effective influencers for our specific product line (currently only Dermacia). We hired a number of programmers and after several years we created Adapti. Essentially, the Adapti platform is an AI system that creates a ‘data fingerprint’ for client products data and even the entire company by utilizing third party AI such as ChatGPT, OpenAI or Google AI tools. It is management’s belief that Adapti will be able to match product data with influencers best positioned to successfully promote our products and services. Adapti uses such third party AI to determine which influencers will likely be able to generate the most attention - in specifically curated audiences - to attempt to produce the most positive ROI on client spend. The Company has spent approximately $500,000 in fiscal years 2023, 2024 and 2025 developing this software.

Adapti also continually analyzes proprietary data for each specific campaign along with public data sources as additional feedback to inform ongoing promotions and to further refine its algorithm and attempt to monetize accumulated data.

At the same time, as we had programming capabilities, we took on several outsourced projects to generate limited income and fully deploy our personnel.

In 2023, we began beta testing Adapti and in 2024 ran a few live transactions utilizing Adapti in a production environment in assisting with the sale of Dermacia. Adapti is expected to become a part of the strategy with the Ballengee Acquisition to assist the Ballengee clients with its social media opportunities. However, Adapti has not generated any revenues.

The Company began selling its own licensed products direct to consumers through the acquisition of the product formulation, inventory and customer list of Dermacia, a line of skin care and healthcare products.

Comparison of the Year Ended March 31, 2025 and 2024 – Results of Operations

The following summary of our results of operations should be read in conjunction with our audited financial statements, and related notes, included herein.

Revenues

Merchandise revenues include payments received for products shipped and sold through our vendors. Revenues for the year March 31, 2025 decreased $8,778, or 64%, as compared to the year March 31, 2024, primarily due decreased marketing efforts in 2025. Although our efforts in 2024 were nominal as well.

Cost of Revenues

Cost of revenues primarily include the costs of products. Cost of revenues for the year ended March 31, 2025 decreased $200,240 or 100%, as compared to the year ended March 31, 2024, due to the write off of inventory to zero during the 2024 fiscal year.

General and administrative expenses

General and administrative expense include the costs associated with renewal of the company’s state license. General and administrative expenses increased for the year ended March 31, 2025 by $57,808, or 358%, compared to the year ended March 31, 2024, primarily due to payments made to the state of Nevada.

Professional fees

Professional fees include the costs associated with outside consultants to help manage the public entity as well as other professional consultants. Professional fees decreased for the year ended March 31, 2025 by $662,348, or 44%, as compared to the year ended March 31, 2024, primarily due to reducing consultants during 2025 fiscal year.

Other expense

Other expense includes interest expense on note payables. Other expense increased for the year ended March 31, 2025 by $47,132, or 502%, as compared to the year ended March 31, 2024, primarily due to the fact that the Company has new notes baring interest in 2025 compared to 2024.

Comparison of the Year Ended March 31, 2025 and, 2024

Our cash flow activities were as follows for the periods presented:

Operating activities

Net cash flows used for operating activities was ($250,130) and ($6,470) for the year ended March 31, 2025 and 2024, respectively. The increase of net cash flows used for operating activities of $250,130 was primarily due to the Company not issuing shares for stock compensation.

Investing activities

There were no investing activities for the year ended March 31, 2025 and 2024, respectively.

Financing activities

The Company issued new notes payable of $250,000 for the year ended March 31, 2025. There were no financing activities for the year ended March 31, 2024. The Company settled liabilities utilizing share based compensation and related party notes payables.

Comparison of March 31, 2025 and 2024 – Balance Sheet

Key balance sheet line items

Accounts Payable and Accrued Liabilities

Accounts payable represents various vendors bills essential to operate the company. Accounts payable as of March 31, 2025 and March 31, 2024 is $99,952 and $36,803.The accrued expenses are primarily made of professional and legal fees to manage and operate the Company. The primary reason for the increase is due to professional fees. See related party notes payable footnote for further discussion. Accrued expenses of March 31, 2025 and March 31, 2024 is 425,665 and $103,548 respectively. Accrued expenses is made up of following as of March 31, 2025:

Related party convertible notes payable and accrued interest

Related party convertible notes payable are made of two notes as of March 31, 2025. These are two related party notes as of March 31, 2025 are to Campbell Trust and Stuff International totaling $200,000 plus accrued interest of $11,112, There were no related party convertible notes payable as of March 31, 2024.

Related party notes payable and accrued interest

There is one remaining related party notes payable as of March 31, 2025. The note is from Stuff International and totals $223,245 plus accrued interest of $19,267 for a total balance of $242,511. There was another note to MGI. Per the terms of this note, it was fully settled for common stock as of March , 31, 2025. As of March 31, 2025, the MGI note was fully converted for 118,665,325 common stock for note payable balance of $252,002 plus accrued interest of 32,795 for a total balance of $284,797. This represented a 20% discounted share price at that time of $0.0024 per share.

As of March 31, 2024, two notes, Stuff International and MGI made up the note payable balance of $346,016. One note is to Stuff International and the other Note Payable is to MGI. This MGI note is as a result of conversion of accounts payable to a Note payable. As of March 31, 2024, is $84,613 and $252,002 for Stuff International and MGI respectively plus accrued interest on both notes of $9,400, representing a total note payable and accrued interest balance of $346,016.

Critical Accounting Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reported periods. The SEC has defined a company’s critical accounting policies as the ones that are most important to the portrayal of a company’s financial condition and results of operations, and which require a company to make its most difficult and subjective judgments. Based on this definition, the Company has identified the critical accounting policies and judgments addressed below. Estimates are based on historical experience and on various other assumptions that the Company believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Recently Issued Accounting Standards

The Company has reviewed all recently issued, but not yet adopted, accounting standards in order to determine their effects, if any, on its consolidated results of operation, financial position, or cash flows. Based on that review, the Company believes that none of these pronouncements will have a significant effect on its consolidated financial statements. See Note 3 to the consolidated statements in this Annual Report for a complete discussion of our significant accounting policies and estimates.

Other Estimates

See Note 1 to the accompanying audited financial statements included herein and starting on page F-1 for further discussion.

Off-Balance Sheet Arrangements

As of March 31, 2025 and 2024, the Company had no off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on the Company’s financial condition, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Recently Issued and Adopted Accounting Pronouncements

See Note 1 to the accompanying audited financial statements included herein and starting on page F-1 for further discussion.

In July 2025, we completed the acquisition of Ballengee, which we believed had the potential to increase revenue and accelerate our path to profitability. Although integration efforts have been ongoing, we have not yet achieved profitability, and there can be no assurance that the acquisition will result in the anticipated operational or financial benefits.

Successfully realizing the anticipated synergies from this acquisition depends on a number of factors, many of which are outside of our control, including our ability to:

Our business model depends on our ability to represent professional athletes and successfully connect them with endorsement, sponsorship, and marketing opportunities. Demand for these services is highly sensitive to factors beyond our control, including changes in consumer tastes, social and political climate, brand sentiment, social media trends, and the popularity and public perception of the athletes we represent.

The market for athlete marketing is rapidly evolving. Brands may reduce spending on endorsements or shift marketing budgets away from athlete-driven campaigns to other digital strategies. In addition, social media platforms frequently modify their algorithms, content policies, and monetization frameworks, which may affect the visibility and engagement of our clients’ content and reduce the effectiveness of marketing campaigns.

Our revenues are also directly impacted by the on-field performance, injuries, public conduct, and media exposure of the athletes we represent. Negative publicity, reputational harm, or controversies involving our clients could result in termination or non-renewal of endorsement agreements and damage our ability to attract new clients or brand partners.

Furthermore, the AdaptAI platform, which is intended to enhance matching between athletes and marketing opportunities, is still being developed and remains unproven. If consumer trends shift away from influencer-driven marketing, or if AdaptAI fails to deliver measurable value to clients and sponsors, our anticipated growth and competitive positioning may not materialize.

Any of these factors could reduce demand for our services and materially adversely affect our business, financial condition, and results of operations.

For example, in October 2025, we entered into a letter of intent to acquire Levelution Sports, which represents NIL athletes, along with providing compliance, brand partnerships, and athlete development services. There can be no assurances that we will complete the acquisition of Levelution or any other potential transaction, and if completed, whether we will be able to integrate such businesses into the Company, or whether we will be able to expend sufficient operating capital in order to grow and expand such businesses or whether they will ever be profitable acquisitions for the Company, if and when completed.

We have substantial outstanding convertible debt held by our management, which in addition to impacting their potential continued service, could create conflicts of interest.

We have outstanding indebtedness held by certain of our executive officers, directors and their affiliated entities, as of December 31, 2025 of:

Given that we do not have sufficient funds to currently repay these convertible notes, and certain members of management are additionally owed outstanding wages, there can be no assurances that these officers / directors will continue to provide services to the Company.

Additionally, since the holders of these convertible instruments are members of our executive management and Board, conflicts of interest may arise. These individuals may have interests in their capacity as creditors that differ from, or are in addition to, their interests as stockholders or fiduciaries. Although any related-party transaction is subject to applicable fiduciary duties and governance procedures, there can be no assurance that potential conflicts will be resolved in a manner favorable to unaffiliated stockholders.

Amortization Expense

The Company is amortizing the intangible asset of the future value of contracts of $19,180,000 over 36 months. As a result, it incurred an amortization expense of $1,598,333 during the nine months ended December 31, 2025.

Amortization Expense

The Company is amortizing the intangible asset of the future value of contracts of $19,180,000 over 36 months. As a result, it incurred an amortization expense of $1,598,333 during the three months ended December 31, 2025.