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

The information in this discussion and elsewhere in this Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such statements are based upon current expectations that involve risks and uncertainties. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. For example, the words “may,” “will,” “believe,” “anticipate,” “plan,” “expect,” “intend,” “could,” “estimate,” “continue” and similar expressions or variations identify forward-looking statements.

During the quarters ended March 31, 2026 and 2025, the Company did not engage in substantive business operations, did not generate any revenue and had minimal assets. During the quarter ended March 31, 2026, the Company incurred operating expenses of $20,449, consisting principally of professional fees in connection with satisfying its reporting obligations under federal securities law, outside service fees, selling, general and administrative fees and interest expenses, and suffered a net loss of $20,449, as compared to the quarter ended March 31, 2025 in which the Company incurred operating expenses and a loss of $25,594.

Liquidity is the ability of a company to generate adequate amounts of cash to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. Significant factors in the management of liquidity are funds generated by operations, the availability of credit facilities, levels of accounts receivable and accounts payable and capital expenditures.

Our primary requirements for liquidity and capital are to fund the development and acquisition of new Apps, to develop and promote our Esports platform, for sales and marketing initiatives in connection with the launch and promotion of our games and platforms, and for working capital to fund our general corporate needs, including filing reports under the federal securities laws.

Since our customers pay for their purchases by credit or debit card at the time of sale, neither inventories nor receivables are relevant to our business.

During the three months ended March 31, 2026, we borrowed an aggregate of $19,100 under a drawdown promissory note that entitles us to borrow up to $400,000, which bears interest at the rate of 2% per year borrowings and which matures on December 31, 2027. As of March 31, 2026, we had borrowed an aggregate of 343,223 from BGS under the Drawdown Note and the sum of $56,777 remains available for advances thereunder.

We do not have any cash on hand and we have not generated meaningful cash flow from operations sufficient to support our operations. As described above, we have been borrowing cash to fund our operations. We require significant cash to pursue our AI Profit Lab business. We will continue to rely on borrowings from third party loans. However, our future operations are dependent on our ability to secure significant additional financing. Financing transactions may include the issuance of equity or debt securities, obtaining credit facilities or through other financing mechanisms. However, we cannot assure investors that we will be able to secure such financing on terms favorable to us, if at all. Even if we are able to raise the funds required, it is possible that we could incur unexpected costs and expenses, fail to collect significant amounts owed to us, or experience unexpected cash requirements that would force us to seek alternative financing. Furthermore, if we issue additional equity or debt securities, stockholders may experience additional dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of our common stock. The inability to obtain additional capital may continue to restrict our ability to grow and may reduce our ability to continue to conduct business operations. If we are unable to obtain additional financing, we may have to curtail our marketing and development plans and possibly cease our operations.

Operating Activities

We used net cash used in operating activities for the three months ended March 31, 2026 of $17,768 compared to $23,625 for the 2025 period, in each case consisting principally of payments to outside consultants, developers and programmers and payments to web hosting and email hosting providers. The decrease in cash used in operating activities was the result of our limited cash resources to deploy to our operations.

Financing Activities

During the three months ended March 31, 2025, net cash provided by financing activities was $19,100 compared to $23,600 during the 2025 period. In each year, financing was provided by loans to the Company. We utilized all of the proceeds that we received from the borrowings for working capital.

Contractual Commitments as of March 31, 2026

As of March 31, 2026, the Company had no contractual obligations, as such term is defined in Item 303 of Regulation S-K promulgated under the Securities Act of 1933, as amended.

The notes to our financial statements for the quarter ended March 31, 2026 and the report of our independent registered public accounting firm on our financial statements for the year ended December 31, 2025 include an explanatory paragraph with respect to our ability to continue as a going concern. As reflected in the accompanying financial statements, the Company has a deficit accumulated of $1,129,811 at March 31, 2026. The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and pay its liabilities arising from normal business operations when they come due. The accompanying financial statements do not include any adjustments that might arise because of this uncertainty The presence of the going concern explanatory paragraph suggests that we may not have sufficient liquidity, or minimum cash levels, to operate our business. Since our inception, we have incurred losses and anticipate that we will continue to incur losses until such time as our Apps generate sufficient revenue to offset our research and development, general and administrative and sales and marketing expenses. We will need to raise additional capital to fund our near-term operational plans described elsewhere in this report. We cannot assure you that we will be successful in our operational plans. We cannot be sure that the additional capital we require will be available on acceptable terms or at all. If adequate funds are not available on acceptable terms or at all, we may be unable to develop or enhance our services and products, take advantage of future opportunities, repay debt obligations as they become due, or respond to competitive pressures, any of which would have a material adverse effect on our business, prospects, financial condition, and results of operations.

The discussion and analysis of financial condition and results of operations are based upon the Company’s financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of these condensed consolidated financial statements requires estimates and assumptions that affect the reported amounts of assets, liabilities, sales and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, our management evaluates its estimates based upon historical experience and various other assumptions that it believes to be reasonable in 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.

The Company believes that its significant accounting policies affect its more significant estimates and judgments used in the preparation of its consolidated financial statements. Our significant accounting policies are described in Note C to our audited financial statements included in our annual report on Form 10-K for the period ended December 31, 2025. We do not believe that there has been any significant change in the Company’s critical accounting policies since December 31, 2025.

Emerging Growth Company Critical Accounting Policy Disclosure: We qualify as an “emerging growth company” under the 2012 JOBS Act. Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. As an emerging growth company, we can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period.