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

Except for the historical information, the following discussion contains forward-looking statements that are subject to risks and uncertainties. We caution you not to put undue reliance on any forward-looking statements, which speak only as of the date of this report. Our actual results or actions may differ materially from these forward-looking statements for many reasons, including the risks described in “Risk Factors” and elsewhere in this annual report.reasons. Our discussion and analysis of our financial condition and results of operations should be read in conjunction with the financial statements and related notes and with the understanding that our actual future results may be materially different from what we currently expect.

We had revenues of $1,296,796$3,126,891 and $1,616,148$1,296,796 during the years ended December 31, 20242025 and 2023,2024, respectively, aan decreaseincrease of $319,352$1,830,095 or or 19.8%.141.1%. We had cost of sales of $458,158$1,586,194 and $609,651,$458,158, respectively, for gross profit of $838,638$1,540,697 and $1,006,497,$838,638, respectively. Revenues Revenues are derived from the design, manufacture, and delivery of certain licensed products in accordance with our GloBrands-HUSTLER® distribution distribution agreement. We had higher revenue in the priorcurrent period due to additionalhigher incomesales fromin our vapor product line where sales picked up in the licensinglast half of noveltiesthe in an international territory.year.

During the year ended December 31, 20242025 and 2023,2024, employee costs were $515,807$508,553 and $511,519$515,807, respectively, ana increasedecrease of only $4,288$7,254 or 0.8%.1.4%.

During the year ended December 31, 20242025 and 2023,2024, selling, general, and administrative expenses were $873,570$1,161,867 and $509,895,$873,570, respectively, an an increase of $363,675$288,297 or 71.3%.33%. The increase in operating expenses year over year is the result of additional marketing expense to launch product on detailretail chains.

For the year ended December 31, 2024,2025, we had total other expense of $1,996,615.$418,445. This consisted of $790,589$822,735 of interest expense, ana gain on settlement impairmentof debt of $328,857, a gain on forgiveness of debt of $19,859, a loss on out investmentdisposal of $52,000equipment of $9,323 and a lossgain of $1,161,498$64,891 on derivative valuation. We also had other income of $250 and a gain on the disposal of property of $7,222.$6.

For the year ended December 31, 2023,2024, we had total other expense of $536,782.$1,996,615. This consisted of interest expense$790,589 of $768,899,interest expense, an impairment loss on our investment of $52,000 and a loss of $1,161,498 on the fairderivative valuevaluation. We also had other income of derivative$250 liabilities of $292,100,and a gain on settlementthe disposal of debtequipment of $194,709, a gain on forgiveness of debt of $328,384 and other income of $1,124.$7,222.

During the year ended December 31, 2024,2025, operations used $46,354$1,338,174 of net cash, comprised of a loss from discontinued operations of $153,886,$153,466, noncash noncash items totaling $1,310,404($152,221), consisting primarily of lossesgains recognized from the changes in fair valuessettlement of derivative liabilitiesdebt, and debt discount amortization. Changeschanges in working capital totaled $1,122,020 During the year ended December 31, 2023, operations used $72,607 of net cash, comprised of a loss from continuing operations of $551,699, noncash items totaling $20,948,388 consisting primarily of losses recognized from the changes in fair values of derivative liabilities, debt discount amortization and a gain of $20,831,526 from discontinued operations. Changes in working capital totaled $587,421.($484,319).

During the year ended December 31, 2025, we neither used or received any cash for investing activity. During the year ended December 31, 2024, we were provided with $15,400 of net cash from the sale of an automobile.

During the year ended December 31, 2024,2025, we were provided $30,954$1,347,763 of net cash in financing activities mainly comprised of repaymentsa decrease in our bank onoverdraft related-partyof loans that totaled $61,336$30,384 and proceeds from related-party loans of $61,906.$1,378,147.

During the year ended December 31, 2023,2024, we were provided approximately $63,000$30,954 of net cash in financing activities mainly comprised of repayments on related-party loans that totaled $47,478 and$61,336, proceeds from related-party loans of $114,600.$61,906 and an increase in our bank overdraft of $30,384.

We currently have an outstanding amended, restated, and consolidated secured convertible debenture with Tekfine, LLC, an unrelated entity, entity, with a maturity date of April 30, 2027, to the extent not previously converted. The amended debenture has a total outstanding principal balance of $2.4 million, with accrued interest of $2$2.2 million as of December 31, 2024.2025. We also have four additional convertible debentures with Tekfine with a maturity datesdate ranging from February 28, 2022, until MayApril 30, 2022,2027, totaling $275,000, unless earlier converted. The convertible debentures and accrued interest are convertible into shares of our common stock at the lower of $100 or $0.10 (depending on the instrument) or the lowest bid price for the 20 trading days prior to conversion.

Critical Accounting Policies and Estimates

Results of Operations for the Three Months Ended MarchJune 31,30, 2026, Compared to the Three Months Ended MarchJune 31,30, 2025

During the three months ended MarchJune 31,30, 2026 and 2025, we had net sales of $1,161,353$1,171,666 and $460,816,$168,435, respectively, an increase of $700,537$1,003,231 or 152%.595.6%. We had cost of sales of $697,971$552,642 and $190,522,$83,493, respectively, and gross profit of $463,382$619,024 and $270,294,$84,942, respectively. Revenues are derived from the design, manufacture, and delivery of certain licensed products in accordance with our GloBrands-HUSTLER® distribution agreement. We had higher revenue in the current period due to increaseincreased demand for our vapervapor products.

During the three months ended MarchJune 31,30, 2026 and 2025, employee costs were $130,020$128,567 and $128,908$122,546, respectively, an increase of only $1,112$6,021 or 0.9%.4.9%.

During the three months ended MarchJune 31,30, 2026 and 2025, selling, general, and administrative expenses (“S,GSG&A”) were $297,240$329,829 and and $184,659,$155,654, respectively, an increase of $112,581$174,175 or 61%.111.9%. The increase in S,GSG&A expenses period over period was the result of increased promotional promotional activities to support higher sales.

Total other expense during the three months ended MarchJune 31,30, 2026 was $101,859$256,145 compared to $64,999$331,231 in the prior period. In the current period we had $214,734 of interest expense and a loss of $41,411 on derivative valuation. In the prior period we had $211,806$203,387 of interest expense, a gainloss of $104,436$127,850 on derivative valuation and aother gain on forgivenessincome of debt of $5,511. In the prior period we had $202,374 of interest expense, a gain of $132,234 on derivative valuation and a gain on forgiveness of debt of $5,141.$6.

Our net loss from continuing operations for the three months ended MarchJune 31,30, 2026, was $65,737$95,517 compared to $108,272$524,489 for the three months ended MarchJune 31,30, 2025, a decrease toin our net loss from continuing operations of $42,535.$428,972 or 81.8%. Our net loss decreased in the current period because of our income from operations of $160,628 in the current period due compared to a loss from operations of $193,258 in the reasonsprior discussed above.period.

For the three months ended MarchJune 31,30, 2026 and 2025, we recognized a loss from discontinued operations of $37,841$12,407 dueand to$38,261, respectively, of interest expense.

We have had a history of losses from operations, as our expenses have been greater than our revenue. Our accumulated deficit was approximately $60.1$60.2 million at MarchJune 31,30, 2026. As of MarchJune 31,30, 2026, we had current assets of $2.3$2.4 million and current liabilities of approximately $22.6 $22.5 million, resulting in a working capital deficit of approximately $20.2 million at MarchJune 31,30, 2026.

During the threesix months ended MarchJune 31,30, 2026, financing activities provided $60,855$23,962 of cash, compared to $469,538$631,423 of cash provided during the six three months ended MarchJune 31,30, 2025. Cash provided in financing consisted mostly of related party loans.

We currently have an outstanding amended, restated, and consolidated secured convertible debenture with Tekfine, LLC, an unrelated entity, with a maturity date of April 30, 2027, to the extent not previously converted. The amended debenture had a total outstanding principal balance of $2.4 million, with accrued interest of $2approximately $2.2 million as of MarchJune 31,30, 2026. We also have four additional convertible debentures with TekfineTekfine. withOn November 26, 2025, the Company and the lender entered into a Forbearance and Standstill Agreement, extending the maturity dates rangingon fromall Decemberdebentures to 8, 2022, until DecemberApril 30, 2022, totaling $275,000, unless earlier converted. The convertible debentures and accrued interest are convertible into shares of our common stock at the lower of $100 or $0.10 (depending on the instrument) or the lowest bid price for the 20 trading days prior to conversion.2027.

As of MarchJune 31,30, 2026 and December 31, 2025, there is $21,882$1,424,661 and $21,882$1,400,699 of short-term advances due to related parties ,parties, respectively. The advances are due on demand and included in current liabilities. No demand for payment has been made.

TheseThe interimaccompanying unaudited financialcondensed statements have been prepared on the going concern basis, which assumes that adequate sources of financing will be obtained as required and that our assets will be realized and liabilities settled in the ordinary course of business. Accordingly, the interim unauditedconsolidated financial statements do not include any adjustments relatedrelating to the recoverability and classification of recorded assets or the amounts and classification of assets and liabilities that might be necessary shouldif wethe notCompany beis unable to continue as a going concern.