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

The Company has an accumulated deficit of $24.1$38.4 million as of December 31, 2024.2025 and a net loss of $14.3 million for the year ended December 31, 2025. This deficit and loss may impact the future of the Company in many ways including, but not limited to, making it more difficult difficult to borrow money, sell stock or to maintain a good trading price for our common stock.

Our capital requirements in connection with our development activities of our residential property’s operations have been and will continue to be significant. AsWe of December 31, 2024, we do expect tomay require additional funding for more than one year in order to continue development. construction of houses, infrastructure and marketing activities associated with our properties. However, thereThere can be no assurances that we will not need additional funding in the the future or that our current cash position will be sufficient to fund any future plans to accelerate our commercialization efforts.efforts In the event additional funding is necessary, there can be no assuranceor that financing will be available in amounts or on terms acceptable to us, if at all.

Our relatively lackshort period of operations history in the industry makes evaluating our business difficult.

We have almosta tenshort yearsperiod of time in terms of operational history.history in our industry. Accordingly, our operations are subject to the risks inherent in the establishment of a new business enterprise, including access to capital, successful implementation of our business plan and limited revenue from operations. We cannot assure you that our intended activities or plan of operation will be successful or result in revenue or profit to us and any failure to implement our business plan may have a material adverse effect on the business of the Company.

We may borrow money at variable interest rates in the future to finance operations. Increases in interest rates would increase our interest expense on our variable rate debt, which would adversely affect cash flow and our ability to service our debt and make distributions to us.our stockholders.

We have procured a $2,000,000 general liability insurance policy for our business. In addition, we procured a $1,000,000 Executiveexecutive and Corporatecorporate securities Securitiesliability Liabilitypolicy. policy (“D&O”). To the extent that we suffer a loss of a type which would exceed our limit, we could incur significant expenses in defending any action against us and in paying any claims that result from a settlement or judgment against us. Adverse publicity could result in a loss of consumer confidence in our business or our securities.

General economic conditions in Mexico have an impact on our business and financial results,Mexico, such as inflation, high energy prices, expensive telecommunication services, the scarcity of skilled labor, and the Mexican government’s inability to regulate these input markets may diminish Mexico’s comparative advantage and earning capacity in key industries such as real estate; additionally, weakening of the USU.S. dollarsdollar versus the Mexican Peso and tax fluctuations in in Mexico.Mexico, may have an adverse impact on our business and financial results. The global economy in general and the economic conditions in Mexico remainsremain uncertain. Weak economic conditions could result in lower demand for our properties, resulting in lower sales, earnings, and cash flows.

The value of our common stock may be affected by the foreign exchange rate between U.S. dollars and the currencyMexican of Mexico,Peso, and between those currencies and other currencies in which our revenues, expenses, assets, and liabilities may be denominated. For example, to the extent that we need to convert the U.S. dollars into the currency ofMexican MexicoPesos for our operational needs, should the currencyMexican of MexicoPeso appreciate against the U.S. dollar at that time, our financial position, theour business of the Company,business, and the price of our common stock may be harmed. Conversely, if we decide to convert the currency ofMexican MexicoPesos into the U.S. dollars for the purpose of declaring dividends on our common stock or for other business purposes and the U.S. dollar appreciates against the currencyMexican of Mexico,Peso, the U.S. dollar equivalent of our earnings from our subsidiaries in Mexico would be reduced.

We may, in the future, issue additional shares of common stock, which would reduce investors’ percentpercentage of ownership and may dilute our share value.

Our Articles of Incorporation authorize the issuance of 150,000,000250,000,000 shares of common stock. As of the date of this reportfiling, we had 104,470,465 4,664,667 shares of common stock outstanding. Accordingly, we may issue approximately 245,335,333 additional shares of common stock subject to limitation on reserve amounts for other securities outstanding. The future issuance of common stock may result in substantial dilution in the percentage of our common stock held by our then existing shareholders. We may value any common stock issued in the future on an arbitrary basis. The issuance of common stock for future services or acquisitions or other corporate actions may have the effect of diluting the value of the shares held by our investors and might have an adverse effect on any trading market for our common stock.

Our board of directors has the authority to fix and determine the relative rights and preferences of preferred stock. Our board of directors has the authority to issue up to 2,010,000 shares of our preferred stock without further stockholders’stockholder approval.approval (including 200,000 shares that have been designated Series A, 1,000 shares that have been designated Series B, 15,000 shares that have been designated Series C, and 20,000 shares that have been designated Series D) (see “Description of Capital Stock”). As a result, our board of directors could authorize the issuance of a new series of preferred stock that would grant to holders of preferred stock the right to our assets upon liquidation, or the right to receive dividend payments before dividends are distributed to the holders of common stock. In addition, our board of directors could authorize the creation of a new series of preferred stock that has greater voting power than our common stock or that is convertible into our common stock, which could decrease the relative voting power of our common stock or result in dilution to our existing stockholders.

Revenue increased decreased by $1,036,461$5,660,527 to $8,094,940 for the year ended December 31, 2024, from $7,058,479$2,434,413 for the year ended December 31, 2023.2025, from $8,094,940 for the year ended December 31, 2024. The revenue recognized during the year ended December 31, 20242025, includes real estate sales, interest from financed sales, financing fees, previously deferred revenues, and components of home construction.

Cost of revenue increased by $314,154$376,472 to $1,242,057 for the year ended December 31, 2024, from $927,903$1,618,529 for the year ended December 31, 2023.2025, from $1,242,057 for the year ended December 31, 2024. Cost of revenue includes land cost and related land improvements including infrastructureinfrastructure, construction and subdivision costs.

Operating expenses decreasedincreased by $1,624,606$5,247,071 to $2,730,857$7,977,928 for the year ended December 31, 2024,2025, from $4,355,463$2,730,857 for the year ended December 31, 2023.2024.

Other expenses decreasedincreased by $2,774,149$6,061,895 to $7,136,140 $1,074,245 for the year ended December 31, 2024,2025, from $3,848,394$1,074,245 during ended December 31, 2023.2024. Such change is primarily due to the change in fair value of the Company’s derivative liability,liability aof decrease$2,800,243 inand loss on debt from extinguishment,extinguishment aof decrease in the loss on acquisition,$1,976,914, with interest expense decreasingincreasing $1,175,377 year over year.

Net Income ( Loss)

As a result of the foregoing, the Company finished the year ended December 31, 2024,2025, with net incomeloss of $3,047,781,$14,298,184, as compared to anet loss income of $2,073,281$3,047,781 for the year ended December 31, 2023.2024.

Cash was $26,120$4,186 and $140,247$26,120 as of December 31, 2024 2025 and 2023,2024, respectively. As shown in the accompanying financial statements, we recorded income loss of $3.0$14.3 million for year ended December 31, 2024.2025. Our working capital deficit as of December 31, 2024,2025, was $11.6$24.3 million. These factors and our ability to raise additional capital to accomplish our objectives, raises substantial doubt about our ability to continue as a going concern. We expect our expenses will continue to increase during the foreseeable future as a result of increased operations, increased construction activity and the development of current and future projects which include our current business operations.

As a result of these activities, we experienced a decrease in cash of $21,934 for the year ended December 31, 2025. Our ability to continue as a going concern is dependent on our success in obtaining additional financing from investors or from the sale of our common shares.

Results of Operations for the Three and Six Months Ended March 31,June 30, 2026, compared to the Three and Six Months Ended MarchJune 31,30, 2025

Revenue increased decreased by $408,212$632,875 to $956,836 for the three months ended March 31, 2026, from $548,624$142,496 for the three months ended MarchJune 31,30, 2026, from $775,371 for the three months ended June 30, 2025. The revenue recognized during the three months ended MarchJune 31,30, 20262026, includes real estate sales, interest from financed sales, financing fees, and components of home construction.

Cost of revenue increaseddecreased by $45,563$312,670 to $319,743 for the three months ended March 31, 2026, from $274,180$129,174 for the three months ended MarchJune 31,30, 2026, from $441,874 for the three months ended June 30, 2025. Cost of revenue includes land cost and related land improvements and construction costs, including infrastructure and subdivision costs.

Operating expenses increased by $1,696,654$4,301,735 to $2,808,758 $6,455,608 for the threesix months ended MarchJune 31,30, 2026, from $1,112,103$2,423,873 for the threesix months ended March 31,June 30, 2025. This is primarily due to the Company issuing a large amount of common stock for services during Q1 2026.

Sales and marketing costs decreased by $19,757 to $170,182 for the three months ended June 30, 2026, from $189,939 for three months ended June 30, 2025. Sales and marketing costs decreased by $3,391,$23,148 to $184,120 in$354,302 for the threesix months ended MarchJune 31,30, 2026, from $187,511$377,450 infor the three six months ended MarchJune 31,30, 2025. Sales costs are related to real estate’s sales commissions. Marketing costs include advertising, prospective customers’ education, travel, and accommodation.

General and administrative costs increased by $2,336,007 to $3,457,836 for the three months ended June 30, 2026, from $1,121,829 for the three months ended June 30, 2025. General and administrative costs increased by $1,700,045, $4,036,051 to $2,624,638$6,082,474 infor the threesix months ended MarchJune 31, 30, 2026, comparedfrom to $924,593$2,046,423 for the threesix months ended MarchJune 31,30, 2025. General and administrative increased for mainly due to a large increase in stock-based compensation expenses during the threesix months ended MarchJune 31,30, 2026. Other general and administrative costs mainly include commissions paid attributable to salessales, consulting, and professional fees such as legal and accounting.

Other expenses increaseddecreased by $443,835 $670,556 to $564,980$329,845 infor the three months ended MarchJune 31,30, 2026, from $121,145other inincome of $1,000,401 for the three months ended MarchJune 31,30, 2025. Such change is primarily due to a large increase in interest expense, offset by a reduction in the change in fair value of the Company’s derivative liabilityliability, withoffset Q1by an 2026increase alsoin havinginterest expense and increase in losses on conversion of debt, due to new convertible debt instruments issuedconversion, during 2025.the three months ended June 30, 2026.

The Company finished the three months ended MarchJune 31,30, 2026, with a net loss of 2,736,645,$3,963,373, as compared to a net loss of $958,806$1,978,642 for the three months ended March 31,June 30, 2025. The decrease in our net income resulted from the reasons outlined above.

Cash was $15,635$37,542 and $4,186 as of MarchJune 31,30, 2026, and December 31, 2025, respectively. As shown in the accompanying financial statements, we recorded net loss of $2.7$6.7 million for the three six months ended MarchJune 31,30, 2026. Our working capital deficit as of MarchJune 31,30, 2026, was $21.4 $22.0 million. These factors and our ability to raise additional capital to accomplish our objectives, raises substantial doubt about our ability to continue as a going concern. We expect our expenses will continue to increase during the foreseeable future as a result of increased operations, increased construction activity and the development of current and future projects which include our current business operations.

Net cash cash flows used in operating activities for the threesix months ended MarchJune 31,30, 2026, was $324,884 $1,297,179 which resulted primarily due to a net loss of $2,736,645,$6,700,018, non-cash share-based compensation of $3,625,524,$6,357,546, loss from debt extinguishment of $651,243,$815,441, stock issued for commitment shares of $582,499,$734,976, non-cash interest and amortization of OID expense of $569,011,$1,513,174, offset by a change in fair value of derivative of $1,281,382 $2,278,320 and net change in assets and liabilities of $1,965,785.$1,927,479.

Net cash flows used in operating activities for the threesix months ended MarchJune 31,30, 2025, was $116,409$491,464 which resulted primarily due to net loss of $958,806,$2,937,448, offset by non-cash share-based compensation of $678,275, and$1,296,777, change in fair value of derivative liability of $58,026,$550,470, offset and by net change in assets and liabilities of $222,148.$598,738.

Net cash flows used in investing activities was $81,710$39,841 for the threesix months ended MarchJune 31,30, 2026. The funds were primarily used for the development of the various projects and additional investment for land development.development, Thereoffset wasby nocash activityinflows duringfrom the threechange monthsin endedthe Marchlong-term 31,accounts receivable 2025.balance.

Net cash flows provided by financing activities for the threesix months ended MarchJune 31,30, 2026, was $418,043,$1,370,376, primarily from cash proceeds from convertible debt for $1,583,029,$2,641,529 and cash proceeds from other loans of $491,700, offset by cash payments on other loans of $489,561,$729,724 cash payments on convertible debt of $480,625,$539,791, along with payments on promissory notes and cash dividends.dividends on the Series A and Series D preferred stock.

Net cash flows provided by financing activities for the threesix months ended MarchJune 31,30, 2025, was $277,302,$565,082, primarily from cash proceeds from other loans for $179,167$584,575 and cash proceeds from related party promissory notes of $98,135.$112,561, offset by dividends paid on preferred stock.

As a result of these activities, we experienced an increase in cash of $11,449$33,356 for the threesix months ended MarchJune 31,30, 2026.

During the period ended MarchJune 31,30, 2026, we have not engaged in any off-balance sheet arrangements.