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

Our Common Stock is traded on the OTC Pink Sheets.Markets. The prices quoted may not reflect the price at which you can resell your shares. Because of the illiquid nature of our stock, we are subject to rules of the U.S. Securities and Exchange Commission that make it difficult for stockbrokers to solicit customers to purchase our stock. This reduces the number of potential buyers of our stock and may reduce the value of your shares. There can be no assurance that a trading market for our stock will continue or that you will ever be able to resell your shares at a profit, or at all.

Eco Bright'sOur consolidated financial statements are prepared using Generally Accepted Accounting Principles applicable to a going concern that contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, Ecowe Bright has recentlyhave accumulated losses since its inception and has have had negative cash flows from operations until 2023,operations, which raise substantial doubt about itsour ability to continue as a going concern. Management's plans plans with respect to alleviating the adverse financial conditions that caused management to express substantial doubt about theour Eco Bright'sability ability to continue as a going concern are as follows:

The ability to continue Eco Bright’s our operations depends on itsour ability to generate and grow revenue and results of operations as well as our ability to access capital markets when necessary to accomplish strategic objectives. We expect to continue to incur losses for the immediate future and will need additional equity or debt financing until we can achieve profitability and positive cash flows from operating activities. Our future capital requirements for for operations will depend on many factors, including the ability to generate revenues and obtain capital.

There can be no assurance that Eco Brightwe will be able to achieve its business plans, raise any more required capital or secure the financing necessary to achieve its current operating plan. The ability of Eco Bright to continue as a going concern is dependent upon itsour ability to successfully accomplish the plan described in the preceding paragraph and eventually attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Companycompany is unable to continue as a going concern.

Our common stock is currently traded on the PinkOTC SheetsMarkets OTCQB under the symbol EBFI.UTKN. WeOur goal is to uplist to a larger exchange. However, we cannot assure you that we will be able to meet the initial listing standards of the stock exchanges or quotation medium we are hoping to uplist to, or that we will be able to maintain a listing of our Commoncommon Stockstock on any stock exchange. We expect that our Common Stock would continue to be eligible to trade on the “pink sheets,” where our stockholders may find it more difficult to trade shares in our Common Stock or obtain accurate quotations as to the market value of our Common Stock. In addition, we wouldmay be subject to an SEC rule that, if we failed to meet the criteria outlined in such rule, imposes various practice requirements on broker-dealers who sell securities governed by such rule to persons other than established customers and accredited investors. Consequently, such a rule may deter broker-dealers from recommending or trading shares in our Commoncommon Stock,stock, which may further affect its liquidity. This would also make it more difficult for us to raise additional capital following a business combination.

We are currently applying for several licenses in different Jurisdictions. If theylicenses are not approved it could affect our growth rate.

We plan to operate in El Salvador, Tunisia, United Arab Emirates, Thailand, IndonesiaThailand and Guatemala.Indonesia. The risks associated with the various regimes and government oversite in these countries countries could impact our business.

We plan to operate using licenses with El Salvador, Tunisia, United Arab Emirates, Thailand, IndonesiaThailand and Guatemala.Indonesia. Any country can change regulations and make licensing and compliance more difficult and/or more expensive.

El Salvador has become a global leader in crypto assets and crypto markets. They have been aggressively marketing crypto assets and have created regulations within El Salvador that govern their digital asset markets. This can provide risk if they begin to be more restrictive in certain activities that the company is involved with. We will be using the Digital Asset Provider License (DASP) from El Salvador and the revocation or suspension of this license could cause harm to the company.

Management’s discussion and analysis (“MD&A”) should be read in conjunction with the consolidated financial statements and accompanying notes included in Item 8 of this Annual Report on Form 10-K (annual report), which include additional information about our accounting policies, practices, and the transactions underlying our financial results. The preparation of our consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) requires us to make estimates and assumptions that affect the reported amounts in our consolidated financial statements and the accompanying notes, including various claims and contingencies related to lawsuits, taxes, environmental and other matters arising during the normal course of business. We apply our best judgment, our knowledge of existing facts, circumstances, and actions that we may undertake in the future in determining the estimates that affect our consolidated financial statements. We evaluate our estimates on an ongoing basis using our historical experience, as well as other factors we believe appropriate under the circumstances, such as current economic conditions, and adjust or revise our estimates as circumstances change. As future events and their effects cannot be determined with precision, actual results may differ from these estimates. Our MD&A contains forward-looking statements that discuss, among other things, future expectations and projections regarding future developments, operations, and financial condition. All forward-looking statements are based on management’s existing beliefs about present and future events outside of management’s control and on assumptions that may prove to be incorrect. If any underlying assumptions prove incorrect, our actual results may vary materially from those anticipated, estimated, projected, or intended. We undertake no obligation to publicly update or revise any forward-looking statements to reflect actual results, changes in expectations, events or circumstances after the date of this Report is filed. EcoUniversal Bright Future,Token, Inc. and its subsidiaries are referred to collectively as “EcoUniversal BrightToken” “the Company,” “we, “us” or “our” in the following discussion and analysis.

At December 31, 2024,2025, we had $84,733 $1,151,236 in assets, $12,930 of them current assets and a $178,971 $505,219 accumulated deficit. Our current liquidity resources are not sufficient to fund anticipated level of operations for at least the next 12 months from the date these consolidated financial statements were issued. As a result, there is substantial doubt regarding the Company’ ability to continue as a going concern.

The ability to continue Eco Bright’sUniversal Token’s operations depends on its ability to generate and grow revenue and results of operations as well as our ability to access capital markets when necessary to accomplish strategic objectives. We expect to continue to incur losses for the immediate future and will need additional equity or debt financing until we can achieve profitability and positive cash flows from operating activities. Our future capital requirements for operations will depend on many factors, including the ability to generate revenues and obtain capital.

Operating expenses were $169,033 $355,026 during the year ended December 31, 2024,2025, compared to $18,716$156,838 during the year ended December 31, 2023.2024. Operating expenses consisted mainly of $147,234 $303,264 and $0$147,234 in professional fees; $0 and $14,946 in salaries$51,762 and wages; and, $21,799 and $3,770$9,604 in general and administrative expenses during the years ended December 31, 20242025 and 2023,2024, respectively. Increases in professional fees and general and administrative expenses are a result of theincreased Universasoftware development Hub Africaactivities acquisitionrequiring whichadministrative closed in December 2023.support.

As a result of the above, we recognized a net loss before discontinued operations of $166,378 $352,166 and $156,838 for the yearyears ended December 31, 20242025 and net2024, income of $13,131 for the year ended December 31, 2023.respectively.

Non-current assets as of December 31, 20242025 totaled $430,306, $1,138,306, consisting of $425,500$1,133,500 in capitalized software development costs and $4,806 in intangible assets. Non-current assets as of December 31, 20232024 totaled $296 $447,774, consisting of property$425,500 in software development costs, $4,806 in intangible assets and equipment,assets netof discontinued operations of accumulated depreciation .$17,468.

Total liabilities totaledwere $670,846 $30,000 and $10,868$658,009 as of as of December 31, 20242025 and 2023,2024, respectively, and were all current. Total current liabilities at December 31, 2025 consisted of accounts payable and accrued expenses totaling $20,620$30,000. Total current liabilities at December 31, 2024 consisted of accounts payable and $10,868accrued expenses totaling $7,783 and notes payable to related parties of $650,226 and $0, respectively.$650,226.

During the yearyears ended December 31, 2025 and 2024, our operating activities used net cash of $166,897.$372,889 and $166,897, respectively. Uses of cash during the year ended December 31, 2025 were mainly due to the $356,248 in net loss as well as and $2,560 in gain from disposal of subsidiary and net changes in non-cash currency translation, partially offset by $15,919 in net changes in other current liabilities. Uses of cash during the year ended December 31, 2024 arewere mainly due to the $166,378 in net loss as well as a $15,967 net increase in other current assets. Uses are partially offset by $11,743 in changes in cash used from accounts receivable and payable and $3,705 in non-cash expenses such as depreciation and currency translation.

During the yearyears ended December 31, 2025 and 2024, we used $709,527 and $430,306 in cash investing activities.activities, respectively. Uses of cash during the year ended December 31, 2025 were due to $708,000 in software development costs and $1,527 in cash distributed in the disposal of its subsidiary UHA. Uses of cash during the year ended December 31, 2024 are due to $425,500 in software development costs and $4,806 in purchases of intangible assets. There was no cash used in investing activities during the year ended December 31, 2023.

At December 31, 2025 and 2024, we had a working capital deficit of $586,113, compared to working capitaldeficits of $6,532$17,070 atand December$590,744, 31, 2023.respectively.

EcoUniversal BrightToken recognizes revenue in accordance with the provisions of Accounting Series Codification (“ASC”) 606, Revenue From Contracts With Customers (“ASC 606”), which provides guidance on the recognition, presentation, and disclosure of revenue in financial statements. ASC 606 outlines the basic criteria that must be met to recognize revenue and provides guidance for disclosure related to revenue recognition policies. In general, the Company recognizes revenue based on the allocation of the transaction price to each performance obligation as each performance obligation in a contract is satisfied.

The Company intends to provide digital assets from El Salvador for sale, tokenize assets for sale and develop blockchain tools for sale that will provide entry to the market for countries such as Tunisia and United Arab Emirates. During 2025, the Company plans to enter into agreements in connection with its blockchain products in Thailand, Indonesia,Thailand and Guatemala.Indonesia. Revenue recognition for the sale of digital and tokenized assets will be based on the allocation of the transaction price to each performance obligation as each performance obligation in a contract is satisfied, title or access to digital assets are transferred and amounts are due are collected or collectible.

Trade accounts receivable are recorded at invoiced amounts. Eco BrightUniversal Token does not provide any unusual contractual trade terms, sales incentive programs or discounts. Allowances for doubtful accounts are established for estimated losses resulting from the inability of customers to make required payments. Allowances are determined based on a review of specific customer accounts where collection is doubtful, as well as an assessment of the collectability of total receivables. Receivables are written off against the allowance when it is determined that the amounts will not be recovered.

In accordance with ASC 350-40, Internal Use Software, Eco BrightUniversal Token capitalizes certain internal use software development costs associated with creating and enhancing internally developed software related to its platforms. Software development activities generally consist of three stages (i) the research and planning stage, (ii) the application and development stage, and (iii) the post-implementation stage. Costs incurred in the planning and post-implementation stages of software development, or other maintenance and development expenses that do not meet the qualification for capitalization are expensed as incurred. Costs incurred in the application and infrastructure development stage, including significant enhancements and upgrades, are capitalized. Capitalized costs include personnel and related employee benefits expenses for employees or consultants who are directly associated with and who devote time to software projects, and external direct costs of materials obtained in developing the software. Software development costs, when placed in service, are amortized on a straight-line basis over their estimated useful life upon initial release of the software or additional features. A related license fee shall also commence the amortization only upon capitalization of software development.

The Company is an artificial intelligence and blockchain technology company that intends to utilize real world asset tokenization to create a virtual investment vehicle on the blockchain linked to tangible assets such as real estate, precious metals, art and collectibles. The Company intends to provide digital assets from El Salvador, tokenize assets and develop blockchain tools for entry to countries such as the United Arab Emirates and Thailand.Emirates.

At MarchJune 31,30, 2026, we had $6,898$2,697 in current assets, $1,155,204$1,151,003 in total assets, $7,639$22,128 in current liabilities, $44,000 in non-current liabilities, $66,128 in total liabilities and a $552,944$571,580 accumulated deficit. Our current liquidity resources are not sufficient to fund the anticipated level of operations for at least the next 12 months from the date these consolidated financial statements were issued. As a result, there is substantial doubt regarding the Company’ ability to continue as a going concern.

For the Three Monthsmonths Endedended MarchJune 31,30, 2026 and 2025

We did not recognizedrecognize any revenues during the three months ended MarchJune 31,30, 2026 and 2025.

Operating expenses were $17,725$18,636 during the three months ended MarchJune 31,30, 2026, compared to $93,153$221,426 during the three months ended MarchJune 31,30, 2025. Operating expenses consisted of $11,999$13,990 and $88,335$193,085 in professional fees and $5,726$4,646 and $4,818$28,341 in general and administrative expenses during the three months ended MarchJune 31,30, 2026 and 2025, respectively.espectively. DecreasesThe $179,095 decrease in professional fees areis the result of decreases in audit,consulting, consultingaudit and legal fees.fees from decreases operations and development activity. General and administrative expenses remaineddecreased fairly flat during expenses$23,695 during the three months ended MarchJune 31,30, 2026 compared to the comparable 2025 period.period, also from decreased operations and development activity.

Total other expenses were $0 and $808$165 during the three months ended MarchJune 31,30, 2026 and 2025, respectively.

As a result of the above, we recognized net losses of $17,725$18,636 and $93,961$221,591 for the the three months ended MarchJune 31,30, 2026 and 2025, respectively.

Current assets as of MarchJune 31,30, 2026 totaled $6,898,$2,697, consisting of $223$27 in cash and prepaid assets of $6,675.$2,670. Current assets as of December 31, 2025 totaled $12,930, consisting of $1,842 in cash and prepaid assets of $11,088.

Non-current assets as of MarchJune 31,30, 2026 and December 31, 2025 totaled $1,148,306 and $1,138,306, respectively, consisting of $1,143,500 and $1,133,500 in software development costs and $4,806 and $4,806 in intangible assets, respectively.

Total current liabilities as of MarchJune 31,30, 2026 and December 31, 2025 was $22,128 and $30,000 and consisted of accounts payable and accrued expenses totaling $7,693$16,894 and $30,000, respectively, and advances payable, related party totaling $5,264 and $0, respectively.

Non-current liabilities as of MarchJune 31,30, 2026 and December 31, 31, 2025 consisted of related party loans totaledtotaling $44,000 and $0, respectively.

During the threesix months ended MarchJune 31,30, 2026, our operating activities used net cash of $35,519.$35,815. Uses of cash during the threesix months ended MarchJune 31,30, 2026 are mainly due to the $17,725$36,361 net lossloss, partially asoffset wellby as $17,894$546 in net changes in operating assets and liabilities.

During the threesix months ended MarchJune 31,30, 2025, our operating activities activities used net cash of $100,658.$321,906. Uses of cash during the threesix months ended MarchJune 31,30, 2025 are mainly due to the $93,961$315,552 in net loss as well as $6,755 $6,706 in net changes in operating assets and liabilities. Uses are partially offset by $58$352 in non-cash currency translation.

During the threesix months ended MarchJune 31,30, 2026 and 2025, we used used $10,000 and $175,000$500,000 in cash investing activities, respectively, all from software development costs.

During the threesix months ended MarchJune 31,30, 2026, we received $44,000 $44,000 in related party loans.

During the threesix months ended MarchJune 31,30, 2025, we received $935,000 $595,000 from the sale of common stock and repaid $51,803$162,726 in related party advances.

At MarchJune 31,30, 2026 and December 31, 2025, we had working capital deficits of $795$19,431 and 17,070, respectively.

We had no off-balance sheet arrangements of any kind as of MarchJune 31,30, 2026.

The Company intends to provide digital assets from El Salvador for sale, tokenize assets for sale and develop blockchain tools for sale that will provide entry to the market for countries such as Tunisia and United Arab Emirates. During 2025, the Company plans to enter into agreements in connection with its blockchain products in ThailandIndonesia. and Indonesia. Revenue recognition for the sale of digital and tokenized assets will be based on the allocation of the transaction price to each performance obligation as each performance obligation in a contract is satisfied, title or access to digital assets are transferred and amounts are due are collected or collectible.