UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal quarter ended
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
FOR THE TRANSITION PERIOD FROM _____________ TO _____________
Commission File Number
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(Exact name of registrant as specified in its charter) |
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(State or other jurisdiction of incorporation or organization) |
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(I.R.S. Employer Identification No.) |
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(Address of principal executive offices) |
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(Zip Code) |
Registrant’s telephone number, including area code:
+1
Securities registered pursuant to Section 12(b) of the Act: None.
Securities registered pursuant to Section 12(g) of the Act:
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “ large accelerated filer, ” “ accelerated filer ” and “ smaller reporting company ” and “ emerging growth company ” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer |
☐ |
Accelerated filer |
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Smaller reporting company |
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Emerging growth |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act. Yes
State the number of shares of the issuer’s common stock outstanding, as of the latest practicable date:
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TABLE OF CONTENTS
| 2 |
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| Table of Contents |
Cautionary Statement Regarding Forward-Looking Information
This Quarterly Report on Form 10-Q (this “ Report ”) contains forward-looking statements within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended and the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by the following words: “ anticipate, ” “ believe, ” “ continue, ” “ could, ” “ estimate, ” “ expect, ” “ intend, ” “ may, ” “ ongoing, ” “ plan, ” “ potential, ” “ predict, ” “ project, ” “ should, ” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. Forward-looking statements are not a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information available at the time the statements are made and involve known and unknown risks, uncertainties and other factors that may cause our results, levels of activity, performance or achievements to be materially different from the information expressed or implied by the forward-looking statements in this Report. These factors include:
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unfavorable economic conditions; |
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changes in client demand; |
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our ability to maintain our existing clients; |
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our ability to develop new product offerings; |
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our ability to deploy AI in our business and the development of AI by our competitors; |
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seasonal fluctuations in marketing, research, communications and advertising activity; |
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the impact of future strategic transactions; |
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our lack of a significant operating history; |
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the need for additional funding, our ability to raise such funding, and the ultimate terms thereof; |
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the level of competition in the industries in which compete; |
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the security of our computer systems and our ability to securely store client data; |
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the loss of key personnel or failure to attract, integrate and retain additional personnel; |
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fluctuations in our operating results; |
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corporate governance risks; |
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the impacts of global epidemics, pandemics and similar health issues; |
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risks relating to our legacy swimming pool and home construction business; |
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material weaknesses in our internal controls; |
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dilution to existing stockholders caused by the issuance of additional shares of our common stock; |
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the lack of a significant market for our common stock, and the volatile nature thereof; |
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our failure to pay cash dividends; |
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the status of our common stock as a “penny stock”; |
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lack of liquidity in the market for our stock; |
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our blank check preferred stock and ability to issue significant shares of common stock; |
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costs and expenses associated with being a public company; and |
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other risk factors included under “Risk Factors” below. |
You should read the matters described in “Risk Factors” and the other cautionary statements made in this Report, as being applicable to all related forward-looking statements wherever they appear in this Report. We cannot assure you that the forward-looking statements in this Report will prove to be accurate and therefore prospective investors are encouraged not to place undue reliance on forward-looking statements. Other than as required by law, we undertake no obligation to update or revise these forward-looking statements, even though our situation may change in the future.
| 3 |
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| Table of Contents |
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements.
The accompanying financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and in accordance with the instructions for Form 10-Q. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.
In the opinion of management, the financial statements contain all material adjustments, consisting only of normal recurring adjustments necessary to present fairly the financial condition, results of operations, and cash flows of the Company for the interim periods presented.
The results for the period ended June 30, 2025, are not necessarily indicative of the results of operations for the full year. These financial statements and related footnotes should be read in conjunction with the financial statements and footnotes thereto included in the Company’s Form 10-K/A for the year ended December 31, 2024, filed with the Securities and Exchange Commission on May 5, 2025.
| 4 |
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| Table of Contents |
ONAR HOLDING CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
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June 30, |
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December 31, |
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2025 |
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2024 |
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(Unaudited) |
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ASSETS |
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Current assets: |
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Cash |
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$ |
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$ |
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Accounts receivable, net |
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Investments in equity securities |
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Investments in equity securities, related party |
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Prepaid expenses and other current assets |
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Total current assets |
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Other assets: |
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Property and equipment |
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Intangible Assets, customer relationships, net |
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Goodwill |
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Employee loan receivable, net |
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Advance to affiliated entity |
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Right of use asset |
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Total other assets |
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Total assets |
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$ |
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$ |
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LIABILITIES AND STOCKHOLDERS’ DEFICIT |
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Current liabilities: |
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Accounts payable |
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$ |
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$ |
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Accrued expenses and other liabilities |
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Lines of credit |
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Deferred revenue |
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Contract liabilities |
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Accrued expenses and advances, related party |
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Lease liability |
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Notes payable |
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Notes payable, related party |
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Convertible notes payable |
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Total current liabilities and total liabilities |
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Commitments and contingencies (Note 6) |
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Stockholders’ Deficit: |
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Preferred stock,
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Preferred stock Series A,
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Preferred stock Series B,
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Preferred stock Series C,
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Preferred stock, Series D,
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Preferred stock Series E,
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Common stock
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Additional paid-in capital |
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Accumulated deficit |
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(
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) |
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(
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Total stockholders’ deficit |
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(
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) |
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(
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) |
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Total liabilities and stockholders’ deficit |
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$ |
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$ |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
| 5 |
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| Table of Contents |
ONAR HOLDING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024
(UNAUDITED)
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2025 |
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2024 |
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2025 |
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2024 |
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Revenue (including $-0- and $-0-, respectively and $-0- and $159,431 of related party revenue, respectively, Note 4) |
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$ |
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$ |
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$ |
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$ |
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Cost of revenues |
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Gross profit (loss) |
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(
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) |
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(
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) |
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Operating expenses: |
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General and administrative |
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Depreciation and amortization |
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Total operating expenses |
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Loss from operations |
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(
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) |
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(
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) |
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(
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) |
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(
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) |
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Other (income) expense: |
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Interest expense |
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Transaction costs for merger |
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Other (income) expense |
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(
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) |
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(
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) |
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(
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) |
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(
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) |
|
Change in fair value of investments |
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Total other (income) expense |
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Provision for income tax |
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Net loss |
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$ |
(
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) |
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$ |
(
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) |
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$ |
(
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) |
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$ |
(
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) |
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Net loss per share - basic and diluted |
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$ |
(
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) |
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$ |
(
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) |
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$ |
(
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$ |
(
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) |
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Weighted average common shares outstanding |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
| 6 |
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| Table of Contents |
ONAR HOLDING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
FOR THE SIX MONTHS ENDED JUNE 30, 2025 AND 2024
(UNAUDITED)
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Preferred Stock |
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Series A |
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Series B |
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Series C |
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Series D |
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Series E |
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Common Stock |
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Additional |
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Members' Capital |
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Shares |
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Par Value |
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Shares |
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Par Value |
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Shares |
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Par Value |
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Shares |
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Par Value |
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Shares |
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Par Value |
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Shares |
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Par Value |
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Paid in Capital |
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Accumulated Deficit |
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of HLDCO |
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Total |
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Balance December 31, 2022 - Pre reverse merger |
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- |
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$ |
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- |
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$ |
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- |
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$ |
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- |
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$ |
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- |
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$ |
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- |
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$ |
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$ |
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$ |
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$ |
(
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) |
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$ |
(
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) |
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Effect of reverse merger (Note 2) |
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(
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) |
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Balance December 31, 2022 - Post reverse merger |
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(
|
) |
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|
(
|
) |
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|
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Net loss |
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
(
|
) |
|
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|
(
|
) |
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|
Balance March 31, 2024 |
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|
|
|
|
$ |
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|
|
|
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|
|
$ |
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|
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|
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|
$ |
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|
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|
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|
$ |
|
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|
|
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|
$ |
|
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|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
|
(
|
) |
|
$ |
|
|
|
$ |
(
|
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contributions by members of HLDCO |
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions to members of HLDCO |
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
(
|
) |
|
|
|
|
|
|
|
|
|
|
(
|
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
(
|
) |
|
|
|
|
|
|
(
|
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance June 30, 2024 |
|
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
(
|
) |
|
$ |
|
|
|
$ |
(
|
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance December 31, 2024 |
|
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
|
- |
|
|
$ |
|
|
|
|
- |
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
|
(
|
) |
|
$ |
|
|
|
$ |
(
|
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of shares for services |
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conversion of notes payable and accrued interest |
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
(
|
) |
|
|
|
|
|
|
(
|
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance March 31, 2025 |
|
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
|
- |
|
|
$ |
|
|
|
|
- |
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
(
|
) |
|
$ |
|
|
|
$ |
(
|
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of shares for services |
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from sale of preferred stock |
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
(
|
) |
|
|
|
|
|
|
(
|
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance June 30, 2025 |
|
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
|
- |
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
(
|
) |
|
$ |
|
|
|
$ |
(
|
) |
The accompanying notes are an integral part of these condensed consolidated financial statements.
| 7 |
|
|
| Table of Contents |
ONAR HOLDING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2025 AND 2024
(UNAUDITED)
|
|
|
2025 |
|
|
2024 |
|
||
|
Operating Activities |
|
|
|
|
|
|
||
|
Net loss |
|
$ |
(
|
) |
|
$ |
(
|
) |
|
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
Amortization of employee loan receivable |
|
|
|
|
|
|
|
|
|
Amortization of debt discount |
|
|
|
|
|
|
|
|
|
Lease expense |
|
|
(
|
) |
|
|
|
|
|
Change in fair value of investment in equity securities |
|
|
|
|
|
|
|
|
|
Share based compensation |
|
|
|
|
|
|
|
|
|
Employee loan receivable interest income and extension fee |
|
|
(
|
) |
|
|
|
|
|
Note payable, related party, extension fees added to principal |
|
|
|
|
|
|
|
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(
|
) |
|
|
|
|
|
Accounts receivable, related party |
|
|
|
|
|
|
(
|
) |
|
Prepaid expenses and other assets |
|
|
(
|
) |
|
|
(
|
) |
|
Accounts payable |
|
|
|
|
|
|
(
|
) |
|
Accrued expenses and other liabilities |
|
|
|
|
|
|
|
|
|
Accrued expenses and advances, related party |
|
|
(
|
) |
|
|
(
|
) |
|
Deferred revenue |
|
|
(
|
) |
|
|
|
|
|
Customer contracts |
|
|
|
|
|
|
|
|
|
Net cash used in operating activities |
|
|
(
|
) |
|
|
(
|
) |
|
|
|
|
|
|
|
|
|
|
|
Investing Activities |
|
|
|
|
|
|
|
|
|
Purchase of property and equipment |
|
|
|
|
|
|
(
|
) |
|
Loan receivable |
|
|
|
|
|
|
(
|
) |
|
Net cash used in investing activities |
|
|
|
|
|
|
(
|
) |
|
|
|
|
|
|
|
|
|
|
|
Financing Activities |
|
|
|
|
|
|
|
|
|
Proceeds from issuance of notes payable |
|
|
|
|
|
|
|
|
|
Repayment of notes payable |
|
|
(
|
) |
|
|
|
|
|
Proceeds from sale of preferred stock |
|
|
|
|
|
|
|
|
|
Proceeds from notes payable, related party |
|
|
|
|
|
|
|
|
|
Repayment of notes payable, related party |
|
|
(
|
) |
|
|
(
|
) |
|
Proceeds from line of credit |
|
|
|
|
|
|
|
|
|
Repayment of line of credit |
|
|
(
|
) |
|
|
(
|
) |
|
Proceeds from issuance of convertible notes payable |
|
|
|
|
|
|
|
|
|
Distributions to members of HLDCO |
|
|
|
|
|
|
(
|
) |
|
Contributions from members of HLDCO |
|
|
|
|
|
|
|
|
|
Repayment of convertible notes payable |
|
|
(
|
) |
|
|
|
|
|
Net cash provided by financing activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in cash |
|
|
(
|
) |
|
|
|
|
|
Cash - beginning of year |
|
|
|
|
|
|
|
|
|
Cash - end of period |
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental cash flow disclosures |
||||||||
|
Interest paid |
|
$ |
|
|
|
$ |
|
|
|
Income taxes paid |
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of non-cash investing and financing activities |
||||||||
|
Conversion of notes payable and accrued interest |
|
$ |
|
|
|
$ |
|
|
|
Accrued liabilities paid by related party note payable |
|
$ |
|
|
|
$ |
|
|
|
Discounts on convertible notes payable |
|
$ |
|
|
|
$ |
|
|
|
Line of credit converted to note payable |
|
$ |
|
|
|
$ |
|
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
| 8 |
|
|
| Table of Contents |
ONAR Holding Corporation
Notes to Unaudited Condensed Consolidated Financial Statements
Note 1. The Company and Summary of Significant Accounting Policies
The Company
ONAR Holding Corporation (the “ Company ”) was formed as a Nevada corporation under the name Reliant Holdings, Inc. on May 19, 2014. On May 23, 2014, Reliant Holdings, Inc., along with Reliant Pools, Inc., formerly Reliant Pools, G.P., which was formed in September 2013 (“ Reliant Pools ”) and the shareholders of Reliant Pools, entered into an Agreement for the Exchange of common stock whereby Reliant Pools, Inc. became a wholly-owned subsidiary of Reliant Holdings, Inc. Reliant Holdings, Inc. designs, and installs swimming pools.
On July 25, 2024, the Company acquired HLDCO, LLC (“ HLDCO ”) and its subsidiary Integrum Group LLC (“ Integrum ”) through a reverse merger where the shareholders of HLDCO entered into an Agreement to Contribute the membership interests of HLDCO to the Company in return for common stock of the Company, whereby HLDCO became a wholly-owned subsidiary of Reliant Holdings Inc. Integrum was formed in July 2021 as a Delaware entity and is currently headquartered in Los Angeles, California. Integrum specializes in marketing solutions through a technology-enabled independent marketing agency brand network. Its services span various industries, including performance digital marketing, healthcare industry marketing, and experiential marketing.
Basis of Presentation
The Company prepares consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and follows the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). The accompanying financial statements are unaudited. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at June 30, 2025 and 2024 and for the periods then ended have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s December 31, 2024 audited financial statements. The results of operations for the period ended June 30, 2025 are not necessarily indicative of the operating results for the full year.
Going Concern
The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. The Company has incurred losses since inception, has negative working capital and has not generated positive cash flows from operations since inception. The Company generated a loss of $
The Company’s ability to continue in existence is dependent on its ability to develop additional sources of capital, and/or achieve profitable operations and positive cash flows. Management’s plans with respect to operations include aggressive marketing and raising additional capital through sales of equity or debt securities as may be necessary to pursue its business plans and sustain operations until such time as the Company can achieve profitability. Management believes that aggressive marketing combined additional financing, as necessary, will result in improved operations and cash flows in the future. However, there can be no assurance that management will be successful in obtaining additional funding or in attaining profitable operations. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
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Princi p les of Consolidation
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.
Use of Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from estimates.
Revenue Recognition
The Company accounts for revenue in accordance with Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codifications (“ASC”) 606, ‘ Revenue from Contracts with Customers ’ (“ASC 606”).
A performance obligation is a promise in a contract to transfer a distinct good or service to the client and is the unit of accounting in ASC 606. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation based on the relative standalone selling price. Determining relative standalone selling price and identifying separate performance obligations requires judgment. Contract modifications may occur in the performance of the Company’s contracts. Contracts may be modified to account for changes in the contract specifications, requirements or duration. If a contract modification results in the addition of performance obligations priced at a standalone selling price or if the post-modification services are distinct from the services provided prior to the modification, the modification is accounted for separately. If the modified services are not distinct, they are accounted for as part of the existing contract.
Pool Sale Revenues
Performance Obligations
The Company’s contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts and, therefore, not distinct.
Performance Obligations Satisfied Over Time
Performance Obligations Satisfied at a Point in Time
Revenue for The Company’s contracts that do not satisfy the criteria for over time recognition is recognized at a point in time. Substantially all of The Company’s revenue recognized at a point in time is for work performed for pool maintenance or repairs. Unlike The Company’s construction contracts that use a cost-to-cost input measure for performance, the pool maintenance or repairs utilize an output measure for performance based on the completion of a unit of work. The typical time frame for completion of these services is less than one month. Upon fulfillment of the performance obligation, the customer is provided with an invoice (or equivalent) demonstrating transfer of control or completion of service to the customer. We believe that point in time recognition remains appropriate for these contracts and will continue to recognize revenues upon completion of the performance obligation and the issuance of an invoice.
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Contract modifications are routine in the performance of The Company’s contracts. Contracts are often modified to account for changes in the contract specifications or requirements. In most instances, contract modifications are for goods or services that are not distinct, and, therefore, are accounted for as part of the existing contract.
Contract Estimates
Accounting for long-term contracts and programs involves the use of various techniques to estimate total contract revenue and costs. For long-term contracts, we estimate the profit on a contract as the difference between the total estimated revenue and expected costs to complete a contract and recognize that profit over the life of the contract.
Contract estimates are based on various assumptions to project the outcome of future events. These assumptions include labor productivity and availability, the complexity of the work to be performed, the cost and availability of materials, and the performance of subcontractors.
Variable Consideration
Transaction price for The Company’s contracts may include variable consideration, which includes increases to transaction price for approved and unapproved change orders, claims and incentives, and reductions to transaction price for liquidated damages. Change orders, claims and incentives are generally not distinct from the existing contract due to the significant integration service provided in the context of the contract and are accounted for as a modification of the existing contract and performance obligation. We estimate variable consideration for a performance obligation at the most likely amount to which we expect to be entitled (or the most likely amount we expect to incur in the case of liquidated damages), utilizing estimation methods that best predict the amount of consideration to which we will be entitled (or will be incurred in the case of liquidated damages). We include variable consideration in the estimated transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur or when the uncertainty associated with the variable consideration is resolved. The Company’s estimates of variable consideration and determination of whether to include estimated amounts in transaction price are based largely on an assessment of The Company’s anticipated performance and all information (historical, current and forecasted) that is reasonably available to us. The effect of variable consideration on the transaction price of a performance obligation is recognized as an adjustment to revenue on a cumulative catch-up basis. To the extent unapproved change orders and claims reflected in transaction price (or excluded from transaction price in the case of liquidated damages) are not resolved in The Company’s favor, or to the extent incentives reflected in transaction price are not earned, there could be reductions in, or reversals of, previously recognized revenue. No adjustments on any one contract was material to The Company’s consolidated financial statements for the periods ended June 30, 2025 and 2024.
Contract Balances
The timing of revenue recognition, billings and cash collections results in billed accounts receivable and costs and estimated earnings in excess of billings on uncompleted contracts (contract assets) on the consolidated balance sheet. On The Company’s construction contracts, amounts are billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals (e.g., biweekly or monthly) or upon achievement of contractual milestones. Generally, billing occurs prior to revenue recognition, resulting in contract liabilities. These assets and liabilities are reported on the consolidated balance sheet on a contract-by-contract basis at the end of each reporting period.
Advertising Management Services
The Company enters into Master Services Agreement (“MSA”) and Scope of Work (“SOW”) which govern the terms of the Company’s performance obligation for purposes of revenue recognition.
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The Company’s performance obligation is a single performance obligation, Advertising Management Services which encompasses the following integrated and interdependent services:
|
|
1. |
Strategic Consulting: Development of marketing strategies, including competitive analysis, campaign performance evaluations, and recommendations for campaign execution and optimization in the digital space. |
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2. |
Paid Advertising: Execution of digital advertising campaigns leveraging data analytics, machine learning, and artificial intelligence across a range of digital platforms. Ongoing optimization of these campaigns to achieve optimal results for the client is part of the process, as well as iterative creative services to help achieve results. Continuous monitoring and adjustment of the advertising campaigns is achieved through bi-weekly consultations with the client to review performance and implement optimizations. |
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3. |
Web Development: The creation and development of websites, landing pages, ecommerce platforms, and other web assets is often supplemental to the Paid Advertising being executed for clients. This includes optimization of existing web assets with services such as search engine optimization and conversion rate optimization. |
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4. |
Creative Services: The creation or redevelopment of creative assets is another service area offered. Typically, the creative services are limited to Web Development or the execution of creative services needed to support Paid Advertising. In some cases, full brand development and brand strategy work is included in the Creative Services offering. |
These services are integrated and interdependent, all contributing to the goal of improving the Client's business performance, revenue, and brand awareness over time. Revenue is recognized over time as the services are provided and the performance obligation is satisfied, consistent with the ongoing optimization efforts. Amounts recognized but not yet invoiced to the customer are included as ‘contract assets’ within the accompanying consolidated balance sheets.
A monthly retainer is charged for ongoing services. Any additional services outside the agreed-upon scope, such as the inclusion of additional services, are subject to prior written approval and will result in additional fees. Retainers received for future services are classified as ‘deferred revenue’ within the accompanying consolidated balance sheets.
Executive Management Services
The Company’s chief executive officer and financial team provide executive management services to certain affiliated entities at a fixed monthly rate. Revenue is recognized over time as the services are provided and the performance obligation is satisfied, consistent with the ongoing benefits the affiliated entities receive as the services are rendered.
Classification of Construction Contract-related Assets and Liabilities
Contract assets are presented as a current asset in the accompanying consolidated balance sheets, and contract liabilities are presented as a current liability in the accompanying consolidated balance sheets. The Company’s contracts vary in duration, with the duration of some larger contracts exceeding one year. Consistent with industry practices, the Company includes the amounts realizable and payable under contracts, which may extend beyond one year, in current assets and current liabilities.
Earnin g s Per Share
In accordance with accounting guidance now codified as ASC Topic 260, “Earnings (Loss) per Share,” basic earnings per share is computed by dividing net income by weighted average number of shares of common stock outstanding during each period. Diluted earnings per share is computed by dividing net income by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period. There were no dilutive shares outstanding during the periods ending June 30, 2025 and 2024.
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Recent Accountin g Pronouncements
The Company currently believes there are no issued and not yet effective accounting standards that are materially relevant to our condensed consolidated financial statements.
Note 2. Acquisition of HLDCO LLC
On June 13, 2024 Claude Zdanow via Mount Olympus Ventures, Inc (“Mount Olympus”), purchased the
On June 17, 2024, the Company entered into the acquisition of
The nature and amount of consideration given or received for the assets was exactly
On July 18, 2024, the Company filed the designations for the Series B, Series C, and Series D preferred shares pursuant the Agreement. On July 25, 2024, the Board of Directors issued those shares of respective preferred stock to the members of HLDCO, LLC, to complete the acquisition (the “Closing”).
Management determined that the acquisition of HLDCO was a reverse acquisition as defined within ASC 805, and that HLDCO was the accounting acquirer or legal acquiree. The Company determined that HLDCO was the accounting acquirer based on the guidance contained within ASC 805-40. The significant factors that led to the Company’s conclusion were (i) the Mr. Zdanow and the members of HLDCO obtained 98% of the voting interest of the Company through the preferred shares held by these parties, (ii) at Closing, the remaining Company shareholders held 2% of the voting interest of the Company, (iii) the composition of executive management and the governing body changed such that the sole director and executive officer of HLDCO became the sole director and shareholder of the Company which provided control over the operations of the Company, and (iv) HLDCO was significantly larger than the Company when considering both total assets and operations. As a result, the Company has applied purchase accounting as of the Closing of the acquisition and reflected the historical financial position and operations of HLDCO as the surviving entity. The assets and liabilities the Company were recognized at fair value as of the Closing and the results of its operations have been included within the consolidated statements of operations from that date forward with all historical activity reflective of the operations of HLDCO.
The assets acquired and liabilities assumed are recognized provisionally in the accompanying consolidated balance sheets at their estimated fair values as of the acquisition date. The initial accounting for the business combination is not complete as the Company is in the process of obtaining additional information for the valuation of acquired intangible assets and deferred tax liabilities, if any. The provisional amounts are subject to change to the extent that additional information is obtained about the facts and circumstances that existed as of the acquisition date. Under U.S. GAAP, the measurement period shall not exceed one year from the acquisition date and the Company will finalize these amounts no later than July 25, 2025. The estimated fair values as of the acquisition date are based on information that existed as of the acquisition date. During the measurement period the Company may adjust provisional amounts recorded for assets acquired and liabilities assumed to reflect new information that the Company has subsequently obtained regarding facts and circumstances that existed as of the acquisition date.
|
Shares by the Company shareholders post-Closing |
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|
|
stock price on Closing |
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$ |
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|
|
|
|
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|
Fair value transferred for acquisition |
|
$ |
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|
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The Company determined the fair value of the consideration transferred using the fair value based on the number of shares that would have needed to be issued to provide the Company’s shareholders with an equivalent ownership interest in the combined entities post-Closing. The fair value of the Company’s common shares issued as consideration was based on the closing price of the Company’s common stock as of the Closing.
The consideration transferred was allocated to the assets acquired and liabilities assumed on a preliminary basis as follows:
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Cash |
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$ |
|
|
|
Property and equipment |
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|
Right of use asset |
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|
|
Accounts payable |
|
|
(
|
) |
|
Accrued expenses |
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|
(
|
) |
|
Billings in excess of cost |
|
|
(
|
) |
|
Notes payable |
|
|
(
|
) |
|
Operating lease liability |
|
|
(
|
) |
|
|
|
|
|
|
|
Goodwill |
|
|
|
|
|
Assets and liabilities acquired |
|
$ |
|
|
The goodwill recognized as a result of the acquisition of the Company is attributable primarily to expected synergies and the assembled workforce. None of the goodwill is expected to be deductible for income tax purposes.
Consolidated unaudited pro forma information:
The following consolidated pro forma information assumes that the acquisition of HLDCO took place on January 1, 2024. These amounts have been estimated after applying the Company’s accounting policies
|
Revenues |
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$ |
|
|
|
Net loss |
|
$ |
(
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) |
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Note 3. Contracts in Process
Changes in the Company’s contracts in process during the period were as follows:
|
Contract liabilities at December 31, 2024 |
|
$ |
|
|
|
Revenue recognized |
|
|
(
|
) |
|
Additions |
|
|
|
|
|
Contract liabilities at June 30, 2025 |
|
$ |
|
|
The net liability position for pool construction contracts in process consisted of the following as of June 30, 2025, are:
|
Costs on uncompleted contracts |
|
$ |
|
|
|
Estimated earnings |
|
|
|
|
|
Less: Progress billings |
|
|
|
|
|
Contract liabilities, net |
|
$ |
(
|
) |
The net liability position for contracts in process is included in the accompanying consolidated balance sheets as of June 30, 2025 are:
|
Costs and estimated earnings in excess of billings on uncompleted contracts |
|
$ |
|
|
|
Billings in excess of costs and estimated earnings on uncompleted contracts |
|
|
|
|
|
Contract liabilities |
|
$ |
|
|
Note 4. Related Party Transactions
Advance to Affiliated Entity
During the year ended December 31, 2024 and prior to the acquisition of HLDCO the Company advanced an entity controlled by the Company’s CEO $
As of June 30, 2025 the balance remains outstanding and is included in ‘Advance to affiliated entity’ on the accompanying consolidated balance sheets.
Revenues and Accounts Receivable, related party
During six months ended June 30, 2025 and 2024, the Company recognized revenues of approximately $-
Notes Payable
The Company has 5 notes payable due to a related party as described in Note 7. As of June 30, 2025, accrued interest due under these notes was $-
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| Table of Contents |
Note 5. Equity
Series A Preferred Stock
The Series A Preferred Stock (Series A Stock) consists of
Series B Preferred Stock
The Series B Preferred Stock (Series B Stock) consists of
Series C Preferred Stock
The Series C Preferred Stock (Series C Stock) consists of
Series D Preferred Stock
The Series D Preferred Stock (Series D Preferred Stock) consisted of
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Series E Preferred Stock
The Series E Preferred Stock (Series E Preferred Stock) consisted of
On June 6, 2025, the Company entered into certain Subscription Agreements pursuant to which the Company agreed to issue and sell in a private placement to accredited investors, in the aggregate,
Common Shares
The Company is authorized to issue
On June 23, 2025, the Company issued approximately
Note 6. Commitments and Contingencies
Payroll tax liabilities
During 2023, the Company did not remit federal income tax, social security, Medicare or local and state income taxes which were withheld from the Company’s employees payroll. The Company has estimated and accrued fines and penalties associated with the amounts which have not been remitted and includes these amounts in accrued expenses in the accompanying consolidated balance sheets. As of June 30, 2025, the balance due was $
Customer legal dispute
VMed Services, LLC a subsidiary of the Company, is a plaintiff in a lawsuit that was filed on April 22, 2024 against Meridian Diagnostics LLC in State Court of Fulton County, Georgia. The Company is seeking approximately $
| 17 |
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| Table of Contents |
Note 7. Debt
|
|
|
June 30, 2025 |
|
|
December 31, 2024 |
|
||
|
Promissory note due to a related party which matured on December 20, 2024, requiring interest only payments monthly, bearing interest at 18% per annum and secured by all HLDCO’s assets. Effective March 7, 2025, the lender and the Company entered into an Omnibus Note Extension Agreement which provided that this note was extended to June 5, 2025. As consideration for the extension, the principal balance was increased by 5%. |
|
$ |
|
|
|
$ |
|
|
|
Promissory note due to a related party maturing on August 16, 2025, requiring interest only payments monthly, bearing interest at 18% per annum and secured by all HLDCO’s assets. |
|
|
|
|
|
|
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|
|
Promissory note due to a related party which matured on September 27, 2024, requiring interest only payments monthly, bearing interest at 12% per annum and secured by all HLDCO’s assets. Effective March 7, 2025, the lender and the Company entered into an Omnibus Note Extension Agreement which provided that this note was extended to June 5, 2025. As consideration for the extension, the principal balance was increased by 5%. |
|
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|
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|
|
Promissory note due to a related party which matured on November 10, 2024, requiring interest only payments monthly, bearing interest at 18% per annum and secured by all HLDCO’s assets. Effective March 7, 2025, the lender and the Company entered into an Omnibus Note Extension Agreement which provided that this note was extended to June 5, 2025. As consideration for the extension, the principal balance was increased by 5%. |
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|
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|
|
Promissory notes issued between March 2024 and July 2024 due one year from issuance, requiring interest only payments monthly, bearing interest at 18% per annum and are unsecured. These notes mature March 2025 through July 2025. |
|
|
|
|
|
|
|
|
|
Promissory note due to a related party maturing on September 22, 2025, requiring interest only payments monthly, bearing interest at 18% per annum and secured by all HLDCO’s assets. |
|
|
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|
|
|
|
|
|
Promissory note due to a related party which maturing September 22, 2025, requiring interest only payments monthly, bearing interest at 18% per annum and secured by all HLDCO’s assets. |
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|
On January 13, 2025, the Company entered into a securities purchase agreement providing for the issuance of a promissory note with an original issue discount of $15,000. Additionally, a one-time interest charge of 12%, or $16,800, was applied on the issuance. Accrued, unpaid interest and outstanding principal, subject to adjustment, shall be paid in twelve payments with eleven payments requiring a minimum payment of $5,000 and the final payment for the outstanding balance with payments beginning February 15, 2025. Upon the occurrence and during the continuation of any Event of Default, the note shall become immediately due and payable and the Company shall pay to the holder, in full satisfaction of its obligations hereunder, an amount equal to 150% of any amounts due under the note. Additionally, the note shall be convertible into shares of the Company common stock at a conversion rate equal to 65% multiplied by the lowest VWAP price for the common stock during the ten (10) trading days prior to the conversion date (representing a discount rate of 35%) (subject to equitable adjustments by the Company relating to the Company’s securities or the securities of any subsidiary of the Company, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). |
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On January 22, 2025, the Company entered into a convertible promissory note due July 2025, with an original issue discount of $5,263. This note includes a guaranteed interest payment at a rate of 18%. All principal and accrued interest are due at maturity. Additionally, the holder has the right to convert the note at a rate of $0.04 per share, subject to adjustment for certain events such as a change in control. Additionally, six months after the issuance of the note, the conversion price will be reset if the Company’s stock has (a) fallen below $0.05 or (b) has an average daily trading volume of less than $10,000. In the event of a reset, the conversion price will be reduced to 75% of the VWAP for the 10 days prior to the reset date. |
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On February 10, 2025, the Company entered into a securities purchase agreement providing for the issuance of a promissory note with an original issue discount of $15,000. Additionally, a one-time interest charge of 12%, or $13,800, was applied on the issuance. Accrued, unpaid interest and outstanding principal, subject to adjustment, shall be paid in five payments with the first payment of $64,400 due on August 15, 2025 and four subsequent payments of $16,100 due monthly thereafter. Upon the occurrence and during the continuation of any Event of Default, the note shall become immediately due and payable and the Company shall pay to the holder, in full satisfaction of its obligations hereunder, an amount equal to 150% of any amounts due under the note. Additionally, the note shall be convertible into shares of the Company common stock at a conversion rate equal to 65% multiplied by the lowest VWAP price for the common stock during the ten (10) trading days prior to the conversion date (representing a discount rate of 35%) (subject to equitable adjustments by the Company relating to the Company’s securities or the securities of any subsidiary of the Company, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). |
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On March 10, 2025, the Company entered into a convertible promissory note due December 2025, with a face value of $189,474 and an original issue discount of $9,474. This note includes a guaranteed interest payment at a rate of 18%. The lender agreed to fund the note in three installments of $60,000 with the first due at issuance of the note, the second 30 days after closing and the final payment 90 days after closing. All principal and accrued interest are due at maturity. Additionally, the holder has the right to convert the note at a rate of $0.01 per share, subject to adjustment for certain events such as a change in control. Additionally, six months after the issuance of the note, the conversion price will be reset if the Company’s stock has (a) fallen below $0.01 or (b) has an average daily trading volume of less than $10,000. In the event of a reset, the conversion price will be reduced to 60% of the VWAP for the 10 days prior to the reset date. |
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On July 28, 2022, The Company entered into a $225,000 line of credit agreement with a financial institution. The line of credit matured on July 28, 2024. On July 28, 2024, the line of credit was converted to a term loan agreement with a fixed interest rate of 9.99%, minimum monthly payments of $3,735 and a maturity date of July 28, 2029. |
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On April 22, 2025, the Company entered into a securities purchase agreement providing for the issuance of a promissory note in the principal amount of $180,550, with an original issue discount of $23,550. A one-time interest charge of 12%, or $21,666, was applied on the issuance date to the principal. Accrued, unpaid interest and outstanding principal, subject to adjustment, shall be paid in ten (10) payments, with the first payment due May 30, 2025. Upon the occurrence and during the continuation of any Event of Default, the note shall become immediately due and payable and the Company shall pay to the holder, in full satisfaction of its obligations hereunder, an amount equal to 150% times any amounts due under the note. Additionally, the note shall be convertible into shares of the Company common stock at a conversion rate equal to 65% multiplied by the lowest VWAP price for the common stock during the ten (10) trading days prior to the conversion date (representing a discount rate of 35%) (subject to equitable adjustments by the Company relating to the Company’s securities or the securities of any subsidiary of the Company, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). |
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Term note with a bank secured by car, payable in monthly installments of $939, including interest at 6.79% through October 4, 2030 |
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Total notes payable |
|
$ |
|
|
|
$ |
|
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Line of Credit
On July 28, 2022, The Company entered into a $
On March 11, 2025, The Company entered into a $
Note 8. Segments
As a result of the HLDCO acquisition, the Company determined that there are two reportable segments. These segments have different strategic and economic goals and are managed separately because they require different technology and marketing strategies.
|
Reportable Segment |
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Description |
|
Advertising and Marketing |
|
Providing a single source for all technology enabled digital advertising, experiential marketing, healthcare marketing, and brand development strategies. |
|
Pools |
|
Providing the installation and maintenance of residential pools in and around Austin in Texas, United States. |
The Company’s Chief Executive Officer is the chief operating decision maker and reviews the internal management reports for each segment at least quarterly. During the periods ended June 30, 2025 and 2024, there were no significant inter-company revenues or expenses. The chief operating decision maker assesses performance for each segment and decides how to allocate resources based on segment operating losses that is also reported on the consolidated statements of operations. The measure of segment assets is reported on the balance sheets as total consolidated assets. The accounting policies of each segment are the same as those described in the summary of significant accounting policies.
Information regarding each reportable segment for the six month period ended June 30, 2025, is as follows:
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|
Pool Services |
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Advertising and Marketing |
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Total |
|
|||
|
Revenue |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
Cost of revenues |
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General and administrative |
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|
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Depreciation and amortization |
|
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|
|
|
|
|
|
|
|
|
|
|
Segment operating income (loss) |
|
$ |
(
|
) |
|
$ |
(
|
) |
|
$ |
(
|
) |
Note 9. Subsequent events
Subsequent to June 30, 2025, the Company added three directors to its board of directors. Each director will receive $
On July 9, 2025, the Company entered into a convertible promissory note due July 2026, with an original issue discount of $
On July 24, 2025, the Company entered into a convertible promissory note due April 2026, with an original issue discount of $
The addition of independent directors strengthens our governance and supports our strategic initiatives. The July convertible note financings provide incremental liquidity and extend the Company’s financing horizon as we continue to pursue longer-term funding solutions.
On August 12, 2025, the Company entered into an exchange agreement with one of its lenders to exchange and consolidated certain notes payable into a single note payable with a principal balance $
| 20 |
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Introduction
You should read the matters described in “Risk Factors” and the other cautionary statements made in this Report as being applicable to all related forward-looking statements wherever they appear in this Report. We cannot assure you that the forward-looking statements in this Report will prove to be accurate and therefore prospective investors are encouraged not to place undue reliance on forward-looking statements. Other than as required by law, we undertake no obligation to update or revise these forward-looking statements, even though our situation may change in the future.
This information should be read in conjunction with the interim unaudited financial statements and the notes thereto included in this Quarterly Report on Form 10-Q, and the audited financial statements and notes thereto and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our Annual Report on Form 10-K/A for the year ended December 31, 2024, filed with the Securities and Exchange Commission on May 5, 2025 (the “ Annual Report ”).
Certain capitalized terms used below and otherwise defined below, have the meanings given to such terms in the footnotes to our consolidated financial statements included above under “ Part I - Financial Information ” – “ Item 1. Financial Statements ”.
In this Quarterly Report on Form 10-Q, we may rely on and refer to information regarding the industries in which we operate in general from market research reports, analyst reports and other publicly available information. Although we believe that this information is reliable, we cannot guarantee the accuracy and completeness of this information, we have not independently verified any of it, and we have not commissioned any such information.
Unless the context requires otherwise, references to the “ Company, ” “ we, ” “ us, ” “ our, ” “ ONAR ”, “ ONAR Holding ” and “ ONAR Holding Corporation ” refer specifically to ONAR Holding Corporation and its consolidated subsidiaries.
In addition, unless the context otherwise requires and for the purposes of this Report only:
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“ Exchange Act ” refers to the Securities Exchange Act of 1934, as amended; |
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“ SEC ” or the “ Commission ” refers to the United States Securities and Exchange Commission; and |
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“ Securities Act ” refers to the Securities Act of 1933, as amended. |
Where You Can Find Other Information
We file annual, quarterly, and current reports, proxy statements and other information with the SEC. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC like us at http://www.sec.gov (our filings can be found at https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001682265 ). Copies of documents filed by us with the SEC are also available from us without charge, upon oral or written request to our Secretary, who can be contacted at the address and telephone number set forth on the cover page of this Report. Our website address is https://www.onar.com. The information on, or that may be accessed through, our website is not incorporated by reference into this Report and should not be considered a part of this Report.
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Summary of The Information Contained in Management’s Discussion and Analysis of Financial Condition and Results of Operations
Our Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is provided in addition to the accompanying consolidated financial statements and notes to assist readers in understanding our results of operations, financial condition, and cash flows. MD&A is organized as follows:
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Overview . Summary of our operations. |
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Plan of Operations . A description of our plan of operations for the next 12 months including required funding. |
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Results of Operations . An analysis of our financial results comparing the three and six months ended June 30, 2025 and 2024. |
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Liquidity and Capital Resources . An analysis of changes in our consolidated balance sheets and cash flows and discussion of our financial condition. |
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Critical Accounting Policies and Estimates . Accounting estimates that we believe are important to understanding the assumptions and judgments incorporated in our reported financial results and forecasts. |
Overview
Corporate Information
Our principal executive offices are located at 990 Biscayne Blvd, 5th Floor Miami, FL 33132, and our telephone number is (213) 437-3081.
Summary Description of Business Operations
ONAR
On July 25, 2024, Reliant Holdings acquired HLDCO, LLC and its wholly owned subsidiary, Integrum Group, LLC, which was subsequently renamed and rebranded as ONAR (“ONAR”). Due to the relative significant of HLDCO, LLC, we account for this acquisition as a reverse acquisition. ONAR is a leading marketing agency group that provides a host of services specifically focused on middle-market companies that need the flexibility of both specialized and holistic marketing services. ONAR currently operates three wholly owned and highly specialized marketing agencies: Storia, an artificial intelligence-enabled digital performance marketing agency and VMED, a healthcare marketing agency.
As a network of marketing agencies, ONAR is structured for strategic mergers and acquisitions. Beyond organic growth, ONAR capitalizes on the rising cost of capital and decreasing multiples for marketing agency owners. Agencies acquired by ONAR can leverage our platform and resources to monetize their business better and lower their expenses. Additionally, by leveraging public equities, we offer sellers/partners the chance to secure future liquidity at higher valuations, backed by our extensive experience, making it attractive for them to join the ONAR family.
ONAR’s agencies currently serve B2B and B2C clients across diverse industries, including consumer products, manufacturing, business services, technology, e-commerce, healthcare, and more. The top productized services offered by ONAR agencies include paid digital advertising, search engine optimization, conversion rate optimization, web development, creative, field marketing, and experiential marketing.
Residential Pools
We, through our wholly-owned subsidiary Reliant Pools (which has been in operation since September 2013), are an award winning, custom, swimming pool construction company located in the greater Austin, Texas market. We assist customers with the design of, and then construct, recreational pools which blend in with the surroundings, geometric pools which complement the home’s architecture and water features (e.g., waterfalls and negative edge pools) which provide the relaxing sounds of moving water. Management is evaluating strategic alternatives for the pool business, including a potential divestiture, to focus capital and resources on scaling our AI-enabled marketing agency network, which we believe offers higher growth potential and improved margins.
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To date, the majority of our growth has been through referral business. We offer a wide variety of pool projects based upon price and the desires of the client. When our sales personnel meet with a prospective customer, we provide them with an array of projects from the basic pool building to more high-end projects that may include waterfalls, mason work, backyard lighting and in-ground spas to highlight the outdoor living experience.
Plan of Operations
We ended the quarter with $0.75 million in current assets and $6.23 million in current liabilities, resulting in a working capital deficit of approximately $5.47 million. Current liabilities include approximately $3.7 million of notes and other borrowings due within twelve months. Management used $1.02 million of net cash in operating activities for the six months ending June 30, 2025, and generated $0.95 million from financing activities in the period. We do not currently have additional committed sources of capital from third parties or from our officers, directors or majority stockholders and may be required to pursue additional debt and/or equity financing; there can be no assurance such financing will be available on acceptable terms, if at all.
We are executing a transition plan focused on strengthening our balance sheet, streamlining operations, and positioning ONAR for scalable growth. Our priorities include: (1) refinancing or converting near-term debt maturities to improve liquidity and reduce financing costs, (2) tightening expense controls and accelerating collections to improve cash conversion, (3) driving net new revenue through higher-margin, AI-enabled marketing services, and (4) selectively funding growth initiatives.
Near‑term priorities
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Address near‑term maturities and cost of capital. We have had $142,445 of notes payable converted into common stock and have repaid $298,650 in principal during the quarter ended June 30, 2025 quarter. We expect to refinance $1,009,062 in related party debt into a new note with a maturity in August of 2026 during the third quarter of 2025. Additionally, we are in the process of extending and issuing a replacement note for approximately $1,800,000. We are also evaluating options to further refinance, extend, or retire portions of our remaining short‑term notes, as well as working to extend maturity or convert additional debt into common stock of the company. |
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Tighten operating expenses and improve cash conversion. Continuing to improve expense controls, vendor rationalization, and billing/collections discipline to shorten our cash cycle. |
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Focusing on net new revenue growth, including from new technology initiatives. |
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Funding growth selectively. During June 2025, we completed an initial $500,000 closing of our Series E Preferred Stock financing. We have conducted additional closings and plan to continue closing additional capital for aggregate proceeds of up to $6,000,000 (less the initial closing), subject to market conditions and corporate approvals. Proceeds are expected to support working capital and targeted growth initiatives across our agency network, specifically in the area of mergers and acquisitions. |
Collectively, these initiatives are designed to improve liquidity, reduce financing costs, and position ONAR to execute on its acquisition pipeline and organic growth opportunities.
These actions are intended to mitigate the substantial doubt about our ability to continue as a going concern and to support our transition toward a scalable, AI‑enabled marketing platform. Execution of this plan will depend on operating performance and access to capital.
Results of Operations
Highlights: The first half of 2025 reflected a 28% year-over-year increase in total revenue, driven by the inclusion of Reliant Pools, partially offset by lower quarterly marketing revenues due to client timing. Higher operating expenses primarily reflect public company compliance costs, growth investments, and stock-based compensation. We continue to prioritize cost discipline and strategic growth initiatives to improve profitability.
For the Three Months Ended June 30, 2025, compared to the Three Months Ended June 30, 2024
We had revenue of $550,639 for the three months ending June 30, 2025, compared to revenue of $667,296 for the three months ending June 30, 2024, a decrease of $116,657 or 17% from the prior period. The decrease in revenues was primarily due to changes in the Marketing segment’s customer base and the timing of revenue streams during the period.
We had cost of revenues of $821,584 for the three months ending June 30, 2025, compared to cost of revenues of $348,171 for the three months ended June 30, 2024, an increase of $473,413 or 136% from the prior period. This increase is primarily due to the acquisition of Reliant Holdings which was not included in the previous period coupled with increased labor costs as we continue to seek to retain top talent within our business segments.
We had operating expenses of $896,967 for the three months ending June 30, 2025, compared to operating expenses of $381,004 for the three months ending June 30, 2024, representing an increase of $515,963 or 135%. This increase was related to costs of compliance as a result of our acquisition of Reliant Holdings and the accompanying public company reporting obligations coupled with increases in stock-based compensation and executive compensation during the period.
We had interest expense of $175,497 for the three months ending June 30, 2025, compared to interest expense of $98,499 for the three months ending June 30, 2024, due to interest costs in connection with new loans during 2025 to fund operations as described in greater detail under “ Liquidity and Capital Resources ” below.
We had transaction costs for merger of $-0- for the three months ending June 30, 2025, compared to $157,047 for the three months ending June 30, 2024, representing a decrease of $157,047 or 100%. This decrease was related to merger-related costs which were incurred prior to our acquisition of Reliant Holdings and such costs do not continue post-acquisition.
We had changes in the fair value of our investments of $64,653 for the three months ending June 30, 2025, compared to $-0- for the three months ended June 30, 2024, representing a 100% increase for the period. This change is the result of changes in the market value of our investments, which are shares of common stock we received as compensation for services in a previous period.
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For the six Months Ended June 30, 2025, compared to the six Months Ended June 30, 2024
We had revenue of $1,623,234 for the six months ending June 30, 2025, compared to revenue of $1,267,838 for the six months ending June 30, 2024, an increase of $355,396 or 28% from the prior period. The increase in revenues was primarily due to the acquisition of Reliant Holdings and its related pool business.
We had cost of revenues of $1,699,260 for the six months ending June 30, 2025, compared to cost of revenues of $827,021 for the six months ending June 30, 2024, an increase of $872,239 or 105% from the prior period. This increase is primarily due to the acquisition of Reliant Holdings which was not included in the previous period coupled with increased labor costs as we continue to seek to retain top talent within our business segments.
We had operating expenses of $2,041,789 for the six months ending June 30, 2025, compared to operating expenses of $764,694 for the six months ending June 30, 2024, representing an increase of $1,277,095 or 167%. This increase was related to costs of compliance as a result of our acquisition of Reliant Holdings and the accompanying public company reporting obligations coupled with increases in stock-based compensation and executive compensation during the period.
We had interest expense of $369,224 for the six months ended June 30, 2025, compared to interest expense of $148,172 for the six months ended June 30, 2024, due to interest costs in connection with new loans during 2025 to fund operations as described in greater detail under “ Liquidity and Capital Resources ” below.
We had transaction costs for merger of $-0- for the six months ending June 30, 2025, compared to $216,647 for the six months ending June 30, 2024, representing an decrease of $216,647 or 100%. This decrease was related to merger-related costs which were incurred prior to our acquisition of Reliant Holdings and such costs are not continuing post-acquisition.
We had changes in the fair value of our investments of $246,804 for the six months ending June 30, 2025, compared to $-0- for the six months ending June 30, 2024, representing a 100% increase for the period. This change is the result of changes in the market value of our investments, which are shares of common stock we received as compensation for services in a previous period.
Liquidity and Capital Resources
We had total assets of $2 million as of June 30, 2025, consisting of total current assets of $751,828, which included cash of $265,409, and accounts receivable of $163,956.
We had total and current liabilities of $6.2 million as of June 30, 2025, including accounts payable of $499,047 and accrued expenses of $1,740,766, contract liabilities, relating to billings in excess of costs and estimated earnings on uncompleted jobs of $213,636, and notes payable maturing within one year of $3.7 million.
We had a working capital deficit of $5.5 million as of June 30, 2025, compared to a working capital deficit of $4 million as of December 31, 2024.
We used $1,024,544 net cash in operating activities for the six months ending June 30, 2025, as compared to $826,210 of net cash used in operating activities for the six months ending June 30, 2024. Net cash used in operating activities for the 2025 period was mainly due to our net loss for the period offset by certain non-cash charges. For the 2024 period, net cash used in operating activities was mainly due to a net loss for the period.
We used $-0- of cash in investing activities for the six months ending June 30, 2025. We used $427,729 of net cash in investing activities for the six months ending June 30, 2024, which was due primarily by a loan made to a non-executive employee of the Company prior to the acquisition of Reliant Holdings and the acquisition of fixed assets during the period
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We generated $950,754 of cash provided by financing activities for the six months ending June 30, 2025, primarily driven by the issuance of new debt instruments offset by repayments of previous balances. We generated $1.6 million of net cash provided by financing activities for the six months ending June 30, 2024, which was driven primarily by the issuance of debt instruments during the period.
While we do not currently have committed additional sources of capital, we are actively evaluating financing options, including potential equity raises, strategic debt facilities, and partnership opportunities. We expect these efforts, combined with ongoing cost discipline and debt restructuring initiatives, to extend our operating runway.
As disclosed in Note 9, subsequent to quarter-end we added three independent directors to enhance governance and completed two convertible note financings, providing incremental liquidity and extending our financing horizon.
In the future, we may be required to seek additional capital by selling additional debt or equity securities, or otherwise be required to bring cash flows in balance when we approach a condition of cash insufficiency. The sale of additional equity or debt securities, if accomplished, may result in dilution to our then stockholders. Financing may not be available in amounts or on terms acceptable to us, or at all. In the event we are unable to raise additional funding and/or obtain revenues sufficient to support our expenses, we may be forced to curtail or abandon our business operations, and any investment in the Company could become worthless.
Critical Accounting Policies and Estimates
The preparation of financial statements and related disclosures in conformity with U.S. generally accepted accounting principles and the Company’s discussion and analysis of its financial condition and operating results require the Company’s management to make judgments, assumptions and estimates that affect the amounts reported. Management bases its estimates on historical experience and on various other assumptions it 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. Actual results may differ from these estimates, and such differences may be material.
“ Note 1. The Company and Summary of Significant Accounting Policies ” in Part I, Item 1 of this Form 10-Q and “ Note 1. The Company and Significant Accounting Policies ” in the Notes to Consolidated Financial Statements in Part II, Item 8, of the 2024 Annual Report, describe the significant accounting policies and methods used in the preparation of the Company’s consolidated financial statements.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Pursuant to Item 305(e) of Regulation S-K (§ 229.305(e)), the Company is not required to provide the information required by this Item as it is a “ smaller reporting company, ” as defined by Rule 229.10(f)(1).
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We have established and maintain a system of disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act, that are designed to provide reasonable assurance that information required to be disclosed in our reports filed with the Securities and Exchange Commission pursuant to the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Commission and that such information is accumulated and communicated to our management, including our Chief Executive Officer (CEO) and Chief Financial Officer (CFO), to allow timely decisions regarding required disclosures.
In connection with the preparation of this Quarterly Report on Form 10-Q, our management, with the participation of our Chief Executive Officer (our Principal Executive Officer and Principal Financial Officer), carried out an evaluation of the effectiveness of our disclosure controls and procedures as of June 30, 2025, as required by Rules 13a-15(e) and 15d-15(e) of the Exchange Act. Based on the evaluation described above, our management, including our Principal Executive Officer and Principal Financial Officer, concluded that, as of June 30, 2025, our disclosure controls and procedures were not effective.
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Changes in Internal Control Over Financial Reporting
We regularly review our system of internal control over financial reporting to ensure we maintain an effective internal control environment. There were no changes in our internal control over financial reporting that occurred during the quarter ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Material Weakness in Internal Controls Over Financial Reporting
We identified a material weakness in our internal control over financial reporting that exists as of June 30, 2025. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. We determined that we had a material weakness because, due to our small size, and our limited number of personnel, we did not have in place an effective internal control environment with formal processes and procedures, to allow for a detailed review of accounting transactions that would identify errors in a timely manner.
To remediate this material weakness, we are implementing additional review and reconciliation procedures, engaging external accounting resources for complex transactions, and evaluating the addition of finance personnel to strengthen segregation of duties and oversight. Progress on these measures will be evaluated and reported in future filings.
Notwithstanding the material weaknesses in our internal control over financial reporting, we have concluded that the consolidated financial statements included in this Quarterly Report on Form 10-Q fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented in conformity with accounting principles generally accepted in the United States of America.
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Part II – Other Information
Item 1. Legal Proceedings
Although we may, from time to time, be involved in litigation and claims arising out of our operations in the normal course of business, we are not currently a party to any material legal proceeding. In addition, we are not aware of any material legal or governmental proceedings against us or contemplated to be brought against us. See Note 6 to the financial statements for discussion of the resolution of a customer legal dispute during the quarter. We are not currently a party to any other material legal proceedings.
Item 1A. Risk Factors
There have been no material changes from the risk factors previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the SEC on April 15, 2025, under the heading “Item 1A. Risk Factors”, and investors should review the risks provided in the Annual Report, and below, prior to making an investment in the Company. The business, financial condition and operating results of the Company can be affected by a number of factors, whether currently known or unknown, including but not limited to those described in the Annual Report, under “Item 1A. Risk Factors”, any one or more of which could, directly or indirectly, cause the Company’s actual financial condition and operating results to vary materially from past, or from anticipated future, financial condition and operating results. Any of these factors, in whole or in part, could materially and adversely affect the Company’s business, financial condition, operating results and stock price.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Unregistered Sales of Equity Securities
On June 6, 2025, the Company sold 500 shares Series E Preferred Stock for aggregate proceeds of $500,000. The shares of Series E Preferred Stock were offered and sold without registration under the Securities Act of 1933in reliance upon the exemption from registration under Section 4(a)(2) of the Securities Act and/or Rule 506 of Regulation D promulgated thereunder. The Company used the proceeds of the offering for general corporate purposes.
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Use of Proceeds From Sale of Registered Securities
None.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information .
(c) Rule 10b5-1(c) Trading Plans. Our director and executive officer may from time to time enter into plans or other arrangements for the purchase or sale of our shares that are intended to satisfy the affirmative defense conditions of Rule 10b5 - 1 (c) or may represent a non-Rule 10b5 - 1 trading arrangement under the Exchange Act. During the quarter ended June 30, 2025, none of the Company’s directors or officers (as defined in Rule 16a - 1 (f)) adopted or terminated any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5 - 1 (c) or any “non-Rule 10b5 - 1 trading arrangement.”
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Item 6. Exhibits
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June 12, 2025 |
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000-56012 |
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June 12, 2025 |
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Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act |
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Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act |
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Certification of Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act |
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Certification of Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act |
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* Filed herewith.
** Furnished Herewith.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.
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ONAR HOLDING CORPORATION |
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Date: August 19, 2025 |
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/s/ Claude Zdanow |
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Claude Zdanow |
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Chief Executive Officer and President |
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(Principal Executive Officer) |
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ONAR HOLDING CORPORATION |
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Date: August 19, 2025 |
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/s/ Patricia Kaelin |
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Patricia Kaelin |
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Chief Financial Officer |
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(Principal Financial and Accounting Officer) |
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