Financial Analysis

NOTE 7 COMMITMENTS AND CONTINGENCIES Litigation and Claims Various vendors, service providers, and others have asserted legal claims in previous years. These creditors generally are not actively seeking collection of amounts due to them, and we have determined that the probability of realizing any loss on these claims is remote and will seek to compromise and settle at a deep discount any of such claims that are asserted for collection. These amounts are included in our current liabilities, except where we believe collection or enforcement of the judgments is barred by the applicable statute of limitations, in which case the liabilities have been eliminated. We have not accrued any liability for claims or judgments that we have determined to be barred by the applicable statute of limitations, which generally is eight years for judgments in Utah. Employment Agreements We engage Iehab Hawatmeh, our president and chief executive officer, through an employment agreement entered in August 2009 and amended in September 2017. In July 2017, Mr. Hawatmeh had resigned all positions with us to pursue other business activities, thereby effectively terminating the agreement. However, the amendment to his employment agreement in September 2017 reinstated Mr. Hawatmeh to his previous positions, with a salary in an amount to be determined. Among other things, the reinstated employment agreement: (a) grants options to purchase a minimum of 6,000 shares of our stock each year, with an exercise …

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NOTE 9 CONVERTIBLE DEBENTURES Convertible debentures consisted of the following: SCHEDULE OF CONVERTIBLE DEBENTURES December 31, 2025 December 31, 2024 Convertible debenture, 5 % stated interest rate, secured by all our assets, due on April 30, 2027 $ 200,000 $ 200,000 Convertible debenture, 5 % stated interest rate, secured by all our assets, due on April 30, 2027 25,000 25,000 Convertible debenture, 5 % stated interest rate, secured by all our assets, due on April 30, 2027 25,000 25,000 Convertible debenture, 5 % stated interest rate, secured by all our assets, due on April 30, 2027 25,000 25,000 Convertible debenture, 5 % stated interest rate, secured by all our assets, due on April 30, 2027 2,390,528 2,390,528 Subtotal $ 2,665,528 $ 2,665,528 Less: discounts (117,400 ) (223,521 ) Total $ 2,548,128 $ 2,442,007 Less: current portion (264,284 ) (264,284 ) Long-term portion $ 2,283,844 $ 2,177,723 The convertible debentures and accrued interest are convertible into shares of our common stock at the lower of $ 100 or the lowest bid price for the 20 trading days prior to conversion. On November 26, 2025, the Company and the lender entered into a Forbearance and Standstill Agreement, extending the maturity date on all debentures to April 30, 2027. As of December 31, 2025 and 2024, we had accrued interest on the convertible debentures totaling $ 2,179,837 and $ 2,055,232 , respectively. …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

NOTE 13 INCOME TAXES We did not provide any current or deferred U.S. federal income tax provision or benefit for any of the periods presented because we have experienced operating losses since inception. When it is more likely than not that a tax asset cannot be realized through future income, the company must allow for this future tax benefit. We provided a full valuation allowance on the net deferred tax asset, consisting of net operating loss carryforwards, because management has determined that it is more likely than not that we will not earn income sufficient to realize the deferred tax assets during the carryforward period. The U.S. federal income tax rate of 21 % is being used. We have not taken a tax position that, if challenged, would have a material effect on the financial statements for the years ended December 31, 2025 and 2024, applicable under FASB ASC 740, Income Taxes . We did not recognize any adjustment to the liability for an uncertain tax position and, therefore, did not record any adjustment to the beginning balance of accumulated deficit on the balance sheet. All our tax returns remain open. As of December 31, 2025 and 2024, we had net operating loss carryforwards for tax reporting purposes of approximately $ 6.1 million and $ 6.1 million, respectively. During the year ended December 31, 2019, we dissolved four subsidiaries that had total net operating loss carryforwards of approximately $ 8.9 million, which were forfeited upon dissolution, reducing our …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

NOTE 8 NOTES PAYABLE Notes payable consisted of the following: SCHEDULE OF NOTES PAYABLE December 31, 2025 December 31, 2024 Note payable to former service provider for past due account payable (current) $ 90,000 $ 90,000 Note payable for settlement of debt 500,000 500,000 Small Business Administration loan 143,000 143,000 Total $ 733,000 $ 733,000 There is $ 447,334 and $ 402,906 of accrued interest due on these notes as of December 31, 2025 and 2024, respectively. …

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Recently Issued Accounting Pronouncements In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which enhances the disclosure requirements for income taxes, including additional disaggregation of rate reconciliation and income taxes paid. The standard is effective for annual periods beginning after December 15, 2024. The Company adopted ASU 2023-09 in the annual financial statements for the year ended December 31, 2025, and for interim periods within the year of adoption. The adoption had no impact on the Companys financial statements. The Financial Accounting Standards Board (FASB) issued Accounting Standards Update ASU 2025-02 - Liabilities (Topic 405): Amendments to SEC Paragraphs Pursuant to SEC SAB No. 122, which is effective for annual periods beginning after December 15, 2024, and may require full retrospective adoption. This amendment eliminates outdated SEC guidance previously codified under SAB No. 122 and may impact disclosures or recognition related to obligations and liabilities. The Company adopted this ASU, effective for the year ended December 31, 2025. The adoption had no impact on the Companys financial statements. The Financial Accounting Standards Board (FASB) issued Accounting Standards Update ASU 2024-01 - Compensation - Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards, effective for public entities for annual periods beginning after December 15, 2024. This …

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NOTE 5 RELATED PARTY TRANSACTIONS In 2007, we issued a 10 % promissory note to a family member of our president in exchange for $ 300,000 . The note was due on demand after May 2008. There were no repayments made during the periods presented. At December 31, 2025 and 2024, the principal amount owing on the note was $ 151,833 and $ 151,833 , respectively. No demand for payment has been made. On March 31, 2008, we issued to this same family member, along with two other company shareholders, promissory notes totaling $ 315,000 ($ 105,000 each). Under the terms of these three $ 105,000 notes, we received total proceeds of $ 300,000 and agreed to repay the amount received plus a 5 % borrowing fee. The notes were due April 30, 2008, after which they were due on demand, with interest accruing at 12 % per annum. We made no payments towards the outstanding notes during the periods presented. The principal balance owing on the notes as of December 31, 2025 and 2024, was $ 72,466 and $ 72,466 , respectively. No demand for payment has been made. There were $ 1,400,699 and $ 22,452 of short-term advances due to related parties as of December 31, 2025 and 2024, respectively. As of December 31, 2025 and 2024, we owed our president a total of $ 433,379 and $ 433,379 , respectively, in unsecured advances. The advances and short-term bridge loans were approved by our board of directors under a 5 % borrowing fee. The borrowing fees were waived by our president on these loans. These amounts are …

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NOTE 12 SEGMENTS The Company uses ASC 280, Segment Reporting , in determining its reportable segments. The Company has two reportable segments based on sales: Tobacco products and all other sources of revenue. The guidance requires that segment disclosures present the measure(s) used by the Chief Operating Decision Maker (CODM) to decide how to allocate resources and for purposes of assessing such segments performance. The Companys CODM is comprised of its executive management team who use revenue and expenses of the two reporting segments to assess the performance of the business of our reportable operating segments. The following table details revenue, operating expenses, and assets for the Companys reportable segments for the year ended December 31, 2025. SCHEDULE OF SEGMENTAL INFORMATION Tobacco Line All other product lines Total ASSETS Current Assets: Cash $ 9,589 $ $ 9,589 Inventory 1,091,084 45,462 1,136,546 Deposits on inventory 270,036 11,252 281,288 Accounts receivable 351,035 14,626 365,661 Other current assets 449,606 18,734 468,340 Total current assets 2,171,350 90,074 2,261,424 Investment in securities at cost 248,000 248,000 Property and equipment, net of accumulated depreciation 4,607 4,607 Total assets $ 2,171,350 $ 342,681 $ 2,514,031 LIABILITIES AND STOCKHOLDERS EQUITY Current Liabilities: Accounts payable $ 143,470 $ 5,978 $ 149,448 Liabilities for product returns and credits 87,178 3,632 90,810 Short-term advances payable 162,866 162,866 Short-term advanc …

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NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). Use of Estimates The preparation of financial statements in conformity with U.S. GAAP 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. Significant estimates include the estimated useful lives of property and equipment. Actual results could differ from those estimates. Principles of Consolidation The consolidated financial statements include the accounts of the company and our wholly owned subsidiaries: CirTran Products Corp., LBC Products, Inc., and CirTran Asia, Inc. Intercompany accounts and transactions have been eliminated in consolidation. Concentrations of Credit Risk We maintain our cash in bank deposit accounts, the balances of which at times may exceed federally insured limits. We continually monitor our banking relationships and consequently have not experienced any losses in our accounts. At times, such deposits may exceed the Federal Deposit Insurance Corporation insurable limit. As of December 31, 2025, one customer represented 97.4 % of the Companys total accounts receivable, resulting in a significant …

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NOTE 15 SUBSEQUENT EVENTS In accordance with SFAS 165 (ASC 855-10), management has performed an evaluation of subsequent events through the date that the consolidated financial statements were issued and has determined that it does not have any material subsequent events to disclose in these consolidated financial statements. …

SubsequentEventsTextBlock · excerpt; the full note is in the filing