Financial Analysis

"NOTE 10 - COMMITMENTS AND CONTINGENCIES General The Company accrues a loss contingency if it is probable that a liability has been incurred and the amount can be reasonably estimated, in accordance with ASC 450-20, Contingencies. If a loss is reasonably possible but not probable, or if the amount of loss cannot be reasonably estimated, the Company discloses the nature of the contingency but does not record an accrual. Management evaluates all known legal matters and other contingencies on an ongoing basis and adjusts accruals as additional information becomes available. Legal Proceedings BKR Strategy Group The Company is pursuing a collections matter against BKR Strategy Group related to unpaid invoices and a $500 thousand promissory note executed on November 30, 2021. Following non-payment, the Company filed two lawsuits on February 18, 2022, totaling $1.4 million. BKR filed a $500 thousand counterclaim alleging overbilling, which the Company disputes and intends to defend. On June 21, 2022, the Supreme Court of New York ruled in favor of the Company, awarding $500 thousand, plus 12% interest. The Company has dropped the second lawsuit and accordingly no accrual has been made. Pipl, Inc. On September 6, 2023, the Company was served with a civil lawsuit filed by Pipl, Inc. in the Superior Court of the State of Connecticut, Judicial District of New Britain. The lawsuit alleges that the Company failed to pay for goods and/or services provided by Pipl, Inc. between January 3, 2 …

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NOTE 7 - LOANS PAYABLE AND LINE OF CREDIT PAYABLE Promissory Notes Payable Parrut Note The Company issued a promissory note for $ 1.8 million pursuant to the Parrut acquisition agreement dated July 7, 2021. On August 31, 2023, the Company did not make payments of amounts due under the note and defaulted with Parrut. On March 27, 2024, the Company and Parrut signed an agreement to convert the current outstanding principal, accrued interest, and penalties in aggregate of $ 259 thousand into 168,414 shares of common stock. As a result of this transaction the Company recognized $ 15 thousand in loss on extinguishment of debt recorded within net loss from discontinued operations on the consolidated statement of operations for the year ended December 31, 2024. As of December 31, 2025, and December 31, 2024, the outstanding balance on the promissory note with Parrut was $ 0 and $ 0 , respectively. This note and the related loss on debt extinguishment was attributable to CognoGroup as a part of the spin-off completed on December 30, 2025. As such, the loss on debt extinguishment was appropriately recorded within net loss from discontinued operations for the year ended December 31, 2024. Novo Note The Company issued a promissory note for $ 3 million pursuant to the Novo Group acquisition agreement dated August 27, 2021. The note originally had a term of 30 months, bears interest at 6%, and was scheduled to mature on February 1, 2024. The note requires monthly payments of $85 thousand …

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Schedule of revenue disaggregation Years Ended December 31, (in thousands) 2025 2024 Telecommunication services $ 97,906 $ Consulting and staffing services 6 Total revenue $ 97,906 $ 6 …

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NOTE 9 - STOCK OPTIONS AND WARRANTS 2021 Equity Incentive Plan In July 2021, our Board and shareholders authorized the 2021 Equity Incentive Plan (the 2021 Plan), covering 180,000 shares of common stock. In January 2022, the number of shares authorized under the 2021 Plan was automatically increased to 228,530 shares pursuant to an escalation provision in the plan. The purpose of the 2021 Plan is to advance the interests of the Company and our related corporations by enhancing the ability of the Company to attract and retain qualified employees, consultants, officers, and directors, by creating incentives and rewards for their contributions to the success of the Company and its related corporations. The 2021 Plan is administered by our Board or by the Compensation Committee. The following awards may be granted under the 2021 Plan: incentive stock options (ISOs) non-qualified options (NSOs) awards of our restricted common stock stock appreciation rights (SARs) restricted stock units (RSUs) Any option granted under the 2021 Plan must provide for an exercise price of not less than 100% of the fair market value of the underlying shares on the date of grant and not less than $4.00 per share, but the exercise price of any ISO granted to an eligible employee owning more than 10% of our outstanding common stock must not be less than 110% of fair market value on the date of the grant. The plans further provide that with respect to ISOs the aggregate fair market value of the common sto …

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NOTE 5 - GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill Goodwill is accounted for in accordance with ASC 350, Intangibles - Goodwill and Other, which requires that goodwill is not amortized but tested for impairment at least annually and more frequently if events or changes in circumstances indicate that the carrying value may not be recoverable. The Company performs its goodwill impairment testing using appropriate valuation methods, such as discounted cash flow analysis and market approach techniques, consistent with ASC 350 guidance. Impairment charges, if any, are recognized in the consolidated statements of operations as a non-cash expense, and the carrying value of goodwill is adjusted accordingly. As of December 31, 2024, the Company determined that the carrying value of its online recruiting reporting unit exceeded its estimated fair value under the market approach. As a result, the Company recorded a non-cash goodwill impairment charge of $ 4.7 million in the consolidated statements of operations. The impairment was primarily driven by a decline in revenue from the Company's online recruiting platform, which reduced the estimated fair value under the market-based revenue multiple analysis. Following this impairment, the goodwill carrying value associated with continuing operations was reduced to $ 1.7 million as of December 31, 2024. For the year ended December 31, 2025, the Company performed the goodwill impairment assessment and concluded that the remaining goodwill …

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NOTE 13 - INCOME TAXES The Company has, subject to limitation, approximately $ 68 million of net operating loss carryforwards (NOL) at December 31, 2025, of which approximately $ 7 million will expire at various dates through 2037 and approximately $ 61 million can be carried forward indefinitely. The Company has provided a 100 % valuation allowance for the deferred tax benefits resulting from the net operating loss carryover due to the lack of earnings history. In addressing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences are deductible. The valuation allowance increased by approximately $ 4 million and $ 6 million for the years ended December 31, 2025 and 2024, respectively. Significant components of deferred tax assets and liabilities are as follows (in thousands): Schedule of deferred tax assets and liabilities (in thousands) 2025 2024 Deferred tax assets (liabilities): Net operating loss carryover $ 16,918 $ 16,050 Fixed assets 3 (4 ) Intangibles amortization 1,971 1,616 Goodwill 2,003 Stock compensation 4,240 3,463 Capital losses 14 14 Accrued expenses 83 (4 ) R&D Sec 174 capitalization 181 Credit loss allowance 214 221 Contract liabilities 6 (19 ) Other 119 92 Total deferred tax asset …

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Recently Issued Accounting Pronouncements From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and are adopted by the Company as of the specified effective date. In December 2023, the FASB issued ASU 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which is intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments primarily relate to expanded disclosure requirements for the effective tax rate reconciliation and income taxes paid. The standard is effective as of January 1, 2025, and allows either a prospective or retrospective application. The Company adopted the revised guidance effective January 1, 2025 and implemented the related disclosure requirements on a retrospective basis in the consolidated financial statements. The adoption only impacted disclosures and had no impacts to the Company's consolidated statements of operations, cash flows, or balance sheets. In November 2024, the FASB issued ASU 2024-03, Income StatementReporting Comprehensive IncomeExpense Disaggregation Disclosures (Subtopic 220-40), which requires entities to provide more detailed disaggregation of expenses in the income statement, focusing on the nature of the expenses rather than their function. The new disclosures will require entities to separately present expenses for significant line items, including but not limited to, depreciation, amortization, and employee compensation. E …

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NOTE 11 RELATED PARTY TRANSACTIONS General The Company accounts for and discloses related party transactions in accordance with ASC 850, Related Party Disclosures. All related party transactions are reviewed and approved by the Companys Board of Directors or an appropriate committee to ensure that the terms are fair and reasonable and in the best interest of the Company. Related Party Transactions Under a technology services agreement entered into on January 17, 2020, the Company uses a related party firm of the Company, Recruiter.com Mauritius, for software development and maintenance related to our website and platform underlying our operations. This was an oral arrangement prior to January 17, 2020. The initial term of the Services Agreement is five years, whereupon it shall automatically renew for additional successive 12-month terms until terminated by either party by submitting a 90-day prior written notice of non-renewal. The firm was formed outside of the United States solely for the purpose of performing services for the Company and has no other clients. The consultant to the Company, who was our Chief Technology Officer until July 15, 2021, and thereafter our Chief Web Officer until August 23, 2023, is an employee of Recruiter.com Mauritius and exerts control over Recruiter.com Mauritius. Pursuant to the Services Agreement, the Company has agreed to pay Recruiter.com Mauritius fees in the amount equal to the actualized documented costs incurred by Recruiter.com Maur …

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NOTE 12 - SEGMENT REPORTING The Company has one reportable segment, which is aligned with its internal organizational structure and reviewed by the Chief Executive Officer, who is the Companys Chief Operating Decision Maker (CODM). In accordance with ASC 280, Segment Reporting, segments are defined based on the manner in which financial information is evaluated by the CODM for resource allocation and performance assessment. The Companys reportable segment is as follows: Telecomm Provider of private telecommunications solutions and proprietary billing services. All material operating units within each segment have been aggregated as they share similar economic characteristics, customer types, nature of products and services, and processes for procurement and delivery. The Company evaluates segment performance based on segment operating loss, which includes gross profit less direct research and development, sales and marketing, and general and administrative expenses that are specifically attributable to each segment. Items below loss from operations, such as interest and taxes, and all balance sheet data are not allocated to segments, as they are not used by the CODM. The tables below present segment information reconciled to total Company loss from operations, with segment operating loss including gross profit less direct research and development expenses and direct selling, general and administrative expenses to the extent specifically identified by segment: Schedule of segm …

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NOTE 8 - STOCKHOLDERS EQUITY Preferred Stock The Company is authorized to issue 2,000,000 shares of Preferred Stock, Series D, par value $ 0.0001 per share. The Company is authorized to issue 775,000 shares of Preferred Stock, Series E, par value $ 0.0001 per share. The Company is authorized to issue 200,000 shares of Preferred Stock, Series F, par value $ 0.0001 per share. On February 14, 2024, the sole shareholder of 86,000 shares of Series E preferred stock converted the entire balance into 28,667 shares of common stock. As of December 31, 2025, and December 31, 2024, the Company had 0 shares of preferred stock issued and outstanding. Preferred Stock Penalties On March 31, 2019, the Company entered into certain agreements with investors pursuant to which the Company issued convertible preferred stock and warrants. Each of the series of preferred stock and warrants required the Company to reserve shares of common stock in the amount equal to two times the common stock issuable upon conversion of the preferred stock and exercise of the warrants. The Company did not comply in part due to our attempts to manage the Delaware tax which increases to a maximum of $200 thousand as the authorized capital increases without the simultaneous increase in the number of shares outstanding. In May 2020 following stockholder approval at a special meeting the Company effected a reincorporation from Delaware to Nevada and a simultaneous increase in our authorized common stock from 31,250,000 …

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NOTE 13 - SUBSEQUENT EVENTS On March 13, 2026, the Company issued the third and final tranche of shares of common stock to NexGenAI related to the asset acquisition during 2025. The Company issued 915,540 shares of common stock worth $500 thousand in order to fully satisfy the purchase agreement and the contingent consideration of $500 thousand on the consolidated balance sheet as of December 31, 2025. On March 30, 2026, the Company entered into a Securities Purchase Agreement (the SPA) with certain investors pursuant to which the Company issued shares of its common stock in a private placement transaction for aggregate gross proceeds of approximately $1.0 million. …

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