Financial Analysis

NOTE 9 BENEFITS AND OTHER COMPENSATION The Company offers a 401(k)-profit sharing plan for employees who meet the eligibility requirements. Pursuant to the plan, the Company may make discretionary matching contributions and/or discretionary profit-sharing contributions to the plan. All such contributions must comply with federal pension laws, non-discrimination requirements and the terms of the plan. In determining whether to make a discretionary contribution, the board of directors would evaluate current and prospective costs of such awards to the Company and managements desire to reward and retain employees and attract new employees. To date, the Company has never made matching contributions and/or discretionary profit-sharing contributions to the plan. …

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NOTE 7 INSURANCE FINANCING AGREEMENT The Company entered into an insurance policy finance arrangement for business insurance coverage effective May 2024. The agreement matured in March 2025 and had monthly payments of principal and interest of approximately $12,276 with interest at 9.3%. …

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NOTE 8 INCOME TAXES For the three months ended March 31, 2026, the Company recognized expense from income taxes of $74,201, representing an effective tax rate of 27.7%. For the three months ended March 31, 2025, the Company recognized expense from income taxes of $113,978, representing an effective tax rate of 28.0%. The Companys effective tax rate will generally differ from the U.S. Federal statutory rate of 21.0% due to state taxes, permanent items, and discrete items. On July 4, 2025, President Trump signed the One Big Beautiful Bill Act, which includes a broad range of tax reform provisions affecting businesses, including extending and modifying certain key Tax Cuts & Jobs Act provisions, expanding certain Inflation Reduction Act incentives while accelerating the phase-out of others, and modifying the endowment excise tax for higher education institutions. The Company is currently evaluating the impact of this new bill but does not believe it will have a material impact. …

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NOTE 13 COMMITMENTS AND CONTINGENCIES From time to time, the Company may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. …

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NOTE 5 LEASES The Company rents office space at 19800 MacArthur Boulevard, Suites 306 & 307, in Irvine, California. This lease was to expire as of March 31, 2026, but was renewed on December 10, 2025, for an additional 12 months, with a new expiration of March 31, 2027 with no extension options. The lease provides 320 square feet of office space for the executive team and a shared office space for key employees to use as needed. All other employees will continue to work remotely. Lease expenses were $12,763 and $12,138 during the three-month periods ended March 31, 2026 and 2025, respectively. …

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NOTE 14 RELATED PARTY TRANSACTIONS The Company defines a related party as an individual or entity that has the ability to exercise significant influence over the Companys management or operations. Related parties include, among others, the Companys principal stockholders, directors, executive officers, and members of their immediate families, as well as entities controlled by, or under common control with, such individuals. The Company retained Donald P. Balzano, a shareholder owning 6.9% of the Companys common stock, as legal counsel through September 2025. Mr. Balzano provided legal guidance and expertise in the workers compensation industry on behalf of the Company. The fees paid to Mr. Balzano are recorded in Professional Fees on the consolidated statement of operations. For the three months ended March 31, 2025, Mr. Balzano earned $36,036 related to the retainer agreement. The Companys former CFO and board member, Kristina Kubota, provides financial consulting services for the Company. Kristina Kubota is the daughter of Tom Kubota, the Companys CEO, President, Chairman of the board and majority shareholder. Ms. Kubotas consulting arrangement commenced upon her resignation from the CFO position with the Company on March 5, 2024. The fees paid to Ms. Kubota are recorded in Professional Fees on the consolidated income statement. Fees for services not yet billed are included in Accrued Expenses on the consolidated balance sheet, totaling $100 at both March 31, 2026 and Decem …

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NOTE 3 SEGMENT INFORMATION The Company conducts its business activities and reports financial results as a single reportable segment, the workers compensation cost containment specialists segment, based on the nature of its business and accounting policies. The Chief Operating Decision Maker (CODM) is its executive team. The CODM makes decisions about allocating resources and assessing performance in a manner consistent with the way the Company operates its business and presents its financial results, using the same net income that is also reported on the consolidated statements of operations as net income. There are no reconciling items to the consolidated statements of operations. The measurement of segment assets is reported on the consolidated balance sheet as total assets. The CODM uses net income to evaluate income generated from segment assets (return on assets) in deciding whether to reinvest profits into the workers compensation cost containment specialists segment or into other parts of the entity. All of the Companys customers are based in the United States. …

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NOTE 2 SIGNIFICANT ACCOUNTING POLICIES A. Principles of Consolidation The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Intercompany transactions and balances have been eliminated in consolidation. B. Use of Estimates The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in these unaudited condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Significant estimates include the values assigned to the allowance for credit losses, legal contingencies, and accruals for income taxes. C. Reclassifications Certain reclassifications have been made to prior year amounts to conform to the current years presentation. These changes had no impact on the Companys total assets, stockholders equity or reported net income. D. Revenue Recognition The Company recognizes revenue in accordance with ASU 2014-09, Revenue from Contracts with Customers (Topic 606). The core principle underlying Topic 606 is that the Company recognizes revenue to represent the transfer of goods and services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. This requires the Company to identify contractual performance obligations an …

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NOTE 11 STOCKHOLDERS EQUITY On January 6, 2020, the Company effected a four-shares-for-one-share (4:1) forward stock split (Forward Split) of its common stock and its Series A convertible preferred stock. Unless otherwise noted, impacted amounts, share and per share information included in the financial statements and notes thereto have been retroactively adjusted for the Forward Split as if such Forward Split occurred on the first day of the first period presented. The Company has two classes of stock. The Company had 800,000,000 shares of voting common stock authorized, and 12,800,000 shares issued and outstanding at both March 31, 2026 and 2025. The Articles of Incorporation of the Company, as amended, also authorizes 5,000,000 shares of $0.001 par value preferred stock, which may be issued in one or more series, with designation, rights and privileges of such preferred stock to be set by the board of directors of the Company from time to time. On November 21, 2016, the board of directors of the Company approved a Certificate of Designation of Rights, Privileges and Preferences of Series A convertible preferred stock and authorized the Companys officers to file such with the Utah Division of Corporations and Commercial Code to create the Series A convertible preferred stock. The Series A convertible preferred stock has a par value of $0.001 and consists of 40,000 shares, and may be converted into common stock on a one-share for one-share basis at the election of the holder …

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