E-Smart Corp (OTCQB: ESMR) boosts revenue as losses widen and cash thins

Rhea-AI Filing Summary

E-Smart Corp reported higher revenue but wider losses for the quarter ended February 28, 2026. Revenue for the quarter rose to $20,151 from $5,885 a year earlier, and six-month revenue increased to $29,760 from $10,303, reflecting early traction for its AI-driven tattoo design and artist marketplace platform.

Despite this growth, the company recorded a six-month net loss of $64,500, up from $37,529, and an accumulated deficit of $174,748. Cash fell to $1,138 with total liabilities of $247,822, including a related-party loan of $239,773, resulting in a stockholders’ deficit of $119,291. Management states there is substantial doubt about the company’s ability to continue as a going concern and plans to rely on director loans and potential equity offerings.

The company cancelled 2,000,000 restricted shares previously held by its CEO, leaving 3,799,469 common shares outstanding as of April 14, 2026. E-Smart continues to position its subscription-based API and digital platform to connect tattoo artists and clients while operating as an emerging growth company with reduced reporting requirements.

Positive

• None.

Negative

• Going concern uncertainty and weak liquidity: Management discloses substantial doubt about E-Smart Corp’s ability to continue as a going concern, with only $1,138 in cash, liabilities of $247,822, a stockholders’ deficit of $119,291, and growing reliance on a related-party loan.

Insights

Small-cap equity analyst

Revenue is growing, but losses, low cash and going-concern risk dominate.

E-Smart Corp is showing early topline progress, with six-month revenue rising to $29,760 from $10,303. This comes from its AI-powered tattoo design API and marketplace platform, indicating some initial customer adoption.

However, the company’s financial position is strained. The six-month net loss widened to $64,500, accumulated deficit reached $174,748, and cash declined to $1,138 against liabilities of $247,822 as of February 28, 2026. A related-party loan from the CEO rose to $239,773, underscoring dependence on insider financing.

Management explicitly notes substantial doubt about the ability to continue as a going concern and plans to fund the next twelve months through available cash, director loans, and potential common stock offerings. Investors will need to evaluate how effectively the company can convert revenue growth into sustainable cash generation in future reporting periods.

Key Figures

Quarterly revenue: $20,151 Six-month revenue: $29,760 Six-month net loss: $64,500 +5 more

8 metrics

Quarterly revenue $20,151 Three months ended February 28, 2026

Six-month revenue $29,760 Six months ended February 28, 2026

Six-month net loss $64,500 Six months ended February 28, 2026

Cash balance $1,138 As of February 28, 2026

Total liabilities $247,822 As of February 28, 2026

Stockholders’ deficit $119,291 As of February 28, 2026

Related-party loan balance $239,773 Due to CEO as of February 28, 2026

Shares outstanding 3,799,469 shares Common shares as of April 14, 2026

Key Terms

going concern, emerging growth company, deferred revenue, imputed interest, +2 more

6 terms

going concern financial

"Therefore, there is substantial doubt about the Company’s ability to continue as a going concern."

A going concern is a business that is expected to continue its operations and meet its obligations for the foreseeable future, rather than shutting down or selling off assets. This assumption matters to investors because it indicates stability and ongoing profitability, making the business a more reliable investment. Think of it as believing a restaurant will stay open and serve customers, rather than closing down suddenly.

emerging growth company regulatory

"We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012, as amended, and therefore we intend to take advantage of certain exemptions"

An emerging growth company is a recently public or smaller public firm that qualifies for temporary, lighter regulatory and disclosure rules to reduce the cost and effort of being public. For investors, it means the company may provide less historical financial detail and face fewer reporting requirements than larger firms, so it can grow more quickly but also carries higher uncertainty—like buying a promising early-stage product with fewer user reviews.

deferred revenue financial

"As of February 28, 2026 and August 31, 2025 the Company reported deferred revenue of $7,950 and $0, respectively."

Cash a company has already received for goods or services it has promised but not yet delivered; it's recorded as a liability because the company still owes that product, service, or future revenue recognition. For investors, deferred revenue signals upcoming work or deliveries that will convert into reported sales over time and affects short-term obligations, cash flow quality, and how quickly a firm can grow recognized revenue—think of it like prepaid subscriptions or gift cards a business must honor later.

imputed interest financial

"Imputed interest expense of $2,482 for the three months ended February 28, 2026 was recorded as additional paid in capital."

short-term leases financial

"The 12-month lease of these services was not accounted for under ASC 842 due to the Company's decision not to apply the requirements of ASC 842 to short-term leases"

fair value hierarchy financial

"The Company determines the fair values of its assets and liabilities based on a fair value hierarchy that includes three levels of inputs"

10-Q Quarterly Reports: What Changes Quarter to Quarter →

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-Q

[X] Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended February 28, 2026

[ ] 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 000-56733

E-SMART CORP.

(Exact name of registrant as specified in its charter)

Nevada	7371		35-2810816
(State or Other Jurisdiction of Incorporation or Organization)		(Primary Standard Industrial Classification Number)		(IRS Employer Identification Number)

Diana Vasylenko

7311 Oxford Ave

Philadelphia, PA 19111

Tel. +1620-3079197

Email: office@e-smart.io

(Address, including zip code, and telephone number, including area code,

of registrant's principal executive offices)

ndicate by checkmark whether the issuer: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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. Yes [X] No [ ]

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). Yes [X] No [ ]

Large accelerated filer	[ ]	Accelerated filer	[ ]
Non-accelerated filer	[X]	Smaller reporting company	[X]
Emerging growth company	[X]

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 ( )       No (X)

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 3,799,469 common shares issued and outstanding as of April 14, 2026.

E-SMART CORP.

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS

		Page
PART I	FINANCIAL INFORMATION:
Item 1.	Financial Statements (Unaudited)	3
	Condensed Balance Sheets as of February 28, 2026 (Unaudited) and August 31, 2025	4
	Condensed Statements of Operations for the three and six months ended February 28, 2026 and 2025 (Unaudited)	5
	Condensed Statements of Changes in Stockholders’ Deficit for the three and six months ended February 28, 2026 and 2025 (Unaudited)	6
	Condensed Statements of Cash Flows for the six months ended February 28, 2026 and 2025 (Unaudited)	7
	Notes to the Condensed Financial Statements for the six months ended February 28, 2026 and 2025 (Unaudited)	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	17
Item 4.	Controls and Procedures	18
PART II	OTHER INFORMATION:
Item 1.	Legal Proceedings	19
Item 1A	Risk Factors	19
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	19
Item 3.	Defaults Upon Senior Securities	19
Item 4.	Submission of Matters to a Vote of Securities Holders	19
Item 5.	Other Information	19
Item 6.	Exhibits	19
	Signatures	19

2

PART 1 – FINANCIAL INFORMATION

Item 1. Financial Statements

The accompanying interim financial statements of E-Smart Corp. (“the Company”, “we”, “us” or “our”), have been prepared without audit pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with United States generally accepted principles have been condensed or omitted pursuant to such rules and regulations.

The interim financial statements are condensed and should be read in conjunction with the company’s latest annual financial statements.

In the opinion of management, the financial statements contain all material adjustments, consisting only of normal adjustments considered necessary to present fairly the financial condition, results of operations, and cash flows of the Company for the interim periods presented.

3

E-SMART CORP.

Condensed Balance Sheets

		February 28, 2026 (Unaudited)		August 31, 2025
ASSETS
Current Assets
Cash and cash equivalents	$	1,138	$	6,825
Prepaid Expenses		30,591		20,274
Total Current Assets		31,729		27,099
Intangible assets
Intangible assets		173,800		173,800
Accumulated amortization		(76,998)		(59,618)
Total Intangible assets		96,802		114,182
Total Assets	$	128,531	$	141,281
STOCKHOLDERS’ DEFICIT AND LIABILITIES
Liabilities
Current Liabilities
Related Party Loan	$	239,773	$	200,790
Accounts Payable		99		198
Deferred Revenue		7,950		-
Total Current Liabilities		247,822		200,988
Total Liabilities		247,822		200,988
Stockholders’ Deficit
Common stock, par value $0.001; 75,000,000 shares authorized, 3,799,469 and 5,799,469 shares issued and outstanding as of February 28, 2026 and August 31, 2025, respectively		3,799		5,799
Additional Paid-in Capital		51,658		44,742
Accumulated deficit		(174,748)		(110,249)
Total Stockholders’ Deficit		(119,291)		(59,708)
Total Liabilities and Stockholders’ Deficit	$	128,531	$	141,281

See accompanying notes, which are an integral part of these financial statements

4

E-SMART CORP.

Condensed Statements of Operations (Unaudited)

		Three months ended February 28, 2026		Three months ended February 28, 2025		Six months ended February 28, 2026		Six months ended February 28, 2025
REVENUES	$	20,151	$	5,895	$	29,760	$	10,346
Discounts given		-		(10)		-		(42)
GROSS PROFIT		20,151		5,885		29,760		10,303
OPERATING EXPENSES
General and Administrative Expenses		60,155		26,609		89,344		43,188
TOTAL OPERATING EXPENSES	$	(60,155)	$	(26,609)	$	(89,344)	$	(43,188)
LOSS FROM OPERATIONS	$	(40,004)	$	(20,724)	$	(59,584)	$	(32,885)
OTHER LOSS
Interest Income	$	-	$	-	$	-	$	5
Interest Expense		(2,482)		(2,290)		(4,416)		(4,649)
TOTAL OTHER LOSS	$	(2,482)	$	(2,290)	$	(4,916)	$	(4,644)
PROVISION FOR INCOME TAXES		-		-		-		-
NET LOSS	$	(42,486)	$	(23,014)	$	(64,500)	$	(37,529)
NET LOSS PER SHARE: BASIC AND DILUTED	$	(0.01)	$	(0.00)	$	(0.01)	$	(0.00)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC AND DILUTED		5,046,142		5,707,188		5,455,025		5,189,281

See accompanying notes, which are an integral part of these financial statements

5

E-SMART CORP.

Condensed Statements of Changes in Stockholders’ Deficit

For the three and six months ended February 28, 2026 and 2025 (Unaudited)

	Common Stock				Additional Paid-in Capital		Accumulated Deficit		Total Stockholders’ Equity (Deficit)
	Shares		Amount
Balance, August 31, 2024	4,500,000	$	4,500	$	6,905	$	(42,215)	$	(30,810)
Common Shares Issued for Cash	1,020,003		1,020		21,930		-		22,950
Imputed Interest	-		-		2,359		-		2,359
Net Loss for the Period	-		-		-		(14,514)		(14,514)
Balance, November 30, 2024	5,520,003	$	5,520	$	31,194	$	(56,729)	$	(20,015)
Common Shares Issued for Cash	279,466		279		6,009		-		6,288
Imputed Interest	-		-		2,290		-		2,290
Net Loss for the Period	-		-		-		(23,014)		(23,014)
Balance, February 28, 2025	5,799,469	$	5,799	$	39,493	$	(79,743)	$	(34,451)
Balance, August 31, 2025	5,799,469	$	5,799	$	44,742	$	(110,249)	$	(59,708)
Imputed Interest	-		-		2,434		-		2,434
Net Loss for the Period	-		-		-		(22,013)		(22,013)
Balance, November 30, 2025	5,799,469	$	5,799	$	47,176	$	(132,262)	$	(79,287)
Common Shares Cancelled	(2,000,000)		(2,000)		2,000		-		-
Imputed Interest	-		-		2,482		-		2,482
Net Loss for the Period	-		-		-		(42,486)		(42,486)
Balance, February 28, 2026	3,799,469	$	3,799	$	51,658	$	(174,748)	$	(119,291)

See accompanying notes, which are an integral part of these financial statements

6

E-SMART CORP.

Condensed Statements of Cash Flows (Unaudited)

		For the six months ended February 28, 2026		For the six months ended February 28, 2025
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the period	$	(64,500)	$	(37,529)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization		17,380		17,380
Accounts Payable		(99)		-
Prepaid Expense		(10,317)		(13,221)
Deferred revenue		7,950		3,189
Imputed interest		4,916		4,649
Cash flows used in Operating Activities		(44,670)		(25,531)
CASH FLOWS FROM INVESTING ACTIVITIES
Intangible Assets		-		-
Cash flows used in Investing Activities		-		-
CASH FLOWS FROM FINANCING ACTIVITIES
Related Party Loan (proceeds /repayment)		38,983		(3,490)
Issuance of capital stock		-		29,238
Cash Flows provided by Financing Activities		38,983		25,748
NET CHANGE IN CASH		(5,687)		217
Cash, beginning of period		6,825		546
Cash, end of period	$	1,138	$	763
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid	$	-	$	-
Income taxes paid	$	-	$	-
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Common Shares Cancelled		(2,000)		-

See accompanying notes, which are an integral part of these financial statements

7

E-SMART CORP.

Notes to the Condensed Financial Statements

For the three and six months ended February 28, 2026 and 2025 (Unaudited)

Note 1 – ORGANIZATION AND NATURE OF BUSINESS

E-Smart Corp. (“the Company”, “we”, “us” or “our”) was incorporated on June 6, 2023 under the laws of the State of Nevada United States of America. E-Smart Corp. is an innovative digital platform that aims to revolutionize the tattoo industry by efficiently connecting tattoo artists and clients. Our platform is designed to enhance efficiency, simplifying the client-artist interaction process to meet the requirements of both clients and tattoo studios.

Our platform ensures a seamless experience for all users, providing a comprehensive database of skilled tattoo artists. Artists can easily showcase their exceptional work, and expand their client base. By including essential information and direct links to their social media profiles, we facilitate convenient access for users to view portfolios and initiate contact with their preferred artists. Masters interested in joining our platform shall contact us through our designated contacts and apply for inclusion in the database.

Note 2 – GOING CONCERN

The accompanying financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. The Company currently has losses and has not completed its efforts to establish a stabilized source of revenues sufficient to cover operating costs over an extended period of time. Therefore, there is substantial doubt about the Company’s ability to continue as a going concern. Management anticipates that the Company will be dependent, for the near future, on additional investment capital to fund operating expenses The Company intends to position itself so that it will be able to raise additional funds through the capital markets. In light of management’s efforts, there are no assurances that the Company will be successful in this or any of its endeavors or become financially viable and continue as a going concern.

E-Smart Corp. has generated $29,760 of revenue and incurred a net loss of $64,500 for the six months ended February 28, 2026, additionally, it is reporting an accumulated deficit since inception of $174,748 as of February 28, 2026.

The Company's capacity to operate as a going concern is reliant on its ability to generate profitable operations in the future and/or secure the required funding to meet its obligations and settle liabilities resulting from standard business operations when they become due. Management plans to finance operational expenses for the next twelve months by using available cash on hand, as well as loans from directors and/or a private offering of Common Stock.

Note 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The accompanying financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America. The Company’s year-end is August 31.

Use of Estimates

The preparation of financial statements in conformity with 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 the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

8

Fair Value of Financial Instruments 

FASB ASC Topic 820, "Fair Value Measurement," defines fair value as the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The standards apply to recurring and nonrecurring fair value measurements of financial and non-financial assets and liabilities. The Company determines the fair values of its assets and liabilities based on a fair value hierarchy that includes three levels of inputs that may be used to measure fair value. 

The three levels are defined as follows: 

Level 1:	defined as observable inputs such as quoted prices in active markets;
Level 2:	defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and
Level 3:	defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

Cash and Cash Equivalents

The Company considers all highly liquid investments with the original maturities of three months or less to be cash equivalents. The Company had $1,138 and $6,825 of cash as February 28, 2026 and August 31, 2025, respectively.

Prepaid Expenses

Prepaid expenses are amounts paid to secure the use of assets or the receipt of services at a future date or continuously over one or more future periods. When the prepaid expenses are eventually consumed, they are charged to expense.

As of February 28, 2026 the amount of prepaid expenses was $30,591. The balance of prepaid expenses as of February 28, 2026 relates to a 12-month lease of servers, marketing services, fee for OTCQB, search engine optimization (SEO) services for the same period and website optimization support for 4 months. The 12-month lease of these services was not accounted for under ASC 842 due to the Company's decision not to apply the requirements of ASC 842 to short-term leases (leases with a term of twelve months or less). The balance will be amortized using the straight-line method over the 12-month term. During the three months ended February 2026, we recognized server expenses of $5,100, marketing expenses of $4,950, and SEO service expenses of $3,750, fee for OTCQB of $1,375 and website optimization support of $2,550.

Accounts Payable

Accounts Payable discloses a liability to a creditor, carried on open account, usually for purchases of goods and services. As of February 28, 2026, the Company had accounts payable of $99.

Depreciation, Amortization, and Capitalization

The Company records depreciation and amortization when appropriate using straight-line balance method over the estimated useful life of the assets. We estimate that the useful life of equipment is 5 years. Expenditures for maintenance and repairs are charged to expense as incurred. Additions, major renewals and replacements that increase the property's useful life are capitalized. Property sold or retired, together with the related accumulated depreciation is removed from the appropriated accounts and the resultant gain or loss is included in net income.

As of February 28, 2026, the Company had accumulated amortization of $76,998.

9

Income Taxes 

Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.

All income tax amounts reflect the use of the liability method under accounting for income taxes. Income taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due plus deferred taxes arising primarily from differences between financial and tax reporting purposes. Current year expense represents the amount of income taxes paid, payable or refundable for the period. 

Deferred income taxes, net of appropriate valuation allowances, are determined using the tax rates expected to be in effect when the taxes are actually paid. Valuation allowances are recorded against deferred tax assets when it is more likely than not that such assets will not be realized. When an uncertain tax position meets the more likely than not recognition threshold, the position is measured to determine the amount of benefit or expense to recognize in the financial statements. 

The Company’s income tax returns are subject to review and examination by federal, state and local governmental authorities. As of February 28, 2026, there is no year currently under examination with federal, state and local governmental authorities. To the extent penalties and interest are incurred through an examination, they would be included in the income tax section of the statement of operations. 

Basic Income (Loss) Per Share

The Company computes income (loss) per share in accordance with FASB ASC 260 “Earnings per Share”. Basic loss per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted income (loss) per share gives effect to all dilutive potential common shares outstanding during the period.  Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive.

Revenue Recognition

Under Accounting Standards Codification No. 606, "Revenue from Contracts with Customers" ("ASC 606"), the Company recognizes revenue when control of promised goods or services is transferred to customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. ASC 606 establishes a five-step model for revenue recognition:

1. Identify the contract with the customer: The Company enters into subscription agreements for its API services with customers. The Company offers the "AI Powered Tattoo Artist," a subscription-based API service that utilizes artificial intelligence to generate custom tattoo designs. The "AI Powered Tattoo Artist" API is available through both a free trial plan with limited features and paid subscription plans for different amount of API requests.

2. Identify the performance obligations in the contract: The Company's performance obligation is providing access to its API services for the subscription period.

3. Determine the transaction price: The transaction price is the fixed amount agreed upon in the subscription agreement, adjusted for any variable consideration such as discounts or rebates.

4. Allocate the transaction price to the performance obligations: The transaction price is allocated entirely to the performance obligation of API access.

5. Recognize revenue when (or as) the performance obligation is satisfied: Revenue is recognized over time as API access is provided, typically ratably over the subscription period.

10

During the six months ended February 28, 2026 and 2025 the Company recorded revenue of $29,760 and $10,303, respectively. As of February 28, 2026 and August 31, 2025 the Company reported deferred revenue of $7,950 and $0, respectively. Accounts receivable was $0 as of February 28, 2026 and August 31, 2025.

Recent Accounting Pronouncements

We have reviewed all the recently issued, but not yet effective, accounting pronouncements and we do not believe any of these pronouncements will have a material impact on the Company.

Note 4 – INTANGIBLE ASSETS

Intangible assets relate to the website and API software, which the Company purchased on June 30, 2023. The website was put on use on August 30, 2023 and amortization is expected to cover a period of 5 years. As of February 28, 2026, the amount of intangible assets is $173,800 consisting of website and API. Amortization expense for the six months ended February 28, 2026 was $17,380. Accumulated amortization as of February 28, 2026 was $76,998.

Intangible assets amounts are as follows:

		Website Development		AI-Powered Tattoo Cost Calculator API		Total
Estimated Useful Life (Years)		5		5
Total Cost of the Asset		81,000	$	92,800	$	173,800
Accumulated Amortization at February 28, 2026		(37,958)		(39,040)		(76,998)
Net Book Value at February 28, 2026	$	43,042	$	53,760	$	96,802
Amortization Expense for three months ended February 28, 2026	$	4,050	$	4,640	$	8,690
Amortization Expense for the six months ended February 28, 2026	$	8,100	$	9,280	$	17,380

Note 5 – COMMON STOCK

The Company has 75,000,000, $0.001 par value shares of common stock authorized.

On June 30, 2023, the Company issued 4,500,000 shares of common stock to its President and Incorporator, Diana Vasylenko, at $0.001 per share.

The Company did not issue any common shares during the six months ended February 28, 2026.

During the six months ended February 28, 2026, 2,000,000 of restricted shares held by Diana Vasylenko, President, Chief Executive Officer, Treasurer, Secretary, Director were returned to the Company and cancelled for no consideration.

As of February 28, 2026, the Company had 3,799,469 shares issued and outstanding.

Note 6 – RELATED PARTY

Effective June 6, 2023, the Company entered a Loan Agreement with its CEO. The lender agreed to lend a total of $70,000 payable in applicable installments over the Term of the loan. The CEO agreed to an interest rate of 0% and a Term of 5 years. Effective November 14, 2023, the CEO agreed to increase the maximum loan amount to $220,000, and effective January 30, 2026, the loan amount was increased to $320,000.

As of February 28, 2026 and August 31, 2025, the amount due to a related party was $239,773 and $200,790, respectively. 

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Imputed interest expense of $2,482 for the three months ended February 28, 2026 was recorded as additional paid in capital.

Note 7 – COMMITMENTS AND CONTINGENCIES

In the normal course of business, the Company may become a party to litigation matters involving claims against it. As of February 28, 2026, there are no current matters that would have a material effect on the Company’s financial position or results of operations.

Note 8 – SUBSEQUENT EVENTS

In accordance with FASB ASC Topic 855 “Subsequent Events”, the Company has analyzed its operations subsequent to February 28, 2026, and has determined that it does not have any material subsequent events to disclose in these financial statements.

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ITEM 2. MANAGEMENT’ DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD LOOKING STATEMENT NOTICE

Statements made in this Form 10-Q that are not historical or current facts are "forward-looking statements" made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 (the "Act") and Section 21E of the Securities Exchange Act of 1934. These statements often can be identified by the use of terms such as "may," "will," "expect," "believe," "anticipate," "estimate," "approximate" or "continue," or the negative thereof. We intend that such forward-looking statements be subject to the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management's best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.

Financial information contained in this quarterly report and in our unaudited interim financial statements is stated in United States dollars and are prepared in accordance with United States generally accepted accounting principles.

IN GENERAL

E-Smart Corp. (“Company”) was incorporated on June 06, 2023 under the laws of Nevada. We are a Nevada-incorporated Company focused on creating a platform that facilitates interaction between tattoo artists and enthusiasts. Our product serves as a combined professional profile and artistic showcase for tattoo artists, enabling them to present their expertise and history in an aesthetically pleasing format. This platform simplifies the process for employers to identify and locate skilled artists within their vicinity. Moreover, our service offers users the capability to generate preliminary tattoo sketches through an AI-driven tattoo design tool.

E-Smart is a dynamic and forward-thinking digital platform that connects tattoo artists and clients seamlessly. By leveraging advanced technologies, offering comprehensive services, and prioritizing user convenience, we provide an unparalleled experience for all stakeholders in the tattoo industry.

INITIAL FOCUS OF OUR BUSINESS

We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012, as amended, and therefore we intend to take advantage of certain exemptions from various public Company reporting requirements, including not being required to have our internal control over financial reporting audited by our independent registered public accounting firm pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in this prospectus, our periodic reports and our proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and any golden parachute payments not previously approved. We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year in which the market value of our Common Stock that is held by non-affiliates equals or exceeds $700 million as of the end of that year’s second fiscal quarter, (ii) the last day of the fiscal year in which we have total annual gross revenue of $1.235 billion or more during such fiscal year (as indexed for inflation), (iii) the date on which we have issued more than $1.00 billion in non-convertible debt in the prior three-year period.

We are not a “shell Company” within the meaning of Rule 405, promulgated pursuant to the Securities Act, because we have developed business plan and real business operations.

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MONETIZATION STRATEGY

Our monetization strategy includes offering an API - AI textual tattoo idea generator, enabling businesses and developers to leverage our technology to enhance their own products and services.

Businesses and developers can integrate this technology into their products and services by subscribing to the API. This API is provided on a subscription basis, offering different tiers such as a 14-day pass and a 30-day pass. To obtain an AI key for API access, users can choose a pricing plan on our website and initiate contact by using the designated button, submitting their request. Additionally, we are exploring other revenue avenues, including premium features, and strategic partnerships with tattoo-related businesses.

Exploring collaborations with tattoo supply companies, tattoo equipment manufacturers, and other industry partners is essential for long-term growth and revenue diversification.

Continuous assessment of market trends and customer feedback will guide us in refining and expanding the functionality of our platform to unlock additional monetization opportunities.

PROMOTION AND MARKETING

We are focused on promoting our platform to attract a diverse user base, including tattoo artists and clients. Our comprehensive advertising campaign is aimed at increasing platform awareness and attracting new users. To effectively reach our target audience, we will utilize social media marketing, online advertising channels, and strategic partnerships with industry influencers. We plan to develop engaging promotional materials, including videos, to showcase the platform's features and benefits, generating interest and user engagement. Depending on available resources, we may engage advertising agencies to accelerate our marketing efforts.

RESEARCH AND DEVELOPMENT EXPENDITURES

We have not incurred any research expenditures since our incorporation.

BANKRUPTCY OR SIMILAR PROCEEDINGS

There has been no bankruptcy, receivership or similar proceeding.

COMPLIANCE WITH GOVERNMENT REGULATION

We will be required to comply with all regulations, rules and directives of governmental authorities and agencies applicable to the construction and operation of any facility in any jurisdiction which we would conduct activities.

We do not believe that any existing or probable government regulation on our business, including any applicable export or import regulation or control imposed by China will have a material impact on the way we conduct our business.

PATENTS, TRADEMARKS AND COPYRIGHTS

We do not own, either legally or beneficially, any patents or trademarks. We intend to protect our website (https://e-smart.io/) with copyright laws. Beyond our trade name, we do not hold any other intellectual property.

SIGNIFICANT EMPLOYEES

Ms. Diana Vasylenko, the Company’s Chief Executive Officer, continues to devote approximately forty hours per week to company matters. In addition, the Company has engaged two directors to support its operational, and administrative functions.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

Results of Operations for the three months ended February 28, 2026 as compared to the three months ended February 28, 2025

Revenue

For the three months ended February 28, 2026, the Company generated total revenue of $20,151 from selling services to its customers.

For the three months ended February 28, 2025, the Company generated total revenue of $5,885 from selling services to its customers.

Operating expenses

Total operating expenses for the three months ended February 28, 2026. were $60,155. The operating expenses included bank service charges ($109), Amortization Expense ($8,690), Legal & Professional Fees ($872), Legal & Professional Services ($34,363), Postage and Delivery ($13), Server leasing expense ($5,100), Marketing services ($8,458) and Website Maintenance ($2,550).

Total operating expenses for the three months ended February 28, 2025 were $26,609. The operating expenses included bank service charges ($72), Amortization Expense ($8,690), Legal & Professional Fees ($2,847), Legal & Professional Services ($9,704), Postage and Delivery ($66), Exchange Gain or Loss ($130), Server leasing expense ($5,100).

Net Loss

The net loss for the three months ended February 28, 2026 was $42,486.

The net loss for the three months ended February 28, 2025 was $23,014.

Results of Operations for the six months ended February 28, 2026 as compared to the three months ended February 28, 2025

Revenue

For the six months ended February 28, 2026, the Company generated total revenue of $29,760 from selling services to its customers.

For the six months ended February 28, 2025, the Company generated total revenue of $10,303 from selling services to its customers.

Operating expenses

Total operating expenses for the six months ended February 28, 2026. ware $89,344. The operating expenses included bank service charges ($137), Amortization Expense ($17,380), Legal & Professional Fees ($1,619), Legal & Professional Services ($40,040), Postage and Delivery ($40), Business Licenses and Permits ($220). Server leasing expense ($10,200), Marketing services ($17,158) and Website Maintenance ($2,550).

Total operating expenses for the six months ended February 28, 2025 were $43,188. The operating expenses included bank service charges ($88), Amortization Expense ($17,380), Legal & Professional Fees ($3,147), Legal & Professional Services ($15,331), Business Licenses and Permits ($220), Postage and Delivery ($92), Exchange Gain or Loss ($130), Server leasing expense ($6,800).

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Net Loss

The net loss for the six months ended February 28, 2026 was $64,500.

The net loss for the six months ended February 28, 2025 was $37,529.

LIQUIDITY AND CAPITAL RESOURCES

Period ended February 28, 2026 compared to period ended August 31, 2025

As at February 28, 2026, our Assets were $128,531. Total Assets included Current Assets $31,729 and Intangible Assets $96,802. As at February 28, 2026, our Liabilities were $247,822 and Equity was ($119,291).

As at August 31, 2025, our Assets were $141,281. Total Assets included Current Assets $27,099 and Intangible Assets $114,182. As at August 31, 2025, our Liabilities were $200,988 and Equity was ($59,708).

CASH FLOWS FROM OPERATING ACTIVITIES

For the six months ended February 28, 2026 net cash flows used in operating activities was $44,670.

For the six months ended February 28, 2025 net cash flows used in operating activities was $25,531.

CASH FLOWS FROM INVESTING ACTIVITIES

We had no cash used in investing activities during the six months ended February 28, 2026 and 2025.

CASH FLOWS FROM FINANCING ACTIVITIES

For the six months ended February 28, 2026 net cash flows provided by financing activities was $38,983.

For the six months ended February 28, 2025 net cash flows provided by financing activities was 25,748.

MANAGEMENT’S DISCUSSION AND ANALYSIS

You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and the related notes and other financial information. Some of the information contained in this discussion and analysis, including information with respect to our plans and strategy for our business and related financing.

We qualify as an “emerging growth company” under the JOBS Act. As a result, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements. For so long as we are an emerging growth company, we will not be required to:

         Have an auditor report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act;

         Provide an auditor attestation with respect to management’s report on the effectiveness of our internal controls over financial reporting;

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         Comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis);

         Submit certain executive compensation matters to shareholder advisory votes, such as “say-on-pay” and “say-on-frequency;” and

         Disclose certain executive compensation related items such as the correlation between executive compensation and performance comparisons of the CEO’s compensation to median employee compensation.

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.

We will remain an “emerging growth company” for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our total annual gross revenues exceed $1 billion, (ii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, which would occur if the market value of our ordinary shares that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter or (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three year period. However, even if we no longer qualify for the exemptions for an emerging growth company, we may still be, in certain circumstances, subject to scaled disclosure requirements as a smaller reporting company. For example, smaller reporting companies, like emerging growth companies, are not required to provide a compensation discussion and analysis under Item 402(b) of Regulation S-K or the auditor attestation of internal controls over financial reporting.

We believe that we will be able to raise enough money through the offering to continue our proposed operations, but we cannot guarantee that once we continue operations we will stay in business after doing so. If we are unable to successfully find customers, we may quickly use up the proceeds from this offering and will need to find alternative sources.

OFF-BALANCE SHEET ARRANGEMENTS

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

LIMITED OPERATING HISTORY; NEED FOR ADDITIONAL CAPITAL

There is no historical financial information about us upon which to base an evaluation of our performance. We are in start-up stage operations and have generated limited revenues. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and possible cost overruns due to price and cost increases in services and products.

We have no assurance that future financing will be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our operations. Equity financing could result in additional dilution to existing shareholders.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

None

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ITEM 4. CONTROLS AND PROCEDURES

Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

An evaluation was conducted under the supervision and with the participation of our management of the effectiveness of the design and operation of our disclosure controls and procedures as of February 28, 2026. Based on that evaluation, our management concluded that our disclosure controls and procedures were not effective as of such date to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms.

Changes in Internal Controls over Financial Reporting

There was no change in the Company’s internal control over financial reporting during the quarterly period covered by this report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are not currently a party to any legal proceedings, and we are not aware of any pending or potential legal actions.

ITEM 1A. RISK FACTORS

None

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None

ITEM 3. DEFAULTS UPON SENIOR SECURITES

None

ITEM 4. SUBMISSION OF MATTERS TO A VOITE OF SECURITIES HOLDERS

None

ITEM 5. OTHER INFORMATION

None

ITEM 6. EXHIBITS

The following exhibits are included as part of this report by reference:

31.1		Certification of Chief Executive Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a).
32.1		Certifications pursuant to Securities Exchange Act of 1934 Rule 13a-14(b) or 15d-14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the 7311 Oxford Ave, Philadelphia, PA 19111 United States on April 14, 2026.

E-SMART CORP.

By: /s/ Diana Vasylenko

Name: Diana Vasylenko

Title: President, Chief Executive Officer, Treasurer, Secretary and Director

(Principal Executive, Financial and Accounting Officer)

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FAQ

How did E-Smart Corp (ESMR) perform financially for the quarter ended February 28, 2026?

E-Smart Corp increased quarterly revenue to $20,151, up from $5,885 a year earlier. However, it posted a quarterly net loss of $42,486, reflecting higher operating expenses tied to professional fees, marketing, and platform-related costs.

What were E-Smart Corp’s revenues and net loss for the six months ended February 28, 2026?

For the six months, E-Smart Corp generated $29,760 in revenue and recorded a net loss of $64,500. This compares with revenue of $10,303 and a net loss of $37,529 for the prior-year period, indicating higher activity but deeper losses.

What is the liquidity position of E-Smart Corp (ESMR) as of February 28, 2026?

As of February 28, 2026, E-Smart Corp held $1,138 in cash and total assets of $128,531. Liabilities totaled $247,822, producing a stockholders’ deficit of $119,291, highlighting tight liquidity and a leveraged balance sheet.

Does E-Smart Corp’s 10-Q disclose a going concern risk?

Yes. The company states there is substantial doubt about its ability to continue as a going concern. It cites ongoing losses, limited cash, and reliance on future funding through director loans and potential equity offerings to meet obligations and support operations.

How many E-Smart Corp (ESMR) shares are outstanding and were there any recent share changes?

As of April 14, 2026, E-Smart Corp had 3,799,469 common shares outstanding. During the six months ended February 28, 2026, 2,000,000 restricted shares held by the CEO were returned to the company and cancelled for no consideration.

What is E-Smart Corp’s business model and how does it generate revenue?

E-Smart Corp operates a digital platform connecting tattoo artists and clients, including an AI-powered tattoo design API. It generates revenue primarily through subscription-based access to this API, offering different plans such as 14-day and 30-day passes for businesses and developers.