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[10-Q] Fyntechnical Innovations Inc Quarterly Earnings Report

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(Neutral)
Filing Sentiment
(Neutral)
Form Type
10-Q
Rhea-AI Filing Summary

Fyntechnical Innovations Inc. (FYNN) reports several material acquisitions and financing arrangements that reshape equity and liabilities. The company closed the Bateau acquisition on January 9, 2025, issuing 14,000,000 Series C Preferred shares and two convertible promissory notes of $1,000,000 each that bear 5% interest and convert at $1.00 per common share. The company purchased ChainTrade's AI trading platform for an $8,000,000 convertible promissory note (18 months, 5% interest) convertible at $1.00 per share and committed $500,000 total working capital, with $30,000 paid in the first tranche.

The filing discloses extensive convertible securities and preferred series: Series B (2,500,000 shares, $10 stated), Series C (14,000,000 shares, stated $1, fair value noted as $26,600), Series D with conversion terms and an agreed conversion floor of $0.015 per share. Management recorded notes at a low stated fair value and recognized a $1,996,200 debt discount related to Bateau notes, with $772,012 amortized to interest expense through June 30, 2025. Potentially dilutive convertible instruments total 1,148,961,183 shares, although dilution effects may be anti-dilutive given reported losses.

Fyntechnical Innovations Inc. (FYNN) riferisce diverse acquisizioni significative e accordi di finanziamento che rimodellano azioni e passività. La società ha concluso l'acquisizione di Bateau il 9 gennaio 2025, emettendo 14.000.000 azioni privilegiate di Serie C e due note promissorie convertibili da 1.000.000 di dollari ciascuna che pagano un interesse del 5% e si convertono a 1,00 dollari per azione ordinaria. La società ha acquistato la piattaforma di trading AI di ChainTrade per una nota promissoria convertibile da 8.000.000 di dollari (18 mesi, 5% di interesse) convertibile a 1,00 dollari per azione e si è impegnata a fornire in tutto 500.000 dollari di capitale circolante, con 30.000 dollari pagati nella prima tranche.

La dichiarazione rivela una estesa serie di strumenti convertibili e azioni privilegiate: Serie B (2.500.000 azioni, valore dichiarato 10), Serie C (14.000.000 azioni, valore dichiarato 1, fair value indicato come 26.600), Serie D con condizioni di conversione e una soglia di conversione concordata di 0,015 dollari per azione. Il management ha registrato note a fair value dichiarato basso e ha riconosciuto uno sconto sul debito di 1.996.200 dollari relativo alle note di Bateau, con 772.012 dollari ammortizzati come costo d'interesse fino al 30 giugno 2025. Strumenti potenzialmente diluitivi totali ammontano a 1.148.961.183 azioni, sebbene gli effetti di diluizione possano essere anti-diluenti data la perdita riportata.

Fyntechnical Innovations Inc. (FYNN) informa sobre varias adquisiciones importantes y acuerdos de financiamiento que remodelan el capital y los pasivos. La empresa cerró la adquisición de Bateau el 9 de enero de 2025, emitiendo 14,000,000 de acciones preferentes Serie C y dos pagarés convertibles de 1,000,000 de dólares cada uno que devengan un interés del 5% y se convierten a 1,00 dólar por acción común. La compañía compró la plataforma de trading de IA de ChainTrade con una nota convertible de 8,000,000 de dólares (18 meses, 5% de interés) convertible a 1,00 dólar por acción y se comprometió a un capital de trabajo total de 500,000 dólares, con 30,000 dólares pagados en la primera tranche.

La presentación revela una extensa serie de valores convertibles y acciones preferentes: Serie B (2,500,000 acciones, valor declarado 10), Serie C (14,000,000 acciones, valor declarado 1, valor razonable citado como 26,600), Serie D con términos de conversión y un piso de conversión acordado de 0,015 por acción. La dirección registró notas a un valor razonable declarado bajo y reconoció un descuento de deuda de 1,996,200 dólares relacionado con las notas de Bateau, con 772,012 amortizados a gasto por intereses hasta el 30 de junio de 2025. Instrumentos potencialmente dilutivos totales de 1,148,961,183 acciones, aunque los efectos de dilución pueden ser anti-dilutivos dado las pérdidas reportadas.

Fyntechnical Innovations Inc. (FYNN)는 주식 자본과 부채를 재편하는 여러 주요 인수 및 금융 조치를 보고합니다. 회사는 2025년 1월 9일 Bateau 인수를 종료하고 시리즈 C 우선 주식 14,000,000주를 발행했으며 각각 1,000,000달러의 두 개의 전환 가능 약속어음은 5% 이자를 가지며 보통주당 1.00달러에 전환됩니다. 또한 ChainTrade의 AI 트레이딩 플랫폼을 8,000,000달러의 전환 가능 약속어음(18개월, 5% 이자)으로 인수했고, 총 50만 달러의 운전 자본을 약정했으며 첫 분기에는 30,000달러를 지불했습니다.

공시는 Series B(주당 2,500,000주, 명목가 10), Series C(14,000,000주, 명목가 1, 공정가치 26,600으로 기재), Series D의 전환 조건 및 주당 0.015달러의 합의 전환가 하한선 등을 포함한 광범위한 전환증권 및 우선주를 공개합니다. 경영진은 낮은 공정가치로 음각된 메모를 기록했고 Bateau 메모와 관련된 1,996,200달러의 채무 할인을 인식했으며 772,012달러가 2025년 6월 30일까지 이자비용으로 상각되었습니다. 잠재적으로 희석될 수 있는 도구 총계는 1,148,961,183주에 달하지만, 손실이 보고된 상황에서 희석 효과가 역희석일 수 있습니다.

Fyntechnical Innovations Inc. (FYNN) rapporte plusieurs acquisitions matérielles et arrangements de financement qui transforment les capitaux propres et les passifs. La société a clos l'acquisition de Bateau le 9 janvier 2025, émettant 14 000 000 d'actions privilégiées de série C et deux notes promissoires convertibles de 1 000 000 $ chacune qui portent un intérêt de 5% et se convertissent à 1,00 $ par action ordinaire. La société a acheté la plateforme de trading IA de ChainTrade pour une note promissory convertible de 8 000 000 $ (18 mois, 5% d'intérêt) convertible à 1,00 $ par action et s'est engagée à un fonds de roulement total de 500 000 $, avec 30 000 $ versés lors de la première tranche.

Le dépôt révèle une série étendue d'instruments convertibles et d'actions privilégiées : Série B (2 500 000 actions, valeur déclarée 10), Série C (14 000 000 d'actions, valeur déclarée 1, juste valeur indiquée comme 26 600), Série D avec conditions de conversion et un plancher de conversion convenu de 0,015 $ par action. La direction a enregistré des notes à une juste valeur déclarée faible et a reconnu une décote de dette de 1 996 200 $ liée aux notes Bateau, avec 772 012 $ amortis en charges d'intérêts jusqu'au 30 juin 2025. Des instruments potentiellement dilutifs totaux s'élèvent à 1 148 961 183 actions, bien que les effets de dilution puissent être antidilutifs compte tenu des pertes rapportées.

Fyntechnical Innovations Inc. (FYNN) meldet mehrere wesentliche Akquisitionen und Finanzierungsvereinbarungen, die Eigenkapital und Verbindlichkeiten umgestalten. Das Unternehmen schloss die Übernahme von Bateau am 9. Januar 2025 ab und gab 14.000.000 Series-C-Preferred-Aktien heraus sowie zwei wandelbare Schuldscheine über je 1.000.000 $, die 5 % Zinsen tragen und zu 1,00 $ pro Stammaktie wandelbar sind. Das Unternehmen kaufte ChainsTrades KI-Handelsplattform für eine 8.000.000 $ wandelbare Anleihe (18 Monate, 5 % Zinsen) wandelbar zu 1,00 $ pro Aktie und verpflichtete sich zu insgesamt 500.000 $ Betriebskapital, wobei in der ersten Tranche 30.000 $ gezahlt wurden.

Die Einreichung offenbart umfangreiche wandelbare Wertpapiere und Vorzugsaktien: Serie B (2.500.000 Aktien, Nennwert 10), Serie C (14.000.000 Aktien, Nennwert 1, beizulegender Wert angegeben als 26.600), Serie D mit Wandlungskonditionen und einer vereinbarten Wandlungsschwelle von 0,015 $ pro Aktie. Das Management erfasste Noten zu einem niedrig angegebenen beizulegenden Wert und erkannte einen Schuldenabschlag von 1.996.200 $ im Zusammenhang mit den Bateau-Notes an, wobei 772.012 $ bis zum 30. Juni 2025 linear als Zinsaufwand abgeschrieben wurden. Potenziell verwässernde Instrumente belaufen sich auf insgesamt 1.148.961.183 Aktien, obwohl Verwässerungseffekte aufgrund gemeldeter Verluste gegen-dilutiv sein könnten.

Fyntechnical Innovations Inc. (FYNN) تُبلغ عن عدة استحواذات مادية وترتيبات تمويل تعيد تشكيل حقوق الملكية والالتزامات. أغلقت الشركة الاستحواذ على Bateau في 9 يناير 2025، مجهِّزة 14,000,000 سهماً الممتاز من الفئة C واثنان من السندات القابلة للتحويل بقيمة $1,000,000 لكل منهما بفائدة 5% وقابلة للتحويل عند $1.00 للسهم العادي. كما اشتُريت منصة ChainTrade لتداول الذكاء الاصطناعي مقابل سند قابل للتحويل بقيمة $8,000,000 (18 شهراً، فائدة 5%) يمكن تحويله إلى $1.00 للسهم والتزمت بـ $500,000 رأس مال تشغيلي إجمالي، مع دفع $30,000 في الدفعة الأولى.

يكشف الملف عن أدوات قابلة للتحويل واسعة وسلسلة من الأسهم الممتازة: السلسلة B (2,500,000 سهم، قيمة مصرح بها 10)، السلسلة C (14,000,000 سهم، قيمة مصرح بها 1، وتُذكر قيمة عادلة بمقدار 26,600)، السلسلة D بشروط التحويل وأرضية تحويل متفق عليها تبلغ 0.015 دولار للسهم. قامت الإدارة بتسجيل ملاحظات بقيمة عادلة منخفضة مُصرح بها واعتُرف بخصم ديون قدره 1,996,200 دولار يتعلق بملاحظات Bateau، مع 772,012 دولار يتم استهلاكها كنفقة فائدة حتى 30 يونيو 2025. أدوات محتملة الإخضاع إجمالاً تبلغ 1,148,961,183 سهم، على الرغم من أن آثار التخفيف قد تكون مضادة للتخفيف في وجود خسائر مبلغة.

Fyntechnical Innovations Inc. (FYNN) 报告了若干重要的并购与融资安排，这些安排重塑了股权和负债。公司于2025年1月9日完成对Bateau的收购，发行了1340万股C系列优先股，并发行了两张各值$1,000,000的可转换本票，利率为5%，可按每股1.00美元转换为普通股。公司以800万美元的可转换本票购买ChainTrade的AI交易平台（18个月，5%利息），可按每股1.00美元转换，并承诺总计提供50万美元营运资金，首批分期支付了3万美元。

该文件披露了广泛的可转换证券和优先股：系列B（2,500,000股，名义价值10），系列C（14,000,000股，名义价值1，公允价值记为26,600），系列D及其转换条款，以及约定的每股转换底价<0.015美元。管理层以较低的公允价值记账，并确认与Bateau票据相关的债务折价为1,996,200美元，至2025年6月30日有772,012美元计入利息费用的摊销。潜在的潜在稀释工具总计为1,148,961,183股，尽管由于披露的亏损，稀释效应在某些情况下可能具有反稀释性。/p>

Positive
  • Acquisitions of tech assets: 100% of Bateau equity and ChainTrade's AI trading platform were acquired, adding intellectual property and capabilities.
  • Non-cash financing: Major acquisitions were structured with convertible promissory notes and preferred shares, conserving cash in the near term.
  • Working capital commitment started: Company committed $500,000 total for ChainTrade and paid the first tranche of $30,000.
Negative
  • Large potential dilution: 1,148,961,183 potentially dilutive shares from convertible instruments are disclosed.
  • Material debt discount: Company recognized a $1,996,200 debt discount related to Bateau notes, with $772,012 amortized to interest expense through June 30, 2025.
  • Low fair-value indications: Fair value calculations reference per-share values as low as $0.0019, indicating valuation uncertainty and thin trading liquidity.
  • Conversion mechanics with floor: Series D converts at 65% of a prior trading low but has an agreed conversion floor of $0.015, which may still be dilutive at current valuations.

Insights

TL;DR: Significant dilution risk and debt-related expense could pressure equity value despite asset acquisitions.

The filing shows FYNN funding acquisitions primarily with convertible debt and preferred stock that create large potential dilution: 1,148,961,183 potentially dilutive shares are disclosed. A substantial debt discount of $1,996,200 and $772,012 amortized interest expense reduce near-term earnings and increase effective financing costs. Convertible notes convert at $1.00 (several instances) while market-implied valuations used in fair-value calculations are extremely low, signaling thin trading liquidity and valuation uncertainty. These factors likely weigh on per-share metrics and warrant scrutiny of cash runway and liquidity assumptions.

TL;DR: Strategic asset acquisitions add technology and capacity but are financed in ways that transfer dilution risk to existing shareholders.

FYNN acquired 100% of Bateau equity and ChainTrade's AI-powered trading platform, expanding technology and intellectual property holdings without immediate cash outlay. The ChainTrade purchase uses an $8,000,000 convertible note and working capital commitments, preserving cash short term while aligning seller consideration to future equity. The structure can be accretive if integration and monetization succeed, but conversion prices and large conversion pools mean benefits will be shared with note/preferred holders. Monitoring integration milestones and actual cash generation from the platform will determine whether these are value-accretive.

Fyntechnical Innovations Inc. (FYNN) riferisce diverse acquisizioni significative e accordi di finanziamento che rimodellano azioni e passività. La società ha concluso l'acquisizione di Bateau il 9 gennaio 2025, emettendo 14.000.000 azioni privilegiate di Serie C e due note promissorie convertibili da 1.000.000 di dollari ciascuna che pagano un interesse del 5% e si convertono a 1,00 dollari per azione ordinaria. La società ha acquistato la piattaforma di trading AI di ChainTrade per una nota promissoria convertibile da 8.000.000 di dollari (18 mesi, 5% di interesse) convertibile a 1,00 dollari per azione e si è impegnata a fornire in tutto 500.000 dollari di capitale circolante, con 30.000 dollari pagati nella prima tranche.

La dichiarazione rivela una estesa serie di strumenti convertibili e azioni privilegiate: Serie B (2.500.000 azioni, valore dichiarato 10), Serie C (14.000.000 azioni, valore dichiarato 1, fair value indicato come 26.600), Serie D con condizioni di conversione e una soglia di conversione concordata di 0,015 dollari per azione. Il management ha registrato note a fair value dichiarato basso e ha riconosciuto uno sconto sul debito di 1.996.200 dollari relativo alle note di Bateau, con 772.012 dollari ammortizzati come costo d'interesse fino al 30 giugno 2025. Strumenti potenzialmente diluitivi totali ammontano a 1.148.961.183 azioni, sebbene gli effetti di diluizione possano essere anti-diluenti data la perdita riportata.

Fyntechnical Innovations Inc. (FYNN) informa sobre varias adquisiciones importantes y acuerdos de financiamiento que remodelan el capital y los pasivos. La empresa cerró la adquisición de Bateau el 9 de enero de 2025, emitiendo 14,000,000 de acciones preferentes Serie C y dos pagarés convertibles de 1,000,000 de dólares cada uno que devengan un interés del 5% y se convierten a 1,00 dólar por acción común. La compañía compró la plataforma de trading de IA de ChainTrade con una nota convertible de 8,000,000 de dólares (18 meses, 5% de interés) convertible a 1,00 dólar por acción y se comprometió a un capital de trabajo total de 500,000 dólares, con 30,000 dólares pagados en la primera tranche.

La presentación revela una extensa serie de valores convertibles y acciones preferentes: Serie B (2,500,000 acciones, valor declarado 10), Serie C (14,000,000 acciones, valor declarado 1, valor razonable citado como 26,600), Serie D con términos de conversión y un piso de conversión acordado de 0,015 por acción. La dirección registró notas a un valor razonable declarado bajo y reconoció un descuento de deuda de 1,996,200 dólares relacionado con las notas de Bateau, con 772,012 amortizados a gasto por intereses hasta el 30 de junio de 2025. Instrumentos potencialmente dilutivos totales de 1,148,961,183 acciones, aunque los efectos de dilución pueden ser anti-dilutivos dado las pérdidas reportadas.

Fyntechnical Innovations Inc. (FYNN)는 주식 자본과 부채를 재편하는 여러 주요 인수 및 금융 조치를 보고합니다. 회사는 2025년 1월 9일 Bateau 인수를 종료하고 시리즈 C 우선 주식 14,000,000주를 발행했으며 각각 1,000,000달러의 두 개의 전환 가능 약속어음은 5% 이자를 가지며 보통주당 1.00달러에 전환됩니다. 또한 ChainTrade의 AI 트레이딩 플랫폼을 8,000,000달러의 전환 가능 약속어음(18개월, 5% 이자)으로 인수했고, 총 50만 달러의 운전 자본을 약정했으며 첫 분기에는 30,000달러를 지불했습니다.

공시는 Series B(주당 2,500,000주, 명목가 10), Series C(14,000,000주, 명목가 1, 공정가치 26,600으로 기재), Series D의 전환 조건 및 주당 0.015달러의 합의 전환가 하한선 등을 포함한 광범위한 전환증권 및 우선주를 공개합니다. 경영진은 낮은 공정가치로 음각된 메모를 기록했고 Bateau 메모와 관련된 1,996,200달러의 채무 할인을 인식했으며 772,012달러가 2025년 6월 30일까지 이자비용으로 상각되었습니다. 잠재적으로 희석될 수 있는 도구 총계는 1,148,961,183주에 달하지만, 손실이 보고된 상황에서 희석 효과가 역희석일 수 있습니다.

Fyntechnical Innovations Inc. (FYNN) rapporte plusieurs acquisitions matérielles et arrangements de financement qui transforment les capitaux propres et les passifs. La société a clos l'acquisition de Bateau le 9 janvier 2025, émettant 14 000 000 d'actions privilégiées de série C et deux notes promissoires convertibles de 1 000 000 $ chacune qui portent un intérêt de 5% et se convertissent à 1,00 $ par action ordinaire. La société a acheté la plateforme de trading IA de ChainTrade pour une note promissory convertible de 8 000 000 $ (18 mois, 5% d'intérêt) convertible à 1,00 $ par action et s'est engagée à un fonds de roulement total de 500 000 $, avec 30 000 $ versés lors de la première tranche.

Le dépôt révèle une série étendue d'instruments convertibles et d'actions privilégiées : Série B (2 500 000 actions, valeur déclarée 10), Série C (14 000 000 d'actions, valeur déclarée 1, juste valeur indiquée comme 26 600), Série D avec conditions de conversion et un plancher de conversion convenu de 0,015 $ par action. La direction a enregistré des notes à une juste valeur déclarée faible et a reconnu une décote de dette de 1 996 200 $ liée aux notes Bateau, avec 772 012 $ amortis en charges d'intérêts jusqu'au 30 juin 2025. Des instruments potentiellement dilutifs totaux s'élèvent à 1 148 961 183 actions, bien que les effets de dilution puissent être antidilutifs compte tenu des pertes rapportées.

Fyntechnical Innovations Inc. (FYNN) meldet mehrere wesentliche Akquisitionen und Finanzierungsvereinbarungen, die Eigenkapital und Verbindlichkeiten umgestalten. Das Unternehmen schloss die Übernahme von Bateau am 9. Januar 2025 ab und gab 14.000.000 Series-C-Preferred-Aktien heraus sowie zwei wandelbare Schuldscheine über je 1.000.000 $, die 5 % Zinsen tragen und zu 1,00 $ pro Stammaktie wandelbar sind. Das Unternehmen kaufte ChainsTrades KI-Handelsplattform für eine 8.000.000 $ wandelbare Anleihe (18 Monate, 5 % Zinsen) wandelbar zu 1,00 $ pro Aktie und verpflichtete sich zu insgesamt 500.000 $ Betriebskapital, wobei in der ersten Tranche 30.000 $ gezahlt wurden.

Die Einreichung offenbart umfangreiche wandelbare Wertpapiere und Vorzugsaktien: Serie B (2.500.000 Aktien, Nennwert 10), Serie C (14.000.000 Aktien, Nennwert 1, beizulegender Wert angegeben als 26.600), Serie D mit Wandlungskonditionen und einer vereinbarten Wandlungsschwelle von 0,015 $ pro Aktie. Das Management erfasste Noten zu einem niedrig angegebenen beizulegenden Wert und erkannte einen Schuldenabschlag von 1.996.200 $ im Zusammenhang mit den Bateau-Notes an, wobei 772.012 $ bis zum 30. Juni 2025 linear als Zinsaufwand abgeschrieben wurden. Potenziell verwässernde Instrumente belaufen sich auf insgesamt 1.148.961.183 Aktien, obwohl Verwässerungseffekte aufgrund gemeldeter Verluste gegen-dilutiv sein könnten.

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the Quarterly Period Ended June 30, 2025

 

OR

 

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period ________

 

Commission File No. 000-56558

 

FYNTECHNICAL INNOVATIONS INC.

(Exact name of the small business issuer as specified in its charter)

 

Nevada

(State of either jurisdiction of

Incorporation or Organization)

 

59170 Glades Road Suite 150

Boca Raton, FL 33434

(Address of principal executive offices)

 

(360) 820-5973

(Registrant’s telephone number, including area code)

 

SMC ENTERTAINMENT, INC.

(Former name, if changed since last report)

 

Securities registered pursuant to Section 12(b) of the Act: None

 

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. Yes ☒     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 during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒     No ☐

 

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,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

 

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☒

Smaller reporting Company

☒

 

 

Emerging Growth Company

☐

 

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 Act). Yes ☐    No ☒   

   

The number of shares of Common Stock, $0.001 par value of the registrant outstanding at September 12, 2025 was 1,761,630,228 shares.

 

 

 

 

FORM 10-Q

 

For the Quarterly Period Ended June 30, 2025

 

INDEX

 

PART I

 

Financial Information

 

3

 

Item 1.

 

Financial Statements (unaudited)

 

3

 

Item 2.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

19

 

Item 3.

 

Quantitative and Qualitative Disclosures about Market Risk

 

22

 

Item 4.

 

Controls and Procedures

 

22

 

 

 

 

 

 

 

PART II

 

Other Information

 

23

 

Item 1.

 

Legal Proceedings

 

23

 

Item 1A.

 

Risk Factors

 

23

 

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

23

 

Item 3.

 

Defaults Upon Senior Securities

 

23

 

Item 4.

 

Mine Safety Disclosures

 

23

 

Item 5.

 

Other Information

 

23

 

Item 6.

 

Exhibits

 

23

 

 

 

 

 

 

 

Signatures

 

24

 

 
2

Table of Contents

 

PART I – FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

INDEX TO FINANCIAL STATEMENTS

 

Consolidated Balance Sheets as of June 30, 2025 (unaudited) and December 31, 2024

 

4

 

 

 

 

 

Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2025 and 2024 (unaudited)

 

5

 

 

 

 

 

Consolidated Statements of Changes in Stockholders’ Deficit for the Three and Six Months Ended June 30, 2025 and 2024 (unaudited)

 

6

 

 

 

 

 

Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2025 and 2024 (unaudited)

 

7

 

 

 

 

 

Notes to the Consolidated Financial Statements (unaudited)

 

8

 

 

 
3

Table of Contents

 

FYNTECHNICAL INNOVATIONS INC.

Formerly SMC ENTERTAINMENT, INC.

 

CONSOLIDATED BALANCE SHEETS

 

 

 

June 30,

 

 

December 31,

 

 

 

2025

 

 

2024

 

 

 

(Unaudited)

 

 

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash

 

$4,128

 

 

$11,661

 

Total current assets

 

 

4,128

 

 

 

11,661

 

Intangible assets, net

 

 

146,649

 

 

 

64,194

 

Total assets

 

$150,777

 

 

$75,855

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

$170,499

 

 

$139,631

 

Accrued compensation - related parties

 

 

809,385

 

 

 

615,585

 

Due to related party

 

 

14,125

 

 

 

17,625

 

Notes payable – related parties

 

 

1,111,460

 

 

 

1,111,460

 

Convertible notes - net of debt discount

 

 

1,426,388

 

 

 

683,559

 

Convertible notes and interest - abandoned acquisition

 

 

-

 

 

 

8,235,617

 

Accrued interest

 

 

184,070

 

 

 

145,883

 

Derivative liability

 

 

74,164

 

 

 

126,544

 

Loan payable

 

 

140,786

 

 

 

-

 

Total liabilities

 

 

3,930,877

 

 

 

11,075,904

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' deficit:

 

 

 

 

 

 

 

 

Series A preferred stock, $0.001 par value, 1,000,000 shares authorized, no shares issued and outstanding as of both June 30, 2025 and December 31, 2024

 

 

-

 

 

 

-

 

Series B preferred stock, $10.00 par value, 4,500,000 shares authorized, 2,500,000 shares issued and outstanding as of both June 30, 2025 and December 31, 2024

 

 

32,500

 

 

 

32,500

 

Series C preferred stock, $0.001 par value, 25,000,000 shares authorized, 14,000,000 and 0 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively

 

 

14,000

 

 

 

-

 

Series D preferred stock, $0.001 par value, 100,000 shares authorized, 70,000 and 70,000 shares issued and outstanding as of both June 30, 2025 and December 31, 2024

 

 

70

 

 

 

70

 

Common stock, $0.001 par value, 3,000,000,000 shares authorized, 1,565,137,922 and 1,352,951,483 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively

 

 

1,565,138

 

 

 

1,352,952

 

Additional paid-in capital

 

 

13,898,093

 

 

 

13,838,299

 

Accumulated deficit

 

 

(19,289,901 )

 

 

(26,223,870 )

Total stockholders' deficit

 

 

(3,780,100 )

 

 

(11,000,049 )

Total liabilities and stockholders' deficit

 

$150,777

 

 

$75,855

 

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

 
4

Table of Contents

 

FYNTECHNICAL INNOVATIONS INC.

Formerly SMC ENTERTAINMENT, INC.  

 

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

For the Three Months Ended

 

 

For the Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2025

 

 

2024

 

 

2025

 

 

2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$24,499

 

 

$—

 

 

$51,898

 

 

$—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

 

153,372

 

 

 

42,083

 

 

 

241,282

 

 

 

129,166

 

Compensation expense – related party

 

 

110,000

 

 

 

116,000

 

 

 

222,000

 

 

 

233,800

 

Bad debt expense

 

 

41,563

 

 

 

300,000

 

 

 

41,563

 

 

 

300,000

 

Development expense

 

 

15,000

 

 

 

30,000

 

 

 

35,000

 

 

 

30,000

 

Total operating expenses

 

 

319,935

 

 

 

488,083

 

 

 

539,845

 

 

 

692,966

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

 

(295,436 )

 

 

(488,083 )

 

 

(487,947 )

 

 

(692,966 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(429,635 )

 

 

(52,312 )

 

 

(888,188 )

 

 

(68,063 )

Gain on extinguishment of debt

 

 

—

 

 

 

—

 

 

 

8,308,360

 

 

 

—

 

Loss on conversion of debt

 

 

(50,636)

 

 

—

 

 

 

(50,636)

 

 

—

 

Transaction expense

 

 

—

 

 

 

(7,970,400

 

 

 

—

 

 

 

(7,970,400

)

Change in fair value of derivative

 

 

121,952

 

 

 

(6,108,617 )

 

 

52,380

 

 

 

(5,732,170 )

Total other (expense) income

 

 

(358,319 )

 

 

(14,131,329 )

 

 

7,421,916

 

 

 

(13,770,633 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income

 

$(653,755 )

 

$(14,619,412 )

 

$6,933,969

 

 

$(14,463,599 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income per share – basic

 

$(0.00 )

 

$(0.01 )

 

$0.00

 

 

$(0.01 )

Net (loss) income per share –diluted

 

$(0.00 )

 

$(0.01 )

 

$0.00

 

 

$(0.01 )

Weighted average shares outstanding, basic

 

 

1,438,725,596

 

 

 

1,433,371,101

 

 

 

1,398,008,272

 

 

 

1,429,545,043

 

Weighted average shares outstanding, diluted

 

 

1,438,725,596

 

 

 

1,433,371,101

 

 

 

8,064,047,154

 

 

 

1,429,545,043

 

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

 
5

Table of Contents

 

FYNTECHNICAL INNOVATIONS INC.

Formerly SMC ENTERTAINMENT, INC.

 

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

For the Three and Six Months Ended June 30, 2025 and 2024

(Unaudited)

 

 

 

Series A

 

 

Series B

 

 

Series C

 

 

Series D

 

 

 

 

 

Additional

 

 

Common stock

 

 

 

 

 

Total

 

 

 

Preferred Stock

 

 

Preferred Stock

 

 

Preferred Stock

 

 

Preferred Stock

 

 

Common Stock

 

 

Paid-in

 

 

To be

 

 

Accumulated

 

 

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Issued

 

 

Deficit

 

 

Deficit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2023 (restated)

 

 

990,346

 

 

$990

 

 

 

2,500,000

 

 

$32,500

 

 

 

-

 

 

$-

 

 

 

-

 

 

$-

 

 

 

1,379,960,743

 

 

$1,379,961

 

 

$12,796,175

 

 

$22,000

 

 

$(17,793,562)

 

$(3,561,936)

Common stock issued for services – related party

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

19,000,000

 

 

 

19,000

 

 

 

4,800

 

 

 

(22,000)

 

 

-

 

 

 

1,800

 

Common stock issued for services

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

75,000,000

 

 

 

75,000

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

75,000

 

Net income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

155,813

 

 

 

155,813

 

Balance at March 31, 2024

 

 

990,346

 

 

 

990

 

 

 

2,500,000

 

 

 

32,500

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,473,960,743

 

 

 

1,473,961

 

 

 

12,800,975

 

 

 

-

 

 

 

(17,637,749)

 

 

(3,329,323)

Common stock issued for accrued compensation – related party

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

121,990,740

 

 

 

121,991

 

 

 

82,509

 

 

 

-

 

 

 

-

 

 

 

204,500

 

Common stock issued for accrued compensation

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

7,000,000

 

 

 

7,000

 

 

 

7,000

 

 

 

-

 

 

 

-

 

 

 

14,000

 

Common stock cancelled

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(250,000,000)

 

 

(250,000)

 

 

250,000

 

 

 

-

 

 

 

-

 

 

 

-

 

Forgiveness of debt – related party

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

364,690

 

 

 

-

 

 

 

-

 

 

 

364,690

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(14,619,412)

 

 

(14,619,412)

Balance at June 30, 2024

 

 

990,346

 

 

$990

 

 

 

2,500,000

 

 

$32,500

 

 

 

-

 

 

$-

 

 

 

-

 

 

$-

 

 

 

1,352,951,483

 

 

$1,352,952

 

 

$13,505,174

 

 

$-

 

 

$(32,257,161)

 

$(17,365,545)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2024

 

 

-

 

 

$-

 

 

 

2,500,000

 

 

$32,500

 

 

 

-

 

 

$-

 

 

 

70,000

 

 

$70

 

 

 

1,352,951,483

 

 

$1,352,952

 

 

$13,838,299

 

 

$-

 

 

$(26,223,870)

 

$(11,000,049)

Common stock issued for conversion of debt and accrued interest

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

55,793,129

 

 

 

55,793

 

 

 

30,686

 

 

 

-

 

 

 

-

 

 

 

86,479

 

Preferred stock C issued for acquisition

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

14,000,000

 

 

 

14,000

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

12,600

 

 

 

-

 

 

 

-

 

 

 

26,600

 

Net income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

7,587,724

 

 

 

7,587,724

 

Balance at March 31, 2025

 

 

-

 

 

$-

 

 

 

2,500,000

 

 

$32,500

 

 

 

14,000,000

 

 

$14,000

 

 

 

70,000

 

 

$70

 

 

 

1,408,744,612

 

 

$1,408,745

 

 

$13,881,585

 

 

$-

 

 

$(18,636,146)

 

$(3,299,246)

Common stock issued for conversion of debt and accrued interest

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

156,393,310

 

 

 

156,393

 

 

 

16,508

 

 

 

-

 

 

 

-

 

 

 

172,901

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(653,755)

 

 

(653,755)

Balance at June 30, 2025

 

 

-

 

 

$-

 

 

 

2,500,000

 

 

$32,500

 

 

 

14,000,000

 

 

$14,000

 

 

 

70,000

 

 

$70

 

 

 

1,565,137,922

 

 

$1,565,138

 

 

$13,898,093

 

 

$-

 

 

$(19,289,901)

 

$(3,780,100)

 

The accompanying notes are an integral part of these unaudited consolidated financial statements. 

 

 
6

Table of Contents

 

FYNTECHNICAL INNOVATIONS INC.

Formerly SMC ENTERTAINMENT, INC.

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited) 

 

 

 

Six Months Ended

 

 

 

June 30,

 

 

 

2025

 

 

2024

 

Cash flows from operating activities:

 

 

 

 

 

 

Net income (loss)

 

$6,933,969

 

 

$(14,463,599)

Adjustments to reconcile net income (loss) to net cash used in operating activities:

 

 

 

 

 

 

 

 

Amortization of debt discount

 

 

728,328

 

 

 

-

 

Common stock issued for services – related party

 

 

-

 

 

 

1,800

 

Common stock issued for services

 

 

-

 

 

 

75,000

 

Change in fair value of derivative

 

 

(52,380)

 

 

5,732,170

 

Bad debt expense

 

 

41,563

 

 

 

300,000

 

Loss on conversion of debt

 

 

50,636

 

 

 

-

 

Amortization of intangible assets

 

 

8,321

 

 

 

-

 

Gain on extinguishment of debt

 

 

(8,308,360)

 

 

-

 

Transaction expense

 

 

-

 

 

 

7,970,400

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable, net

 

 

27,114

 

 

 

-

 

Accounts payable and accrued liabilities

 

 

(16,526)

 

 

(9,668)

Accrued interest

 

 

157,646

 

 

 

68,063

 

Accrued compensation - related parties

 

 

193,800

 

 

 

244,251

 

Net cash used in operating activities

 

 

(235,889)

 

 

(81,583)

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Cash acquired pursuant to business acquisition

 

 

11,925

 

 

 

-

 

Net cash provided by investing activities

 

 

11,925

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Repayment- related parties

 

 

(3,500)

 

 

(1,771)

Proceeds from loan payable

 

 

47,201

 

 

 

-

 

Proceeds from notes

 

 

172,730

 

 

 

77,503

 

Net cash provided by financing activities

 

 

216,431

 

 

 

75,732

 

Net change in cash and cash equivalents

 

 

(7,533)

 

 

(5,851)

Cash at beginning of period

 

 

11,661

 

 

 

7,269

 

Cash at end of period

 

$4,128

 

 

$1,418

 

 

 

 

 

 

 

 

 

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

 

 

Cash paid for interest

 

$-

 

 

$-

 

Cash paid for taxes

 

$-

 

 

$-

 

 

 

 

 

 

 

 

 

 

Supplemental disclosure of non-cash investing and financing activities:

 

 

 

 

 

 

 

 

Preferred stock C issued for acquisition

 

$26,600

 

 

$-

 

Common stock issued for conversion of debt and accrued interest

 

$259,380

 

 

$-

 

Acquisition of intangible assets

 

$-

 

 

$29,600

 

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

 
7

Table of Contents

 

FYNTECHNICAL INNOVATIONS INC.

Formerly SMC ENTERTAINMENT, INC.

 

Notes to Consolidated Financial Statements

June 30, 2025

(Unaudited)

 

NOTE 1 — DESCRIPTION OF BUSINESS AND HISTORY

 

SMC Entertainment, Inc. (the “Company” or “SMC”) was incorporated in the State of Nevada on January 23, 1998, under the name of Professional Recovery Systems, Ltd. On July 25, 2025, the Company legally changed its name from “SMC Entertainment, Inc” to “Fyntechnical Innovations, Inc.”.

 

On April 21, 2023, the Company completed its acquisition of AI-enabled wealth management technology platform provider, Fyniti Global Equities EBT Inc. (“Fyniti”) for 2,500,000 shares of Series B $10.00 Preferred Stock.

 

Fyniti (www.fyniti.com, www.fynitiiq.com) is a Fintech developer and provider of technology that combines Artificial Intelligence/Machine Learning (AI/ML) driven Quantitative investing (IQ Engine) with AI-enabled wealth management Electronic Block Trading (“EBT”) technology.

 

On January 7, 2025, the Company completed closing on the acquisition agreement dated November 2, 2024 (the “Acquisition Agreement”) with Bateau Asset Management Pty, Ltd., an Australia company and the Bateau Shareholders (“Bateau”) to purchase 100% of the outstanding ordinary shares of Bateau (the “Bateau Equity”).   See Note 9.

 

Bateau is a boutique investment manager founded in 2016 based in Australia with offices in Singapore. Bateau follows an absolute-return investment philosophy and a multi-manager approach to investing.

 

The Company is in the process of consolidating all of its current and legacy technologies (Fyniti) under one technology platform which will be referred to as FYNN AI. This consolidation will help SMC to effectively manage and streamline product offering, removal of product/feature redundancies and reduce development. With this consolidation, SMC will be more agile in deploying future features faster to meet the ever-expanding AI marketspace. 

 

NOTE 2 — SUMMARY OF SIGNIFICANT POLICIES

 

Basis of Presentation

 

The Company’s unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The accompanying unaudited consolidated financial statements reflect all adjustments, consisting of only normal recurring items, which, in the opinion of management, are necessary for a fair statement of the results of operations for the periods shown and are not necessarily indicative of the results to be expected for the full year ending December 31, 2025. These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes for the year ended December 31, 2024.

 

Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires the Company to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. These estimates and judgments are based on historical information that is currently available to the Company and on various other assumptions that the Company believes to be reasonable under the circumstances. Significant estimates include the fair value for derivatives, calculations used for stock-based compensation, fair value of net assets acquired in a business combination and the estimate of the valuation allowance on deferred taxes. Actual results could differ from those estimates.

 

 
8

Table of Contents

 

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 be in excess of the Federal Deposit Insurance Corporation insurable amount (“FDIC”).

 

Concentrations

 

During the three and six months ended and as of June 30, 2025, all revenues attributable to Bateau were with one customer, who is a related party to Bateau.

 

Cash Equivalents

 

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. There were no cash equivalents as of June 30, 2025 or December 31, 2024.

 

Accounts Receivable

 

Accounts receivable primarily consists of management fees earned for services provided to managed funds and investment vehicles. Accounts receivable are recorded when services are rendered and are typically due within 30 to 90 days. The Company assesses the collectability of receivables on an ongoing basis. An allowance for doubtful accounts is established when there is substantial evidence that the Company will not collect the full amount due under the contractual terms. Factors considered in the assessment include the age of the receivable, the financial condition of the customer, and historical collection experience. As of the reporting date, the Company has determined that all accounts receivable are not collectible and, therefore, was written off as bad debts during the six months ended June 30, 2025.

 

Business Combinations

 

The Company accounts for acquisitions in which it obtains control of one or more businesses as a business combination. The purchase price of the acquired businesses is allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition date. The excess of the purchase price over those fair values is recognized as goodwill. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments, in the period in which they are determined, to the assets acquired and liabilities assumed with the corresponding offset to goodwill. If the assets acquired are not a business, the Company accounts for the transaction or other event as an asset acquisition. Under both methods, the Company recognizes the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquired entity. In addition, for transactions that are business combinations, the Company evaluates the existence of goodwill or a gain from a bargain purchase.

 

Intangible Assets

 

The Company accounts for its intangible assets in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Subtopic 350-30, General Intangibles Other Than Goodwill. ASC Subtopic 350-30, which requires assets to be measured based on the fair value of the consideration given or the fair value of the assets (or net assets) acquired, whichever is more clearly evident and, thus, more reliably measurable. Under ASC Subtopic 350-30 any intangible asset with a useful life is required to be amortized over that life and the useful life is to be evaluated every reporting period to determine whether events or circumstances warrant a revision to the remaining period of amortization. If the estimate of useful life is changed the remaining carrying amount of the intangible asset is amortized prospectively over the revised remaining useful life. Costs to renew or extend the term of an intangible assets are recognized as an expense when incurred.

 

Impairment of Long-Lived Assets

 

The Company continually monitors events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell.

 

 
9

Table of Contents

 

Foreign Currency Translation

 

The Company’s consolidated financial statements are presented in US Dollar, which is also the functional currency of the Company. For each entity, functional currency is determined and items included in their separate financial statements are measured using that functional currency. All assets and liabilities are translated into U.S. Dollars at the balance sheet date, stockholders’ equity are translated at balance sheet dates, property and equipment and intangible assets are translated at historical rates and revenue and expense accounts are translated at the average exchange rate for the year or the reporting period. The translation adjustments are reported as income or expense in the consolidated statements of operations due to nominal accumulated other comprehensive income.

 

Basic and Diluted Earnings Per Share

 

Net income (loss) per common share is computed pursuant to ASC 260-10-45. Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period. The weighted average number of common shares outstanding and potentially outstanding common shares assumes that the Company incorporated as of the beginning of the first period presented. As of June 30, 2025, there are 3,516,174,402, 14,000,000 and 44,400,267 potentially dilutive shares from Series B, Series C and Series D preferred stock, respectively, and 1,148,961,183 potentially diluted shares from convertible debt. Diluted amounts are not presented when the effect of the computations are anti-dilutive due to the losses incurred.

 

The Company is aware that the current number of potentially dilutive common shares exceeds its authorized shares and has taken the appropriate steps to remediate the situation.

 

Stock-Based Compensation

 

We account for equity-based transactions with employees and non-employees under the provisions of FASB ASC Topic 718, “Compensation – Stock Compensation” (Topic 718), which establishes that equity-based payments to employees and non-employees are recorded at the grant date fair value of the equity instruments the entity is obligated to issue when the employees and non-employees have rendered the requisite service and satisfied any other conditions necessary to earn the right to benefit from the instruments. Topic 718 also states that observable market prices of identical or similar equity or liability instruments in active markets are the best evidence of fair value and, if available, should be used as the basis for the measurement for equity and liability instruments awarded in these share-based payment transactions. However, if observable market prices of identical or similar equity or liability instruments are not available, the fair value shall be estimated by using a valuation technique or model that complies with the measurement objective, as described in FASB ASC Topic 718.

 

Revenue Recognition

 

The Company recognizes revenue under ASC 606, “Revenue from Contracts with Customers” (“ASC 606”). The Company determines revenue recognition through the following steps:

 

 

●

Identification of a contract with a customer;

 

●

Identification of the performance obligations in the contract;

 

●

Determination of the transaction price;

 

●

Allocation of the transaction price to the performance obligations in the contract; and

 

●

Recognition of revenue when or as the performance obligations are satisfied.

 

Revenue is recognized when control of the 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. As a practical expedient, the Company does not adjust the transaction price for the effects of a significant financing component if, at contract inception, the period between customer payment and the transfer of goods or services is expected to be one year or less.

 

Bateau generates management fee revenue from its investment advisory services.  Management fees are generally based on a percentage of assets under management (“AUM”) and are recognized as revenue over time in accordance with the terms of the respective management agreements, typically on a monthly or quarterly basis. The fees are based on the underlying assets which Bateau manages for services provided to managed funds and investment vehicles. 

 

 
10

Table of Contents

 

Derivative Financial Instruments

 

The Company evaluates all its contracts to determine if such instruments have derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company uses a weighted-average Black-Scholes-Merton option pricing model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period.

 

Fair value of Financial Instruments

 

The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP) and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:

 

Level 1: Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.

 

Level 2: Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.

 

Level 3: Pricing inputs that are generally unobservable inputs and not corroborated by market data.

 

The carrying amount of the Company’s financial assets and liabilities, such as cash, prepaid expenses and accrued expenses approximate their fair value because of the short maturity of those instruments. The Company’s notes payable approximates the fair value of such instruments as the notes bear interest rates that are consistent with current market rates.

 

The following table classifies the Company’s asset measured at fair value on a recurring basis into the fair value hierarchy as of June 30, 2025:

 

Description

 

Level 1

 

 

Level 2

 

 

Level 3

 

Derivative liability

 

$-

 

 

$-

 

 

$74,164

 

Total

 

$-

 

 

$-

 

 

$74,164

 

 

The following table classifies the Company’s liabilities measured at fair value on a recurring basis into the fair value hierarchy as of December 31, 2024:

 

Description

 

Level 1

 

 

Level 2

 

 

Level 3

 

Derivative liability

 

$-

 

 

$-

 

 

$126,544

 

Total

 

$-

 

 

$-

 

 

$126,544

 

 

Segment Information

 

In accordance with ASC 280, Segment Reporting (“ASC 280”), we identify our operating segments according to how our business activities are managed and evaluated. As of June 30, 2025 our operating segments included: Corporate and Fyniti.  As the Company integrates its acquisition of Bateau, it may reevaluate its operating and reporting segments in the third quarter of 2025. Each operating segment currently reports to the Chief Executive Officer, the chief operating decision-maker. The results of our operating segments are aggregated into one reportable segment. All of the operating segments have met the aggregation criteria and have been aggregated and are presented as one reportable segment, as permitted by ASC 280. We continually monitor and review our segment reporting structure in accordance with authoritative guidance to determine whether any changes have occurred that would impact our reportable segments.

 

 
11

Table of Contents

  

Recently issued accounting pronouncements

 

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures, which requires greater disaggregation of income tax disclosures related to the income tax reconciliation and income taxes paid. The amendments improve the transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. The new standard is effective for annual periods beginning after December 15, 2024, and early adoption is permitted.

 

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 guidance addresses investor requests for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information. The guidance is effective for annual periods beginning after December 15, 2024. We are assessing the impact of this guidance on our disclosures.

 

In November 2024, the FASB issued Accounting Standards Update 2024-03 "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40)" which requires that at each interim and annual reporting period an entity:

 

1. Disclose the amounts of (a) purchases of inventory, (b) employee compensation, (c) depreciation, (d) intangible asset amortization, and (e) depreciation, depletion, and amortization included in each relevant expense caption. A relevant expense caption is an expense caption presented on the face of the income statement within continuing operations that contains any of the listed expense categories.

 

2. Include certain amounts that are already required to be disclosed under current generally accepted accounting principles (GAAP) in the same disclosure as the other disaggregation requirements.

 

3. Disclose a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively.

 

4. Disclose the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses.

 

These amendments are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027: either (1) prospectively to financial statements issued for reporting periods after the effective date of this Update or (2) retrospectively to any or all prior periods presented in the financial statements. The Company expects to enhance disclosures of expenses based on new requirements.

 

In November 2024, the FASB also issued Accounting Standards Update 2024-04 "Debt - Debt with Conversion and Other Options (Subtopic 470-20) “Induced Conversions of Convertible Debt Instruments” to clarify the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. Under the amendments, to account for a settlement of a convertible debt instrument as an induced conversion, an inducement offer is required to provide the debt holder with, at a minimum, the consideration (in form and amount) issuable under the conversion privileges provided in the terms of the instrument. An entity should assess whether this criterion is satisfied as of the date the inducement offer is accepted by the holder. If, when applying this criterion, the convertible debt instrument had been exchanged or modified (without being deemed substantially different) within the one-year period leading up to the offer acceptance date, an entity should compare the terms provided in the inducement offer with the terms that existed one year before the offer acceptance date. The amendments in this Update also clarify that the induced conversion guidance applies to a convertible debt instrument that is not currently convertible as long as it had a substantive conversion feature as of both its issuance date and the date the inducement offer is accepted. The amendments are effective for all entities for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. The Company is examining the impact this pronouncement may have on the Company’s consolidated financial statements.

 

The Company has implemented all new applicable accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

 

NOTE 3 — GOING CONCERN

 

The accompanying unaudited consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has suffered recurring losses since inception, has an accumulated deficit of $19,289,901 at June 30, 2025 and has no assurance of future profitability. The Company will continue to require financing from external sources to finance its operating and investing activities until sufficient positive cash flows from operations can be generated. There is no assurance that financing or profitability will be achieved, accordingly, there is substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements of the Company do not include any adjustments that may result from the outcome of these uncertainties.

 

NOTE 4 — INTANGIBLE ASSETS

 

Intangible assets as of June 30, 2025 and December 31, 2024 consisted of the following:

 

 

 

June 30,

 

 

December 31,

 

 

 

2025

 

 

2024

 

Developed technology

 

$64,194

 

 

$64,194

 

Customer relationships

 

 

90,776

 

 

 

-

 

 

 

 

154,970

 

 

 

64,194

 

Less: Accumulated amortization

 

 

(8,321 )

 

 

-

 

 

 

$146,649

 

 

$64,194

 

 

See Note 9 for further detail on the customer relationships acquired pursuant to the Bateau acquisition in January 2025.

 

In connection with the Fyniti acquisition, the Company identified intangible assets of $64,194 pertaining to developed technology of the Fyniti platform.  The developed technology will be amortized over an estimated useful life of 3 years when placed in service, which is expected in third quarter of 2025.

 

 
12

Table of Contents

 

During the three and six months ended June 30, 2025, the Company recorded amortization expense of $4,539 and $8,321, respectively.

 

The estimated future amortization expense for the next five years and thereafter is as follows:

 

Year ending December 31,

 

 

 

2025

 

$9,835

 

2026

 

 

18,155

 

2027

 

 

18,155

 

2028

 

 

18,155

 

Thereafter

 

 

18,155

 

Total

 

$82,455

 

 

NOTE 5 — CONVERTIBLE NOTES PAYABLE

 

A summary of all the Company’s convertible loans is as follows.

 

 

 

Date

 

Maturity

 

 

 

 

 Balance

 

 

 

 

 

Conversions/

 

 

 Balance

 

 

 Cony

 

 

 

Issued

 

Date

 

 

 

 

12/31/24

 

 

 Additions

 

 

Payments

 

 

6/30/25

 

 

 Terms

 

Christopher Whitcomb

 

7/7/2016

 

7/7/2017

 

 

18

%

 

$

2,393

 

 

$

-

 

 

$

-

 

 

$

2,393

 

 

 

(1

)

Christopher Whitcomb

 

1/25/2017

 

1/25/2018

 

 

18

%

 

$

29,050

 

 

$

-

 

 

$

-

 

 

$

29,050

 

 

 

(1

)

Christopher Whitcomb

 

5/30/2017

 

5/30/2018

 

 

18

%

 

$

32,640

 

 

$

-

 

 

$

-

 

 

$

32,640

 

 

 

(1

)

Kanno Group Holdings ll Ltd

 

10/1/2019

 

10/1/2020

 

 

12

%

 

$

42,601

 

 

$

-

 

 

$

(42,601

)

 

$

-

 

 

$

0.00466

 

Kanno Group Holdings ll Ltd

 

1/6/2020

 

1/6/2021

 

 

12

%

 

$

14,977

 

 

$

-

 

 

$

(14,977

)

 

$

-

 

 

$

0.00615

 

Kanno Group Holdings ll Ltd

 

6/30/2020

 

6/30/2021

 

 

12

%

 

$

7,732

 

 

$

-

 

 

$

(7,732

)

 

$

-

 

 

$

0.00615

 

Kanno Group Holdings ll Ltd

 

12/31/2020

 

12/31/2021

 

 

12

%

 

$

9,527

 

 

$

-

 

 

$

(9,527

)

 

$

-

 

 

$

0.00185

 

Kanno Group Holdings ll Ltd

 

3/31/2021

 

3/31/2022

 

 

12

%

 

$

5,112

 

 

$

-

 

 

$

(5,112

)

 

$

-

 

 

$

0.00628

 

Kanno Group Holdings ll Ltd

 

7/24/2021

 

7/24/2022

 

 

12

%

 

$

5,406

 

 

$

-

 

 

$

(5,406

)

 

$

-

 

 

$

0.00603

 

Kanno Group Holdings ll Ltd

 

11/1/2021

 

11/1/2022

 

 

12

%

 

$

2,828

 

 

$

-

 

 

$

(2,828

)

 

$

-

 

 

$

0.00544

 

Kanno Group Holdings ll Ltd

 

12/31/2021

 

12/31/2022

 

 

12

%

 

$

37,391

 

 

$

-

 

 

$

-

 

 

$

37,391

 

 

$

0.00509

 

Kanno Group Holdings ll Ltd

 

3/31/2022

 

3/31/2023

 

 

12

%

 

$

7,606

 

 

$

-

 

 

$

-

 

 

$

7,606

 

 

$

0.00222

 

Kanno Group Holdings ll Ltd

 

4/25/2022

 

4/25/2023

 

 

12

%

 

$

50,000

 

 

$

-

 

 

$

-

 

 

$

50,000

 

 

$

0.00206

 

Kanno Group Holdings ll Ltd

 

7/12/2022

 

7/12/2023

 

 

12

%

 

$

2,388

 

 

$

-

 

 

$

-

 

 

$

2,388

 

 

$

0.00163

 

Kanno Group Holdings ll Ltd

 

11/3/2022

 

11/3/2023

 

 

n/a

 

 

$

11,357

 

 

$

-

 

 

$

-

 

 

$

11,357

 

 

$

0.00167

 

Kanno Group Holdings ll Ltd

 

12/31/2022

 

12/31/2023

 

 

n/a

 

 

$

6,407

 

 

$

-

 

 

$

-

 

 

$

6,407

 

 

$

0.00096

 

Kanno Group Holdings ll Ltd

 

3/31/2023

 

3/31/2024

 

 

n/a

 

 

$

13,312

 

 

$

-

 

 

$

-

 

 

$

13,312

 

 

$

0.00054

 

Kanno Group Holdings ll Ltd

 

6/30/2023

 

6/30/2024

 

 

n/a

 

 

$

89,038

 

 

$

-

 

 

$

-

 

 

$

89,038

 

 

$

0.00084

 

Kanno Group Holdings ll Ltd

 

9/30/2023

 

9/30/2024

 

 

n/a

 

 

$

36,230

 

 

$

-

 

 

$

-

 

 

$

36,230

 

 

$

0.00042

 

Kanno Group Holdings ll Ltd

 

12/31/2023

 

9/30/2024

 

 

n/a

 

 

$

19,726

 

 

$

-

 

 

$

-

 

 

$

19,726

 

 

$

0.00035

 

Kanno Group Holdings ll Ltd

 

3/31/2024

 

3/31/2025

 

 

n/a

 

 

$

9,918

 

 

$

-

 

 

$

-

 

 

$

9,918

 

 

$

0.00030

 

Kanno Group Holdings ll Ltd

 

6/30/2024

 

6/30/2025

 

 

n/a

 

 

$

67,584

 

 

$

-

 

 

$

-

 

 

$

67,584

 

 

$

0.00117

 

ChainTrade, Ltd

 

5/30/2024

 

11/30/2025

 

 

5

%

 

$

8,000,000

 

 

$

-

 

 

$

(8,000,000

)

 

$

-

 

 

$

1.00000

 

Proactive Capital Partners

 

7/1/2024

 

demand

 

 

10

%

 

$

35,000

 

 

$

-

 

 

$

(16,847

)

 

$

18,153

 

 

$

0.00200

 

Kanno Group Holdings ll Ltd

 

9/30/2024

 

9/30/2025

 

 

n/a

 

 

$

48,845

 

 

$

-

 

 

$

-

 

 

$

48,845

 

 

$

0.00110

 

Proactive Capital Partners

 

11/12/24

 

8/1/25

 

 

10

%

 

$

15,000

 

 

$

-

 

 

$

-

 

 

$

15,000

 

 

$

0.001

 

Red Road Holdings Corp

 

9/15/24

 

12/6/25

 

 

12

%

 

$

51,000

 

 

$

-

 

 

$

(51,000

)

 

$

-

 

 

 

(2

) 

Kanno Group Holdings ll Ltd

 

12/31/24

 

12/31/25

 

 

n/a

 

 

$

35,824

 

 

$

-

 

 

$

-

 

 

$

35,824

 

 

$

0.00066

 

bateau

 

 

 

 

 

 

 

 

 

$

-

 

 

$

2,000,000

 

 

$

-

 

 

$

2,000,000

 

 

 

 *

 

Red Road Holdings Corp

 

1/9/25

 

10/30/25

 

 

12

%

 

$

-

 

 

$

56,000

 

 

$

-

 

 

$

56,000

 

 

 

(2

) 

Red Road Holdings Corp

 

3/11/25

 

12/30/25

 

 

12

%

 

$

-

 

 

$

48,000

 

 

$

-

 

 

$

48,000

 

 

 

 (2

) 

Kanno Group Holdings ll Ltd

 

 6/30/25

 

 6/30/2026

 

 

n/a

 

 

$

 

 

 

$

26,133

 

 

$

 

 

 

$

26,133

 

 

$

0.001 

 

Kanno Group Holdings ll Ltd

 

6/30/25

 

 6/30/2026

 

 

 n/a

 

 

$

 

 

 

$

34,198

 

 

$

 

 

 

$

34,198

 

 

$

0.001 

 

Red Road Holdings Corp

 

4/14/25

 

2/15/26

 

 

15

%

 

$

 

 

 

$

27,600

 

 

$

 

 

 

$

27,600

 

 

 

(2 

)

 

 

 

 

 

 

 

 

 

 

$

8,688,892

 

 

$

2,191,931

 

 

$

(8,156,030

)

 

$

2,724,793

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Kanno Group Holdings 11 Ltd - accrued interest

 

 

 

 

 

 

 

 

 

$

72,228

 

 

$

17,475

 

 

 

(40,502

)

 

$

49,201

 

 

 

 

 

Other accrued interest

 

 

 

 

 

 

 

 

 

 

309,272

 

 

 

135,599

 

 

 

(310,002

)

 

 

134,869

 

 

 

 

 

Less:- discount

 

 

 

 

 

 

 

 

 

 

(5,333

)

 

 

(1,293,072

)

 

 

-

 

 

 

(1,298,405

)

 

 

 

 

Total convertible debt and accrued interest

 

 

 

 

 

 

 

 

 

$

9,065,059

 

 

$

1,051,933

 

 

$

(8,506,534

)

 

$

1,610,458

 

 

 

(1)

25% discount to the lowest closing price within the 60 previous trading sessions.

 

(2)

greater of 1) $0.0003, or 65% of the lowest trading price for 10 days prior to conversion date.

 

* 

Represents the seller of Bateau (see Note 9).

 

On January 9, 2025, the Company issued two convertible promissory notes to the sellers of Bateau for an aggregate principal of $2,000,000.  The notes are convertible into shares of common stock at $1.00 per share.  The Company recorded the notes at a fair value of $3,800, based on the 2,000,000 shares of common stock for which the notes are convertible into and the fair value of the Company’s common stock of $0.0019 at the time of issuance. Accordingly, the Company recognized a debt discount of $1,996,200 pertaining to the Bateau notes.  Through June 30, 2025, $772,012 of the notes were amortized to interest expense.

 

On March 16, 2025, Kanno converted $57,578 and $28,901 of principal and interest, respectively, into 55,793,129 shares of common stock.

 

In June 2025, Kanno converted $30,605 and $11,602 of principal and interest, respectively, into 38,369,336 shares of common stock.

 

In June 2025, the Company entered into a debt conversion transaction with Red Road, whereby $51,000 of principal and $3,060 of accrued interest were converted into 108,023,974 shares of common stock. The shares issued had a fair value of $110,696 at the date of conversion. As a result, the Company recognized a loss on conversion of debt of $50,636, which is presented within other income (expense) in the consolidated statements of operations. In addition, the Company incurred $6,000 of conversion-related fees, which are included in general and administrative expenses.

 

In June 2025, Proactive Capital converted $16,847 and $3,153 of principal and interest, respectively, into 10,000,000 shares of common stock.

 

All notes past their maturity date are considered to be in default.

 

 
13

Table of Contents

 

The following is a summary of the convertible notes:

 

 

 

June 30,

2025

 

 

December 31,

2024

 

Total convertible notes, principal outstanding

 

$2,724,793

 

 

$688,892

 

Less: unamortized debt discount

 

 

(1,298,405 )

 

 

(5,333 )

Convertible notes - net of debt discount

 

$1,426,388

 

 

$683,559

 

 

 

 

June 30,

2025

 

 

December 31,

2024

 

Convertible notes, principal - abandoned acquisition

 

$-

 

 

$8,000,000

 

Convertible notes, accrued interest - abandoned acquisition

 

 

-

 

 

 

235,617

 

Convertible notes and interest - abandoned acquisition

 

$-

 

 

$8,235,617

 

 

Convertible notes and interest – abandoned acquisition per the consolidated balance sheet represents the promissory note and accrued interest with ChainTrade, LTD (“ChainTrade”) pursuant to its May 2024 acquisition agreement (see Note 9).  The Company has abandoned this acquisition due to nonperformance of the seller.  In March 2025, the Company extinguished the note and accrued interest. See Note 9 for details.

 

Derivative Liability

 

A summary of the activity of the derivative liability for the notes above is as follows:

 

 

 

Derivative

 

 

 

Liability

 

Balance at December 31, 2024

 

$

126,544

 

Derivative gain due to mark to market adjustment

 

 

(52,380)

Balance at June 30, 2025

 

$74,164

 

 

A summary of quantitative information about significant unobservable inputs (Level 3 inputs) used in measuring the Company’s derivative liability that are categorized within Level 3 of the fair value hierarchy as of June 30, 2025, is as follows:

 

 

 

 

 

 

 

 

 

 

 

 

Initial

 

Inputs

 

June 30, 2025

 

 

March 31, 2025

 

 

December 31, 2024

 

 

Valuation

 

Stock price

 

$0.0006

 

 

$0.0019

 

 

$0.0015

 

 

$

0.006 - $0.0115

 

Conversion price

 

$

0.0004

 

 

$

0.0007 - $0.0008

 

 

$

0.0007 - $0.0008

 

 

$

0.0016 - $0.0098

 

Volatility (annual)

 

220.03

% 

 

171.84%-213.52

% 

 

145.76% - 213.52

% 

 

163.53% - 214.94

% 

Risk-free rate

 

4.410

% 

 

4.32% - 4.24

% 

 

4.73% - 4.24

% 

 

0.39% - 1.55

% 

Dividend rate

 

 

 

 

 

 

-

 

 

 

-

 

 

 

-

 

Years to maturity

 

0.25

 

 

0.25 - 0.51

 

 

0.25 - 0.51

 

 

 

1

 

 

The development and determination of the unobservable inputs for Level 3 fair value measurements and fair value calculations are the responsibility of the Company’s management.

 

NOTE 6 — COMMON STOCK

 

In June 2025, Kanno converted $30,605 and $11,602 of principal and interest, respectively, into 38,369,336 shares of common stock.

 

In June 2025, the Company entered into a debt conversion transaction with Red Road, whereby $51,000 of principal and $3,060 of accrued interest were converted into 108,023,974 shares of common stock. The shares issued had a fair value of $110,696 at the date of conversion. As a result, the Company recognized a loss on conversion of debt of $50,636, which is presented within other income (expense) in the consolidated statements of operations. In addition, the Company incurred $6,000 of conversion-related fees, which are included in general and administrative expenses.

 

In June 2025, Proactive Capital converted $16,847 and $3,153 of principal and interest, respectively, into 10,000,000 shares of common stock.

 

On March 16, 2025, Kanno converted $57,578 and $28,901 of principal and interest, respectively, into 55,793,129 shares of common stock.

 

 
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Table of Contents

 

NOTE 7 — PREFERRED STOCK

 

Series B Preferred Stock

 

On December 16, 2021, the Company amended its Articles of Incorporation, creating a series of Preferred Stock designating 4,500,000 shares of Series B Convertible Preferred Stock, par value $10.00 per share. The Series B preferred stock are entitled to dividends, if declared, and are convertible into common stock at a discount of 10% to the preceding ten day weighted average price. In 2023, the preferred stock designation was amended and restated as to the conversion terms, which now read that one share of the preferred stock is convertible into 10 shares of common stock.

 

As of June 30, 2025 and December 31, 2024, there were 2,500,000 shares of Series B Preferred Stock outstanding.

 

Series C Preferred Stock

 

On November 6, 2024, the Company Amended its Articles of Incorporation to authorize and designate 25,000,000 shares of Series C Preferred Stock (“Series C”), par value $0.001. The Series C has a stated value of $1.00, has no voting rights and converts into shares of common stock of one for one.

 

On January 9, 2025, the Company issued 14,000,000 shares of Series C Preferred Stock for Bateau Acquisition at a fair value of $26,600, which is calculated based on 14,000,000 shares of common stock for which the Series C Preferred Stock are convertible into and the fair value of common stock at the issuance date of $0.0019 per share.  See Note 9.

 

As of June 30, 2025, there were 14,000,000 shares of Series C Preferred Stock outstanding.

 

Series D Preferred Stock

 

On October 25, 2024, the Company Amended its Articles of Incorporation to authorize and designate 100,000 shares of Series D Preferred Stock (“Series D”), par value $0.001. The Series D has a stated value of $10.00, has no voting rights and converts into shares of common stock at the rate of 65% of the lowest trade during the ninety trading days prior to the conversion date.  As of the issuance date of these consolidated financial statements, the parties have agreed to and the Company is currently amending the Series D Certificate of Designation to include a conversion floor price of $0.015 per share.

 

In October 2024, the Company exchanged $546,895 of debt and accrued interest for 55,000 shares of Series D stock. 

 

On December 30, 2024, Kanno converted $150,000 in accrued interest into 15,000 shares of Series D stock.

 

As of June 30, 2025 and December 31, 2024, there were 70,000 shares of Series D preferred stock outstanding.

 

NOTE 8 — RELATED PARTY TRANSACTIONS

 

On March 31, 2024, the Company entered into a new consulting agreement with Ronald Hughes and North Arm Capital LLC. Per the terms of the agreement, effective January 1, 2024, Mr. Hughes is to be compensated $5,000 per month. In addition, the Company issued to Mr. Hughes a convertible promissory note for all accrued compensation as of December 31, 2023. The note for $517,000 is non-interest bearing and convertible into shares of common stock at $0.0006 per share. As of June 30, 2025 and December 31, 2024, there is $65,000 and $35,000 due to Mr. Hughes, respectively, for accrued consulting services.

 

 
15

Table of Contents

 

On March 31, 2024, the Company entered into a new consulting agreement with Erik Blum and J W Price LLC. Per the terms of the agreement, effective January 1, 2024, Mr. Blum is to be compensated $26,666 per month. In addition, the Company issued to Mr. Blum a convertible promissory note for all accrued compensation as of December 31, 2023. The note for $594,460 is non-interest bearing and convertible into shares of common stock at $0.00055 per share. As of June 30, 2025 and December 31, 2024, there is $311,510 and $177,710 due to Mr. Blum, respectively, for accrued consulting services.

 

As of June 30, 2025 and December 31, 2024, there is $42,000 due to Mr. Yang, who resigned as CFO in January 2025.

 

The following is a summary of notes payable to related parties as of June 30, 2025:

 

Convertible note to Mr. Hughes for accrued compensation

 

 

 

as of June 30, 2025. Non-interest bearing and convertible

 

 

 

into shares of common stock at $0.0006 per share.

 

$517,000

 

 

 

 

 

 

Convertible note to Mr. Blum for accrued compensation

 

 

 

 

as of June 30, 2025. Non-interest bearing and convertible

 

 

 

 

into shares of common stock at $0.00055 per share.

 

 

594,460

 

 

 

$1,111,460

 

 

NOTE 9 — ACQUISITIONS

 

ChainTrade, LTD

 

On June 21, 2024, the Company closed on the May 30, 2024 Acquisition Agreement (the “Acquisition Agreement”) with ChainTrade, LTD (“ChainTrade”), to purchase 100% of the assets of ChainTrade’s AI-powered Trading Platform (the “Platform”). Under the terms of the Acquisition Agreement, the Company purchased the ChainTrade Assets in exchange for an $8,000,000 promissory note, with a term of 18 months, and a 5% interest rate. The Note is convertible into shares of the Company’s common stock at $1.00 per share. The Company has also committed to provide total working capital of $500,000, in tranches, over 18 months. The first tranche of $30,000 was paid during the quarter ended June 30, 2024. The purchase price is based on an estimate of the fair value of the convertible shares.

 

On June 25, 2024, as required by the Acquisition Agreement, Paul (Prem) Couture, CEO of ChainTrade, and Red Matter Capital, was appointed as the Company’s Chief Technology Officer. Mr. Couture and the Company entered into an Employment Agreement under which he is to be paid a salary of $7,500 per month, for a term of one year for his service as Chief Technology Officer. Also on June 25, 2024, Bryan Feinberg was appointed to our Board of Directors.

 

On March 5, 2025, the Company formed FYNX, Inc., a Nevada corporation, which is the Company’s wholly-owned subsidiary (“FYNX”).  On March 7, FYNX entered into an Assignment Agreement with Plato Technologies, Inc. (“Plato”), the majority holder of the equity in ChainTrade, under which Plato assigned all of its rights, title and interest in ChainTrade to FYNX in exchange for a mutual release of claims.  Upon the execution of the Assignment Agreement, FYNX acquired 50% voting control of ChainTrade and became Chain trade’s Manager.

 

On March 17, 2025, the Company filed a lawsuit (Case No. A-25-914825-C) in the District Court of Clark County Nevada, against ChainTrade  and FYNX, related to certain representations and warranties made by Chaintrade in the Acquisition Agreement.  ChainTrade and FYNX accepted service of the complaint on March 24, 2025.

 

On April 18, 2025, the Nevada Court ruled in favor of the Company and issued an Entry of Stipulation and Order for Dismissal under which the Acquisition Agreement dated May 30, 2024 was unwound and terminated, and the $8,000,000 Promissory Note issued to ChainTrade, in exchange for ChainTrade assets which were not delivered, was cancelled due to lack of consideration. The parties further agreed that subject to the express terms of the Settlement Agreement dated March 7, 2025, all claims, counterclaims, cross-claims and affirmative defenses by and between the Settling Parties were dismissed with prejudice.

 

 
16

Table of Contents

 

As a result of the legal proceedings, the Company extinguished the full promissory note and accrued interest totaling $8,308,360 due to ChainTrade’s nonperformance, and accordingly recognized a gain on extinguishment in the consolidated statements of operations.

 

Bateau Asset Management Pty, Ltd

 

On November 2, 2024, the Company entered into an Acquisition Agreement (the “Bateau Acquisition Agreement”) with Bateau Asset Management Pty, Ltd., an Australia company (“Bateau”), and the Shareholders of Bateau to purchase 100% of the outstanding ordinary shares of Bateau (the “Bateau Equity”). Under the terms of the Acquisition Agreement, the Company will purchase Bateau Equity for the issuance to Bateau of 14,000,000 shares of the Company’s Series C Preferred Stock and two convertible promissory notes, each in the principal amount of $1,000,000 (the “Notes”), carrying 5% interest, which are convertible into shares of the Company’s Common Stock at $1 per share. The Company closed on the Bateau Acquisition on January 9, 2025.

 

The Company accounted for the transaction as a business combination under ASC 805 and as a result, allocated the fair value of the identifiable assets acquired and liabilities assumed as of the acquisition date as outlined in the table below.

 

Provisional Purchase Price Allocation

 

Consideration

 

 

 

Series C Preferred stock

 

$26,600

 

Convertible notes

 

 

3,800

 

Total consideration issued

 

$30,400

 

Identified assets, liabilities, and noncontrolling interest

 

 

 

 

Cash

 

 

11,925

 

Intangible assets - customer relationships

 

 

90,776

 

Accounts receivable, net

 

 

68,677

 

Accounts payable and accrued liabilities

 

 

(47,393 )

Loan payable

 

 

(93,585 )

Total identified assets, liabilities, and noncontrolling interest

 

 

30,400

 

Excess purchase price allocated to goodwill

 

$-

 

 

 
17

Table of Contents

 

Unaudited Pro Forma Financial Information

 

The following unaudited pro forma financial information presents the Company’s financial results as if the Bateau acquisition had occurred as of January 1, 2024. The unaudited pro forma financial information is not necessarily indicative of what the financial results actually would have been had the acquisitions been completed on this date. In addition, the unaudited pro forma financial information is not indicative of, nor does it purport to project, the Company’s future financial results. The unaudited pro forma information does not give effect to any estimated and potential cost savings or other operating efficiencies that could result from the acquisition:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2025

 

 

2024

 

 

2025

 

 

2024

 

Net revenues

 

$24,499

 

 

$42,300

 

 

$51,898

 

 

$84,599

 

Net (loss) income

 

$(653,755)

 

$(14,646,453)

 

$6,933,969

 

 

$(14,517,681)
Net (loss) income per common share

 

$(0.00)

 

$(0.01)

 

$0.00

 

 

$(0.01)

 

NOTE 10 — SUBSEQUENT EVENTS

 

Management has evaluated subsequent events pursuant to the requirements of ASC Topic 855, Subsequent Events, from the balance sheet date through the date the consolidated financial statements were issued and has determined that there are the following material subsequent events.

 

In July 2025, the Company converted $63,860 of its outstanding convertible note payable into 196,492,306 shares of common stock.

 

 
18

Table of Contents

  

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Our Management’s Discussion and Analysis should be read in conjunction with our unaudited consolidated financial statements and related notes thereto included elsewhere in this quarterly report.

 

Forward-Looking Statements

 

The information in this report contains forward-looking statements. All statements other than statements of historical fact made in this report are forward-looking. In particular, the statements herein regarding industry prospects and future results of operations or financial position are forward-looking statements. These forward-looking statements can be identified by the use of words such as “believes,” “estimates,” “could,” “possibly,” “probably,” anticipates,” “projects,” “expects,” “may,” “will,” or “should” or other variations or similar words. No assurances can be given that the future results anticipated by the forward-looking statements will be achieved. Forward-looking statements reflect management’s current expectations and are inherently uncertain. If underlying assumptions prove inaccurate or unknown risks or uncertainties materialize, our actual results may differ significantly from management’s expectations. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

 

You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q or, in the case of documents referred to or incorporated by reference, the date of those documents.

 

The following discussion and analysis should be read in conjunction with our unaudited financial statements, included herewith. This discussion should not be construed to imply that the results discussed herein will necessarily continue into the future, or that any conclusion reached herein will necessarily be indicative of actual operating results in the future. Such discussion represents only the best present assessment of our management.

 

Company Overview and Description of Business

 

On April 21, 2023, the Company completed its acquisition of AI-enabled wealth management technology platform provider, Fyniti Global Equities EBT Inc. (“Fyniti”) for 2,500,000 shares of Series B $10.00 Preferred Stock.

 

Fyniti, (www.fyniti.com, www.fynitiiq.com) is a Fintech platform developer founded by veteran Wall Street technologists and investment bankers who worked for Goldman Sachs, JP Morgan Chase, Bank of America (Merrill Lynch) and Citigroup. Fyniti has a clear focus on developing disruptive technologies in the Wealth Management and capital markets domains. Fyniti owns the IQ Engine and EBT Technology.

 

 
19

Table of Contents

  

Fintech developer and provider of technology that combines Artificial Intelligence/Machine Learning (AI/ML) driven Quantitative investing (IQ Engine) with AI-enabled wealth management Electronic Block Trading (“EBT”) technology.

 

On August 14, 2023, the Company filed a Certificate of Change with the Nevada Secretary of State to increase the authorized shares of the Company’s common stock to 3,000,000,000.

 

On January 7, 2025, the Company completed closing on the acquisition agreement dated November 2, 2024 (the “Acquisition Agreement”) with Bateau Asset Management Pty, Ltd., an Australia company and the Bateau Shareholders (“Bateau”), and the Shareholders of Bateau to purchase 100% of the outstanding ordinary shares of Bateau (the “Bateau Equity”).   

 

Bateau is a boutique investment manager founded in 2016 based in Australia with offices in Singapore. Bateau follows an absolute-return investment philosophy and a multi-manager approach to investing.

 

The Company is in the process of consolidating all of its current and legacy technologies (Fyniti) under one technology platform which will be referred to as FYNN AI. This consolidation will help SMC to effectively manage and streamline product offering, removal of product/feature redundancies and reduce development. With this consolidation, SMC will be more agile in deploying future features faster to meet the ever-expanding AI marketspace.

 

Results of Operations

 

Management’s discussion and analysis of financial condition and results of operations (“MD&A”) includes a discussion of the consolidated results from operations of SMC Entertainment, Inc. and its subsidiaries.

 

Three Months Ended June 30, 2025 Compared to the Three Months Ended June 30, 2024

 

Revenue

 

For the three months ended June 30, 2025 and 2024, we recognized $24,499 and $0 revenue, respectively. In the current period our revenue came via management fees from the newly acquired Bateau Asset Management Pty, Ltd.

 

General and Administrative Expenses

 

General and Administrative expenses (“G&A”) for the three months ended June 30, 2025 were $153,372 as compared to $42,083 for the comparable prior period, an increase of $111,289 or 264.45%. In the current period we had G&A expense for Bateau of $89,005. This added G&A expense was offset by a decrease in consulting expense during the period.

 

 
20

Table of Contents

 

Compensation Expense – Related Party

 

Compensation Expense – Related Party for the three months ended June 30, 2025, was $110,000 as compared to $116,000 for the comparable prior period, a decrease of $6,000 or 5.17%.

 

Bad Debt Expense

 

During the three months ended June 30, 2025, we have bad debt expense of $41,563 that relates to customer Ballast Corporation Pty Ltd compared to wrote off a $300,000 note receivable for the comparable prior period.

 

Development Expense

 

During the three months ended June 30, 2025, we have new development expense of $15,000 for payments made to Plato Technologies compared to $30,000 for the comparable prior period.

 

Other Income (Expense)

 

Total other income (expense) for the three months ended June 30, 2025, was $(358,319) compared to $(14,131,329) for the comparable prior period. In the current period we had interest expense of $429,635, of which $383,880 was for the amortization of debt discount, a gain of $121,952 related to the change in the fair value of derivatives and a loss of $50,636 on conversion of debt. In the prior period we had interest expense of $52,312, a loss of $6,108,617 related to the change in the fair value of derivatives and a loss $7,970,400 transaction expense.

 

Net Loss

 

For the three months ended June 30, 2025, we had net loss of $653,755, mainly due to the interest expense. For the three months ended June 30, 2024, we had net loss of $14,619,412, mainly due to loss of $6,108,617 from change in fair value of derivatives and transaction expense of $7,970,400.

 

Six Months Ended June 30, 2025 Compared to the Six Months Ended June 30, 2024

 

Revenue

 

For the six months ended June 30, 2025 and 2024, we recognized $51,898 and $0 revenue, respectively. In the current period our revenue came via management fees from the newly acquired Bateau Asset Management Pty, Ltd.

 

General and Administrative Expenses

 

General and Administrative expenses (“G&A”) for the six months ended June 30, 2025 were $241,282 as compared to $129,166 for the comparable prior period, an increase of $112,116 or 86.80%. In the current period we had G&A expense for Bateau of $109,946. This added G&A expense was offset by a decrease in consulting expense during the period.

 

 Compensation Expense – Related Party

 

Compensation Expense – Related Party for the six months ended June 30, 2025, was $222,000 as compared to $233,800 for the comparable prior period, a decrease of $11,800 or 5.05%.

 

Bad Debt Expense

 

During the six months ended June 30, 2025, we have bad debt expense of $41,563 that relates to customer Ballast Corporation Pty Ltd compared to wrote off a $300,000 note receivable for the comparable prior period.

 

Development Expense

 

During the six months ended June 30, 2025, we have new development expense of $35,000 for payments made to Plato Technologies compared to $30,000 for the comparable prior period.

 

Other Income (Expense)

 

Total other income (expense) for the six months ended June 30, 2025, was $7,421,916 compared to $(13,770,633) for the comparable prior period. In the current period we had gain of $8,308,360 on extinguishment of debt, partially offset by interest expense of $888,188, of which $728,328 was for the amortization of debt discount, a gain of

$52,380 related to the change in the fair value of derivatives and a loss of $50,636 on conversion of debt. In the prior period we had interest expense of $68,063, a loss of $5,732,170 related to the change in the fair value of derivatives and a loss $7,970,400 transaction expense.

 

Net Loss

 

For the six months ended June 30, 2025, we had net income of $6,933,969, mainly due to the gain on extinguishment of debt of $8,308,360. For the six months ended June 30, 2024, we had net loss of $14,463,599, mainly due to loss of $5,732,170 from change in fair value of derivatives and transaction expense of $7,970,400.

 

Liquidity and Capital Resources

 

During the six months ended June 30, 2025, we used $235,889 of cash in operations compared to $81,583 used in the prior period.

 

During the six months ended June 30, 2025, we netted $11,925 of cash from investing activities compared to $0 received in the prior period resulting from cash acquired pursuant to the Bateau acquisition.

 

During the six months ended June 30, 2025, we netted $216,431 of cash from financing activities compared to $75,732 received in the prior period.

 

As of June 30, 2025, we have convertible notes, including accrued interest, due of $1,610,458. We also have notes payable to related parties of $1,111,460.

 

The following is a summary of the convertible notes:

 

 

 

June 30,

2025

 

 

December 31,

2024

 

Total convertible notes, principal outstanding

 

$2,724,793

 

 

$688,892

 

Less: unamortized debt discount

 

 

(1,298,405 )

 

 

(5,333 )

Convertible notes - net of debt discount

 

$1,426,388

 

 

$683,559

 

 

Off-Balance Sheet Arrangements

 

As of June 30, 2025, the Company had no off-balance sheet arrangements.

 

 
21

Table of Contents

  

Going Concern

 

Our auditors have expressed substantial doubt as to our ability to continue as a going concern. The accompanying unaudited consolidated financial statements have been prepared on a going concern basis. For the six months ended June 30, 2025, the Company had net income of $6,933,969; however, this was largely due to the extinguishment of debt. We had net cash used in operating activities of $235,889 and an accumulated deficit of $19,289,901. These matters raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the date of this filing. The Company’s ability to continue as a going concern is dependent upon its ability to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due, to fund possible future acquisitions, and to generate profitable operations in the future. Management plans to provide for the Company’s capital requirements by continuing to issue additional equity and debt securities. The outcome of these matters cannot be predicted at this time and there are no assurances that, if achieved, the Company will have sufficient funds to execute its business plan or generate positive operating results. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Critical Accounting Policies

 

Refer to Note 2 for a condensed discussion of our critical accounting policies and to our Form 10-K, which includes our audited financial statements for the year ended December 31, 2024, for a full discussion of our critical accounting policies.

 

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk.

 

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and, as such, are not required to provide the information under this Item.

 

ITEM 4. Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures

 

We carried out an evaluation of the effectiveness of disclosure controls and procedures as of the end of the period covered by this report under the supervision and with the participation of our management, including our Principal Executive Officer and Principal Financial Officer, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934. Based on that evaluation, our Principal Executive Officer and Principal Financial Officer have concluded that our disclosure controls and procedures during the six months ended June 30, 2025 were not effective to ensure that information required to be disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. The term “disclosure controls and procedures,” as defined under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Notwithstanding the identified material weaknesses, management believes the financial statements included in this quarterly report on Form 10-Q fairly represent in all material respects our financial condition, results of operations and cash flows at and for the periods presented in accordance with U.S. GAAP.

 

Changes in Internal Control over Financial Reporting

 

There have been no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 or Rule 15d-15 under the Exchange Act that occurred during quarter ended June 30, 2025, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

 
22

Table of Contents

 

PART II

 

ITEM 1. Legal Proceedings

 

There are no claims, actions, suits, proceedings, or investigations that are currently pending or, to the Company’s knowledge, threatened by or against the Company or respecting its operations or assets, or by or against any of the Company’s officers, directors, or affiliates.

 

Item 1A. Risk Factors.

 

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and, as such, are not required to provide the information under this Item.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

 

None

 

Item 3. Defaults Upon Senior Securities.

 

None

 

Item 4. Mine Safety Disclosures.

 

Not applicable.

 

Item 5. Other Information.

 

None.

 

Item 6. Exhibits.

 

(a) Exhibits.

 

Exhibit No.

 

Description

31.1

 

Rule 13a14(a)/15d-14(a) Certification of Chief Executive Officer

32.1

 

Section 1350 Certification of Chief Executive Officer and Chief Financial Officer

101.INS*

 

Inline XBRL Instance Document(1)

101.SCH*

 

Inline XBRL Taxonomy Extension Schema Document(1)

101.CAL*

 

Inline XBRL Taxonomy Extension Calculation Linkbase Document(1)

101.DEF*

 

Inline XBRL Taxonomy Extension Definition Linkbase Document(1)

101.LAB*

 

Inline XBRL Taxonomy Extension Label Linkbase Document(1)

101.PRE*

 

Inline XBRL Taxonomy Extension Presentation Linkbase Document(1)

 

 
23

Table of Contents

 

SIGNATURES

 

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Date: September 12, 2025

FYNTECHNICAL INNOVATIONS INC.

Formerly SMC ENTERTAINMENT,

 

 

 

 

By:

/s/ Erik Blum

 

 

Name: Erik Blum

 

 

 

Title: Chief Executive Officer

 

 

 

(Principal Executive Officer) and Director

 

 

 

 

 

 

By:

/s/ Eric Sherb

 

 

 

Name: Eric Sherb

 

 

 

Title: Chief Financial Officer

 

 

 

(Principal Financial Officer and Principal Accounting Officer)

 

 

 
24

 

Source: View Original Filing on SEC EDGAR

FAQ

What did FYNN acquire and how was it paid for?

FYNN acquired 100% of Bateau equity and ChainTrade's AI trading platform. Consideration included issuance of 14,000,000 Series C Preferred for Bateau and convertible promissory notes: two $1,000,000 notes for Bateau and an $8,000,000 note for ChainTrade, all bearing 5% interest.

How much potential dilution is disclosed in the 10-Q for FYNN?

The filing discloses 1,148,961,183 potentially dilutive shares from convertible debt and other convertible securities; the company notes diluted amounts are not presented when anti-dilutive due to losses.

What are the key terms of the ChainTrade purchase note?

The ChainTrade purchase is funded by an $8,000,000 promissory note due in 18 months with 5% interest, convertible into common stock at $1.00 per share, plus a $500,000 working capital commitment paid in tranches (first tranche of $30,000 paid).

What debt expense related to the acquisitions is recorded?

The company recorded a debt discount of $1,996,200 related to the Bateau notes and amortized $772,012 of the notes to interest expense through June 30, 2025.

Are there preferred stock series with special conversion terms?

Yes. Series C has a stated value of $1.00 and converts one-for-one into common; Series D stated value is $10.00 and converts at 65% of the lowest trade during a prior 90-day window with a conversion floor agreed at $0.015.
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Software - Application
Technology
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United States
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