Heavy debt and going concern risk at Mitesco (MITI) after Q1 2026 results
Mitesco, Inc. reported a net loss of $777,289 for the quarter ended March 31, 2026, reversing a prior-year profit that was driven by a large non-cash derivative gain. Quarterly revenue was $0, down from $17,000, as Centcore data center operations were paused.
Cash was only $1,533 against total liabilities of $23,923,376, resulting in a stockholders’ deficit of $23,891,947. Current liabilities of about $19.5M include notes payable, convertible debt, legal settlements and an SBA loan, while a Series A preferred stock liability totals $13.7M on a present value basis.
Management disclosed substantial doubt about the company’s ability to continue as a going concern, citing minimal cash, large obligations and the need for additional capital. The company is pivoting to data center services and artificial intelligence software, spending $103,533 on research and development and funding operations with new convertible bridge notes.
Positive
- None.
Negative
- Substantial doubt about going concern: Management reports minimal cash of $1,533, recurring losses, significant current liabilities of about $19.5M, and explicitly states substantial doubt about the company’s ability to continue as a going concern without new funding.
Insights
Very weak balance sheet, heavy legal and preferred obligations, and going concern doubt.
Mitesco shows a highly leveraged position: total liabilities of $23.9M versus total assets of $31,429 and a stockholders’ deficit near $23.9M. Large components include legal settlements of $3.45M, notes and convertible debt, and the Series A preferred liability.
Cash was only $1,533 at quarter end, while net cash used in operations was $219,739 for the quarter, indicating limited runway without fresh financing. Management explicitly states substantial doubt about continuing as a going concern, as additional funding is needed to support the new AI and data center initiatives.
Subsequent events add more 10% original issue discount convertible notes and further Series A and Series X preferred share activity. These instruments provide near-term liquidity but increase overhang and potential dilution. Future disclosures in periodic reports will clarify whether capital raising can keep pace with obligations and development spending.
Key Figures
Key Terms
going concern financial
Series A Preferred Stock financial
derivative liabilities financial
original issue discount financial
variable interest entity financial
stockholders’ deficit financial
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Table of Contents
| Page | |||
| PART I – FINANCIAL INFORMATION | |||
| Item 1. | Financial Statements (Unaudited) | ||
| Consolidated Balance Sheets as of March 31, 2026, and December 31, 2025 | 1 | ||
| Consolidated Statements of Operations for the three months ended March 31, 2026, and 2025 | 2 | ||
| Consolidated Stockholder’s Deficit for the three months ended March 31, 2026, and 2025 | 3 | ||
| Consolidated Statements of Cash Flows for the three months ended March 31, 2026, and 2025 | 4 | ||
| Notes to Consolidated Financial Statements | 5 | ||
| 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 | |||
| Item 1. | Legal Proceedings. | 23 | |
| Item 1A. | Risk Factors. | 24 | |
| Item 2. | Sale of Unregistered Securities. | 24 | |
| Item 3. | Defaults Upon Senior Secured Securities. | 24 | |
| Item 4. | Mine Safety Disclosures. | 24 | |
| Item 5. | Other Information. | 24 | |
| Item 6. | Exhibits. | 25 | |
| Signatures | 26 | ||
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MITESCO, INC.
CONSOLIDATED BALANCE SHEETS
| March 31, | December 31, | |||||||
| 2026 | 2025 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable, net | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Total Assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued liabilities | $ | $ | ||||||
| Accrued interest | ||||||||
| Derivative liabilities | ||||||||
| Deferred Revenue | ||||||||
| Lease liability - operating leases, current | ||||||||
| Notes payable, net of discounts | ||||||||
| SBA loan payable | ||||||||
| Convertible Notes Payable, Net | ||||||||
| Other current liabilities | ||||||||
| Preferred stock dividends payable | ||||||||
| Legal settlements | ||||||||
| Series A preferred stock liability, current | ||||||||
| Total current liabilities | ||||||||
| Series A preferred stock liability, non-current | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (Note 12) | ||||||||
| Stockholders’ deficit | ||||||||
| Preferred stock, $0.01 par value, 100,000,000 shares authorized; 10,000,000 shares designated Series D; 10,000 shares designated as Series E; 140,000 shares designated as Series F; and 400,000 shares designated Series X: | ||||||||
| Preferred stock, Series D, $ | ||||||||
| Preferred stock, Series F, $ | ||||||||
| Preferred stock, Series X, $ | ||||||||
| Common stock, $ | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ deficit | ( | ) | ( | ) | ||||
| Total liabilities and stockholders’ deficit | $ | $ | ||||||
See accompanying notes to these unaudited consolidated financial statements.
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MITESCO, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
| For the Three Months Ended | ||||||||
| March 31, | ||||||||
| 2026 | 2025 | |||||||
| Revenue | $ | $ | ||||||
| Operating expenses: | ||||||||
| Software development | ||||||||
| General and administrative | ||||||||
| Total operating expenses | ||||||||
| Net Operating Loss | ( | ) | ( | ) | ||||
| Other income (expense): | ||||||||
| Interest expense | ( | ) | ( | ) | ||||
| Interest expense - related parties | ( | ) | ||||||
| Loss on revaluation of Series A preferred shares | ( | ) | ( | ) | ||||
| Gain (loss) on revaluation of derivative liabilities | ( | ) | ||||||
| Total other income (expense) | ( | ) | ||||||
| Income (loss) before provision for income taxes | ( | ) | ||||||
| Provision for income taxes | ||||||||
| Net income (loss) | $ | ( | ) | $ | ||||
| Preferred stock dividends | ( | ) | ( | ) | ||||
| Preferred stock dividends - related parties | ( | ) | ||||||
| Net income (loss) available to common shareholders | $ | ( | ) | $ | ||||
| Net income (loss) per share – basic | $ | ( | ) | $ | ||||
| Net loss per share – diluted | $ | ( | ) | $ | ( | ) | ||
| Weighted average shares outstanding – basic | ||||||||
| Weighted average shares outstanding – diluted | ||||||||
See accompanying notes to these unaudited consolidated financial statements.
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MITESCO, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)
FOR THE THREE MONTHS ENDED MARCH 31, 2026 and 2025
(UNAUDITED)
| Preferred
Stock Series D | Preferred Stock
Series F | Preferred Stock
Series X | Common Stock | Additional Paid-in | Accumulated | |||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | Total | ||||||||||||||||||||||||||||||||||
| Balance, December 31, 2025 | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||||||
| Shares issued for Series A redemptions | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||
| Shares issued for Series X dividends | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||
| Stock-based compensation | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||
| Preferred stock dividends | - | - | - | - | - | - | - | - | ( | ) | - | ( | ) | |||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||
| Balance, March 31, 2026 | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||||||
| Shares issued for Series A redemptions | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||
| Shares issued for Series X dividends | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||
| Stock-based compensation | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||
| Preferred stock dividends | - | - | - | - | - | - | - | - | ( | ) | - | ( | ) | |||||||||||||||||||||||||||||||
| Net income | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||
| Balance, March 31, 2025 | $ | - | $ | - | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||||
See accompanying notes to these unaudited consolidated financial statements.
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MITESCO, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| Three Months Ended | ||||||||
| March 31, 2026 | March 31, 2025 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net income (loss) | $ | ( | ) | $ | ||||
| Adjustments to reconcile net income to net cash used in operating activities: | ||||||||
| Amortization of intangible assets | ||||||||
| Amortization of debt discounts | ||||||||
| Stock-based compensation | ||||||||
| Accretion of Series A preferred recorded as interest expense | ||||||||
| Loss on revaluation of Series A preferred | ||||||||
| Gain on revaluation of derivative liabilities | ( | ) | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ||||||
| Prepaid expenses | ||||||||
| Accounts payable and accrued liabilities | ||||||||
| Accrued interest | ||||||||
| Accrued interest - related parties | ||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Principal payments on SBA Loan | ( | ) | ( | ) | ||||
| Proceeds from sale of Series A preferred stock | ||||||||
| Proceeds from convertible notes payable | ||||||||
| Net cash provided by financing activities | ||||||||
| Net change in cash | ( | ) | ( | ) | ||||
| Cash at beginning of period | ||||||||
| Cash at end of period | $ | $ | ||||||
| Supplemental disclosure of cash flow information: | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Cash paid for taxes | $ | $ | ||||||
| Supplemental disclosure of financing cash flow information: | ||||||||
| Preferred stock dividends | $ | $ | ||||||
| Shares issued for Series X dividends | $ | $ | ||||||
| Shares issued for redemption of Series A preferred stock | $ | $ | ||||||
See accompanying notes to these unaudited consolidated financial statements.
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MITESCO, INC.
UNAUDITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2026
Note 1: Description of Business
Company Overview
Mitesco, Inc. (the “Company,” “we,” “us,” or “our”) was formed in the state of Delaware on January 18, 2012. On December 9, 2015, we restructured our operations and acquired Newco4pharmacy, LLC, a development stage company which sought to acquire compounding pharmacy businesses. As a part of the restructuring, we shut down our former business line. On April 24, 2020, we changed our name to Mitesco, Inc. In October 2023, the Company changed its domicile from Delaware to Nevada in order to effect reduced costs.
From 2020 through 2022, our operations were focused on establishing general practice medical clinics utilizing nurse practitioners under The Good Clinic name and development and acquisition of telemedicine technology. We opened our first The Good Clinic in Minneapolis, Minnesota in the first quarter of 2021 and had six operating clinics during the year ended December 31, 2022, with two additional sites under contract. In the fourth quarter of fiscal 2022, we made the strategic decision to close the entire clinic operation and release our staff due to a lack of profitability. The majority of the holders of Series D and F Preferred stock, promissory notes and accounts payable discussed herein, were investors, lenders and vendors to the Company during the operation of the clinic business and have now received either restricted common stock, or the Series A Preferred shares in consideration of the cancelation of, or in exchange for, the previous obligations. The financial results and obligations are now accounted for as “discontinued operations”. For details see “Debt Restructuring” herein.
Current Business Operations
We are a holding company seeking to provide products, services and technology.
In June 2024 we announced the formation of two (2) new wholly owned business units, Centcore, LLC (“Centcore”) that is providing data center services including cloud computing and application hosting, and Vero Technology Ventures, LLC (“VTV”), whose aim is to seek investment and acquisition opportunities, generally in the areas of cloud computing and data center related applications.
Centcore has two (2) areas of focus. The first,
generic data center services, is aimed at hosting applications for a specific user, sometimes referred to as “managed services offerings”
or MSO, where the client moves the software licensed from various vendors, or internally developed, into our data center where we maintain
the computing, communications and backup environment. We currently offer services through a “co-location” agreement with a
data center based in Melbourne, Florida, which has relationships with eight (8) other data centers worldwide. Using this approach, we
have an ability to rapidly expand the size of our computing resources quickly, at minimal expense. Over time we expect to create similar
situations with other data centers worldwide based on our clients’ specific needs. We are also evaluating the development of a network
of smaller format (
We have retained experienced professionals in the data center, cyber security and infrastructure services areas to support our needs on a per hour basis, which we believe will allow us to control our costs relative to business activity, without significant staffing internally.
The Vero Technology Ventures (VTV) subsidiary is actively reviewing potential early-stage cloud computing solution vendors and is developing its own artificial intelligence (A.I.) based application set. VTV is currently involved with the formation of a new software development project aimed at applying artificial intelligence (A.I.) to the sales process for various businesses, including residential real estate using cloud computing based software. This initial effort dubbed “Robo Agent”, is expected to be available for initial users in Q3 of FY2026. Later versions may include similar functionality focused on other markets, generally in a “business to consumer” (B2C) selling situation.
In August 2025 we retained a highly qualified
executive to begin development of our Robo Agent product set on a consulting basis at a rate of $
There are several other projects in evaluation, generally aimed at software that would operate on a cloud computing platform such as that which the Company has in its Centcore Data Center.
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Note 2: Going Concern
As of March 31, 2026, the Company had cash and
cash equivalents of approximately $
The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts classified as liabilities that might be necessary should the Company be forced to take any such actions.
Note 3: Summary of Significant Accounting Policies
Basis of Presentation – The consolidated financial statements are prepared in conformity with accounting principles accepted in the United States of America (“GAAP”).
The consolidated financial statements and related disclosures as of March 31, 2026, are unaudited, pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted pursuant to such rules and regulations. In our opinion, these unaudited financial statements include all adjustments (consisting only of normal recurring adjustments) necessary for the fair statement of the results for the interim periods. These unaudited financial statements should be read in conjunction with the audited financial statements of the Company for the years ended December 31, 2025, and 2024 included in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on April 15, 2026. The results of operations for the three months ended March 31, 2026, are not necessarily indicative of the results to be expected for the full year ended December 31, 2026.
Principles of Consolidation – The accompanying consolidated financial statements include the accounts of Mitesco, Inc., and its wholly owned subsidiaries Mitesco NA, LLC, The Good Clinic, LLC, Vero Technology Ventures, LLC, and Centcore, LLC. In addition, we relied on the operating activities of certain legal entities in which we did not maintain a controlling ownership interest, but over which we had indirect influence and of which we were considered the primary beneficiary. These entities are typically subject to nominee ownership and transfer restriction agreements that effectively transfer the majority of the economic risks and rewards of their ownership to the Company. The Company’s management, restrictions and other agreements concerning such nominee-owned entities typically includes both financial terms and protective and participating rights to the entities’ operating, strategic and non-clinical governance decisions which transfer substantial powers over and economic responsibility for these entities to the Company. As such, the Company applies the guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810 – Consolidation (“ASC 810”), to determine when an entity that is insufficiently capitalized or not controlled through its voting interests, referred to as a variable interest entity should be consolidated. All intercompany balances and transactions have been eliminated.
Use of Estimates - The preparation of these financial statements requires our management to make estimates and assumptions about future events that affect the amounts reported in the financial statements and related notes. Future events and their effects cannot be determined with absolute certainty. Therefore, the determination of estimates requires the exercise of judgment.
Revenue Recognition – The Company recognizes revenue in accordance with ASC 606 when it has satisfied the performance obligations under an arrangement with the customer reflecting the terms and conditions under which products or services will be provided, the fee is fixed or determinable, and collection of any related receivable is probable. ASC Topic 606, “Revenue from Contracts with Customers” establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers. Revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements: 1) identify the contract with a customer; 2) identify the performance obligations in the contract; 3) determine the transaction price; 4) allocate the transaction price to performance obligations in the contract; and 5) recognize revenue as the performance obligation is satisfied.
Our revenues generally relate to data center services. Revenues are recorded during the period our obligations to provide services are satisfied. The Company’s performance obligation for its revenue stream is to provide the access to its data centers to the customer, and revenues associated with completed sales are recognized rateably over the contractual term as services are provided to the customer. There is no significant financing component to the Company’s sales.
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In September 2025 we received a contract for development
of a new application intended to effect the listing and sale of properties and products specifically related to sports. We expect this
project to be executed using both internal and external resources and to be completed in late FY2026. As of March 31, 2026, we have received
an upfront fee of $
Capitalized Software Development Costs - Software development costs primarily consist of personnel costs. We capitalize software development costs upon the establishment of technological feasibility and prior to the availability of the product for general release to clients for software sold to third parties. During the three months ended March 31, 2026 and during the year ended December 31, 2025, no costs have been capitalized as we have not yet reached technological feasibility. We begin to amortize capitalized costs when a product is available for general release to clients. Amortization expense is determined on a product-by-product basis at a rate not less than straight-line basis over the software’s remaining estimated economic life.
Software Research and Development Costs
- Research and development costs are expensed as incurred and include compensation costs for engineering and product management personnel,
third-party contractor expenses, software development tools and other expenses related to researching and developing new solutions or
upgrading and enhancing existing solutions that do not qualify for capitalization. We expensed research and development costs of $
Segments - The Company manages its operations as a single segment for the purposes of assessing performance and making operating decisions. The Company’s Chief Operating Decision Maker (“CODM”) is its Chief Executive Officer. The CODM allocates resources and evaluates the performance of the Company at the consolidated level using information about its revenues, gross profit, and income from operations. All significant operating decisions are based upon an analysis of the Company as one operating segment, which is the same as its reporting segment.
Per Share Data - Basic income (loss) per share is computed by dividing net loss by the weighted average number of common shares outstanding for the year. Diluted loss per share is computed by dividing net loss by the weighted average number of common shares outstanding plus common stock equivalents (if dilutive) related to warrants, options, and convertible instruments.
The following table presents the effect of potential dilutive issuances for the three months ended March 31, 2026 and 2025:
| Three Months Ended | ||||||||
| March 31, 2026 | March 31, 2025 | |||||||
| Net income (loss) attributable to common stockholders | $ | $ | ||||||
| Preferred stock dividends | ||||||||
| Derivative gain | ( | ) | ||||||
| Interest expense associated with convertible debt | ||||||||
| Net loss for dilutive calculation | ( | ) | ( | ) | ||||
| Weighted average shares outstanding | ||||||||
| Dilutive effect of preferred stock | ||||||||
| Dilutive effect of convertible debt | ||||||||
| Dilutive effect of common stock warrants | - | |||||||
| Weighted average shares outstanding for diluted net income (loss) per share | ||||||||
During the three months ended March 31, 2026 the
effect of
Financial Instruments and Fair Values - The fair value of a financial instrument represents the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Fair value estimates are made at a specific point in time, based upon relevant market information about the financial instrument. In determining fair value, we use various valuation methodologies and prioritize the use of observable inputs. We assess the inputs used to measure fair value using a three-tier hierarchy based on the extent to which inputs used in measuring fair value are observable in the market:
Level 1 – inputs include exchange quoted prices for identical instruments and are the most observable.
Level 2 – inputs include brokered and/or quoted prices for similar assets and observable inputs such as interest rates.
Level 3 – inputs include data not observable in the market and reflect management judgment about the assumptions market participants would use in pricing the asset or liability.
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The use of observable and unobservable inputs and their significance in measuring fair value are reflected in our hierarchy assessment. The carrying amount of cash, prepaid assets, accounts payable and accrued liabilities approximate fair value due to the short-term maturities of these instruments. Because cash and cash equivalents are readily liquidated, management classifies these values as Level 1. The fair value of the derivative liabilities approximates their book value as the instruments are short-term in nature and contain market rates of interest. Because there is no ready market or observable transactions, management classifies the derivative liabilities as Level 3.
Recent Accounting Standards
In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses, and in January 2025, the FASB issued ASU 2025-01, Clarifying the Effective Date (“ASU 2025-01”). The amendments are intended to enhance disclosures regarding an entity’s costs and expenses by requiring additional disaggregated information disclosures about certain income statement expense line items. The amendments, as clarified by ASU 2025-01, are effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the effect of this pronouncement on its disclosures.
In July 2025, the FASB issued ASU 2025-05, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”). ASU 2025-05 amends ASC, Financial Instruments – Credit Losses (Topic 326) (“ASC Topic 326”) to simplify how entities measure credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC, Revenue from Contracts with Customers (Topic 606) (“ASC Topic 606”). This update allows entities to assume that current conditions as of the balance sheet date will remain unchanged for the remaining life of the asset when estimating expected credit losses. ASU 2025-05 is effective for interim and annual periods beginning after December 15, 2025. Early adoption is permitted. The Company adopted this standard effective January 1, 2026, which did not have a material impact on the Company’s consolidated financial statements.
There are various other updates recently issued, most of which represent technical corrections to the accounting literature or application to specific industries and are not expected to have a material impact on the Company’s consolidated financial position, results of operations or cash flows.
Note 4: Accounts Payable and Accrued Liabilities
Accounts payable and accrued liabilities consisted of the following at March 31, 2026, and December 31, 2025:
| March 31, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Trade accounts payable | $ | $ | ||||||
| Accrued payroll and payroll taxes | ||||||||
| Total accounts payable and accrued liabilities | $ | $ | ||||||
Note 5: Right to Use Assets and Lease Liabilities – Operating Leases
The Company had operating leases for its clinics for which the Company is currently in negotiations with the Lessors to settle the remaining amounts owed after closing the clinic facilities. As of March 31, 2026 the Company had impaired all balances of the related right to use assets.
Operating lease liabilities are summarized below:
| March 31, 2026 | December 31, 2025 | |||||||
| Lease liability | $ | $ | ||||||
| Less: current portion | ( | ) | ( | ) | ||||
| Lease liability, non-current | $ | $ | ||||||
As a result of closing the facilities, the Company has made no further lease payments during the year ending December 31, 2025, or the three months ending March 31, 2026. As of March 31, 2026, the Company has either settled amounts owed or entered into default judgements for all leases except for the office lease, which we believe is nominal. For all leases for which a legal settlement has been entered into, all amounts have been reclassified to legal settlements as of March 31, 2026 . See Note 12 for further details.
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Note 6: SBA Loan Payable
PPP Loan Conversion to SBA Loan
During March 2020, in response to the COVID-19
crisis, the federal government announced plans to offer loans to small businesses in various forms, including the Payroll Protection Program,
or “PPP”, established as part of the Corona Virus Aid, Relief and Economic Security Act (“CARES Act”) and administered
by the U.S. Small Business Administration (the “SBA”). On April 25, 2020, the Company entered an unsecured Promissory Note
with Bank of America for a loan in the original principal amount of $
On July 12, 2023, the Company received confirmation
of a payment plan arrangement from the SBA for total principal and interest due on the loan of $
The following table provides the maturities of March 31, 2026:
| Amount owed for Fiscal year ending December 31, | Principal | |||
| 2026 (9 months remaining) | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Thereafter | ||||
| Total | $ | |||
Note 7: Notes Payable
The following table summarizes the outstanding notes payable as of March 31, 2026 and December 31, 2025, respectively:
| March 31, 2026 | December 31, 2025 | |||||||
| Kishon Note | $ | $ | ||||||
| 2025 Bridge Notes | ||||||||
| Total Notes Payable | ||||||||
| Current Portion | ( | ) | ( | ) | ||||
| Long-term portion | $ | - | $ | |||||
Kishon Note
On May 10, 2022, the Company entered into a Securities
Purchase Agreement (the “Kishon Agreement”) with Kishon Investments, LLC (“Kishon”) with respect to the sale and
issuance to Kishon of: (i) an initial commitment fee in the amount of $
The Kishon Note was issued in the principal amount
of $
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During the year ended December 31, 2023, a default
penalty in the amount of $
At March 31, 2026,
principal and interest in the amount of $
2025 Bridge Notes
On May 6, 2025, the Company entered into a short
term note payable agreement with one of its investors and received cash proceeds of $
On May 19, 2025, the Company entered into Senior
Secured 5% Original Issue Discount Promissory Notes with three of its institutional investors for gross proceeds of $
On July 21, 2025, the Company entered into Senior
Secured
Aggregate interest expense on the notes payable
was $
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Convertible Notes Payable
On October 31, 2025,
the Company entered into a Senior Secured
On December 19, 2025, the Company entered into
a Senior Secured
On December 19, 2025, the Company entered into
a Senior Secured
On February 20, 2026, the Company entered into
a third Senior Secured
The following table provides the maturities of March 31, 2026 of the Companies notes and convertible notes payable:
| Amount owed for Fiscal year ending December 31, | Principal | |||
| 2026 (9 months remaining) | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Thereafter | ||||
| Total | $ | |||
Note 8: Derivative Liabilities
Certain of the Company’s convertible notes and warrants contain features that create derivative liabilities. The pricing model the Company uses for determining fair value of its derivatives is the Monte Carlo Model. Valuations derived from this model are subject to ongoing internal and external verification and review. The model uses market-sourced inputs such as interest rates and stock price volatilities. Selection of these inputs involves management’s judgment and may impact net income. The derivative components of these notes are valued at issuance, at conversion, at restructuring, and at each period end.
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Derivative liability activity for the three months ended March 31, 2026, is summarized in the table below:
| December 31, 2025 | $ | |||
| Loss on revaluation | ||||
| March 31, 2026 | $ |
The following assumptions were used for the valuation of the derivative liability associated with this obligation:
| ● | The stock price on the date of valuation represents the fair market value of the stock | |
| ● | The notes convert with variable conversion prices based on the percentages of the lowest trades over the prior 20 trading days | |
| ● | The holder would automatically convert the note immediately (based on ownership or trading volume limitations) if the registration were effective and the Company was not in default |
Note 9: Series A preferred stock
On October 28, 2024, the Company filed a Certificate
of Designation, Preferences and Rights of the Series A Preferred Stock with the Nevada Secretary of State (the “Certificate of Designation”).
The Company authorized
Holders of shares of the Series A Preferred Stock are not entitled to receive any dividends, and the security bears no interest.
The Series A Preferred Stock will rank, with respect to rights to the payment of dividends and the distribution of assets in the event of any liquidation, dissolution or winding up of the Company, (i) senior to all classes or series of the Company’s Common Stock, and to all other equity securities issued by the Company; and (ii) effectively junior to all existing and future indebtedness (including indebtedness convertible into our Common Stock or preferred stock) of the Company and to any indebtedness and other liabilities of (as well as any preferred equity interest held by others in) existing subsidiaries of the Company.
In addition to any other rights provided by law, except where the vote or written consent of the holders of a greater number of shares is required by law or by another provision of the Articles of Incorporation, without first obtaining the affirmative vote at a meeting duly called for such purpose or the written consent without a meeting of the majority of the outstanding Series A Preferred Stock, voting together as a single class, the Company shall not: (a) amend or repeal any provision of, or add any provision to, its Articles of Incorporation or bylaws, or file any certificate of designations or certificate of amendment, if such action would adversely alter or change in any respect the preferences, rights, privileges or powers, or restrictions provided for the benefit, of the Series A Preferred Stock, regardless of whether any such action shall be by means of amendment to the Articles of Incorporation or by merger, consolidation or otherwise; or (b) without limiting the provisions of the Certificate of Designation, circumvent a right of the Series A Preferred Stock.
As a result of the mandatory redemption features
requiring the Company to repay the Series A in either cash or shares of Common Stock of the Company, under ASC 480, the Company is required
to record the full redemption value of the Series A preferred shares as a liability on the accompanying balance sheet. The Company has
recorded the redemption value based on the
During the three months ended March 31, 2026,
the Company redeemed
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The following table provides the maturities of Series A preferred stock redemptions at March 31, 2026:
| Series A Preferred Stock | ||||
| 2026 (9 months remaining) | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 and thereafter | ||||
| Total future undiscounted redemption payments | ||||
| Less: Interest | ( | ) | ||
| Present value of redemption payments | ||||
| Current portion | ( | ) | ||
| Long term portion | $ | |||
Note 10: Stockholders’ Equity (Deficit)
Common Stock
The Company has authorized
Issuance of Restricted Common Stock for Series X Preferred Stock Dividends
During the three months ended March 31, 2026,
the Company issued
Issuance of Restricted Common Stock for the Redemption of Series A Preferred Stock
During the three months ended March 31, 2026,
the Company issued
Other Common stock Issuances
During the three months ended March 31, 2026, the Company issued
Preferred Stock
We are authorized to issue
Series D Preferred Stock
The Series D Preferred Stock has a par value of $
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Series E Preferred Stock
The number of shares of Series E designated is
Series F Preferred Stock
The number of shares of Series F Preferred Stock
designated is
Series X Preferred Stock
The Company has
The Company accrued dividends in the amount of
$
Warrants
The following table summarizes the warrants outstanding on March 31, 2026, and the related prices for the warrants to purchase shares of the Company’s common stock:
| Weighted | Weighted | |||||||||||||||||||||
| Weighted | average | average | ||||||||||||||||||||
| average | exercise | exercise | ||||||||||||||||||||
| Range of | Number of | remaining | price of | Number of | price of | |||||||||||||||||
| exercise | warrants | contractual | outstanding | warrants | exercisable | |||||||||||||||||
| prices | outstanding | life (years) | warrants | exercisable | warrants | |||||||||||||||||
| $ | $ | $ | ||||||||||||||||||||
| $ | $ | $ | ||||||||||||||||||||
| $ | $ | |||||||||||||||||||||
The following table summarizes the transactions involving options to purchase shares of the Company’s common stock:
| Shares | Weighted- Average Exercise Price ($) | |||||||
| Outstanding at December 31, 2025 | $ | |||||||
| Granted | $ | |||||||
| Cancelled | $ | |||||||
| Exercised | $ | |||||||
| Outstanding at March 31, 2026 | $ | |||||||
At March 31, 2026, there was no intrinsic value on the issued or vested warrants.
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Note 11: Fair Value of Financial Instruments
The following summarizes the Company’s derivative financial liabilities that are recorded at fair value on a recurring basis at March 31, 2026 and December 31, 2025.
| March 31, 2026 | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Liabilities | ||||||||||||||||
| Derivative liabilities | $ | $ | $ | $ | ||||||||||||
| December 31, 2025 | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Liabilities | ||||||||||||||||
| Derivative liabilities | $ | $ | $ | $ | ||||||||||||
Note 12: Commitments and Contingencies
Legal
From time to time, we may become involved in legal proceedings or be subject to claims arising in the ordinary course of our business.
The Company has a number of legal situations involved with the winding down of its clinic’s business activities. These include claims regarding certain construction contracts and cancellation of leases as noted below:
Nordhaus Clinic
On November 1, 2020, we entered into an agreement
to open a clinic in Minneapolis, Minnesota. The initial lease term is
Egan Clinic a.k.a. Vikings
On October 14, 2021, we entered into an agreement
to open a clinic in Eagan, Minnesota, which began operations in the fourth quarter of 2021. The initial lease term is for
St. Paul Clinic a.k.a. The Grove
On August 31, 2021, we entered into an agreement
to open a clinic in St. Paul, Minnesota, which began operations in the fourth quarter of 2021. The initial lease term is for
St. Louis Park Clinic a.k.a. Excelsior & Grand
On May 24, 2021, we entered into an agreement
to open a clinic in St. Louis Park, Minnesota, which began operations in the third quarter of 2021. The initial lease term is
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Eden Prairie Clinic a.k.a. TP Elevate
On June 8, 2021, we entered into an agreement
to open a clinic in Eden Prairie, Minnesota, which began operation in the third quarter of 2021. The initial lease term is
Maple Grove Clinic a.k.a. Arbor Lakes
On October 8, 2021, we entered into an agreement
to open a clinic in Maple Grove, Minnesota which began operation in the fourth quarter of 2021. The initial lease term is for
Radiant Clinic a.k.a. LMC Welton
On September 9, 2021, we entered into an agreement
to open a clinic in Denver, Colorado, which was expected to begin operation in the first quarter of 2023 but possession of which has been
relinquished to the landlords. The initial lease term is for
Quincy Clinic a.k.a. 1776 Curtis
On September 28, 2021, we entered into an agreement
to open a clinic in Denver, Colorado, which was expected to begin operation in the first quarter of 2023 but possession of which has been
relinquished to the landlords. The initial lease term is for
The following table summarizes the status of our property settlements as noted above and the total settlement amounts as of the date of the filing:
| LOCATION | PROPERTY NAME | ORIGINAL OBLIGATION | SETTLEMENT AMOUNT | DATE OF AWARD | INTEREST RATE | INTEREST ACCRUED ON SETTLEMENT | TOTAL SETTLEMENT OBLIGATION | TYPE OF SETTLEMENT | ||||||||||||||||||
| WAYZETTA, MN | WAZETTA BAY | $ | $ | NA | - | $ | CASH PAYMENT OBLIGATION | |||||||||||||||||||
| EAGAN, MN | VIKINGS | $ | $ | % | $ | $ | DEFAULT JUDGEMENT | |||||||||||||||||||
| ST. LOUIS PARK, MN | EXCELSIOR | $ | $ | % | $ | $ | DEFAULT JUDGEMENT | |||||||||||||||||||
| ST. PAUL, MN | CONTINENTAL 560 | $ | $ | % | $ | $ | DEFAULT JUDGEMENT | |||||||||||||||||||
| MAPLE GROVE, MN | BUTTNICK | $ | $ | % | $ | $ | SETTLEMENT AGREEMENT | |||||||||||||||||||
| DENVER, CO | RADIANT | $ | $ | - | $ | DISMISSED | ||||||||||||||||||||
| DENVER, CO | QUINCY | $ | $ | % | $ | DEFAULT JUDGEMENT | ||||||||||||||||||||
| TOTAL | $ | $ | $ | $ | ||||||||||||||||||||||
Administrative offices
On June 24, 2021, we entered into an agreement
to open an administrative office in St. Louis Park, Minnesota. The initial lease term is 2.5 years. Fixed rent payments under
the initial term are approximately $
During the three months ending March 31, 2026
and 2025, the Company recorded interest expense of $
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Note 13: Income Taxes
Deferred income taxes result from the temporary differences primarily attributable to amortization of intangible assets and debt discount and an accumulation of net operating loss carryforwards for income tax purposes with a valuation allowance against the carryforwards for book purposes.
In assessing the realizability of deferred tax
assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized.
Included in deferred tax assets are Federal and State net operating loss carryforwards of approximately $
For the three months ended March 31, 2026, the expected tax expense (benefit) based on the U. S. federal statutory rate is reconciled with the actual tax provision (benefit) as follows:
| For the Three Months Ended March 31, | ||||||||
| 2026 | ||||||||
| Expected tax at statutory rates | ||||||||
| Federal | $ | ( | ) | % | ||||
| State | ( | )% | ||||||
| Permanent Differences | ( | ) | % | |||||
| Temporary difference for derivative gain | ( | )% | ||||||
| Temporary difference for stock compensation | ( | )% | ||||||
| Other | ( | )% | ||||||
| Prior Year True-Ups | % | |||||||
| Current Year Change in Valuation Allowance | ||||||||
| Federal | ( | )% | ||||||
| State | ( | ) | % | |||||
| Income tax expense | $ | % | ||||||
Deferred income taxes reflect the tax impact of temporary differences between the amounts of assets and liabilities for financial reporting purposes and such amounts as measured by tax laws and regulations.
Deferred income taxes include the net tax effects
of net operating loss (NOL) carryforwards and the temporary differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes.
| As of | ||||||||
| March 31, 2026 | December 31, 2025 | |||||||
| Deferred Tax Assets (Liabilities): | ||||||||
| Accrued payroll | $ | $ | ||||||
| ASC842-ROU (Liability) | ||||||||
| Loss from derivatives | ( | ) | ( | ) | ||||
| Stock based compensation | ( | ) | ( | ) | ||||
| Depreciation | ||||||||
| Net operating loss | ||||||||
| Net deferred tax assets (liabilities) | ||||||||
| Valuation allowance | ( | ) | ( | ) | ||||
| Net deferred tax assets (liabilities) | $ | $ | ||||||
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Note 14: Subsequent Events
2026 Bridge financing
On April 10, 2026 the Company entered into a
On April 23, 2026 the “Company received
funding from a new institutional investor in the Company using the 2026 Bridge Note previously executed with other of its historical investors.
The note bears interest of
Series X Preferred Stock dividend payments for Q1 FY2026
In April 2026, the Company issued a total of
Series A Preferred Stock redemptions for Q1 FY2026
In April 2026, the Company issued a total of
Series X Preferred Stock issuances
On April 20, 2026, the Board of Directors has
approved the issuance of additional shares of its Series X Preferred stock whereby each director shall receive $
On April 20, 2026, the Board of Directors has
approved the issuance of additional shares of its Series X Preferred stock whereby A historical shareholder, Anglo Irish Investments,
LLC shall receive $
As of a result of these issuances there are now
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
References to the “Company,” “Mitesco, Inc.,” “our,” “us” or “we” refer to Mitesco, Inc. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited interim financial statements and the notes thereto contained elsewhere in this report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act. We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other SEC filings.
Company Overview
Mitesco, Inc. (the “Company,” “we,” “us,” or “our”) was formed in the state of Delaware on January 18, 2012. On December 9, 2015, we restructured our operations and acquired Newco4pharmacy, LLC, a development stage company which sought to acquire compounding pharmacy businesses. As a part of the restructuring, we shut down our former business line. On April 24, 2020, we changed our name to Mitesco, Inc. In October 2023, the Company changed its domicile from Delaware to Nevada in order to effect reduced costs.
Current Business Operations
We are a holding company seeking to provide products, services and technology.
In June 2024 we announced the formation of two (2) new wholly owned business units, Centcore, LLC (“Centcore”) that is providing data center services including cloud computing and application hosting, and Vero Technology Ventures, LLC (“VTV”), whose aim is to seek investment and acquisition opportunities, generally in the areas of cloud computing and data center related applications.
Centcore has two (2) areas of focus. The first, generic data center services, is aimed at hosting applications for a specific user, sometimes referred to as “managed services offerings” or MSO, where the client moves the software licensed from various vendors, or internally developed, into our data center where we maintain the computing, communications and backup environment. We currently offer services through a “co-location” agreement with a data center based in Melbourne, Florida, which has relationships with eight (8) other data centers worldwide. Using this approach, we have an ability to rapidly expand the size of our computing resources quickly, at minimal expense. Over time we expect to create similar situations with other data centers worldwide based on our clients’ specific needs.
The second focus involves hosting software applications developed by software vendors, from which they will sell the use of the software by their end user clients on a “cloud” basis. By taking this approach, we gain the business of the vendor, and their clients, perhaps allowing us to grow at a faster rate with lower cost of sales. We have developed the “Centcore Partner Program” where we will help promote the software vendors who are hosting in our data centers. If we are successful helping the vendor grow his business, we will have provided a “value added service”, and benefit from increased utilization of our computing resources by not only the vendor, but also his new end user clients. Our initial focus for this area is on software providers who serve the “technology infrastructure” market doing design, engineering, construction and maintenance of significant systems. We desire to create “life cycle” relationships as the design, construction and operational life of these systems includes document management and performance modeling over years, often from 5 to 20 years.
We have retained experienced professionals in the data center, cyber security and infrastructure services areas to support our needs on a per hour basis, which we believe will allow us to control our costs relative to business activity, without significant staffing internally. We have also formed an “Advisory Board” where individuals with experience in business areas where we have interest have agreed to assist us, receiving a nominal issuance of restricted common stock, in consideration of their advice.
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The Vero Technology Ventures arm is actively reviewing potential early-stage cloud computing solution vendors and is developing its own artificial intelligence (A.I.) based application set (VTV) is currently involved with the formation of a new software development project aimed at applying artificial intelligence (A.I.) to the sales process for various businesses including residential real estate using cloud computing based software. This initial effort dubbed “Robo Agent”, is expected to be available for initial users in Q3 of FY2025. Later versions may include similar functionality focused on other markets, generally in a “business to consumer” (B2C) selling situation.
There are several other projects in evaluation, generally aimed at software that would operate on a cloud computing platform such as that which the Company has in its Centcore Data Center.
FY2024 Debt Restructuring
From FY2021 until late FY2022 the Company invested in an operating subsidiary, The Good Clinic, which was developing a series of primary care healthcare facilities. In late FY2022, as a result of a lack of adequate revenues and limited funding, it ceased operations. As of June 30, 2024, the Company had over $30 million in senior securities, notes and accounts payable related to that discontinued operation. In order to clear those obligations management began a restructuring which involved negotiations to reduce the overall debt, converting certain accredited institutional investors into a newly created Series A Amortizing Preferred stock (“Series A Preferred”), and all others into restricted common stock using a price per share of $4.00.
As of the date of this filing it has converted approximately $26 million of its obligations, representing approximately $21.7 million of its senior securities, and approximately $4.3 million of notes and accounts payable, into 2,628,179 shares of restricted Common Stock, and 562,998 Series A Preferred stock (before giving effect to redemptions made in Q1, Q2 and Q3 FY2025). The Series A Preferred stock is held by six (6) accredited institutional investors, while over 40 holders of obligations of the Company elected to receive common stock using the $4 per share valuation.
Included in the above totals, effective December 31, 2024, the Company has entered into Obligation Exchange Agreements pursuant to which it has converted $580,132, including $32,132 of principal and interest, of its 2024 Bridge Notes into Series A Preferred shares, which resulted in the issuance of 23,206 shares of Series A Preferred shares to three (3) of its institutional investor. This extinguishes $580,132 of its short-term debt. As of the date of this filing all FY2024 bridge notes have been extinguished. Further, during January 2025 the Company issued 4,000 shares of its Series A Preferred shares in consideration of an investment of $100,000 by three (3) of its institutional investors.
As part of the restructuring, the Company agreed to register shares of Common Stock issued and to be issued to Series A Preferred Stockholders.
Comparison of the Three Months Ended March 31, 2026, and 2025.
Revenues
We had revenues of $0 for the three months ended March 31, 2026, compared to $17,000 in the comparable period in 2025. The revenues were related to our subsidiary Centcore, LLC which we pause operations during the current period.
Operating Expenses
Our total operating expenses for the three months ended March 31, 2026, were $352,929. For the comparable period in 2025, the operating expenses were $283,986. The increase is the result of the Company’s focus on developing its new Robo Agent software.
Other Income and Expenses
Interest expense was $318,239 for the three months ended March 31, 2026, compared to $392,049 for the comparable period in 2025. The decrease was a result of decreased debt balances offset by the Series A preferred shares accretion.
Interest expense – related parties was $0 for the three months ended March 31, 2026, compared to $2,297 in the prior period. The decrease was a result of the settlement of all outstanding debt balances during the year ended December 31, 2025.
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During the three months ended March 31, 2026, we recorded a loss on settlement of series A preferred shares of $101,733 compared to $250,977 in the prior period. The decrease is a result of reduce number of common shares issued for settlement as a result of beneficial ownership limitation.
During the three months ended March 31, 2026, we recorded a loss on revaluation of derivative liabilities of $4,388 compared to $4,362,645 in the prior period.
Liquidity and Capital Resources
To date, we have not generated sufficient revenue from operations to support our operations. We have financed our operations through the sale of equity securities and short-term borrowings. As of May 20, 2026, we had cash of approximately $2,400 compared to cash of approximately $1,500 as of March 31, 2026. Our Company’s recurring losses from operations, negative cash flows from operations and our need to raise additional funding to finance our operations raise substantial doubt about our ability to continue as a going concern.
Net cash used in operating activities was $219,739 for the three months ended March 31, 2026 compared to cash used in operations for the three months ended March 31, 2025, of $97,413. The increase is the result of the Company’s focus on developing its new Robo Agent software.
The Company had no investing activities for the three months ended March 31, 2026 and 2025.
Net cash provided by financing activities for the three months ended March 31, 2026, was $120,415, compared to $94,200 for the three months ended March 31, 2025. Cash provided by financing activities for the three months ended March 31, 2026 was the result of cash proceeds from convertible promissory notes of $125,000, offset by the repayment of principal on the SBA loan in the amount of $4,585. Cash provided by financing activities for the three months ended March 31, 2025, was the result of cash proceeds from sales of Series A preferred shares of $100,000, offset by the repayment of principal on the SBA loan in the amount of $5,800.
At March 31, 2026 we had the following current liabilities which are payable in cash: Accounts payable and accrued liabilities of $4.1 million; notes payable of $0.6 million; convertible notes payable of $0.6 million; SBA Loan Payable of $0.4 million; legal settlements of $3.5 million; accrued interest payable of $0.4 million; and other current liabilities of $0.2 million. We also have the following liabilities which are payable in stock: derivative liabilities of $0.4 million, Series A Preferred Stock liability of $9.2 million and preferred stock dividends payable $0.02 million.
The Company has relationships with a number of consultants who are assisting in the creation of the new business units. It is anticipated that this approach will continue indefinitely as it does not desire to create the overhead associated with a large employment force.
The following table summarizes the status of our property-related settlements as noted above and the total settlement amounts as of the date of the filing:
| LOCATION | PROPERTY NAME | ORIGINAL OBLIGATION | SETTLEMENT AMOUNT | DATE OF AWARD | INTEREST RATE | INTEREST ACCRUED ON SETTLEMENT | TOTAL SETTLEMENT OBLIGATION | TYPE OF SETTLEMENT | ||||||||||||||||||
| WAYZETTA, MN | WAZETTA BAY | $ | 407,000 | $ | 25,000 | NA | - | - | $ | 25,000 | CASH PAYMENT OBLIGATION | |||||||||||||||
| EAGAN, MN | VIKINGS | $ | 767,000 | $ | 488,491 | 12/7/2023 | 10 | % | $ | 113,089 | $ | 601,580 | DEFAULT JUDGEMENT | |||||||||||||
| ST. LOUIS PARK, MN | EXCELSIOR | $ | 673,000 | $ | 425,350 | 5/22/2024 | 10 | % | $ | 79,010 | $ | 504,360 | DEFAULT JUDGEMENT | |||||||||||||
| ST. PAUL, MN | CONTINENTAL 560 | $ | 1,153,000 | $ | 415,606 | 1/22/2024 | 10 | % | $ | 90,978 | $ | 506,584 | DEFAULT JUDGEMENT | |||||||||||||
| MAPLE GROVE, MN | BUTTNICK | $ | 1,153,127 | $ | 219,000 | 10/3/2022 | 10 | % | $ | 76,500 | $ | 295,500 | SETTLEMENT AGREEMENT | |||||||||||||
| DENVER, CO | RADIANT | $ | 782,000 | $ | 530,557 | - | - | $ | 530,557 | DISMISSED | ||||||||||||||||
| DENVER, CO | QUINCY | $ | 1,079,000 | $ | 848,764 | 11/14/2023 | 12 | % | 138,486 | $ | 987,250 | DEFAULT JUDGEMENT | ||||||||||||||
| TOTAL | $ | 6,014,127 | $ | 2,952,768 | $ | 498,063 | $ | 3,450,831 | ||||||||||||||||||
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ne
Critical Accounting Estimates
Management uses various estimates and assumptions in preparing our financial statements in accordance with generally accepted accounting principles. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Accounting estimates that are the most important to the presentation of our results of operations and financial condition, and which require the greatest use of judgment by management, are designated as our critical accounting estimates. We have the following critical accounting estimates:
| ● | Estimates and assumptions used in the valuation of derivative liabilities: Management utilizes a lattice model to estimate the fair value of derivative liabilities. The model includes subjective assumptions that can materially affect the fair value estimates. |
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not applicable.
ITEM 4. CONTROLS AND PROCEDURES.
(a) Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Based on such an evaluation, the Company’s management has identified what it believes are material weaknesses in the Company’s disclosure controls and procedures and concluded that we did not have effective disclosure controls and procedures.
The deficiencies in our disclosure controls and procedures included (i) lack of formal documentation of policies and procedures, (ii) lack of segregation of duties and multiple levels of review, and (iii) lack of sufficient resources with appropriate accounting experience, especially with regards to equity-based transactions and tax accounting expertise.
The Company intends to take corrective action to ensure that information required to be disclosed by the Company pursuant to the reports that the Company files or submits to the SEC is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
(b) Changes in Internal Control Over Financial Reporting
There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that occurred during the three months ended March 31, 2026, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company has a number of legal situations involved with the winding down of its clinic business activities. These include claims regarding certain construction contracts and cancellation of leases as noted below:
| LOCATION | PROPERTY NAME |
ORIGINAL OBLIGATION |
SETTLEMENT AMOUNT |
DATE
OF AWARD |
INTEREST RATE |
INTEREST ACCRUED ON SETTLEMENT |
TOTAL SETTLEMENT OBLIGATION |
TYPE
OF SETTLEMENT | ||||||||||||||||||
| WAYZETTA, MN | WAZETTA BAY | $ | 407,000 | $ | 25,000 | NA | - | - | $ | 25,000 | CASH PAYMENT OBLIGATION | |||||||||||||||
| EAGAN, MN | VIKINGS | $ | 767,000 | $ | 488,491 | 12/7/2023 | 10 | % | $ | 113,089 | $ | 601,580 | DEFAULT JUDGEMENT | |||||||||||||
| ST. LOUIS PARK, MN | EXCELSIOR | $ | 673,000 | $ | 425,350 | 5/22/2024 | 10 | % | $ | 79,010 | $ | 504,360 | DEFAULT JUDGEMENT | |||||||||||||
| ST. PAUL, MN | CONTINENTAL 560 | $ | 1,153,000 | $ | 415,606 | 1/22/2024 | 10 | % | $ | 90,978 | $ | 506,584 | DEFAULT JUDGEMENT | |||||||||||||
| MAPLE GROVE, MN | BUTTNICK | $ | 1,153,127 | $ | 219,000 | 10/3/2022 | 10 | % | $ | 76,500 | $ | 295,500 | SETTLEMENT AGREEMENT | |||||||||||||
| DENVER, CO | RADIANT | $ | 782,000 | $ | 530,557 | - | - | $ | 530,557 | DISMISSED | ||||||||||||||||
| DENVER, CO | QUINCY | $ | 1,079,000 | $ | 848,764 | 11/14/2023 | 12 | % | 138,486 | $ | 987,250 | DEFAULT JUDGEMENT | ||||||||||||||
| TOTAL | $ | 6,014,127 | $ | 2,952,768 | $ | 498,063 | $ | 3,450,831 | ||||||||||||||||||
Quincy Clinic a.k.a. 1776 Curtis
On September 28, 2021, we entered into an agreement to open a clinic in Denver, Colorado, which was expected to begin operation in the first quarter of 2023 but possession of which has been relinquished to the landlords. The initial lease term is 94 months. Fixed rent payments under the initial term are approximately $1,079,000. A Final Judgment was granted on November 14, 2023, in the amount of $348,764 including interest, fees and other costs. The Company has released the property back to the leaseholder. The owner of the property has filed before the same court, an action against the Company (Case No. 2022 CV 33173, Division: 409, Consolidated with 2022CV33653) seeking to modify the final settlement for an additional $900,000. We intend to vigorously defend the Company as our position is that there is no basis for this claim.
Administrative office
On June 24, 2021, we entered into an agreement to open an administrative office in St. Louis Park, Minnesota. The initial lease term is 2.5 years. Fixed rent payments under the initial term were approximately $244,000. We believe that there is no further obligation in this situation, but we do not have such documented in writing at this time.
Gardner Debt for Equity Agreement and other obligations
The Company entered into a debt-for-equity exchange agreement with Gardner Builders Holdings, LLC (the “Creditor”) on January 7, 2022 (the “Agreement”). Pursuant to the Agreement, the Company issued shares of restricted common stock, par value $0.01 per share, of MITI (the “Restricted Shares”) to the Creditor in exchange for the Company Debt Obligations, as defined below.
The Agreement settled certain accounts payable amounts owed by the Company to the Creditor (the “Accounts Payable Amount”) as well as then upcoming amounts that would become due between the date of the Agreement and April 1, 2022. The Agreement also settled incurred interest and penalties on the amounts due through January 5, 2022, as well as future interest payments on amounts to be incurred in the first quarter of 2022 (collectively, the “Additional Costs”, and combined with the Accounts Payable Amount, the “Company Debt Obligations”). The Accounts Payable Amount was $500,000, the Additional Costs were $294,912 and the conversion price was $12.50. As a result, 63,593 Restricted Shares were authorized to be issued. The Company’s Board of Directors approved the Agreement on January 5, 2022. Much of the amounts claimed by Gardner have been resolved by the settlements with the various leaseholders where Gardner had filed liens. During 2021 and through 2022 a total of $2,305,155 was paid by the Company directly to Gardner for their services. As of the date of this filing the Company is continuing an effort to negotiate a settlement of any remaining obligations to this vendor.
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ITEM 1A. RISK FACTORS
Our business is subject to risks and events that, if they occur, could adversely affect our financial condition and results of operations and the trading price of our securities. In addition to the other information set forth in this quarterly report on Form 10-Q, you should carefully consider the factors described in Part I, Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the Securities and Exchange Commission on April 15, 2026. There have been no material changes to the risk factors described in that report.
ITEM 2. SALE OF UNREGISTERED SECURITIES
During the period ending March 31, 2026 the Company made the following issuances of restricted common stock
Issuance of Restricted Common Stock for Series X Preferred Stock Dividends
During the three months ended March 31, 2026, the Company issued 99,337 shares of common stock for dividends payable on its Series X Preferred Stock
Issuance of Restricted Common Stock for the Redemption of Series A Preferred Stock
On January 15, 2026, the Company issued 2,228,148 shares of its restricted common stock in order to redeem $192,800 of its Series A Preferred stock.
Issuances related to consultants
In January 2026, The Company has issued 125,000 shares of restricted common stock to an individual who was involved with the development of its Robo Agent software application as consideration for their services. It has also issued 250,000 shares to a firm involved with the planned “uplist” of its common stock to a senior exchange.
ITEM 3. DEFAULTS ON SENIOR SECURED SECURITIES
Not Applicable.
ITEM 4. MINE SAFETY DISCLOSURES
Not Applicable.
ITEM 5. OTHER INFORMATION
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ITEM 6. EXHIBITS
The following exhibits are included with this Quarterly Report on Form 10-Q.
| Form
Type |
Exhibit
Number |
Date
Filed |
Filed
Herewith | |||||||
| 3.1 | Certificate of Incorporation of Trunity Holdings, Inc., dated January 18, 2012. | 8-K | 10.1 | 1/31/2012 | ||||||
| 3.2 | Bylaws of Trunity Holdings, Inc., dated January 18, 2012. | 8-K | 10.2 | 1/31/2012 | ||||||
| 3.3 | Certificate of Ownership Merging between Trunity Holdings, Inc. and Brain Tree International, Inc. dated January 24, 2012. | 10-K | 3.3 | 4/16/2013 | ||||||
| 3.4 | Certificate of Amendment to the Certificate of Incorporation of Trunity Holdings, Inc., dated December 24, 2015. | 8-K | 3.1(i) | 1/06/2016 | ||||||
| 3.5 | Certificate of Designations of Series X Preferred Stock of True Nature Holding, Inc. | 8-K | 3.6 | 1/06/2020 | ||||||
| 3.6 | Form of Amended and Restated Certificate of Designations of Series A Preferred Stock of True Nature Holding, Inc. | 8-K | 3.07 | 3/13/2020 | ||||||
| 3.7 | Certificate of Amendment of the Certificate of Incorporation of True Nature Holding, Inc. dated April 21, 2020. | 10-Q | 3.7 | 8/14/2020 | ||||||
| 3.8 | Certificate of Amendment of Certificate of Incorporation, dated as of November 5, 2020, correcting December 24, 2015, Certificate of Amendment. | 10-Q | 3.8 | 11/13/2020 | ||||||
| 3.9 | Bylaws of Mitesco, Inc., as amended, dated November 10, 2020 | 10-Q | 3.9 | 11/13/2020 | ||||||
| 3.10 | Certificate of Designations, Preferences and Rights of the Series C Convertible Preferred Stock of Mitesco, Inc. | 8-K | 3.1 | 03/26/2021 | ||||||
| 3.11 | Certificate of Correction to the Certificate of Designations, Preferences and Rights of the Series C Convertible Preferred Stock of Mitesco, Inc. | 8-K | 3.2 | 03/26/2021 | ||||||
| 31.1 | Certification by the Principal Executive Officer of the Registrant pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | X | ||||||||
| 32.1 | Certification by the Principal Executive Officer of the Registrant pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | X | ||||||||
| 101.INS ** | Inline XBRL INSTANCE DOCUMENT | |||||||||
| 101.SCH ** | Inline XBRL TAXONOMY EXTENSION SCHEMA | |||||||||
| 101.CAL ** | Inline XBRL TAXONOMY EXTENSION CALCULATION LINKBASE | |||||||||
| 101.DEF ** | Inline XBRL TAXONOMY EXTENSION DEFINITION LINKBASE | |||||||||
| 101.LAB ** | Inline XBRL TAXONOMY EXTENSION LABEL LINKBASE | |||||||||
| 101.PRE ** | Inline XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE | |||||||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
| # | Management contract or compensatory plan or arrangement required to be identified pursuant to Item 15(a)(3) of this report. |
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SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Quarterly Report on Form 10-Q for the period ended March 31, 2026, to be signed on its behalf by the undersigned, thereunto duly authorized.
| MITESCO, INC. | ||
| Dated: May 20, 2026 | By: | /s/ Brian Valania |
| Brian Valania | ||
| Chief Executive Officer and Chief Financial Officer | ||
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