[10-Q] MedWellAI, Inc. Quarterly Earnings Report
MedWellAI, Inc. reports sharply higher revenue but continues to operate at a loss with serious liquidity pressure. For the six months ended December 31, 2025, revenue rose to
Despite this growth, MedWellAI recorded a net loss attributable to shareholders of
The company has exited digital asset mining, pivoting to AI-driven healthcare and wellness through pharmaceutical product distribution and health-focused real estate. Management discloses that these recurring losses and the large deficit raise substantial doubt about its ability to continue as a going concern without new debt or equity financing.
Positive
- None.
Negative
- Severe liquidity and going-concern risk: current liabilities of $7.68M vs. $0.16M in current assets, a $7.51M working capital deficit, $89.61M accumulated deficit, a $500,000 note in default, and explicit disclosure of substantial doubt about continuing as a going concern.
Insights
Revenue is ramping, but leverage, deficits, and going-concern risk dominate.
MedWellAI is rapidly reshaping its business, replacing discontinued digital-asset mining with GLP medication distribution and health-focused real estate. Six-month revenue jumped to
However, the balance sheet is highly stressed. Current liabilities of
Management explicitly states that recurring losses and negative cash flow raise substantial doubt about the company’s ability to continue as a going concern. Future viability depends on successfully raising capital and scaling the new healthcare and wellness operations to cover operating and financing obligations.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the quarterly period ended | |
TRANSITION REPORT UNDER SECTION13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period from __________ to __________ | |
Commission file number:
(Exact Name of Registrant as Specified in Its Charter) |
| ||
(State or Other Jurisdiction of Incorporation or Organization) |
| (I.R.S. Employer Identification No.) |
(Address of principal executive offices) (Zip Code)
(
(Registrant’s Telephone Number, Including Area Code)
Securities registered under Section 12(b) of the Exchange Act: None.
Securities registered under Section 12(g) of the Exchange Act: Common Stock, $0.001 par value per share
Title of each class |
| Trading Symbol(s) |
| Name of each exchange on which registered |
N/A |
| N/A |
| N/A |
Indicate by check mark whether the registrant (1) has filed all reports required 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.
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).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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 | ☐ |
☐ | 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. Yes ☐ No ☐.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of February 20, 2026, the registrant had
TABLE OF CONTENTS
Page |
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PART I: FINANCIAL INFORMATION |
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Item 1. | Financial Statements | F-1 |
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Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
| 3 |
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Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
| 13 |
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Item 4. | Controls and Procedures |
| 13 |
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Item 1. | Legal Proceedings |
| 15 |
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Item 1A. | Risk Factors |
| 15 |
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Item 2. | Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities |
| 15 |
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Item 3. | Defaults upon Senior Securities |
| 15 |
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Item 4. | Mine Safety Disclosures |
| 15 |
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Item 5. | Other Information |
| 15 |
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Item 6. | Exhibits |
| 16 |
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SIGNATURES |
| 17 |
| |
| 2 |
| Table of Contents |
PART I – FINANCIAL INFORMATION
INDEX TO FINANCIAL STATEMENTS
| Page |
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Condensed Consolidated Balance Sheets as of December 31, 2025 (unaudited) and June 30, 2025 | F-2 |
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Condensed Consolidated Statements of Operations for the Three and Six Months Ended December 31, 2025 and 2024 (unaudited) | F-3 |
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Condensed Consolidated Statement of Stockholders’ Equity (Deficit) for the Three and Six Months Ended December 31, 2025 and 2024 (unaudited) | F-4 |
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Condensed Consolidated Statements of Cash Flows for Six Months Ended December 31, 2025 and 2024 (unaudited) | F-5 |
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Notes to Condensed Consolidated Financial Statements as of December 31, 2025 (unaudited) | F-6 |
| F-1 |
| Table of Contents |
MedWellAI, Inc. | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
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| December 31, |
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| June 30, |
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| 2025 |
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| 2025 |
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ASSETS |
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Current assets: |
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Cash |
| $ |
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| $ |
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Receivables |
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Prepaid expenses and other current assets |
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Deposits, Current |
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Current assets held for sale |
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Total current assets |
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Other assets: |
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Property and equipment, net |
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Intangible assets, net |
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Operating lease right-of-use assets |
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Deposits, noncurrent |
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Other assets held for sale |
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Total other assets |
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TOTAL ASSETS |
| $ |
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| $ |
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LIABILITIES, MEZZANINE AND STOCKHOLDERS' EQUITY (DEFICIT) |
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Current liabilities: |
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Accounts payable |
| $ |
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| $ |
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Accrued expenses |
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Deferred revenue |
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Accrued preferred stock dividends |
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Operating lease liability, current |
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Due to related party |
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Notes payable in default, net of debt discount |
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Series C convertible preferred stock, $ |
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Current liabilities held for sale |
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Total current liabilities |
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Long Term Liabilities |
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Sub-lease security deposit |
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Operating lease liability, long-term |
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Long term liabilities held for sale |
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Total Liabilities |
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Mezzanine: |
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Series C preferred stock, $ |
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Series D preferred stock, $ |
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Commitments and contingencies |
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Stockholders' equity (deficit): |
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Series A preferred stock, $ |
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Series B preferred stock, $ |
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Common stock payable |
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Common stock, $ |
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Additional paid in capital |
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Accumulated deficit |
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| ( | ) |
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Total Stockholders' deficit of MedWellAI, Inc. and Subsidiaries |
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| ( | ) |
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Noncontrolling interest |
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Total stockholders' deficit |
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| ( | ) |
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Total liabilities, mezzanine and stockholders' deficit |
| $ |
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| $ |
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The accompanying notes are an integral part of these condensed consolidated financial statements. | ||||||||
| F-2 |
| Table of Contents |
MedWellAI, Inc. | ||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
(Unaudited) | ||||||||||||||||
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| Three Months Ended December 31, |
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| Six Months Ended December 31, |
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| 2025 |
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| 2024 |
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| 2025 |
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| 2024 |
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Revenue: |
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Commissions |
| $ |
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| $ |
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| $ |
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| $ |
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Online sales, net |
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Product sales, net |
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Rental income |
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Total revenue |
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Costs and expenses: |
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Cost of revenues - online products |
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Cost of revenues - product sales |
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Cost of revenues - rent |
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Selling and marketing |
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General and administrative |
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Depreciation and amortization |
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Change in fair value of digital assets |
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Realized (gain) loss on sale/purchase of digital assets |
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| ( | ) |
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Total operating expenses |
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Income (loss) from operations |
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| ( | ) |
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Other income (expense): |
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Interest expense |
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Loss on settlement of payables |
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Loss on exchange of Series C & D preferred shares |
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Total other income (expense) |
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Income (loss) from continued operations before income taxes |
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Provision for income taxes |
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Net income (loss) from continued operations |
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| ( | ) |
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Net income (loss) from discontinued operations |
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| ( | ) | |
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Net income (loss) |
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Net income (loss) attributable to noncontrolling interest |
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Net income (loss) attributable to MedWellAI, Inc. |
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Dividends on Preferred Stock |
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Net income (loss) attributable to shareholders |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
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Continuing operations: |
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Net income (loss) per common share attributable to shareholders, basic |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
Net income (loss) per common share attributable to shareholders, diluted |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
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Weighted average number of common shares outstanding, basic |
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Weighted average number of common shares outstanding, diluted |
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Discontinuing operations: |
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Net income (loss) per common share attributable to shareholders, basic |
| $ |
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| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) | |
Net income (loss) per common share attributable to shareholders, diluted |
| $ |
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| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) | |
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Weighted average number of common shares outstanding, basic |
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Weighted average number of common shares outstanding, diluted |
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The accompanying notes are an integral part of these condensed consolidated financial statements. | ||||||||||||||||
| F-3 |
| Table of Contents |
MedWellAI, Inc. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
THREE AND SIX MONTHS ENDED DECEMBER 31, 2025 AND 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Healthy Lifestyles |
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| Series C |
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| Series D |
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| Series A |
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| Series B |
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| Common |
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| Additional |
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| Additional |
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| Preferred Stock |
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| Preferred Stock |
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| Preferred Stock |
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| Preferred Stock |
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| Stock |
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| Common Stock |
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| Paid in |
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| Paid in |
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| Accumulated |
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| Noncontrolling |
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| Shares |
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| Amount |
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| Shares |
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| Amount |
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| Shares |
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| Amount |
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| Shares |
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| Amount |
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| Payable |
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| Shares |
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| Amount |
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| Capital |
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| Capital |
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| Deficit |
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| Interest |
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| Total |
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Balance, June 30, 2024 |
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| $ |
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| $ |
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| $ |
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| $ |
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| $ |
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| $ |
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| $ |
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| $ |
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| $ | ( | ) |
| $ |
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| $ | ( | ) | ||||||||||||||
Common stock issued for investment in Healthy Lifestyles USA, LLC |
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| - |
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| - |
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| - |
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| - |
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Recognition of noncontrolling interest in acquisition |
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| - |
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| - |
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| - |
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| - |
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Common stock payable in exchange for settlement of liabilities |
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| - |
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| - |
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| - |
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| - |
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| - |
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Net loss |
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| - |
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| - |
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| - |
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| - |
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| - |
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| ( | ) |
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| ( | ) |
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Balance, September 30, 2024 |
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| $ |
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| $ |
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| $ |
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| $ |
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| $ |
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| $ |
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| $ |
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| $ |
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| $ | ( | ) |
| $ |
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| $ | ( | ) | ||||||||||||||
Common stock issued for services |
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| - |
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| - |
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| - |
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| - |
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Common stock issued for settlement of liabilities |
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| - |
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| - |
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| - |
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| - |
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| ( | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
Net loss |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) |
|
| ( | ) | ||||||||
Balance, December 31, 2024 |
|
|
|
| $ |
|
|
|
|
| $ |
|
|
|
|
| $ |
|
|
|
|
| $ |
|
| $ |
|
|
|
|
| $ |
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ |
|
| $ | ( | ) | ||||||||||||||
|
|
|
|
|
|
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|
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|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, June 30, 2025 |
|
|
|
| $ |
|
|
|
|
| $ |
|
|
|
|
| $ |
|
|
|
|
| $ |
|
| $ |
|
|
|
|
| $ |
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ |
|
| $ | ( | ) | ||||||||||||||
Share exchange agreement with BHP Capital |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Common stock issued for services |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Net loss |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) |
|
| ( | ) | ||||||||
Balance, September 30, 2025 |
|
| - |
|
| $ |
|
|
| - |
|
| $ |
|
|
|
|
| $ |
|
|
|
|
| $ |
|
| $ |
|
|
|
|
| $ |
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ |
|
| $ | ( | ) | ||||||||||||
Common stock issued for services |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
| ( | ) |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
Settlement of accounts payable |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
Net loss |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) |
|
| ( | ) | ||||||||
Balance, December 31, 2025 |
|
| - |
|
| $ |
|
|
| - |
|
| $ |
|
|
|
|
| $ |
|
|
|
|
| $ |
|
| $ |
|
|
|
|
| $ |
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ |
|
| $ | ( | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
|
The accompanying notes are an integral part of these condensed consolidated financial statements. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| F-4 |
| Table of Contents |
MedWellAI, Inc. | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(Unaudited) | ||||||||
| ||||||||
|
| Six Months Ended December 31, |
| |||||
|
| 2025 |
|
| 2024 |
| ||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
| ||
Net income (loss) from continuing operations |
| $ | ( | ) |
| $ | ( | ) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
|
|
|
| ||
Stock-based compensation |
|
|
|
|
|
| ||
Realized loss on sale/purchase of digital assets |
|
|
|
|
|
| ||
Loss on settlement of payables |
|
| - |
|
|
|
| |
Loss on exchange of Series C & D preferred stock |
|
|
|
|
|
| ||
Lease cost, net of repayment |
|
|
|
|
| |||
Change in fair value of digital assets |
|
|
|
|
|
| ||
Operating cost paid with digital assets |
|
|
|
|
|
| ||
Revenue recognized from Bitcoin mined |
|
|
|
|
|
| ||
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Receivables |
|
|
|
|
| ( | ) | |
Prepaid expenses and other current assets |
|
| ( | ) |
|
|
| |
Accounts payable |
|
| ( | ) |
|
|
| |
Accrued expenses |
|
|
|
|
|
| ||
Deferred revenue |
|
|
|
|
|
| ||
Due to related party |
|
|
|
|
|
| ||
Net cash provided by (used in) operating activities - continuing |
|
| ( | ) |
|
| ( | ) |
Net cash provided by (used in) operating activities - discontinuing |
|
|
|
|
|
| ||
Net cash provided by (used in) operating activities |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
Cash acquired in acquisition of Healthy Lifestyle USA LLC |
|
|
|
|
|
| ||
Purchase of 51% interest in Healthy Lifestyle USA LLC |
|
|
|
|
| ( | ) | |
Net proceeds from the sale of digital assets |
|
|
|
|
|
| ||
Purchase of digital assets |
|
|
|
|
| ( | ) | |
Purchase of property and equipment |
|
|
|
|
| ( | ) | |
Purchase of leasehold improvements |
|
| ( | ) |
|
| ( | ) |
Purchase of intangible assets |
|
|
|
|
| ( | ) | |
Cash deposit received from subtenant |
|
|
|
|
|
| ||
Net cash provided by (used in) investing activities - continuing |
|
| ( | ) |
|
|
| |
Net cash provided by (used in) investing activities - discontinuing |
|
|
|
|
|
| ||
Net cash provided by (used in) investing activities |
|
| ( | ) |
|
|
| |
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
Repayment of accrued interest on note payable |
|
|
|
|
|
| ||
Repayment of related party advance |
|
|
|
|
|
| ||
Net cash provided by (used in) financing activities - continuing |
|
|
|
|
|
| ||
Net cash provided by (used in) financing activities - discontinuing |
|
|
|
|
|
| ||
Net cash provided by (used in) financing activities |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash |
|
| ( | ) |
|
|
| |
Cash, cash equivalents, and restricted cash - beginning of period |
|
|
|
|
|
| ||
Cash, cash equivalents, and restricted cash - end of period |
| $ |
|
| $ |
| ||
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: |
|
|
|
|
|
|
|
|
Cash paid during the period for: |
|
|
|
|
|
|
|
|
Interest |
| $ |
|
| $ |
| ||
Income taxes |
| $ |
|
| $ |
| ||
Non-cash investing and financing activities - continuing: |
|
|
|
|
|
|
|
|
Common Stock issued for purchase of 51% interest in Healthy Lifestyle USA LLC |
| $ |
|
| $ |
| ||
Common stock payable in exchange for settlement of liabilities |
| $ |
|
| $ |
| ||
Recognition of lease liability and ROU asset at lease commencement |
| $ |
|
| $ |
| ||
Accrued compensation repaid with digital assets |
| $ |
|
| $ |
| ||
Common stock issed for common stock payable |
| $ |
|
| $ |
| ||
APIC in exchange for settlement of accounts payable |
| $ |
|
| $ |
| ||
Non-cash investing and financing activities - discontinuing: |
|
|
|
|
|
|
|
|
Common stock issued for purchase of bitcoin miners |
| $ |
|
| $ |
| ||
Purchase of bitcoin miners with digital assets |
| $ |
|
| $ |
| ||
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these condensed consolidated financial statements. | ||||||||
| F-5 |
| Table of Contents |
MedWellAI, Inc.
Notes to Condensed Consolidated Financial Statements
Six Months Ended December 31, 2025
(Unaudited)
1. ORGANIZATION BASIS OF PRESENTATION
Organization
We were incorporated in the State of Nevada on March 22, 2011 under the name Lightcollar, Inc. In March 2015, we changed our name to EMS Find, Inc. On May 30, 2017, Integrated Ventures, Inc. (“Integrated Ventures”), a Nevada corporation, was formed as a wholly owned subsidiary of the Company. Pursuant to an Agreement and Plan of Merger dated May 30, 2017, Integrated Ventures was merged into the Company, with the Company being the surviving corporation and changing its name to Integrated Ventures, Inc. In July 2024, the Company formed three wholly-owned subsidiaries, MedWell Direct, LLC (“MedWell Direct”), MedWell Facilities, LLC (“MedWell Facilities”), and MedWell USA, LLC (“MedWell USA”), all of which were organized in the State of Nevada. In June 2025, we changed our name to MedWellAI, Inc.
On August 29, 2024, the Company, through MedWell Direct, consummated its acquisition of 51% of the membership interests of Healthy Lifestyle USA LLC, a Florida limited liability company (“Healthy Lifestyle”).
We are a diversified holdings company that develops, acquires, operates, and invests in unique and profitable businesses. Our business focus is on AI-driven healthcare and wellness solutions. Currently, the company operates through their subsidiary MedWell USA, a B2B e-commerce platform for distributing pharmaceutical products, particularly GLP medications for weight loss and diabetes management. It features an AI-powered ordering system with real-time inventory tracking, smart suggestions, and dedicated support for healthcare providers like wellness clinics, med spas, and corporate wellness facilities. Additionally, the company operates through their subsidiary MedWell Facilities, a facilities management company that is dedicated to the health and wellness industry. This subsidiary is focused on developing real estate opportunities, designed to attract healthcare providers and wellness clinic operators.
Basis of Presentation
The accompanying unaudited financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles ("US GAAP") for interim financial information and the instructions to Form 10-Q and Article 8 of Regulation S-X. The results of operations for the interim period ended December 31, 2025 shown in this report are not necessarily indicative of results to be expected for the full fiscal year ending June 30, 2026. In the opinion of the Company's management, the information contained herein reflects all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the Company's results of operations, financial position and cash flows. The unaudited interim financial statements should be read in conjunction with the audited financial statements in the Company's Annual Report on Form 10-K for the year ended June 30, 2025 filed on September 30, 2025 and Management's Discussion and Analysis of Financial Condition and Results of Operations.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies of the Company are disclosed in Notes to Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2025 filed on September 30, 2025. The following summary of significant accounting policies of the Company is presented to assist in understanding the Company’s interim financial statements. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements.
| F-6 |
| Table of Contents |
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Because of the use of estimates inherent in the financial reporting process, actual results could differ significantly from those estimates.
Reclassification
Certain accounts from prior periods have been reclassified to conform to the current period presentation.
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, MedWell Direct, MedWell Facilities, Medwell USA, and Healthy Lifestyles. The Company owns
All significant intercompany transactions and balances have been eliminated.
Cash and Cash Equivalents
The Company maintains cash balances in non-interest-bearing accounts that at times may exceed federally insured limits. For the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. The Company had no cash equivalents at December 31, 2025.
Property and Equipment
Property and equipment, consisting primarily of computer, other equipment, and leasehold improvements is stated at the lower of cost or estimated realizable value and is depreciated when placed into service using the straight-line method over estimated useful lives. Management has assessed the basis of depreciation of these assets and believes they should be depreciated over three – five years depending on the asset. Computers, due to their technological obsolescence reflecting rapid development of hardware that have faster processing capacity and other factors are depreciated over three years. Leasehold improvements are depreciated over five years representing the lease term. Maintenance and repairs are expensed as incurred and improvements are capitalized. Gains or losses on the disposition of property and equipment are recorded upon disposal.
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 intangible assets are recognized as an expense when incurred.
Impairment of Long-Lived Assets
All assets, including intangible assets subject to amortization, are reviewed for impairment when changes in circumstances indicate that the carrying amount of the asset may not be recoverable in accordance with ASC 350 and ASC 360. If the carrying amount of the asset exceeds the expected undiscounted cash flows of the asset, an impairment charge is recognized equal to the amount by which the carrying amount exceeds fair value or net realizable value. The testing of these intangibles under established guidelines for impairment requires significant use of judgment and assumptions. Changes in forecasted operations and other assumptions could materially affect the estimated fair values. Changes in business conditions could potentially require adjustments to these asset valuations.
| F-7 |
| Table of Contents |
Goodwill
Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired in a business combination. Goodwill is not amortized but is tested for impairment annually in the fourth quarter or more frequently if events or changes in circumstances indicate that the asset may be impaired. The Company operates as one reporting unit. When testing goodwill for impairment, the Company may first perform an optional qualitative assessment. If the Company determines it is not more likely than not the reporting unit’s fair value is less than its carrying value, then no further analysis is necessary. If the Company determines that it is more likely than not that the fair value of its reporting unit is less than its carrying amount, then the quantitative impairment test will be performed. Under the quantitative impairment test, if the carrying amount of the Company’s reporting unit exceeds its fair value, the Company will recognize an impairment loss in an amount equal to that excess but limited to the total amount of goodwill. Goodwill of approximately $
Leases
The Company follows the provisions of ASC 842, and records right-of-use (“ROU”) assets and lease obligations for its operating leases, which are initially recognized based on the discounted future lease payments over the term of the lease. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. If the rate implicit in the Company's leases is not readily determinable, the Company's applicable incremental borrowing rate is used in calculating the present value of the sum of the lease payments.
The lease term is defined as the non-cancelable period of the lease plus any options to extend or terminate the lease when it is reasonably certain that the Company will exercise the option. The Company has elected not to recognize ROU asset and lease obligations for its short-term leases, which are defined as leases with an initial term of
Discontinued Operations
The Company follows the provisions of ASC 205-20, Presentation of Discontinued Operations, which requires separate reporting if a company sells part of its business. In order to recognize discontinued operation a major product line or division of an entity must be both a component and a strategic shift in operations. The Company assessed its digital asset mining business and determined it met the criteria of ASC 205-20. We disclosed our discontinued operations separately in the consolidated balance sheets, statements of operations, and statements of cash flows as items held for sale and discontinued operations. See Note 15. Discontinued Operations.
Mezzanine
Series C and D preferred stock that contain certain default provisions requiring mandatory cash redemption that are outside the control of the Company are recorded as Mezzanine in the accompanying balance sheets. Effective August 1, 2025, the Company amended and restated the Certificate of Designation for its Series C Preferred Stock, effecting the consolidation of the Series C Preferred Stock and Series D Preferred Stock classes into a single series of convertible preferred stock.
Convertible Preferred Stock
The Company follows the provisions of ASC 480, Distinguishing Liabilities from Equity in determining if a financial instrument should be classified as a liability or equity on the balance sheet. This standard provides, among others, that the conversion of preferred stock into a variable number of equity shares and at inception, the monetary value is fixed, the instrument should be classified as a liability. As such upon the exchange of the Series C & D preferred shares on August 1, 2025 into convertible preferred stock, the Company determined the Series C convertible preferred stock met the requirements to be classified as a liability. Further, due to their convertible nature at any time at the option of the holder they are presented as current liability on the balance sheet.
| F-8 |
| Table of Contents |
Stock-Based Compensation
The Company accounts for all equity-based payments in accordance with ASC Topic 718, Compensation – Stock Compensation. ASC Topic 718 requires companies to recognize in the statement of operations the grant-date fair value of stock awards, stock options, warrants and other equity-based compensation issued to employees. The value of the portion of an award that is ultimately expected to vest is recognized as an expense over the requisite service periods using the straight-line attribution method. The fair value of a stock award is recorded at the fair market value of a share of the Company’s stock on the grant date. The Company estimates the fair value of stock options and warrants at the grant date by using an appropriate fair value model such as the Black-Scholes option pricing model or multinomial lattice models.
Revenue Recognition
The following table presents the Company’s revenue by revenue source for the three months ended December 31:
|
| 2025 |
|
| 2024 |
| ||
|
|
|
|
|
|
| ||
Commissions |
| $ |
|
| $ |
| ||
Online sales, net |
|
|
|
|
|
| ||
Product sales, net |
|
|
|
|
|
| ||
Rental income |
|
|
|
|
|
| ||
|
| $ |
|
| $ |
| ||
The following table presents the Company’s revenue by revenue source for the six months ended December 31:
|
| 2025 |
|
| 2024 |
| ||
|
|
|
|
|
|
| ||
Commissions |
| $ |
|
| $ |
| ||
Online sales, net |
|
|
|
|
|
| ||
Product sales, net |
|
|
|
|
|
| ||
Rental income |
|
|
|
|
|
| ||
|
| $ |
|
| $ |
| ||
Commissions
The Company earns commissions by informing, educating, and initiating sales of health and wellness products offered by a third party to customers. The commissions earned is based on the gross sales of products to customers less costs and fees. Periodically, the third party computes the commission payable since the previous Reconciliation Date. The third party then pays the Company the amount due. The transactions price is set as the commissions to be received based on the agreed terms. The commissions are earned at a point in time upon the successful sale of products to a customer.
The timing of commission revenue recognition may differ from the timing of payment by the Company’s customers. The Company records a receivable when revenue is recognized prior to payment and there is an unconditional right to payment. As of December 31, 2025, the Company had receivables from commissions of $
Online Sales
The Company’s online sales, which are no longer being pursued due to regulatory hurdles, consisted of sales of health and wellness products and services through the Company’s websites, including prescription drugs. In contracts that contained prescription products issued as the result of a consultation, revenue also included medical consultation services and post-consultation service support provided by Affiliated Medical Groups (defined below). The Company defined its customer as an individual who purchased products or services through its websites. The transaction price in the Company’s contracts with customers was the total amount of consideration to which the Company expected to be entitled in exchange for transferring products or services to the customer.
| F-9 |
| Table of Contents |
The Company’s contracts that contain prescription products issued as the result of a consultation primarily included the following performance obligations: access to (i) products, as well as medication adjustments, as applicable, and (ii) consultation services, as well as post-consultation service support, as applicable. Revenue was recognized at the time the related performance obligation was satisfied by transferring the promised product to the customer and, in contracts that contain services, by the provision of consultation services to the customer. The Company satisfied its performance obligation for products at a point in time, which was upon delivery of the products to a third-party carrier. The Company satisfied its performance obligation for consultation services typically within one day and for post-consultation service support over the contract term. The customer obtained control of the products and services upon the Company’s completion of its performance obligations.
For contracts with multiple performance obligations, the transaction price is allocated to each performance obligation on a relative stand-alone selling price basis. The stand-alone selling price is based on market and cost plus estimates. For the three and six months ended December 31, 2025, service revenue represented less than 10% of consolidated revenues.
To fulfill its promise to customers for contracts that include professional medical consultations, the Company maintained relationships with various “Affiliated Medical Groups,” which are professional corporations or other professional entities owned by licensed physicians and that engage licensed healthcare professionals (physicians, physician assistants, nurse practitioners, and mental health providers; collectively referred to as “Providers” or individually, a “Provider”) to provide consultation services. The Company accounts for service revenue as a principal in the arrangement with its customers. This conclusion is reached because (i) the Company determines which Affiliated Medical Group and Provider provides the consultation to the customer; (ii) the Company is primarily responsible for the satisfactory fulfillment and acceptability of the services; (iii) the Company incurs costs for consultation services even for visits that do not result in a prescription and the sale of products; and (iv) the Company, in its sole discretion, sets all listed prices charged on its websites and mobile applications for products and services.
Additionally, to fulfill its promise to customers for contracts that include sale of prescription products, the Company maintained relationships with certain third-party pharmacies (“Partner Pharmacies” or individually, a “Partner Pharmacy”). The Company accounted for prescription product revenue as a principal in the arrangement with its customers. This conclusion was reached because (i) the Company had sole discretion in determining which pharmacy fills a customer’s prescription; (ii) the pharmacies filled the prescription based on fulfillment instructions provided by the Company; (iii) the Company was primarily responsible to the customer for the satisfactory fulfillment and acceptability of the order; (iv) the Company was responsible for refunds of the prescription medication after transfer of control to the customer; and (v) the Company, in its sole discretion, sets all listed prices charged on its websites and mobile applications for products and services.
Payment for prescription medication was typically collected from the customer a few days in advance of product shipment in accordance with contract terms. Contract liabilities are recorded when payments have been received from the customer for undelivered products or services and are recognized as revenue when the performance obligations are later satisfied. As of June 30, 2025 and December 31, 2025, the Company had $
Product Sales
The Company’s product sales revenue consists of the bulk sale of GLP medications for weight loss and diabetes management to doctors’ offices and clinics. The Company’s performance obligation is to deliver the products to customers. Therefore, revenue is recognized once delivery occurs. Customers remit payment at the time of order placement, therefore payment received by the Company prior to product delivery is recorded as deferred revenue. As of June 30, 2025 and December 31, 2025, the Company had $
| F-10 |
| Table of Contents |
Rental Income
The Company recognizes rent revenue from the lease of its sub-leased properties in accordance with ASC 842, Leases. The sub-lease is categorized as an operating lease according to ASC criteria for the lease definitions. Rent revenue is recognized on a straight-line basis over the lease term, reflecting the pattern of the economic benefits derived from the lease.
The Company’s leases generally have fixed rental payments over the lease term, with occasional escalations based on predetermined factors. Rent revenue is recognized monthly as the lessor fulfills its obligations under the lease agreement.
Any lease incentives or concessions provided to lessees, such as rent-free periods or tenant improvement allowances, are recognized as a reduction of rent revenue over the lease term.
For the three and six months ended December 31, 2025, the Company had only one lease arrangement with a single customer.
Income Taxes
Income taxes are recorded in accordance with ASC Topic 740, Income Taxes, which requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statement or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.
Management judgment is required in determining our provision for income taxes, our deferred tax assets and liabilities, and any valuation allowance recorded against our deferred tax assets. Deferred tax assets are reduced by a valuation allowance if, based on the consideration of all available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. Changes in assumptions in future periods may require we adjust our valuation allowance, which could materially impact our financial position and results of operations. The Company recognizes the benefit of an uncertain tax position that it has taken or expects to take on its income tax return, if such a position is more likely than not to be sustained.
Net Income (Loss) Per Share
Basic net income or loss per share is calculated by dividing net income or loss by the weighted average number of common shares outstanding for the period. Diluted income or loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock, such as “in-the-money” stock options and warrants, convertible debt and convertible preferred stock, were exercised or converted into common stock. Equivalent shares are not utilized when the effect is anti-dilutive. For the three and six months ended December 31, 2025 and 2024 basic and diluted income per share were the same, as all securities had an anti-dilutive effect.
The following tables present potentially dilutive securities that were not included in the computation of diluted net income per share as their inclusion would be anti-dilutive.
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Convertible preferred stock |
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| F-11 |
| Table of Contents |
Fair Value of Financial Instruments
Assets and liabilities measured at fair value on a recurring basis
We recognize financial instruments under the following fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels as follows:
| Level 1: | quoted prices (unadjusted) in active markets for identical assets or liabilities; | |
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| Level 2: | observable inputs other than Level 1, quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, and model-derived prices whose inputs are observable or whose significant value drivers are observable; and | |
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| Level 3: | assets and liabilities whose significant value drivers are unobservable. | |
The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.
The Company will update its assumptions each reporting period based on new developments and record such amounts at fair value based on the revised assumptions until the agreements expire or contingency is resolved, as applicable.
As of December 31, 2025 and June 30, 2025 the Company did not have any assets and liabilities measured at fair value on a recurring basis.
Assets and liabilities not measured at fair value on a recurring basis
In addition to assets and liabilities that are measured at fair value on a recurring basis, we also measure certain assets and liabilities at fair value on a nonrecurring basis. Our non-financial assets, including goodwill, property and equipment, intangible assets, and operating lease right-of-use assets are measured at fair value when there is an indication of impairment and the carrying amount exceeds the asset’s projected undiscounted cash flows. These assets are recorded at fair value only when an impairment charge is recognized.
As of December 31, 2025 and June 30, 2025, the fair values of cash, prepaid expenses and other current assets, accounts payable, and accrued expenses approximated their carrying values because of their short-term nature.
Recently Issued Accounting Pronouncements
In November 2024, the FASB issued ASU No. 2024-03 “Disaggregation of Income Statement Expenses (“ASU 2024-03”). The amendments in ASU 2024-03 aim to improve the decision usefulness of expense information on public business entities’ income statement through the disaggregation of relevant expense captions in the notes to the financial statements. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, with early adoption permitted. The Company is currently evaluating the impact of this update on its consolidated financial statements.
There were no new accounting pronouncements issued or proposed by the FASB during the year ended June 30, 2025 and through the date of filing this report which the Company believes will have a material impact on its financial statements.
| F-12 |
| Table of Contents |
3. GOING CONCERN
Historically, the Company has reported recurring net losses from operations and used net cash in operating activities. As of December 31, 2025, the Company’s current liabilities exceeded its current assets by $
The accompanying financial statements have been prepared in conformity with U.S. GAAP, which contemplate continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The ability of the Company to reach and maintain a successful level of operations is dependent on the execution of management’s plans, which include the raising of capital through the debt and/or equity markets, until such time that funds provided by operations are sufficient to fund working capital requirements. If the Company were not to continue as a going concern, it would likely not be able to realize its assets at values comparable to the carrying value or the fair value estimates reflected in the balances set out in the preparation of the financial statements.
There can be no assurances that the Company will be successful in attaining a profitable level of operations or in generating additional cash from the equity/debt markets or other sources fund its operations. The financial statements do not include any adjustments relating to the recoverability of assets and classification of assets and liabilities that might be necessary. Should the Company not be successful in its business plan or in obtaining the necessary financing to fund its operations, the Company would need to curtail certain or all operational activities and/or contemplate the sale of its assets, if necessary.
4. OPERATING SEGMENTS
Operating segments are defined as components of an entity for which separate financial information is available that is regularly reviewed by the chief operating decision maker (“CODM”). The CODM is the Chief Executive Officer. The CODM uses segment net income from operations to assess the performance of, manage the operations of, and allocate capital and operational resources to the Company’s reportable operating segments. The Company does not allocate assets to the reporting segments as its assets are primarily managed on an entity-wide basis and therefore does not disclose the total assets of its reportable operating segments.
Prior to June 11, 2025, the Company operated as a single operating segment, focusing on distributing pharmaceutical products, particularly GLP medications for weight loss and diabetes management.
Starting June 11, 2025, the Company has two reportable segments, focusing on distributing pharmaceutical products, particularly GLP medications for weight loss and diabetes management and developing real estate opportunities, designed to attract healthcare providers and wellness clinic operators.
For the three and six months ended December 31, 2025, there were no intersegment revenues or costs of revenues that needed to be eliminated in the Consolidated Statements of Operations.
The pharmaceutical products distribution company generates revenue through product sales, commissions, and online sales. Real estate development company generates revenue through rental income. All corporate costs have been allocated to pharmaceutical products distribution company.
The following table illustrates segment revenue and segment net income from operations, including significant expense items reviewed by the CODM for the three months ended December 31, 2025.
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| Pharmaceutical Products Distribution |
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| Real Estate Development |
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Revenue |
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Less: |
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Cost of revenues - product sales |
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Cost of revenues - rent |
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Selling and marketing |
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General and administrative [1] |
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Depreciation and amortization |
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Segment net income (loss) from operations |
| $ | ( | ) |
| $ |
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| $ | ( | ) | |
[1] | General and administrative costs consist mainly of professional fees, salaries and wages, executive compensation, information technology and software, and other payment processing fees. |
| F-13 |
| Table of Contents |
The following table illustrates the reconciliation of segment operating income to net income before taxes for the three months ended December 31, 2025.
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| December 31, 2025 |
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Segment loss from operations |
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Reconciling items |
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Interest expense |
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Net income (loss) from continued operations before income taxes |
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The following table illustrates segment revenue and segment net income from operations, including significant expense items reviewed by the CODM for the six months ended December 31, 2025.
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Revenue |
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Less: |
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Cost of revenues - product sales |
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Cost of revenues - rent |
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Selling and marketing |
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General and administrative [1] |
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Depreciation and amortization |
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Segment net income (loss) from operations |
| $ | ( | ) |
| $ |
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[1] | General and administrative costs consist mainly of professional fees, salaries and wages, executive compensation, information technology and software, and other payment processing fees. |
The following table illustrates the reconciliation of segment operating income to net income before taxes for the three months ended December 31, 2025.
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| December 31, 2025 |
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Segment loss from operations |
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Reconciling items |
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Interest Expense |
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Loss on exchange of Series C & D preferred shares |
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Net income (loss) from continued operations before income taxes |
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| F-14 |
| Table of Contents |
5. PROPERTY AND EQUIPMENT
Property and equipment consisted of the following as of:
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Furniture and equipment |
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Less accumulated depreciation and amortization |
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Net |
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Depreciation expense for the three months ended December 31, 2025 and 2024 was $
6. INTANGIBLE ASSETS
Intangible assets consisted of the following as of:
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| Useful Lives |
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Website |
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Net website |
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Amortization expense for the three months ended December 31, 2025 and 2024 was $
7. OPERATING LEASE
In August 2024, the Company entered a 12-month operating lease with an option to extend for four additional one-year periods which the Company is reasonably certain they will exercise. The lease provides for approximately
Operating lease expense was $
| F-15 |
| Table of Contents |
Future minimum lease payments under the lease as of December 31, 2025, were as follows:
2026 |
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2029 |
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Less: Interest |
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Present value of lease liability |
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Operating lease liability, current [1] |
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Operating lease liability, long term |
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[1] Represents lease payments to be made in the next 12 months. |
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8. RELATED PARTY TRANSACTIONS
We have one executive officer, Steve Rubakh, who is currently our only full-time employee and sole member of our Board of Directors. The Board of Directors establishes Mr. Rubakh’s annual salary, cash bonuses, and the number of Series B preferred stock to issue Mr. Rubakh as additional compensation. Mr. Rubakh earns an annual salary at $
During the six months ended December 31, 2025 and 2024,
Total compensation expense included in general and administrative expenses was $
9. NOTES PAYABLE
On June 15, 2022, the Company entered into a Loan Agreement and Promissory Note with BHP Capital NY, Inc. (“BHP”) in the amount of $
10. SERIES C CONVERTIBLE PREFERRED STOCK
Effective August 1, 2025, the Company amended and restated the Certificate of Designation for its Series C Preferred Stock, effecting the consolidation of the Series C Preferred Stock and Series D Preferred Stock classes into a single series of convertible preferred stock. Per the share exchange agreement,
| F-16 |
| Table of Contents |
Dividends. Holders of Series C Convertible Preferred Stock shall be entitled to receive, and the Company shall pay, dividends on shares of Series C Convertible Preferred Stock equal to (on an as-if-converted-to-Common-Stock basis) and in the same form as dividends actually paid on shares of the Company’s Common Stock (the “Common Stock”) when, as and if such dividends are paid on shares of the Common Stock.
Voting Rights. The Series C Convertible Preferred Stock will vote together with the Common Stock on an as-converted basis subject to certain beneficial ownership limitations. In addition, for as long as any shares of Series C Convertible Preferred Stock are outstanding, the Company shall not, without the affirmative vote of the holders of a majority of the then outstanding shares of the Series C Convertible Preferred Stock (a) amend or alter the rights, powers, or preferences of the Series C Convertible Preferred Stock; (b) authorize or issue any class of stock senior to, or otherwise pari passu with, the Series C Convertible Preferred Stock; (c) amend the Company’s charter documents in a way that adversely affects the Series C Convertible Preferred Stock; (d) increase the number of authorized shares of Series C Convertible Preferred Stock; or (e) enter into any agreement with respect to any of the foregoing.
Liquidation. Upon any Liquidation (as defined in the Certificate of Amendment), holders of Series C Convertible Preferred Stock shall be entitled to receive the Stated Value of their shares plus any accrued and unpaid dividends or other applicable fees, before any distribution is made to holders of junior securities. If the Company’s assets are insufficient to pay all such amounts in full, they will be distributed pro rata among holders of Series C Convertible Preferred Stock based on the amounts otherwise payable.
Conversion. Each share of Series C Convertible Preferred Stock shall be convertible, at any time and from time to time at the option of the holder thereof, into the number of shares of Common Stock, subject to certain ownership limitations set forth in the Certificate of Amendment. The number of shares of Common Stock issuable upon conversion by dividing the Stated Value of the Series C Convertible Preferred Stock by the Conversion Price, which equals to the previous Trading Day’s closing price of the Common Stock. The Conversion Price is subject to adjustments and restrictions set forth in Section 7 of the Certificate of Amendment.
As of December 31, 2025 the Company has
11. MEZZANINE
Series C Preferred Stock
Effective January 14, 2021, the Company filed a Certificate of Designation of the Series C Preferred Stock with the Nevada Secretary of State. The Company had authorized the issuance of an aggregate of
The Company, at its sole discretion, has the right to redeem all, but not less than all, shares of the Series C preferred stock issued and outstanding upon 5 days’ notice at a defined redemption price. The holders of the Series C preferred stock do not have a right to put the shares to the Company.
The holders of the Series C preferred stock shall have the right to vote together with holders of common stock, on an as “converted basis”, on any matter that the Company’s shareholders may be entitled to vote on, either by written consent or by proxy.
| F-17 |
| Table of Contents |
As of June 30, 2025,
Series D Preferred Stock
On February 19, 2021, the Company filed a Certificate of Designation of the Series D Convertible Preferred Stock with the Nevada Secretary of State authorizing the issuance of an aggregate of
Effective August 1, 2025, the Company amended and restated the Certificate of Designation for its Series C preferred stock and all
12. STOCKHOLDERS’ EQUITY (DEFICIT)
Preferred Stock
Series A Preferred Stock
In March 2015, the Company filed with the State of Nevada a Certificate of Designation establishing the designations, preferences, limitations and relative rights of
The Company has
Series B Preferred Stock
On December 21, 2015, the Company filed a Certificate of Designation for a new Series B convertible preferred stock with the State of Nevada following approval by the board of directors of the Company. Five Hundred Thousand (
| F-18 |
| Table of Contents |
The Company had
Common Stock
As of December 31, 2025, we were authorized to issue up to
The Company had
During the six months ended December 31, 2025, the Company issued
During the six months ended December 31, 2024, the Company issued
13. COMMITMENTS AND CONTINGENCIES
Legal Matters
From time to time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business. As of the date of filing of this report, there were no pending or threatened lawsuits.
Short-Term Lease
In January 2025, the Company entered a 12-month short-term lease that provides for approximately 1,500 usable square feet, which the Company intends to use as office space. The monthly lease payments are $
| F-19 |
| Table of Contents |
14. DISCONTINUED OPERATIONS
Through June 6, 2024, we operated our digital asset mining operations in a hosted facility in Granbury, Texas. As of June 7, 2024, all miners were disconnected from their power source and many were sold during the year ended June 30, 2025. This marked a strategic shift in the Company’s operations.
The following is a reconciliation of major classes of assets and liabilities classified as held for sale on our consolidated balance sheets:
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| December 31, 2025 |
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| June 30, 2025 |
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Major classes of assets included as held for sale |
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Prepaid expenses and other current assets |
| $ |
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| $ |
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Deposits, current |
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Current assets held for sale |
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Property and equipment, net |
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Other assets held for sale |
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Total major classes of assets held for sale in the consolidated balance sheets |
| $ |
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Major classes of liabilities included as discontinued operations |
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Accounts payable |
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Total major classes of liabilities held for sale in the consolidated balance sheets |
| $ |
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| $ |
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The following are reconciliations of major classes of revenue and expenses classified as discontinued operations on our consolidated income statements:
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| During the Three Months Ended December 31, |
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| 2025 |
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| 2024 |
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Major classes of line items constituting net income (loss) from discontinued operations |
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Depreciation and amortization |
| $ |
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| $ | ( | ) | |
Impairment expense |
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Total major classes of line items constituting net income (loss) from discontinued operations |
| $ |
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| During the six Months Ended December 31, |
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| 2025 |
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| 2024 |
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Major classes of line items constituting net income (loss) from discontinued operations |
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Depreciation and amortization |
| $ | ( | ) |
| $ | ( | ) |
Impairment expense |
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Total major classes of line items constituting net income (loss) from discontinued operations |
| $ | ( | ) |
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| ( | ) |
Digital Asset Mining - Expenses
During the three months ended December 31, 2025 and 2024, we impaired mining equipment and recognized impairment expense of $
15. SUBSEQUENT EVENTS
Management has evaluated subsequent events according to the requirements of ASC Topic 855, and has determined there are no material events to disclose except as follows:
On January 21, 2026 the Company received $
| F-20 |
| Table of Contents |
Item 2. Management’s Discussion and Analysis or Financial Condition and Results of Operations.
SPECIAL NOTE CONCERNING FORWARD-LOOKING STATEMENTS
We believe that it is important to communicate our future expectations to our security holders and to the public. This report, therefore, contains statements about future events and expectations which are “forward-looking statements” within the meaning of Sections 27A of the Securities Act of 1933 and 21E of the Securities Exchange Act of 1934, including the statements about our plans, objectives, expectations and prospects under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” You can expect to identify these statements by forward-looking words such as “may,” “might,” “could,” “would,” “will,” “anticipate,” “believe,” “plan,” “estimate,” “project,” “expect,” “intend,” “seek” and other similar expressions. Any statement contained in this report that is not a statement of historical fact may be deemed to be a forward-looking statement. Although we believe that the plans, objectives, expectations and prospects reflected in or suggested by our forward-looking statements are reasonable, those statements involve risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements, and we can give no assurance that our plans, objectives, expectations and prospects will be achieved.
Important factors that might cause our actual results to differ materially from the results contemplated by the forward-looking statements are contained in the “Risk Factors” section of and elsewhere in our Annual Report on Form 10-K for the year ended June 30, 2025 filed on September 30, 2025 and in our subsequent filings with the Securities and Exchange Commission. The following discussion of our results of operations should be read together with our financial statements and related notes included elsewhere in this report.
GENERAL
We were incorporated in the State of Nevada on March 22, 2011 under the name Lightcollar, Inc. In March 2015, we changed our name to EMS Find, Inc. On May 30, 2017, Integrated Ventures, Inc. (“Integrated Ventures”), a Nevada corporation, was formed as a wholly owned subsidiary of the Company. Pursuant to an Agreement and Plan of Merger dated May 30, 2017, Integrated Ventures was merged into the Company, with the Company being the surviving corporation and changing its name to Integrated Ventures, Inc. In July 2024, the Company formed three wholly-owned subsidiaries, MedWell Direct, LLC (“MedWell Direct”), MedWell Facilities, LLC (“MedWell Facilities”), and MedWell USA, LLC (“MedWell USA), all of which were organized in the State of Nevada. In June 2025, we changed our name to MedWellAI, Inc.
On August 29, 2024, the Company, through MedWell Direct, consummated its acquisition of 51% of the membership interests of Healthy Lifestyle USA LLC, a Florida limited liability company (“Healthy Lifestyle”).
We are a diversified holdings company that develops, acquires, operates, and invests in unique and profitable businesses. Our business focus is on AI-driven healthcare and wellness solutions. Currently, the company operates through their subsidiary MedWell USA, a B2B e-commerce platform for distributing pharmaceutical products, particularly GLP medications for weight loss and diabetes management. It features an AI-powered ordering system with real-time inventory tracking, smart suggestions, and dedicated support for healthcare providers like wellness clinics, med spas, and corporate wellness facilities. Additionally, the company operates through their subsidiary MedWell Facilities, a facilities management company that is dedicated to the health and wellness industry. This subsidiary is focused on developing real estate opportunities, designed to attract healthcare providers and wellness clinic operators.
Financial
Revenues from commissions were $2,623 and $133,272 for the three months ended December 31, 2025 and 2024, respectively and $2,702 and $133,272 for the six months ended December 31, 2025 and 2024, respectively.
Revenues from online sales, which are no longer pursued due to regulatory hurdles, were $394 and $9,589 for the three months ended December 31, 2025 and 2024, respectively and $1,601 and $10,737 for the six months ended December 31, 2025 and 2024, respectively.
| 3 |
| Table of Contents |
Revenues from product sales were $522,798 and $0 for the three months ended December 31, 2025 and 2024, respectively and $1,026,503 and $0 for the six months ended December 31, 2025 and 2024, respectively.
Rental income was $22,500 and $0 for the three months ended December 31, 2025 and 2024, respectively and $45,000 and $0 for the six months ended December 31, 2025 and 2024, respectively.
Historically, we have funded our operations primarily from cash generated from our digital asset mining operations and proceeds from convertible notes payable and preferred stock. During the year ended June 30, 2025, the Company’s digital asset mining operations were discontinued but digital assets generated prior to the discontinuation and on hand since June 30, 2024 have been sufficient to fund operations. During the six months ended December 31, 2024, the Company’s digital asset mining operations remained disconnected and were classified as discontinued operations. During the three and six months ended December 31, 2025 and 2024, we generated negative cash flow from operations. We did not incur additional debt or issue securities for cash.
Recent Material Developments
Effective August 1, 2025, the Company amended and restated the Certificate of Designation for its Series C Preferred Stock, effecting the consolidation of the Series C Preferred Stock and Series D Preferred Stock classes into a single series of convertible preferred stock. Per the share exchange agreement, 1,500 shares of Series C Preferred Stock and 3,000 shares of Series D Preferred Stock were exchanged for 6,500 Series C Convertible Preferred shares. Concurrent to this agreement, $2,133,081 in accrued and unpaid dividends were retired.
Financial Operations Review
We are incurring increased costs because of being a publicly traded company. As a public company, we incur significant legal, accounting, and other expenses that we did not incur as a private company. We also have paid compensation through the issuance of shares of our common stock, Series B preferred stock and warrants, the valuation of which has resulted in significant stock-based compensation. In addition, the Sarbanes-Oxley Act of 2002, as well as new rules subsequently implemented by the Securities and Exchange Commission, have required changes in corporate governance practices of public companies and will require us to comply with these rules. These new rules and regulations will increase our legal and financial compliance costs and have made some activities more time-consuming and costlier. In addition, these new rules and regulations have made it more difficult and more expensive for us to obtain director and officer liability insurance, which we currently cannot afford to do. As a result of the new rules, it may become more difficult for us to attract and retain qualified persons to serve on our Board of Directors or as executive officers. We cannot predict or estimate the amount of additional costs we may incur as a result of being a public company or the timing of such costs.
RESULTS OF OPERATIONS
THREE MONTHS AND SIX MONTHS ENDED DECEMBER 31, 2025 COMPARED TO THE THREE MONTHS AND SIX MONTHS ENDED DECEMBER 31, 2024
Revenues
Our commission revenues decreased to $2,623 during the three months ended December 31, 2025 from $133,272 during the three months ended December 31, 2024 and decreased to $2,702 during the six months ended December 31, 2025 from $133,272 during the six months ended December 31, 2024. This decrease was a result of the Company receiving less commissions for sales under agreements with third parties as the Company shifted their focus to product sales.
Our online sales revenues decreased to $394 during the three months ended December 31, 2025 from $9,589 during the three months ended December 31, 2024 and decreased to $1,601 during the six months ended December 31, 2025 from $10,737 during the six months ended December 31, 2024. This decrease was remnants of online sales of health and wellness products and services. The Company has exited online sales during the year ended June 2025 and will no longer earn revenue in this area.
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Our product sales increased to $522,798 during the three months ended December 31, 2025 from $0 during the three months ended December 31, 2024 and increased to $1,026,503 during the six months ended December 31, 2025 from $0 during the six months ended December 31, 2024. The increase was due to the Company shifting their focus to product sales in July 2025.
Our rental income increased to $22,500 during the three months ended December 31, 2025 from $0 during the three months ended December 31, 2024 and increased to $45,000 during the six months ended December 31, 2025 from $0 during the six months ended December 31, 2024. The increase was due to the Company entering a sublease agreement effective June 11, 2025.
Cost of Revenues
Cost of revenues – online products was $0 and $3,415 in the three months ended December 31, 2025 and 2024, respectively and $0 and $3,803 in the six months ended December 31, 2025 and 2024, respectively. Expenses associated with fulfilling orders placed by our online sales customers are recorded as cost of revenues – online products. The decrease in cost of revenues – online products was a result of the Company exiting this segment of the health industry due to regulatory hurdles.
Cost of revenues – product sales was $394,706 and $0 during the three months ended December 31, 2025 and 2024, respectively and $790,770 and $0 during the six months ended December 31, 2025 and 2024, respectively. These costs consisted of the cost of products and shipping and handling fees associated with the sale of products. The increase in cost of revenues – product sales was a result of the Company recognizing revenue for the sales of products starting in July 2025.
Cost of revenues – rent was $8,725 and $0 during the three months ended December 31, 2025 and 2024, respectively and $16,275 and $0 during the six months ended December 31, 2025 and 2024, respectively. These costs consisted of the cost to lease the subleased property. The increase in cost of revenues – product sales was a result of the Company entering the sublease agreement effective June 11, 2025.
Selling and marketing expenses were $250 and $0 during the three months ended December 31, 2025 and 2024, respectively and $18,574 and $0 during the six months ended December 31, 2025 and 2024, respectively. These expenses represent the cost associated with informing, educating, and initiating sales of health and wellness products offered by a third party to customers. The increase in selling and marketing costs was a result of the Company entering the health and wellness industry during the year ended June 30, 2025.
General and administrative expenses decreased to $410,051 in the three months ended December 31, 2025 from $625,199 in three months ended December 31, 2024. The decrease resulted primarily from less consulting, legal, cryptocurrency transaction fees, and investor relation expenses during the current period. General and administrative expenses decreased to $833,331 in the six months ended December 31, 2025 from $960,413 in six months ended December 31, 2024. The decrease resulted primarily from less consulting, legal, cryptocurrency transaction fees, and investor relation expenses during the period.
Depreciation and amortization decreased to $8,571 in the three months ended December 31, 2025 from $10,448 in the three months ended December 31, 2024 and increased to $16,878 in the six months ended December 31, 2025 from $13,240 in the six months ended December 31, 2024. The increase is due primarily to the purchase of intangible assets and leasehold improvements for use in the Company’s health and wellness business.
Change in fair value of Bitcoin increased to $0 for the three months ended December 31, 2025 from a $28,336 loss in the three months ended December 31, 2024 and increased to $0 for the six months ended December 31, 2025 from a $8,798 loss in the six months ended December 31, 2024.
The Company discontinued the purchase of digital assets in the year ended June 30, 2025 and as a result did not incur any transactions related to digital assets during the six months ended December 31, 2025. However, during the six months ended December 31, 2024 we purchased various digital assets totaling $4,467,446. We also converted digital assets from one denomination to another based on our assessment of market conditions for each respective digital asset. The market values of individual digital asset denominations continually fluctuate, and the fluctuations may be material from day to day. During the six months ended December 31, 2024 we received total proceeds of $5,502,844 from the sale of digital assets and incurred transactions fees totaling $23,073 which were recorded in General and administrative expenses in our Statement of Operations. We realized a loss on sale of digital assets of $61,835 in the six months ended December 31, 2024.
During the six months ended December 31, 2025 and 2024, we did not report any gain or loss on the disposal of property and equipment and did not impaired intangible assets.
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Other Income (Expense)
Our other income (expense) was comprised of the following for the three and six months ended December 31:
|
| Three Months Ended December 31, |
| |||||
|
| 2025 |
|
| 2024 |
| ||
|
|
|
|
|
|
| ||
Interest expense |
| $ | (13,629 | ) |
| $ | (12,998 | ) |
|
|
|
|
|
|
|
|
|
|
| $ | (13,629 | ) |
| $ | (12,998 | ) |
|
| Six Months Ended December 31, |
| |||||
|
| 2025 |
|
| 2024 |
| ||
|
|
|
|
|
|
| ||
Interest expense |
| $ | (26,565 | ) |
| $ | (26,058 | ) |
Loss on settlement of payables |
|
| - |
|
|
| (56,887 | ) |
Loss on exchange of Series C & D preferred shares |
|
| (241,918 | ) |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| $ | (268,483 | ) |
| $ | (82,945 | ) |
During the six months ended December 31, 2025 and 2024, we had one note payable outstanding for $500,000 with a reduced interest rate of 10% per annum thus resulting no change in interest expense compared to the prior period.
During the six months ended December 31, 2025 and 2024, we recognized a $0 and $56,887 loss, respectively, on settlement of payables with a third-party vendor.
During the six months ended December 31, 2025 we exchanged 1,125 Series C and 3,000 Series D preferred shares for 6,500 Series C convertible preferred shares. As a result, during the six months ended December 31, 2025 and 2024 we recognized a $241,918 and $0 loss, respectively, on exchange of Series C and D preferred shares.
During the three months ended December 31, 2025 and 2024, we recognized net losses from discontinued operations of $0 and $401,566, respectively and $72,719 and $985,884 during the six months ended December 31, 2025 and 2024, respectively as the Company strategically moved from the digital asset mining industry to health and wellness industry.
Net Loss Attributable to shareholders
As a result, during the six months ended December 31, 2025 and 2024, we reported a net loss attributable to shareholders of $939,397 and $1,889,958, respectively.
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LIQUIDITY AND CAPITAL RESOURCES
Overview
As of December 31, 2025, we had total current assets of $164,430, including cash of $137,503 and prepaid expenses and other current assets of $9,075, deposits, current of $17,632, and current assets held for sale of $220 and total current liabilities of $7,678,166. We had total stockholders’ deficit attributable to shareholders of $7,453,861 as of December 31, 2025 compared to a stockholders’ deficit of $6,624,599 as of June 30, 2025.
Sources and Uses of Cash
During the six months ended December 31, 2025, we used cash in operations of $255,749 as a result of our net loss from continuing operations of $868,505, loss on exchange of Series C & D preferred shares of $241,918, lease costs, net of repayment of $2,101, other non-cash expenses of $115,378, decrease in receivables of $287, increases in accrued expenses of $27,003, increases in deferred revenue of $15,485 and due to related party of $254,463 offset by, accounts payable of $34,128, and prepaid expenses of $9,751.
During the six months ended December 31, 2024, we used cash in operations of $461,576 as a result of our net loss from continuing operations of $987,025, non-cash gain on change in fair market value of digital assets of $8,798, realized loss on sale of digital assets of $61,835, loss on settlement of payables of $56,887, lease payments exceeding leases costs of $500, other non-cash expenses of $63,771, decreases in prepaid expenses of $134,763, and increases in accounts payable of $57,551, accrued expenses of $44,900, and due to related party of $134,763 offset by increases in receivables of $24,024.
During the six months ended December 31, 2025, we used net cash in investing activities – continuing operations of $8,058, comprised of cash used for leasehold improvements.
During the six months ended December 31, 2024, we provided net cash in investing activities – continuing operations of $638,280, comprised of net proceeds from the sale of digital assets of $5,502,844, cash acquired in acquisition of Healthy Lifestyles USA, LLC of $4,711, cash deposit received from subtenant of $7,500 offset by purchase of 51% interest in Healthy Lifestyles USA, LLC of $250,000, purchase of digital assets of $4,467,446 and purchase of property and equipment of $2,242, purchase of leasehold improvements of $15,177 and purchase of intangible assets of $141,910.
During the six months ended December 31, 2025 and 2024, we had no net cash provided or used in financing activities.
Going Concern
Historically, the Company has reported recurring net losses from operations and used net cash in operating activities. As of December 31, 2025, the Company’s current liabilities exceeded its current assets by $7,513,736 had an accumulated deficit of $89,613,277. These conditions raise substantial doubt about the Company's ability to continue as a going concern.
The accompanying consolidated financial statements have been prepared in conformity with U.S. GAAP, which contemplate continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The ability of the Company to reach a successful level of operations is dependent on the execution of management’s plans, which include the raising of capital through the debt and/or equity markets, until such time that funds provided by operations are sufficient to fund working capital requirements. If the Company were not to continue as a going concern, it would likely not be able to realize its assets at values comparable to the carrying value or the fair value estimates reflected in the balances set out in the preparation of the consolidated financial statements.
There can be no assurances that the Company will be successful in attaining a profitable level of operations or in generating additional cash from the equity/debt markets or other sources to fund its operations. The consolidated financial statements do not include any adjustments relating to the recoverability of assets and classification of assets and liabilities that might be necessary. Should the Company not be successful in its business plan or in obtaining the necessary financing to fund its operations, the Company would need to curtail certain or all operational activities and/or contemplate the sale of its assets, if necessary.
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SIGNIFICANT ACCOUNTING POLICIES
Our significant accounting policies are disclosed in Note 2 to the accompanying financial statements. The following is a summary of those accounting policies that involve significant estimates and judgment of management.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Because of the use of estimates inherent in the financial reporting process, actual results could differ significantly from those estimates.
Receivables
Receivables are carried at net realizable value, representing the outstanding balance less an allowance for doubtful accounts based on a review of all outstanding amounts. Management determines the allowance for doubtful accounts by regularly evaluating individual receivables and receivables are written off when deemed uncollectible. Recoveries of receivables previously written off are recorded when received
Property and Equipment
Property and equipment, consisting primarily of computer, other equipment, and leasehold improvements is stated at the lower of cost or estimated realizable value and is depreciated when placed into service using the straight-line method over estimated useful lives. Management has assessed the basis of depreciation of these assets and believes they should be depreciated over three – five years depending on the asset. Computers, due to their technological obsolescence reflecting rapid development of hardware that have faster processing capacity and other factors are depreciated over three years. Leasehold improvements are depreciated over five years representing the lease term. Maintenance and repairs are expensed as incurred and improvements are capitalized. Gains or losses on the disposition of property and equipment are recorded upon disposal.
Payments to equipment suppliers prior to shipment of the equipment are recorded as equipment deposits.
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 intangible assets are recognized as an expense when incurred.
Impairment of Long-Lived Assets
All assets, including intangible assets subject to amortization, are reviewed for impairment when changes in circumstances indicate that the carrying amount of the asset may not be recoverable in accordance with ASC 350 and ASC 360. If the carrying amount of the asset exceeds the expected undiscounted cash flows of the asset, an impairment charge is recognized equal to the amount by which the carrying amount exceeds fair value or net realizable value. The testing of these intangibles under established guidelines for impairment requires significant use of judgment and assumptions. Changes in forecasted operations and other assumptions could materially affect the estimated fair values. Changes in business conditions could potentially require adjustments to these asset valuations.
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Goodwill
Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired in a business combination. Goodwill is not amortized but is tested for impairment annually in the fourth quarter or more frequently if events or changes in circumstances indicate that the asset may be impaired. The Company operates as one reporting unit. When testing goodwill for impairment, the Company may first perform an optional qualitative assessment. If the Company determines it is not more likely than not the reporting unit’s fair value is less than its carrying value, then no further analysis is necessary. If the Company determines that it is more likely than not that the fair value of its reporting unit is less than its carrying amount, then the quantitative impairment test will be performed. Under the quantitative impairment test, if the carrying amount of the Company’s reporting unit exceeds its fair value, the Company will recognize an impairment loss in an amount equal to that excess but limited to the total amount of goodwill.
Discontinued Operations
The Company follows the provisions of ASC 205-20, Presentation of Discontinued Operations, which requires separate reporting if a company sells part of its business. In order to recognize discontinued operation a major product line or division of an entity must be both a component and a strategic shift in operations. The Company assessed its digital miners and determined they met the criteria of ASC 205-20.
Mezzanine
Series C and D preferred stock that contain certain default provisions requiring mandatory cash redemption that are outside the control of the Company are recorded as Mezzanine in the accompanying balance sheets. Effective August 1, 2025, the Company amended and restated the Certificate of Designation for its Series C Preferred Stock, effecting the consolidation of the Series C Preferred Stock and Series D Preferred Stock classes into a single series of convertible preferred stock.
Convertible Preferred Stock
The Company follows the provisions of ASC 480, Distinguishing Liabilities from Equity in determining if a financial instrument should be classified as a liability or equity on the balance sheet. This standard provides, among others, that the conversion of preferred stock into a variable number of equity shares and at inception, the monetary value is fixed, the instrument should be classified as a liability. As such upon the exchange of the Series C & D preferred shares on August 1, 2025 into convertible preferred stock, the Company determined the Series C convertible preferred stock met the requirements to be classified as a liability. Further, due to their convertible nature at any time at the option of the holder they are presented as current liability on the balance sheet.
Stock-Based Compensation
The Company accounts for all equity-based payments in accordance with ASC Topic 718, Compensation – Stock Compensation. ASC Topic 718 requires companies to recognize in the statement of operations the grant-date fair value of stock awards, stock options, warrants and other equity-based compensation issued. The value of the portion of an award that is ultimately expected to vest is recognized as an expense over the requisite service periods using the straight-line attribution method. The fair value of a stock award is recorded at the fair market value of a share of the Company’s stock on the grant date. The Company estimates the fair value of stock options and warrants at the grant date by using an appropriate fair value model such as the Black-Scholes option pricing model or multinomial lattice models.
Revenue Recognition
We recognize revenue in accordance with ASC 606, Revenue from Contracts with Customers. This standard provides a single comprehensive model to be used in the accounting for revenue arising from contracts with customers, including industry-specific guidance. The standard’s stated core principle is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this core principle, ASC 606 includes provisions within a five-step model that includes identifying the contract with a customer, identifying the performance obligations in the contract, determining the transaction price, allocating the transaction price to the performance obligations, and recognizing revenue when, or as, an entity satisfies a performance obligation.
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The following table presents the Company’s revenue by revenue source for the three months ended December 31:
|
| 2025 |
|
| 2024 |
| ||
|
|
|
|
|
|
| ||
Commissions |
| $ | 2,623 |
|
| $ | 133,272 |
|
Online sales, net |
|
| 394 |
|
|
| 9,589 |
|
Product sales, net |
|
| 522,798 |
|
|
| - |
|
Rental income |
|
| 22,500 |
|
|
| - |
|
|
| $ | 548,315 |
|
| $ | 142,861 |
|
The following table presents the Company’s revenue by revenue source for the six months ended December 31:
|
| 2025 |
|
| 2024 |
| ||
|
|
|
|
|
|
| ||
Commissions |
| $ | 2,702 |
|
| $ | 133,272 |
|
Online sales, net |
|
| 1,601 |
|
|
| 10,737 |
|
Product sales, net |
|
| 1,026,503 |
|
|
| - |
|
Rental income |
|
| 45,000 |
|
|
| - |
|
|
| $ | 1,075,806 |
|
| $ | 144,009 |
|
Commissions
The Company earns commissions by informing, educating, and initiating sales of health and wellness products offered by a third party to customers. The commissions earned are based on the gross sales of products to customers less costs and fees. Periodically, the third party computes the commission payable since the previous Reconciliation Date. The third party then pays the Company the amount due. The transactions price is set as the commissions to be received based on the agreed terms. The commissions are earned at a point in time upon the successful sale of products to a customer.
The timing of commission revenue recognition may differ from the timing of payment by the Company’s customers. The Company records a receivable when revenue is recognized prior to payment and there is an unconditional right to payment. As of December 31, 2025, the Company had receivables from commissions of $0.
Online Sales
The Company’s online sales, which are no longer being pursued due to regulatory hurdles, consisted of sales of health and wellness products and services through the Company’s websites, including prescription drugs. In contracts that contained prescription products issued as the result of a consultation, revenue also included medical consultation services and post-consultation service support provided by Affiliated Medical Groups (defined below). The Company defined its customer as an individual who purchased products or services through its websites. The transaction price in the Company’s contracts with customers was the total amount of consideration to which the Company expected to be entitled in exchange for transferring products or services to the customer.
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The Company’s contracts that contain prescription products issued as the result of a consultation primarily included the following performance obligations: access to (i) products, as well as medication adjustments, as applicable, and (ii) consultation services, as well as post-consultation service support, as applicable. Revenue was recognized at the time the related performance obligation was satisfied by transferring the promised product to the customer and, in contracts that contain services, by the provision of consultation services to the customer. The Company satisfied its performance obligation for products at a point in time, which was upon delivery of the products to a third-party carrier. The Company satisfied its performance obligation for consultation services typically within one day and for post-consultation service support over the contract term. The customer obtained control of the products and services upon the Company’s completion of its performance obligations.
For contracts with multiple performance obligations, the transaction price is allocated to each performance obligation on a relative stand-alone selling price basis. The stand-alone selling price is based on market and cost plus estimates. For the three months ended September 30, 2025, service revenue represented less than 10% of consolidated revenues.
To fulfill its promise to customers for contracts that include professional medical consultations, the Company maintained relationships with various “Affiliated Medical Groups,” which are professional corporations or other professional entities owned by licensed physicians and that engage licensed healthcare professionals (physicians, physician assistants, nurse practitioners, and mental health providers; collectively referred to as “Providers” or individually, a “Provider”) to provide consultation services. The Company accounts for service revenue as a principal in the arrangement with its customers. This conclusion is reached because (i) the Company determines which Affiliated Medical Group and Provider provides the consultation to the customer; (ii) the Company is primarily responsible for the satisfactory fulfillment and acceptability of the services; (iii) the Company incurs costs for consultation services even for visits that do not result in a prescription and the sale of products; and (iv) the Company, in its sole discretion, sets all listed prices charged on its websites and mobile applications for products and services.
Additionally, to fulfill its promise to customers for contracts that include sale of prescription products, the Company maintained relationships with certain third-party pharmacies (“Partner Pharmacies” or individually, a “Partner Pharmacy”). The Company accounted for prescription product revenue as a principal in the arrangement with its customers. This conclusion was reached because (i) the Company had sole discretion in determining which pharmacy fills a customer’s prescription; (ii) the pharmacies filled the prescription based on fulfillment instructions provided by the Company; (iii) the Company was primarily responsible to the customer for the satisfactory fulfillment and acceptability of the order; (iv) the Company was responsible for refunds of the prescription medication after transfer of control to the customer; and (v) the Company, in its sole discretion, sets all listed prices charged on its websites and mobile applications for products and services.
Payment for prescription medication was typically collected from the customer a few days in advance of product shipment in accordance with contract terms. Contract liabilities are recorded when payments have been received from the customer for undelivered products or services and are recognized as revenue when the performance obligations are later satisfied. As of December 31, 2025, the Company had $0 of receivables for its online sales.
Product Sales
The Company’s product sales revenue consists of the bulk sale of GLP medications for weight loss and diabetes management to doctors’ offices and clinics. The Company’s performance obligation is to deliver the products to customers. Therefore, revenue is recognized once delivery occurs. Customers remit payment at the time of order placement, therefore payment received by the Company prior to product delivery is recorded as deferred revenue. As of June 30, 2025 and December 31, 2025, the Company had $0 and $15,688, respectively, of deferred revenue for its product sales. Shipping and handling costs that occur are paid by the customer and is recorded as revenue. The Company has a policy to provide a refund on any product returned by the customer. As of June 30, 2025 and December 31, 2025, the Company had $0 and $0, respectively, of receivables for its product sales.
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Rental Income
The Company recognizes rent revenue from the lease of its sub-leased properties in accordance with ASC 842, Leases. The sub-lease is categorized as an operating lease according to ASC criteria for the lease definitions. Rent revenue is recognized on a straight-line basis over the lease term, reflecting the pattern of the economic benefits derived from the lease.
The Company’s leases generally have fixed rental payments over the lease term, with occasional escalations based on predetermined factors. Rent revenue is recognized monthly as the lessor fulfills its obligations under the lease agreement.
Any lease incentives or concessions provided to lessees, such as rent-free periods or tenant improvement allowances, are recognized as a reduction of rent revenue over the lease term.
For the three and six months ended December 31, 2025, the Company had only one lease arrangement with a single customer.
Fair Value of Financial Instruments
Assets and liabilities measured at fair value on a recurring basis
We recognize financial instruments under the following fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels as follows:
| Level 1: | quoted prices (unadjusted) in active markets for identical assets or liabilities; | |
|
|
| |
| Level 2: | observable inputs other than Level 1, quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, and model-derived prices whose inputs are observable or whose significant value drivers are observable; and | |
|
|
| |
| Level 3: | assets and liabilities whose significant value drivers are unobservable. | |
The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.
The Company will update its assumptions each reporting period based on new developments and record such amounts at fair value based on the revised assumptions until the agreements expire or contingency is resolved, as applicable.
As of December 31, 2025 and June 30, 2025 the Company did not have any assets and liabilities measured at fair value on a recurring basis.
OFF BALANCE SHEET ARRANGEMENTS
As of December 31, 2025, we have no off-balance sheet arrangements.
RECENTLY ISSUED ACCOUNTING POLICIES
In November 2024, the FASB issued ASU No. 2024-03 “Disaggregation of Income Statement Expenses (“ASU 2024-03”). The amendments in ASU 2024-03 aim to improve the decision usefulness of expense information on public business entities’ income statement through the disaggregation of relevant expense captions in the notes to the financial statements. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, with early adoption permitted. The Company is currently evaluating the impact of this update on its consolidated financial statements.
There were no new accounting pronouncements issued or proposed by the FASB during the year ended June 30, 2025 and through the date of filing this report which the Company believes will have a material impact on its financial statements.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a smaller reporting company, as defined by Item 10 of Regulation S-K, the Company is not required to provide the information required by this item.
ITEM 4. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
We carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)). Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered in this report, our disclosure controls and procedures were not effective to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the required time periods and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
Our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. To address the material weaknesses, we performed additional analysis and other post-closing procedures in an effort to ensure our financial statements included in this quarterly report have been prepared in accordance with generally accepted accounting principles. Accordingly, management believes that the financial statements included in this report fairly present in all material respects our financial condition, results of operations and cash flows for the periods presented.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Securities Exchange Act, as amended. Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2025. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. We have identified the following material weaknesses:
1. | As of December 31, 2025, we did not maintain effective controls over the control environment. Specifically, the Board of Directors does not currently have any independent members and no director qualifies as an audit committee financial expert as defined in Item 407(d)(5)(ii) of Regulation S-K. Since these entity level programs have a pervasive effect across the organization, management has determined that these circumstances constitute a material weakness. |
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2. | As of December 31, 2025, due to the inherent issue of segregation of duties in a small company, we have relied heavily on entity or management review controls and engaged an outside financial consultant to lessen the issue of segregation of duties over accounting, financial close procedures and controls over financial statement disclosure. Accordingly, management has determined that this control deficiency constitutes a material weakness. | |
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| 3. | As of December 31, 2025, we did not establish a written policy for the approval, identification and authorization of related party transactions. Accordingly, management has determined that this control deficiency constitutes a material weakness. |
Because of these material weaknesses, management has concluded that the Company did not maintain effective internal control over financial reporting as of December 31, 2025, based on the criteria established in “Internal Control-Integrated Framework” issued by the COSO.
Changes in Internal Control Over Financial Reporting
There have been no changes in the Company’s internal control over financial reporting through the date of this report or during the quarter ended December 31, 2025, that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
Corrective Action
Management plans to address the structure of the Board of Directors and discuss adding an audit committee during the fiscal year ending June 30, 2026.
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PART II
ITEM 1. LEGAL PROCEEDINGS
We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations, except as set forth below. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company, threatened against or affecting our company, our common stock, or our company’s directors, officers or affiliates, any owner of record or beneficiary of more than 5% of any class of our voting securities is a party adverse to us or has a material interest adverse to us.
ITEM 1A. RISK FACTORS
There have been no material changes to the risk factors set forth in our Annual Report on Form 10-K for the fiscal year ended June 30, 2025.
ITEM 2. UNREGISTERED SALES IN EQUITY SECURITIES, USE OF PROCEEDS, AND ISSUER PURCHASES OF EQUITY SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
During the six months ended December 31, 2025, no director or officer of the Company adopted or terminated any “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
There is no other information required to be disclosed under this item which was not previously disclosed.
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ITEM 6. EXHIBITS
EXHIBIT INDEX
Exhibit Number |
| Exhibit Description |
31.1 |
| Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer and Principal Financial Officer** |
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32.1 |
| Section 1350 Certification of Principal Executive Officer and Principal Financial Officer** |
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101.INS |
| Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document). * |
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101.SCH |
| Inline XBRL Taxonomy Extension Schema * |
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101.CAL |
| Inline XBRL Taxonomy Extension Calculation Linkbase * |
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101.DEF |
| Inline XBRL Taxonomy Extension Definition Linkbase * |
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101.LAB |
| Inline XBRL Taxonomy Extension Label Linkbase * |
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101.PRE |
| Inline XBRL Taxonomy Extension Presentation Linkbase * |
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104 |
| Cover Page Interactive Data File (formatted inline XBRL and contained in Exhibit 101)* |
_________
* Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed “furnished” and not “filed” or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, or deemed “furnished” and not “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934, and otherwise is not subject to liability under these sections.
**This certification is being furnished rather than filed and shall not be deemed incorporated by reference into any filing, in accordance with Item 601 of Regulation S-K.
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SIGNATURES
In accordance with the requirements of the Exchange Act, the Company has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
MEDWELLAI, INC. | |||
Dated: February 23, 2026 | By: | /s/ Steve Rubakh | |
Chief Executive Officer, Chief Financial Officer, and Director (Principal Executive Officer and Principal Financial and Accounting Officer) | |||
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