Transportation & Logistics closes $4.75M PGS merger
All of TLSS’s revenue and operating cash flow now depend on PGS, while acquisition valuation work remains incomplete.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Transportation & Logistics Systems, Inc. (TLSS) completed its merger with Patriot Glass Solutions, LLC (PGS) on November 1, 2026. Its wholly owned acquisition subsidiary received an 80% membership interest in PGS and four U.S. patents for $4,750,000 of gross merger consideration, paid in 47,500 shares of Series J preferred stock with a stated value of $100 per share. TLSS separately issued 3,518 Series J shares, stated at $351,800, to Jeff Badders and Mercer Street Global Opportunity Fund to settle PGS obligations. Michael Wanke retained a 20% interest, and TLSS ceased to be a shell company.
PGS is TLSS’s sole operating business. PGS reported 2025 net sales of $2,607,600, down approximately 14.7% from $3,056,670 in 2024, and net income of $422,044 versus a $940,041 net loss in 2024. TLSS concluded it is the accounting acquirer, but acquisition-date valuations remain subject to completion. TLSS disclosed substantial doubt about its ability to continue as a going concern; at June 30, 2026, it had $29,082 in cash and a $9,134,091 working capital deficit. PGS’s audit identified material weaknesses in internal control over financial reporting.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Major pointPGS net income: $422,044 in 2025, compared with a $940,041 net loss in 2024.
Negative
- Major pointTLSS going-concern warning: substantial doubt disclosed; its June 30, 2026 working capital deficit was $9,134,091.
- Major pointPGS internal controls: auditors identified material weaknesses in financial reporting controls.
- Moderate pointPGS net sales: $2,607,600 in 2025, down approximately 14.7% from $3,056,670 in 2024.
Filing Explained
The company has no escrow backing seller-side indemnification, which is subject to a threshold, a capped recovery and a one-year claim deadline.
The completed merger's Series J consideration was issued as preferred stock convertible into common stock; the merger consideration represents approximately
Acquisition Sub owns the four patents and licenses them non-exclusively to PGS, while PGS does not own the formulations for or right to manufacture its principal C-Bond products. PGS obtains C-Bond Secure under a distributor agreement that either party may terminate on 60 days' notice before an annual anniversary.
For seller-side indemnification, there is no escrow or holdback; payment is unavailable until aggregate losses exceed
8-K Event Classification
Key Figures
Key Terms
non-controlling interest financial
business combination technical
going concern financial
beneficial ownership limitation financial
FAQ
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What are the terms of Michael Wanke’s PGS CEO agreement at TLSS?
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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INTRODUCTORY NOTE
The Merger. As previously disclosed in the Current Reports of Transportation and Logistics Systems, Inc. (the “Company”) on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on April 7, 2026, June 5, 2026, July 10, 2026, August 6, 2026, August 24, 2026 and September 23, 2026, on April 1, 2026 the Company, TLSS Acquisition, Inc., a Delaware corporation and a wholly-owned subsidiary of the Company (“Acquisition Sub”), and TLSS Reverse PGS, LLC, a Texas limited liability company and a wholly-owned subsidiary of Acquisition Sub (“Merger Sub”), entered into a Member Interest and Asset Exchange Agreement with Badcer Ops, Inc., a Nevada corporation (the “Seller”), Jeff Badders (“Badders”) and Mercer Street Global Opportunity Fund, LLC, a Delaware limited liability company (“Mercer”), as the shareholders of the Seller (collectively, the “Seller Shareholders”), Patriot Glass Solutions, LLC, a Texas limited liability company (“PGS”), and Michael Wanke, the sole Manager of PGS and the holder of a twenty percent (20%) membership interest in PGS, as amended by a First Amendment dated as of June 1, 2026, a Second Amendment dated as of July 7, 2026, a Notice of Extension of Closing Date dated as of July 31, 2026, a Third Amendment dated as of August 19, 2026, a Fourth Amendment dated as of September 22, 2026 and a Fifth Amendment dated as of November 1, 2026 (the “Fifth Amendment”) (as so amended, the “Purchase Agreement”). Those amendments extended the deadlines for delivery of the disclosure schedules and the financial statements of PGS and the outside closing date of the transaction, expanded the unaudited financial statements of PGS required to be delivered to cover the first two quarters of 2026, and added a covenant requiring the parties to prepare and execute a closing statement.
The Purchase Agreement provided for a reverse triangular merger of Merger Sub with and into PGS, with PGS continuing as the surviving entity (the “Merger”). The Merger shall become effective upon the filing of a certificate of merger with the Secretary of State of the State of Texas. A certificate of merger was filed with the Secretary of State of the State of Texas and the Merger became effective on November 1, 2026 (the “Effective Time”). On the same date, the Merger closed (the “Closing”, and such date, the “Closing Date”). A copy of the certificate of merger is filed as Exhibit 3.10 hereto.
At the Closing, the Seller’s eighty percent (80%) membership interest in PGS and four (4) United States patents owned by the Seller relating to nanotechnology for strengthening glass and glass products (the “Patents”), which together represented substantially all of the Seller’s assets, were exchanged, transferred and assigned to Acquisition Sub in exchange for aggregate gross merger consideration of $4,750,000, paid in 47,500 shares of the Company’s Series J Senior Convertible Preferred Stock, par value $0.001 per share (the “Series J Preferred Stock”), having a stated value of $100 per share (the “Merger Consideration”). Separately, pursuant to the Fifth Amendment, the Company issued an aggregate of 3,518 shares of Series J Preferred Stock, having an aggregate stated value of $351,800, directly to the Seller Shareholders, consisting of 1,759 shares to each of Badders and Mercer, in consideration of the satisfaction and release of three secured promissory notes dated February 24, 2025 in the original principal amounts of $140,000, $75,000 and $76,000, respectively, and of expense advances made to PGS in the aggregate amount of $11,000, under each of which PGS was a maker (collectively, the “Satisfied Obligations”). Those shares represented payment in full of the amounts due under the Satisfied Obligations, including accrued interest, and PGS was released as a maker thereunder. Mr. Wanke retained his twenty percent (20%) membership interest in PGS. The obligations of the parties to consummate the transactions contemplated by the Purchase Agreement were subject to customary conditions, including the accuracy of the parties’ representations and warranties, the performance of their covenants, receipt of required consents and delivery of audited and unaudited financial statements of PGS. Each of those conditions was satisfied or waived at or prior to the Closing. See “Conditions to Closing” under Item 1.01 below for additional details.
Shell Company Status and Super 8-K Disclosure Requirement. Immediately prior to the Closing of the Merger described in Item 2.01 below, the Company was a “shell company” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), with no or nominal operations following the wind-down of its legacy operations. As a result of the completion of the transactions described in Item 2.01 below, the Company has ceased to be a shell company. Accordingly, pursuant to Item 2.01(f) of Form 8-K, this Current Report on Form 8-K contains the information that would be required if the Company were filing a general form for registration of securities on Form 10 under the Exchange Act, including financial statements of the business acquired, unaudited pro forma financial information, and the other disclosures, exhibits and financial statement schedules required by Form 10.
As used in this Current Report, unless otherwise stated or the context clearly indicates otherwise, the terms the “Company,” the “Registrant,” “we,” “us” and “our” refer to Transportation and Logistics Systems, Inc., a Nevada corporation, and its subsidiaries after giving effect to the Merger, and references to the “Board” are to the board of directors of the Company.
Unless otherwise indicated, the share and per share information in this Current Report has been adjusted to give effect to the one-for-five thousand (1-for-5,000) reverse stock split of the Company’s outstanding common stock that became effective on October 2, 2026 (the “Reverse Stock Split”).
This Current Report contains summaries of the material terms of various agreements executed in connection with the transactions described herein. The summaries of these agreements are subject to, and are qualified in their entirety by, reference to these agreements, which are filed as exhibits hereto and incorporated herein by reference.
| Item 1.01 | Entry into a Material Definitive Agreement. |
Conditions to Closing
In addition to the conditions described in the “Introductory Note” above, the obligations of the Company, Acquisition Sub and Merger Sub were subject to, among other things, the absence of any action or omission causing, or reasonably expected to cause, a material adverse effect on the business of PGS or the Seller, receipt of the consent of the landlord to the assignment of, and amendments to, PGS’s lease for its operating facility, delivery of audited financial statements of PGS for the years ended December 31, 2024 and December 31, 2025 and unaudited interim financial statements of PGS for the periods required by the Purchase Agreement, and delivery of: (i) the completed and certified disclosure schedules; (ii) counterpart signature pages to the employment agreement between PGS and Mr. Wanke (the “Wanke Employment Agreement”) and to the Patent Assignment and the Merger Closing Agreement (each as defined below); (iii) resignations of the manager and the officers of PGS effective as of the Effective Time; (iv) evidence that all liens on the assets of PGS and the Seller had been terminated and released, including the filing of UCC-3 termination statements with respect to financing statements filed by merchant cash advance lenders; (v) evidence of the release of PGS as a maker under three secured promissory notes dated February 24, 2025 in the original principal amounts of $140,000, $75,000 and $76,000, respectively; (vi) evidence of the termination of Mr. Wanke’s put option; and (vii) evidence of the transfer to PGS of certain assets and intellectual property rights and of the Seller’s assignment to PGS of the Distributor Agreement dated as of January 2, 2024 between C-Bond Systems, Inc. and CB Nanoshield, LLC (“CB Nanoshield”), a Texas limited liability company (the “Distributor Agreement”). Each of the conditions to Closing was satisfied or waived at or prior to the Closing.
The foregoing description of the Purchase Agreement is qualified in its entirety by reference to the Purchase Agreement and each amendment thereto, copies of which are filed as Exhibits 2.1 through 2.7 hereto and incorporated herein by reference.
Indemnification Arrangements
The representations and warranties survive the Closing for twelve (12) months following the Closing Date, and the covenants and other agreements survive in accordance with their respective terms. The Seller and the Seller Shareholders, severally and not jointly, and Mr. Wanke, separately, have agreed to indemnify the Company, Acquisition Sub and their respective managers, officers, directors, employees, shareholders, agents, representatives and affiliates against losses arising from breaches of their respective representations, warranties and covenants, fraud or intentional misconduct, and specifically identified material risks disclosed during due diligence. The representations and warranties regarding PGS were made solely by PGS and Mr. Wanke, and neither the Seller nor the Seller Shareholders has any indemnification obligation with respect to those representations and warranties or otherwise with respect to the business, operations, assets or liabilities of PGS. No indemnification is payable until aggregate losses exceed $50,000, the maximum aggregate liability of the Seller and the Seller Shareholders may not exceed twenty-five percent (25%) of the Merger Consideration, and claims must be noticed in writing within twelve (12) months following the Closing Date. Indemnifiable losses are determined net of amounts recovered or recoverable under insurance policies or from third parties and net of related tax benefits. Except in the case of fraud or intentional misrepresentation, to which these limitations do not apply, indemnification under the Purchase Agreement is the sole and exclusive remedy of the parties following the Closing. There is no escrow or holdback of the Merger Consideration, and indemnification claims are not satisfiable in securities of the Company. The Company and Acquisition Sub have agreed to indemnify the Seller, the Seller Shareholders and Mr. Wanke against losses arising from breaches of their representations, warranties and covenants and from the operation of PGS following the Closing Date, other than losses caused by a breach by PGS, Mr. Wanke, the Seller or the Seller Shareholders.
Merger Closing Agreement
At the Closing, the parties to the Purchase Agreement entered into a Merger Closing Agreement (the “Merger Closing Agreement”) with RA Feingold Law & Consulting, P.A., as closing agent, which confirmed the closing of the Merger and directed the closing agent to distribute the closing documents and to cause the issuance of the shares of Series J Preferred Stock described in the “Introductory Note” above. Following the Closing, the parties are required to cause the filing of termination statements with respect to three financing statements naming PGS as debtor and of a satisfaction of judgment in Bexar County, Texas, in order to release liens and encumbrances of record on the assets of PGS. The foregoing is qualified in its entirety by reference to the Merger Closing Agreement, a copy of which is filed as Exhibit 2.8 hereto and incorporated herein by reference.
Patent Assignment, Patent License Agreement and Trademark Assignment
In connection with the Closing, the Seller assigned the Patents to Acquisition Sub pursuant to a Patent Assignment (the “Patent Assignment”), and Acquisition Sub granted PGS a non-exclusive license to use the Patents in the operation of the PGS business by entering into a patent license agreement (the “Patent License Agreement”). The Patents are identified under “Intellectual Property” in Item 2.01 below. The Seller also assigned to PGS the trademarks used in the PGS business together with the associated goodwill, pursuant to a Trademark Assignment Agreement (the “Trademark Assignment”).
The foregoing is qualified in its entirety by reference to the Patent Assignment, the Patent License Agreement and the Trademark Assignment, copies of which are filed as Exhibits 10.3, 10.4 and 10.5 and hereto and incorporated herein by reference.
Assignment of Distributor Agreement
At the Closing, the Seller assigned the Distributor Agreement to PGS pursuant to an Assignment of Distributor Agreement, which identifies the Distributor Agreement as a letter agreement dated December 11, 2023 and effective as of May 8, 2023.
The foregoing is qualified in its entirety by reference to the Distributor Agreement and the Assignment of Distributor Agreement, copies of which are filed as Exhibits 10.2 and 10.6 hereto and incorporated herein by reference.
Wanke Employment Agreement
In connection with the Closing, PGS and Mr. Wanke entered into the Wanke Employment Agreement, under which Mr. Wanke serves as Chief Executive Officer of PGS for a term of three (3) years. Mr. Wanke receives an initial base salary of $118,000, subject to an interim review ninety (90) days after commencement to determine when to increase his base salary to $170,000, and to annual review thereafter. Mr. Wanke is also eligible for bonuses under a bonus program based on the achievement of quarterly EBITDA milestones, to be mutually agreed by the parties ninety (90) days after commencement for the first year of the term and thirty (30) days before the start of each subsequent year, measured by the improvement or increase over projected or budgeted EBITDA results for the PGS operations.
Under the Wanke Employment Agreement, subject to the approval of the Board or its Compensation Committee, the Company agreed to grant Mr. Wanke, as of his start date, an option to purchase a number of shares of the Company’s common stock equal to a value of $730,000, based on the fair market value of the common stock at the time of the grant. The option vests and becomes exercisable over a three (3) year period, with one-third (1/3) of the underlying shares vesting on the first anniversary of his start date and the remaining two-thirds (2/3) vesting in equal annual installments over the following two (2) years, in each case subject to his continued employment through the applicable vesting date. Mr. Wanke is also eligible for an annual discretionary bonus of up to fifty percent (50%) of his base salary, payable in non-qualified stock options or restricted stock units of the Company as determined by the board of managers of PGS and the Board, based on an evaluation of his performance by the authorized manager of PGS and the Chief Executive Officer of the Company, vesting in equal installments over the one-year period following the date of grant. Mr. Wanke is also entitled to participate in PGS’s benefit plans, with PGS paying his medical and dental premiums, to reimbursement of business expenses, and to paid vacation and personal days.
If PGS terminates Mr. Wanke without Cause (including as a result of his death or disability), if he resigns for Good Reason, or if his term is not renewed by PGS, Mr. Wanke is entitled to twelve (12) months of base salary continuation, payment of accrued compensation and benefits, and accelerated vesting of his outstanding equity awards. “Cause” means (i) acts of fraud, theft or embezzlement in connection with the performance of his duties, (ii) conviction of any felony, including any plea of guilty or nolo contendere, or (iii) providing services in any capacity to a business in direct competition with PGS. “Good Reason” means (i) a material reduction in his base salary from one year of the term to another, or in his bonus milestones or bonus potential, (ii) a material reduction in his duties and responsibilities, including a material reduction in status or a requirement that he report to any person or entity other than the board of managers of PGS and the Chief Executive Officer of the Company, (iii) a material breach of the Wanke Employment Agreement by PGS, or (iv) a change in his place of work. Mr. Wanke may not resign for Good Reason unless he gives the board of managers of PGS written notice of the condition within thirty (30) days after it first occurs, PGS fails to cure the condition within thirty (30) days after receiving that notice, and his resignation is effective within thirty (30) days after the expiration of the cure period.
Mr. Wanke is subject to a confidentiality covenant and, during the term and for two (2) years following termination of his employment, to covenants not to compete with PGS or to solicit its customers, employees or suppliers, subject to an exception permitting passive investments of not more than 5% of a publicly traded competitor. PGS is entitled to injunctive relief for a breach of those covenants without posting a bond. In the event of a sale of PGS substantially as an entirety, if the Wanke Employment Agreement is not assigned to and assumed by the acquiring or surviving entity, Mr. Wanke is entitled to a lump sum equal to his remaining base salary for the term plus accrued compensation and benefits, and any unvested equity awards held by Mr. Wanke will fully vest upon such change of control whether or not the agreement is assumed.
The foregoing is qualified in its entirety by reference to the Wanke Employment Agreement, a copy of which is filed as Exhibit 10.7 hereto and incorporated herein by reference.
| Item 2.01 | Completion of Acquisition or Disposition of Assets |
The disclosure set forth in the “Introductory Note” above is incorporated by reference into this Item 2.01.
Shell Company Transaction; Form 10 Information
As described in the “Introductory Note” above, immediately prior to the Closing, the Company was a “shell company” as defined in Rule 12b-2 under the Exchange Act, and completion of the transactions described above has had the effect of causing the Company to cease being a shell company.
Accounting Treatment of the Merger
The Company has concluded that it is the accounting acquirer in the Merger and that the Merger is to be accounted for as a business combination under Accounting Standards Codification Topic 805, Business Combinations, rather than as a reverse acquisition or a reverse recapitalization. Applying the factors in ASC 805-10-55-11 through 55-15 to a combination effected by the exchange of equity interests, the Company considered that Acquisition Sub acquired eighty percent (80%) of the membership interests in PGS and appoints all three (3) of its managers, that the Board and the Company’s executive officers did not change and no seller party holds any right to designate a director, and that the Merger Consideration represents approximately 21.5% of the Company’s voting securities on an as-converted basis, subject to a beneficial ownership limitation on conversion.
The Company accordingly expects to record the identifiable assets acquired and liabilities assumed of PGS at their acquisition-date fair values, a non-controlling interest in Mr. Wanke’s retained twenty percent (20%) membership interest, and goodwill to the extent the fair value of the consideration transferred and of that non-controlling interest exceeds the fair value of the identifiable net assets acquired. The consideration transferred will be measured at the acquisition-date fair value of the 47,500 shares of Series J Preferred Stock issued as the Merger Consideration and, because the Patents were assigned directly to Acquisition Sub rather than held by PGS, must be allocated between the business of PGS and the Patents. These measurements require significant judgment and remain subject to completion of a valuation of the consideration transferred and of the assets acquired.
FORM 10 INFORMATION
The following information is provided pursuant to Item 2.01(f) of Form 8-K and corresponds to the disclosure requirements of a registration statement on Form 10 under the Exchange Act.
Cautionary Note Regarding Forward-Looking Statements
Statements in this Current Report on Form 8-K that are not historical facts are forward-looking statements and are subject to risks and uncertainties that could cause actual future events or results to differ materially from such statements. Any such forward-looking statements, including, but not limited to, financial guidance, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements that do not directly or exclusively relate to historical facts. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “could,” “would,” “expects,” “plans,” “anticipates,” “intend,” “plan,” “goal,” “seek,” “strategy,” “future,” “likely,” “believes,” “estimates,” “projects,” “forecasts,” “predicts,” “potential,” or the negative of those terms, and similar expressions and comparable terminology. These include, but are not limited to, statements relating to future events or our future financial and operating results, plans, objectives, expectations, and intentions. Although we believe that the expectations reflected in these forward-looking statements are reasonable, these expectations may not be achieved. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they represent our intentions, plans, expectations, assumptions, and beliefs about future events and are subject to known and unknown risks, uncertainties and other factors outside of our control that could cause our actual results, performance or achievement to differ materially from those expressed or implied by these forward-looking statements. In addition to the risks described in the “Risk Factors” section below, these risks and uncertainties include: our ability to successfully integrate PGS and realize the anticipated benefits of the acquisition; our dependence on PGS as our sole operating business and on a small number of suppliers for PGS’s principal products; our ability to expand our direct, general contractor and government sales channels and the PGS dealer and distributor network; the concentration of PGS’s revenues in a single industry and geographic region; our ability to attract and retain key personnel, including the manager of PGS; our failure to compete effectively in the safety and security glass industry; our history of losses, deficiency in working capital and stockholders’ equity and our ability to achieve sustained profitability; substantial doubt about our ability to continue as a going concern and material weaknesses in internal control over financial reporting; our ability to obtain additional financing on acceptable terms; remaining liabilities and indebtedness that could adversely affect our business, financial condition and results of operations; the impact of new or changed laws, regulations or other industry standards that could adversely affect our ability to conduct our business; and changes in general market, economic and political conditions in the United States and global economies or financial markets.
These forward-looking statements represent our estimates and assumptions only as of the date of this report and, except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise after the date of this report. Given these uncertainties, you should not place undue reliance on these forward-looking statements and should consider various factors, including the risks described in the “Risk Factors” section below, in our most recent Annual Report on Form 10-K and in our Quarterly Reports on Form 10-Q, as well as any amendments thereto, filed with the SEC.
Description of Business
Overview
Following the Closing, the Company conducts its operations through PGS, in which the Company holds an indirect eighty percent (80%) membership interest through Acquisition Sub, with the remaining twenty percent (20%) membership interest held by Mr. Wanke. PGS, which also does business as A1 Glass Coating, is a Texas limited liability company formed in 2021 and headquartered in Universal City, Texas, in the San Antonio metropolitan area. PGS is the North American distributor of C-Bond products and markets, sells and installs nanotechnology-based glass strengthening and ballistic-resistant window film systems that are designed to protect building occupants and property against ballistic attack, forced entry, blast, severe windstorms and flying debris. PGS sells and installs these products directly, and also sells product to a nationwide network of more than 35 authorized dealers and distributors, serving educational institutions, general contractors, federal, state and local government agencies, airports, law enforcement agencies, commercial and industrial property owners and residential customers, principally in the United States. C-Bond products have been installed in more than 150 schools and at major facilities including Los Angeles International Airport, George Bush Intercontinental Airport, the Federal Bureau of Investigation, the Los Angeles Police Department and the Houston Fire Department. PGS’s revenues are derived primarily from commercial film installation and, to a lesser extent, retail automotive film installation.
Products and Services
PGS’s principal products are C-Bond Secure, a glass strengthening primer and window film mounting solution, and C-Bond BRS, a ballistic-resistant film system. PGS also offers solar, decorative, reflective and other specialty window films. PGS delivers these products principally through direct sales to end users, in which PGS both supplies the product and performs the installation, and to a lesser extent through sales to authorized dealers and distributors, which purchase product from PGS and perform installation for their own customers. PGS also derives revenue from repeat maintenance, warranty and upgrade work for existing customers.
C-Bond Secure. C-Bond Secure is a patented, water-based, non-toxic nanotechnology solution that is applied to glass to increase its strength and flexibility, improve the adhesion of window film to glass, reduce film curing time, and modify the failure pattern of glass in the event of breakage. C-Bond Secure may be used as the mounting solution for any type of window or glass film in place of conventional soap and water, without additional labor cost. The patent-protected formula uses a Silane Coupling Agent, Acrylate Epoxy Adhesive and Self-Assembling Mechanism developed in part in conjunction with Rice University. C-Bond Secure has been tested by independent laboratories, including at Rice University in accordance with ASTM C-1499 (glass strength, validated to provide a 55% improvement) and ASTM C-3330 (film peel strength), at Stork Laboratories in accordance with CPSC 1201.4 (forced entry impact), at the Miami-Dade Hurricane Testing Center in accordance with applicable ASTM wind and storm standards, and at ABS Consulting in accordance with ASTM F1642-04 and GSA TS01-2003 (blast mitigation).
C-Bond BRS. C-Bond BRS is a ballistic-resistant film system consisting of a proprietary multi-layer security film applied to specified glass configurations using C-Bond Secure as the mounting solution. C-Bond BRS has been validated by independent laboratories to provide ballistic protection at National Institute of Justice (“NIJ”) Levels I, II and IIA and under Underwriters Laboratories standard UL 752 by H.P. White Laboratories, and at NIJ Level III by Element U.S. Space & Defense, covering munitions ranging from .22 long rifle and .38 magnum to 9mm, .357 magnum and 5.56x45mm with appropriate glass and film configurations. Because C-Bond BRS is applied to existing glass, it can be installed or retrofitted into existing framing systems without structural changes to the building, and it is substantially lighter and less expensive than traditional ballistic glass or polycarbonate alternatives. PGS believes C-Bond BRS is the only film-to-glass system validated to these ballistic standards and the only such system offering one-way ballistic capability, which is designed to stop incoming projectiles while permitting return fire from the protected side.
Customers and Suppliers
Customers. PGS’s customers include public school districts, general contractors, colleges and universities, federal, state and local government agencies, airports, law enforcement and emergency services agencies, healthcare facilities, commercial and industrial property owners and residential customers. C-Bond products have been installed in more than 150 schools as well as at major airports including Los Angeles International Airport and George Bush Intercontinental Airport, law enforcement agencies including the Los Angeles Police Department and the Federal Bureau of Investigation, and the Houston Fire Department. For the year ended December 31, 2025, no customer accounted for more than ten percent (10%) of PGS’s sales. For the year ended December 31, 2024, one customer accounted for 23.0% of PGS’s sales. Because PGS’s revenues are project-based, the customers that account for a significant portion of sales vary from period to period. PGS’s accounts receivable are more concentrated than its sales: at December 31, 2025, three customers accounted for 60.5% of the total accounts receivable balance, representing 24.3%, 23.4% and 12.8%, respectively, and at December 31, 2024, two customers accounted for 37.8% of that balance, representing 21.4% and 16.4%, respectively.
Suppliers. PGS does not manufacture the products it sells. PGS obtains C-Bond Secure from CB Nanoshield under the Distributor Agreement, which was assigned to PGS in connection with the Closing and under which CB Nanoshield manufactures and supplies product against purchase orders at a fixed price, neither party is obligated to purchase or sell any minimum quantity, and either party may terminate on sixty (60) days’ notice prior to the annual anniversary date. CB Nanoshield manufactures that product under a patent and know-how license granted by C-Bond Systems LLC, as described under “Intellectual Property” below. PGS purchases substantially all of its inventory from four suppliers, and the loss of those suppliers could have a material adverse effect on its results of operations and financial condition. PGS does not own the formulations for, or the right to manufacture, the C-Bond Secure and C-Bond BRS products. PGS believes that, if necessary, alternate vendors could supply similar products in quantities adequate to avoid material disruption to its operations, although an alternative product may not carry the ballistic, forced entry, blast and safety certifications described above.
Sales and Marketing
PGS sells its products primarily through direct sales to end users, including as a subcontractor to general contractors, and to a lesser extent through a network of authorized dealers and distributors located throughout the United States. PGS’s dealer and distributor agreements are entered into on a standard form under which the dealer or distributor submits purchase orders at prices quoted by PGS, PGS may accept or reject any order in its sole discretion, and PGS may establish and change credit terms and limits. Those agreements provide that PGS will not change prices without ten (10) days’ prior written notice, that risk of loss passes to the dealer or distributor upon loading at PGS’s facility, that PGS retains a purchase money security interest in the products sold until payment, that dealers and distributors may resell only to end users except as expressly permitted, and that PGS’s liability is limited to the purchase price paid and excludes incidental, special and consequential damages, with any action required to be commenced within one year after the cause of action accrues. The agreements are non-exclusive, do not obligate the dealer or distributor to purchase or PGS to sell, and may be terminated by either party at any time in its sole discretion. PGS markets its products by emphasizing the independent third-party validation of its product performance, the cost and weight advantages of a film retrofit relative to ballistic glass and polycarbonate alternatives, and its installed base of referenceable public-sector and institutional customers.
Growth Strategy
The Company intends to operate PGS as the initial platform of a diversified holding company focused on the safety and security technology sector. The Company’s growth strategy for the acquired business consists of (i) expanding the authorized dealer and distributor network in order to increase geographic coverage without a proportional increase in capital expenditures, (ii) increasing direct sales to educational institutions, government agencies and airports, including through development of government contracting channels, (iii) investing in sales infrastructure and marketing, and (iv) pursuing additional acquisitions of proven, revenue-generating safety and security technology businesses that can be integrated with PGS or operated alongside it. The Company has identified additional acquisition candidates in adjacent verticals but has not entered into any definitive agreement with respect to any such acquisition. The Company’s ability to implement this strategy will depend on its ability to obtain additional financing on acceptable terms, and there can be no assurance that the Company will do so or that any element of this strategy will be successfully implemented.
Regulatory
PGS’s business is not subject to industry-specific federal licensing or approval requirements. PGS is subject to federal, state and local laws of general application, including workplace health and safety requirements administered by the Occupational Safety and Health Administration and comparable state agencies, laws governing the handling, storage and transportation of the chemical products used in its installations, state and local contractor licensing, registration and permitting requirements applicable to installation work, and, in connection with sales to public school districts and government agencies, procurement, bidding and background check requirements. PGS holds the licenses, permits and other governmental authorizations that are material to the conduct of its business, and PGS has not received notice that any governmental authority intends to cancel, terminate or decline to renew any of them. The ballistic, forced entry, blast, hurricane and glass strength performance standards referenced above, including those of the NIJ, Underwriters Laboratories, ASTM International, the Consumer Product Safety Commission and the General Services Administration, are voluntary product performance standards verified by independent testing laboratories and are not governmental licenses or approvals.
Intellectual Property
In connection with the Closing, Acquisition Sub acquired the four (4) United States patents listed below from the Seller pursuant to the Patent Assignment. The patented technology, which was developed in part in conjunction with Rice University, relates to nanotechnology compositions and processes that bond within microscopic defects in glass to increase its strength and resistance to crack propagation.
(i) U.S. Patent No. 10,155,877, Materials, treatment compositions, and material laminates, with carbon nanotubes, issued December 18, 2018; (ii) U.S. Patent No. 10,273,347, Nano-(multifunctional) solutions for glass and glass products: heterogeneous nano-self-assembly and/or coating, issued April 30, 2019; (iii) U.S. Patent No. 10,696,583, Composition for strengthening glass, issued June 30, 2020; and (iv) U.S. Patent No. 11,247,938, Emulsion Compositions and Methods for Strengthening Glass, issued February 15, 2022.
The Patents are held by Acquisition Sub and not by PGS. In connection with the Closing, Acquisition Sub granted PGS a non-exclusive license to use the Patents in the operation of the PGS business pursuant to the Patent License Agreement. In addition, in connection with the Closing, the Seller assigned to PGS the intellectual property rights necessary for PGS to continue using the trade names and trademarks associated with the PGS business, including the Patriot Glass Solutions and A1 Glass Coating names, and confirmed that all maintenance fees with respect to those rights were current. PGS does not own the formulations for, or the right to manufacture, the C-Bond Secure and C-Bond BRS products. Its right to purchase C-Bond Secure derives from the Distributor Agreement with CB Nanoshield, and CB Nanoshield’s right to manufacture that product derives from a patent and know-how license granted by C-Bond Systems LLC dated June 15, 2023, as amended February 2, 2024, to which neither PGS nor Acquisition Sub is a party.
Competition
The markets in which we operate are highly competitive and fragmented. PGS competes principally against (i) manufacturers and installers of traditional laminated ballistic glass and polycarbonate glazing systems, which generally require full glass or frame replacement, (ii) other suppliers and installers of safety, security and solar window films, many of which are affiliated with large diversified manufacturers with substantially greater financial, technical and marketing resources than the Company, and (iii) regional and local window film installation contractors. PGS competes on the basis of the independently validated ballistic and safety performance of its products, the ability to retrofit existing glass without structural modification, the lower installed cost and weight of its systems relative to ballistic glass and polycarbonate alternatives, optical clarity, its installed base of public-sector and institutional references, and the reach of its dealer network. Some competitors offer broader product lines, longer operating histories and greater brand recognition, and PGS’s competitive position depends in part on its continued access to the C-Bond Secure and C-Bond BRS products under the Distributor Agreement.
Employees
As of the Closing Date, the Company had one (1) full-time employee and one (1) part-time employee, and PGS had thirteen (13) full-time employees, one (1) part-time employee and three (3) independent contractors. Certain employment, payroll and benefits administration functions for the PGS workforce are provided through a professional employer organization arrangement. None of the employees of the Company or PGS is represented by a labor union or covered by a collective bargaining agreement, and neither the Company nor PGS has experienced any material labor interruption. The Company considers its relations with its employees and independent contractors to be good.
Risk Factors
Investing in our common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below together with all of the other information contained in this Current Report, including our audited annual and interim unaudited financial statements, unaudited pro forma financial statements and the related notes included in this Current Report, before deciding to invest in our common stock. Following the Closing, our operations consist principally of the business of PGS, in which we hold an indirect eighty percent (80%) membership interest. If any of the following risks actually occur, our business, prospects, operating results and financial condition could suffer materially. In such event, the trading price of our common stock could decline, and you might lose all or part of your investment.
Risks Related to Our Business and Operations
We were a shell company immediately prior to the Closing and have no history of operating the acquired business.
Immediately prior to the Closing, we were a shell company with no or nominal operations, having previously wound down our legacy operations. Our management has not previously operated a safety and security products business, and we have no operating history as a combined enterprise. Our historical financial statements reflect a shell company without meaningful revenues and are not indicative of our future results of operations, and the historical financial statements of PGS reflect the operation of that business as a privately held company under different ownership and without the costs and obligations associated with being part of a public reporting company. As a result, there is limited information on which you can evaluate our business and prospects, and we may be unable to operate the acquired business profitably or to manage it effectively.
All of our revenues are derived from a single operating business in which we hold only an eighty percent interest.
Following the Closing, all of our revenues and operating cash flows are derived from PGS. We have no other material operating business, and we are therefore dependent on a single business operating in a single industry and, to a significant extent, in a single geographic region. We are a holding company and depend on distributions from PGS to fund our corporate obligations. Because we hold only an eighty percent (80%) membership interest in PGS, twenty percent (20%) of any distributions made by PGS is payable to the holder of the retained minority interest rather than to us, and PGS may be unable, or may determine not, to make distributions in amounts sufficient to fund our obligations. Any deterioration in the business, financial condition or results of operations of PGS would have a disproportionate effect on us.
We will require additional capital to implement our business strategy, and additional capital may not be available on acceptable terms.
Our business strategy contemplates expanding the PGS dealer and distributor network, developing direct and government sales channels, investing in sales and marketing infrastructure and pursuing additional acquisitions. Each of these initiatives requires capital that we do not currently have, and we have no committed source of additional financing. If we raise additional capital through the sale of equity or convertible securities, our existing stockholders will experience dilution, and any such securities may have rights, preferences and privileges senior to those of our common stock. If we incur indebtedness, we may become subject to covenants restricting our operations and to debt service obligations that reduce cash available for the business. If we are unable to obtain additional capital when needed and on acceptable terms, we may be required to delay, reduce or abandon elements of our business strategy, and our ability to continue as a going concern may be adversely affected.
There is substantial doubt about our ability to continue as a going concern.
The report of the independent registered public accounting firm on the audited financial statements of PGS contains an explanatory paragraph stating that PGS’s working capital deficit, members’ deficit and accumulated deficit raise substantial doubt about its ability to continue as a going concern. At December 31, 2025, PGS had a working capital deficit of $150,574, a members’ deficit of $26,152 and an accumulated deficit of $645,380, and at June 30, 2026, PGS had a working capital deficit of $183,799, a members’ deficit of $108,813 and an accumulated deficit of $728,041. Our own financial statements have disclosed substantial doubt about our ability to continue as a going concern, and at June 30, 2026 we had cash of $29,082, a working capital deficit of $9,134,091 and an accumulated deficit of $148,365,105. The Closing does not alleviate these conditions. We are a holding company with no independent operations, and we depend on distributions from PGS, of which twenty percent (20%) is payable to the holder of the retained minority interest rather than to us. Our plans depend on raising additional capital and on PGS continuing to generate positive operating cash flow, and we have no committed source of additional financing. If we are unable to accomplish these objectives, we may be required to curtail or cease operations, and holders of our securities could lose all or part of their investment. The financial statements included in this Current Report do not include any adjustments that might result from the outcome of this uncertainty.
Our disclosure controls and procedures are not effective, and material weaknesses have been identified in the internal control over financial reporting of PGS.
PGS has operated as a privately held company and has not been required to design or maintain internal control over financial reporting sufficient to meet the standards applicable to a public reporting company, to prepare financial statements on a timely basis in accordance with the requirements applicable to public companies, or to comply with Section 404 of the Sarbanes-Oxley Act of 2002. Certain financial information of PGS has historically been prepared on a cash basis. We have limited accounting and financial reporting personnel, and, as disclosed in our periodic reports, management has concluded that our disclosure controls and procedures are not effective. In connection with the audit of PGS, the independent registered public accounting firm identified material weaknesses in the internal control over financial reporting of PGS consisting of a lack of segregation of duties within the accounting function, the absence of multiple levels of management review of complex accounting matters, limitations in the job management system used by PGS that prevented it from functioning as a complete accounting and financial reporting system and delayed the delivery of financial reporting data, and the absence of third-party evidence of job completion supporting certain revenues recognized in 2025. It also identified significant deficiencies relating to the periodic review of liability accounts and period-end accruals, the recording and valuation of notes payable and the analysis of the allowance for credit losses. Remediating these weaknesses will require us to implement monitoring procedures, to obtain independent review of complex accounting transactions and to invest in accounting systems and personnel, and we may be unable to do so on a timely basis or at all. If we are unable to remediate these or any additional deficiencies, or if we otherwise fail to establish and maintain effective internal control over financial reporting and effective disclosure controls and procedures, we may be unable to report our financial results accurately or on a timely basis, which could result in restatements of our financial statements, regulatory action, a loss of investor confidence and a decline in the value of our securities.
We depend on a small number of key personnel, and the loss of any of them could disrupt our business.
Our future success depends on the continued service of our executive officers and of the management of PGS. In particular, the PGS business has been led by Mr. Wanke, who retained a twenty percent (20%) membership interest in PGS and who is party to the Wanke Employment Agreement. Mr. Wanke has relationships with PGS’s dealers, distributors, customers and suppliers, and technical knowledge concerning the specification and installation of PGS’s products, that would be difficult to replace. We do not maintain key person life insurance on any of our personnel. The loss of the services of Mr. Wanke or of our executive officers, or our inability to attract and retain qualified sales, technical and installation personnel, could disrupt our operations and impair our ability to execute our business strategy.
We may be unable to integrate PGS successfully or to realize the anticipated benefits of the acquisition.
The acquisition of PGS is our first acquisition in the safety and security technology sector and is intended to serve as the platform for our future operations. Integration will require us to establish financial reporting, disclosure, budgeting and internal control processes at PGS that are appropriate for a subsidiary of a public reporting company, to implement management oversight of a business located remotely from our executive offices, and to devote management attention and resources that would otherwise be directed to operating the business. We may encounter difficulties that we did not anticipate, including the loss of customers, dealers, distributors, employees or suppliers, unanticipated costs and liabilities, and the diversion of management attention. If we are unable to integrate PGS effectively, we may fail to realize the revenue growth, operating efficiencies and other benefits we expect from the acquisition, and the consideration we paid may prove to have exceeded the value of what we acquired.
The audited financial statements of PGS reflect matters that were not apparent from the financial information on which we evaluated the acquisition, and further adjustments to the unaudited interim financial statements of PGS may be required.
Certain financial information of PGS that we reviewed in evaluating the acquisition was unaudited, was prepared by PGS’s management and was in part prepared on a cash basis. The audit of PGS for the years ended December 31, 2025 and 2024 has since been completed, and the audited financial statements filed with this Current Report reflect matters that include an explanatory paragraph regarding PGS’s ability to continue as a going concern, full impairment of goodwill and other intangible assets of $529,402 recognized in 2024, and the recognition of $291,000 of secured promissory notes payable to related parties on which PGS is jointly and severally liable and which are in default. In the course of the audit, adjustments were identified with respect to unrecorded accrued rent and accrued interest payable to related parties, the recording of notes payable, including approximately $81,000 of obligations arising from joint and several liability provisions, and an increase in the allowance for credit losses. The unaudited interim financial statements of PGS remain subject to year-end audit adjustment, and the unaudited pro forma financial information giving effect to the acquisition depends on a valuation of the consideration transferred and of the assets acquired that has not been completed. Further adjustments could be material and could cause our reported financial position and results of operations to differ from the information on which we based our evaluation of the transaction and our determination of the consideration paid.
PGS purchases substantially all of its inventory from a small number of suppliers and obtains its principal products under a single distributor agreement.
PGS does not manufacture the products it sells. PGS purchases substantially all of its inventory from four suppliers, and it obtains C-Bond Secure, one of its two principal products, solely under the Distributor Agreement, which renews annually and may be terminated by either party on sixty (60) days’ notice prior to the anniversary date. C-Bond Secure is manufactured by CB Nanoshield under a license from C-Bond Systems LLC. PGS has no alternative source of supply for its principal products and does not own the formulations for, or the right to manufacture, those products. If the Distributor Agreement were terminated, were not renewed, or were amended on terms adverse to PGS, if any of these suppliers were unable or unwilling to fill orders on a timely basis or at acceptable prices, or if any of them were to experience financial difficulty, a business interruption or a change of control, PGS could be unable to fill customer orders and our revenues and results of operations would be materially and adversely affected. Although PGS believes that alternate vendors could supply similar products in adequate quantities if necessary, qualifying a substitute product would take time, and any substitute product may not carry the ballistic, forced entry, blast and safety certifications on which PGS’s marketing and pricing depend.
PGS may have liabilities that were not disclosed to us, and our recourse for undisclosed liabilities is limited.
Although we conducted due diligence prior to the Closing, PGS may have liabilities or obligations, including tax, employment, warranty, product liability, environmental and contractual liabilities, that were not disclosed to us or that exceed the amounts disclosed. Prior to the Closing, PGS was subject to a number of financing arrangements, including merchant cash advance obligations on which it defaulted in February 2025, and which were subsequently settled, and equipment and vehicle financing. Although the Purchase Agreement required delivery of evidence that liens on the assets of PGS had been terminated and released, including through the filing of UCC-3 termination statements, and that PGS had been released as a maker under certain secured promissory notes, we may nonetheless become subject to claims relating to these or other pre-Closing matters. Our indemnification rights under the Purchase Agreement are subject to significant limitations. If PGS has material undisclosed liabilities, we may bear the cost of them without effective recourse.
The operating business depends on intellectual property that it does not own, and the value of the acquired Patents depends on our ability to maintain and enforce them.
The Patents acquired in the transaction are held by Acquisition Sub rather than by PGS, and PGS uses them under a non-exclusive license granted by Acquisition Sub. PGS does not own the formulations for the C-Bond Secure or C-Bond BRS products or the right to manufacture them; its right to purchase C-Bond Secure derives from the Distributor Agreement, and CB Nanoshield’s right to manufacture that product derives from a patent and know-how license granted by C-Bond Systems LLC to which we are not a party. As a result, the operating business depends on contractual rights that could be terminated, challenged or determined to be unenforceable, including one to which we have no privity. The value of the Patents depends on our ability to pay maintenance fees and otherwise maintain them, to defend them against assertions of invalidity or unenforceability, and to detect and enforce them against infringers, each of which requires financial and management resources that we may not have. The technology underlying the Patents was developed in part in conjunction with a university, and third parties may assert rights in, or claims relating to, that technology. If the Patents were invalidated, circumvented, designed around or allowed to lapse, or if either the license to PGS or the license on which CB Nanoshield depends were terminated, the competitive advantages on which PGS’s products rely could be diminished or lost.
PGS conducts its operations from a single leased facility that it leases from a related party.
PGS conducts its operations from a single leased facility in Universal City, Texas, which it leases from an entity affiliated with the holder of the retained minority interest in PGS. In connection with the Closing, that lease was amended to exercise the first of two five-year renewal options, as described under “Properties” below. Following expiration of the renewal term, we would be required to exercise the remaining renewal option or to negotiate a new lease, and we have no assurance that we could do so on acceptable terms. Any damage to, or interruption at, that facility, whether resulting from severe weather, fire, loss of utilities or other causes, would disrupt PGS’s ability to fill orders and perform installations, and we do not maintain an alternative facility. In addition, because the landlord is a related party, the lease may not be on terms that could be obtained from an unaffiliated third party, and a dispute with the landlord could result in the loss of the facility.
Adverse macroeconomic conditions, including inflation, elevated interest rates and labor shortages, could increase our costs and reduce demand for our products.
Our results of operations are affected by general economic conditions, including inflation, interest rates, employment levels, the availability and cost of skilled labor, construction and renovation activity, and the fiscal condition of state and local governments and school districts. Inflation increases the cost of the products we purchase, the labor required to install them, and the transportation, insurance and facility costs we incur. Because PGS frequently commits to pricing at the time a bid is submitted or an order is accepted, and performs the installation later, cost increases arising in the interim may not be recoverable from the customer. Elevated interest rates increase the cost of any financing we obtain, may reduce the funds available for capital projects by our commercial and institutional customers, and may increase the cost of the bond and grant financing on which public-sector customers depend. Shortages of qualified installation labor, or increases in wage rates, could constrain our ability to complete projects on schedule or at anticipated margins. A slowdown in commercial construction and renovation activity, a deterioration in state or local government finances, or a broader economic downturn could reduce or defer demand for our products and adversely affect our revenues and results of operations.
Supply chain disruption, trade measures and raw material shortages could prevent us from filling customer orders.
Because PGS purchases finished product from a small number of suppliers and does not manufacture, we have no ability to substitute internal production for purchased product. Our suppliers depend on their own manufacturing capacity, raw material inputs, specialty film substrates, chemical components and packaging, and on third-party logistics providers, any of which may be disrupted by supplier or carrier failures, capacity constraints, raw material shortages, port or transportation congestion, labor disputes, natural disasters, severe weather, public health events, cyber incidents, armed conflict or geopolitical instability. Tariffs, duties, export controls, sanctions and other trade measures affecting imported films, chemicals or components could increase the cost of the products we purchase or restrict their availability, and we may be unable to pass those increases on to customers. Any interruption in the supply of product, or any material increase in its cost, could prevent us from filling customer orders on schedule, cause us to incur penalties or lose projects, damage our relationships with dealers, distributors and institutional customers, and adversely affect our revenues, margins and results of operations.
Our ability to use our net operating loss carryforwards to offset future taxable income may be limited.
We have incurred losses in prior periods and may have net operating loss carryforwards and other tax attributes available to offset future taxable income. Under Section 382 of the Internal Revenue Code of 1986, as amended, and comparable state provisions, if a corporation undergoes an “ownership change,” generally defined as a greater than fifty percent change in the ownership of its stock by five percent stockholders over a rolling three-year period, the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes to offset post-change taxable income is subject to an annual limitation. The issuance of the Series J Preferred Stock as the Merger Consideration, together with prior and future issuances of our securities, conversions of our outstanding preferred stock and transfers among our stockholders, may result in one or more ownership changes. We have not completed a study to determine whether an ownership change has occurred or the extent of any resulting limitation. If our ability to use these attributes is limited, or if the attributes expire before we generate sufficient taxable income to use them, we may be required to pay cash income taxes earlier and in greater amounts than we would otherwise, which would reduce our cash flows and the value of these attributes.
We operate in highly competitive and fragmented markets, and many of our competitors have substantially greater resources than we do.
PGS competes against manufacturers and installers of traditional laminated ballistic glass and polycarbonate glazing systems, against other suppliers and installers of safety, security and solar window films, and against regional and local window film installation contractors. Many of these competitors are affiliated with large, diversified manufacturers and have substantially greater financial, technical, manufacturing, sales and marketing resources, longer operating histories, broader product lines and greater brand recognition than we do. Competitors may develop or obtain certification for competing film systems, may bundle competing products with other offerings, may reduce prices to gain market share, or may enter into exclusive arrangements with dealers, distributors or customers. Barriers to entry in window film installation services are low. If we are unable to compete effectively, we may lose customers, dealers or distributors, may be required to reduce our prices, or may be unable to grow our revenues, any of which would adversely affect our results of operations.
We depend on public-sector and institutional customers whose purchasing decisions are subject to budget appropriations and procurement processes outside our control.
A substantial portion of PGS’s revenues is derived from public school districts, government agencies, airports and law enforcement agencies. Purchases by these customers depend on the availability of budget appropriations, grant funding and bond proceeds, on competitive bidding and procurement requirements, and on political and administrative priorities, none of which we control. Sales cycles for these customers are often lengthy and unpredictable, and awards may be delayed, reduced, cancelled or awarded to competitors. Contracts with governmental customers may permit termination for convenience, may be subject to audit and to compliance obligations that do not apply to commercial customers, and may expose us to penalties or debarment in the event of non-compliance. Reductions in public funding for school and facility security, changes in funding priorities, or delays in procurement would reduce demand for our products and adversely affect our revenues and results of operations.
Our revenues are project-based and have fluctuated significantly from period to period, and prior results are not indicative of future performance.
PGS derives its revenues principally from discrete installation projects rather than from long-term contracts or committed recurring revenue arrangements. The timing and size of individual projects, particularly larger commercial and institutional installations, cause PGS’s revenues and results of operations to fluctuate significantly from month to month and from period to period. Net sales of PGS were $2,607,600 for the year ended December 31, 2025 and $3,056,670 for the year ended December 31, 2024, a decrease of approximately 14.7%, and PGS reported net income of $422,044 in 2025 compared to a net loss of $940,041 in 2024. A small number of projects may account for a significant portion of revenues in any given period, and the completion, deferral, reduction or cancellation of any such project can have a disproportionate effect on results for that period. Because a substantial portion of PGS’s operating costs, including facility costs and salaries, does not vary with revenue in the short term, a decline in project volume would result in a proportionately greater decline in operating results. Results for any prior period should not be relied upon as an indication of results for any future period.
Demand for our products depends on perceptions of security threats and on regulatory mandates that may not continue.
Demand for ballistic-resistant and forced-entry protective products is driven substantially by heightened concern regarding violent incidents at schools and public facilities, by government mandates and building code requirements relating to protective glazing, and by defense and infrastructure spending. Demand may be episodic, increasing following highly publicized incidents and declining thereafter, which makes planning of capacity, inventory and personnel difficult. If anticipated mandates or code requirements are not adopted, are delayed, are repealed or are satisfied through alternative technologies, or if public concern regarding these threats diminishes, demand for our products could decline. Published estimates of the size and growth of the safety and security glass and window film markets reflect the assumptions of the third parties that prepared them, may prove inaccurate, and in any event do not indicate the portion of those markets that we will be able to address.
Our margins vary by sales channel and product, and we may be unable to maintain them.
PGS realizes different margins across its product lines and sales channels, and sales through the general contractor, dealer and distributor channel generally carry lower margins than direct sales and installations. A shift in the mix of our revenues toward lower-margin channels or products would reduce our overall margins even if total revenues increased. Because PGS purchases finished product from a small number of suppliers, increases in the prices charged by those suppliers, or in the cost of labor, transportation or installation materials, may not be recoverable through higher prices to customers, particularly in competitive bidding situations. Dealers and distributors set their own resale prices, and we have no ability to control the prices at which our products are ultimately sold to end users. Competitive pressure, customer consolidation and the availability of lower-cost alternative products may require us to reduce prices or offer discounts, which would adversely affect our margins and results of operations.
Risks Related to the Merger
Our indemnification rights under the Purchase Agreement are subject to significant limitations, and we may be unable to recover for breaches by the seller parties.
The representations and warranties in the Purchase Agreement survive the Closing for only twelve months, and any indemnification claim must be noticed in writing within that period. No indemnification is payable until aggregate losses exceed $50,000, and the maximum aggregate liability of the Seller and the Seller Shareholders may not exceed twenty-five percent (25%) of the Merger Consideration. The obligations of the Seller and the Seller Shareholders are several and not joint, so we must pursue each of them separately for its own share and bear the risk that any of them is unable to pay. Indemnifiable losses are calculated net of amounts recovered or recoverable under insurance policies or from third parties and net of related tax benefits, which may further reduce any recovery. Except in the case of fraud and intentional misrepresentation, indemnification under the Purchase Agreement is our sole and exclusive remedy, and we have waived all other rights, claims and causes of action arising under applicable law. There is no escrow or holdback of the Merger Consideration, and indemnification claims may not be satisfied by cancelling or offsetting against the shares of Series J Preferred Stock we issued. As a result, we may have no effective recourse for a breach discovered after the survival period, for losses below the basket, or for losses in excess of the cap, and we may be required to absorb those losses ourselves.
The parties that received the Merger Consideration made no representations regarding the acquired business, and our only recourse for breaches relating to PGS is against an individual.
Under the Purchase Agreement, the representations and warranties regarding PGS, including those concerning its business, assets, liabilities, financial statements, contracts, permits and compliance with law, were made solely by PGS and by Mr. Wanke, and not by the Seller or the Seller Shareholders, which received the Merger Consideration. The Seller and the Seller Shareholders expressly disclaimed any representation regarding PGS, have no indemnification obligation with respect to PGS, and we released and discharged them from all claims arising from or relating to PGS, its business, operations, assets or liabilities. In addition, all of the representations and warranties of the Seller and the Seller Shareholders are qualified by their actual knowledge, without any duty of inquiry or investigation. Accordingly, our only indemnification recourse for a breach of a representation regarding the acquired business is against Mr. Wanke individually, subject to the same twelve-month survival period and the other limitations described above. Mr. Wanke’s ability to satisfy an indemnification claim depends on his personal financial resources, which may be insufficient, and pursuing a claim against him would place us in an adversarial position with the executive on whose continued service the acquired business depends, and who holds the retained minority interest in PGS.
The Seller is expected to be liquidated, which may leave us without a solvent counterparty for indemnification claims.
The shares of Series J Preferred Stock constituting the Merger Consideration were issued in the name of the Seller and are transferable in equal shares to the Seller Shareholders following the liquidation of the Seller, which the parties contemplated at the time they entered into the Purchase Agreement. The Merger Consideration represents substantially the only asset of the Seller. If the Seller is liquidated and that consideration is distributed to the Seller Shareholders, the Seller may have no assets available to satisfy an indemnification claim, and we would be required to pursue the Seller Shareholders, each only for its several share, or to seek to set aside the distribution. In addition, the Seller has retained post-Closing obligations, including the obligation to prepare and file tax returns for PGS and the Seller for pre-Closing periods at its own expense and to pay amounts due under those returns, and to bear a share of the pre-Closing tax liability of PGS. If the Seller is liquidated without adequate provision for these obligations, we may be required to perform them or to bear the associated cost, and our ability to obtain reimbursement may be limited or unavailable.
The membership interests and Patents we acquired were transferred to the Seller through a strict foreclosure, and a challenge to that transfer could affect our title.
The eighty percent (80%) membership interest in PGS and the Patents that we acquired were transferred to the Seller in January 2025 by C-Bond Systems, Inc. and its affiliates pursuant to a debt forgiveness, equity redemption and strict foreclosure arrangement. Transfers effected through foreclosure or in satisfaction of indebtedness may be subject to challenge by other creditors of the transferor, by a trustee or other representative in a bankruptcy or insolvency proceeding involving the transferor, or by other parties in interest, including on the grounds that the transfer constituted a fraudulent conveyance, a preferential transfer or a transfer for less than reasonably equivalent value, or that it failed to comply with applicable procedural requirements. The Purchase Agreement expressly excludes from the limitations on indemnification any determination of fraudulent conveyance by the Seller, which indicates that the parties considered this possibility. If the transfer to the Seller were successfully challenged, avoided or set aside, our title to the membership interests in PGS or to the Patents could be impaired, we could be required to defend costly litigation, and we could lose all or part of the assets we acquired. Our indemnification recourse in those circumstances would remain subject to the limitations described above.
The Merger may not qualify for the tax treatment the parties intended.
The parties intended that the Merger constitute a tax-free reorganization within the meaning of Section 368(a)(1)(C) of the Internal Revenue Code of 1986, as amended, and we and our subsidiaries represented that we had not taken and would not take any action that would prevent that qualification. We did not obtain a ruling from the Internal Revenue Service or an opinion of counsel regarding the tax treatment of the Merger. Qualification depends on the satisfaction of factual requirements that are tested at and after the Closing, including requirements relating to the substantially-all test, continuity of interest and continuity of business enterprise, and on the conduct of the parties following the Closing, including the disposition of the shares of Series J Preferred Stock issued as the Merger Consideration and the liquidation of the Seller. If the Internal Revenue Service were to successfully assert that the Merger does not qualify as a reorganization, the Seller and the Seller Shareholders could incur tax liabilities they did not anticipate and could assert claims against us, including claims that we breached our representations regarding the intended tax treatment, and we could incur costs in defending the intended treatment or in addressing the consequences of its failure.
We may bear tax liabilities of PGS relating to periods prior to the Closing.
Under the Purchase Agreement, the Seller and the Seller Shareholders are severally responsible for their pro rata share of eighty percent (80%) of any tax liability of PGS for periods prior to and including the Closing Date, and the Seller is obligated to prepare and file, at its own expense, specified tax returns of PGS and of the Seller for pre-Closing periods and to pay amounts due under those returns. We are responsible for eighty percent (80%) of the tax liability of PGS accruing after the Closing Date, and we are obligated to prepare and file returns covering any period that includes the Closing Date. Notwithstanding this allocation, taxing authorities may assess taxes, interest and penalties for pre-Closing periods directly against PGS, and we may be required to satisfy those assessments in order to avoid liens on the assets of PGS or interruption of its operations. Our ability to obtain reimbursement depends on the willingness and financial ability of the Seller and the Seller Shareholders to perform, which may be impaired following the liquidation of the Seller, and any indemnification claim would remain subject to the limitations described above. In addition, PGS is treated as a pass-through entity for United States federal income tax purposes, and we may be required to include our share of its taxable income in our own income whether or not PGS makes distributions sufficient to fund the associated tax.
We may be required to record impairment charges relating to goodwill or acquired intangible assets.
In accounting for the acquisition, we expect to record identifiable intangible assets, which may include the acquired Patents, customer and dealer relationships and trade names, and we may record goodwill to the extent the consideration transferred exceeds the fair value of the identifiable net assets acquired. Goodwill and indefinite-lived intangible assets are tested for impairment at least annually and more frequently if events or changes in circumstances indicate that the carrying amount may not be recoverable, and finite-lived intangible assets are tested when indicators of impairment are present. Impairment testing depends on estimates and assumptions regarding future revenues, margins, growth rates and discount rates. Because the acquired business generates project-based revenues that have fluctuated significantly between periods and depends on a small number of suppliers and a small number of key personnel, actual results may differ materially from the assumptions used. A decline in the performance or prospects of the acquired business, the loss of a supply relationship, an adverse development affecting the Patents, a sustained decline in the market price of our securities, or adverse changes in market or economic conditions could require us to record impairment charges. Any such charge would reduce our reported earnings and stockholders’ equity, and could be material. PGS recognized full impairment charges of $529,402 during the year ended December 31, 2024, consisting of $350,491 of goodwill and $178,911 of other intangible assets, following triggering events that included the loss of funding sources for its growth plan, a decrease in sales due to a slowdown in school-related tinting projects in Texas, and a downward revision to its internal forecasts.
Risks Related to Legal and Regulatory Compliance
Our products are marketed to protect against ballistic and forced-entry threats, and any failure of a product to perform as expected could expose us to substantial product liability and warranty claims.
PGS’s products are marketed and sold for the purpose of protecting building occupants and property against ballistic attack, forced entry, blast and severe weather. The independent laboratory validations on which those representations rest apply only to specified glass thicknesses, film configurations and installation methods, and a product installed on a different substrate or in a different configuration, or installed improperly, may not perform as certified. If a product fails to perform as expected in an actual incident, we could face claims for death, personal injury or property damage, together with claims for breach of warranty, breach of contract, negligence and misrepresentation. Claims of this nature may be brought by parties with whom we have no contractual relationship, including building occupants and their families, and the contractual limitations of liability contained in our customer contracts and subcontracts would not limit those claims. Any such claim, whether or not meritorious, could result in substantial defense costs, damages that exceed our insurance coverage, adverse publicity that damages the reputation on which our marketing depends, and increased insurance premiums or an inability to obtain insurance on acceptable terms. We may also be required to recall or replace products or to remediate completed installations at our own expense.
Our results depend on the quality of our own installation work, and improper installation could expose us to warranty and liability claims.
Substantially all installations of PGS’s products are performed by PGS personnel. The performance of our film systems depends on adherence to specified installation procedures, including surface preparation, film layering and the use of an approved anchoring system, and the manufacturer’s warranty is voided if the application solution is diluted, reused or otherwise altered. Improper installation may cause a product to fail to perform as certified, may result in warranty claims, customer dissatisfaction and remediation costs, and may expose us to liability. Because we self-perform, our ability to complete projects on schedule and at anticipated margins depends on retaining a sufficient number of trained installers, and the loss of installation personnel could delay projects and increase our costs. Installations performed by the independent dealers and distributors that purchase our products are outside our control, and deficient work or other conduct by a dealer or distributor could damage the reputation of our products.
Our marketing relies on comparative and superlative product performance claims that could be challenged.
PGS markets its products using claims regarding their performance relative to competing products, including claims that its film system is the only film-to-glass system validated to certain ballistic standards, the only such system offering one-way ballistic capability, and that its glass strengthening solution is the only patented product of its type that has been scientifically tested and commercially proven. Claims of this nature may be challenged by competitors under federal and state false advertising and unfair competition laws, or by regulators, and defending such a challenge could be costly and could require us to modify our marketing. Our ability to substantiate these claims depends on test reports prepared by independent laboratories with respect to specified product configurations, and those reports may not support the claims as applied to other configurations or as against products introduced by competitors after the tests were conducted. The voluntary standards under which our products were tested may be revised, and certifications may be withdrawn, suspended or become subject to additional requirements, including requirements for retesting at our expense. Any of these developments could deprive us of a principal basis on which we differentiate our products.
We are subject to state and local licensing, permitting and workplace safety requirements, and failure to comply could interrupt our operations.
PGS’s installation activities are subject to state and local contractor licensing, registration and permitting requirements, to building code and inspection requirements, and to workplace health and safety requirements administered by the Occupational Safety and Health Administration and comparable state agencies. PGS also handles, stores and transports chemical products in connection with its installations, which is subject to environmental, health and safety regulation. Sales to public school districts and government agencies may require compliance with procurement, bidding, background check and site access requirements. These requirements differ among jurisdictions, and our expansion into additional jurisdictions will require us to obtain and maintain additional licenses, registrations and permits. If we fail to obtain or maintain a required license, registration or permit, or if we are found to have violated an applicable requirement, we could be subject to fines, penalties, suspension of operations, disqualification from bidding, or claims by customers, and we could be required to cease work in a jurisdiction until the matter is resolved. Compliance costs may increase, and changes in these requirements could require us to modify our installation practices or products.
Our insurance may be insufficient to cover the liabilities we may incur.
We maintain general liability, automobile, property, workers’ compensation and other insurance in amounts that we believe are consistent with the practices of businesses of comparable size, and certain of PGS’s workforce coverages are obtained through a professional employer organization arrangement. Our insurance is subject to policy limits, deductibles, retentions and exclusions, and it may not cover, or may not be sufficient to cover, a claim arising from the failure of a product to protect against a ballistic or forced-entry threat, a claim alleging death or personal injury, a claim relating to installation work performed by an independent dealer or distributor, or a claim relating to our status as a public reporting company. A single significant claim could exceed our available coverage. In addition, insurance for product liability exposures of this nature may become more expensive or unavailable, and our insurers may deny coverage, become insolvent or dispute claims. Any liability that is not covered by insurance, or that exceeds our coverage, would be borne directly by us and could materially and adversely affect our financial condition.
Risks Related to Our Securities and Capital Markets
Because we were a shell company, holders of our restricted securities may not rely on Rule 144 for a substantial period, and we face other limitations applicable to former shell companies.
Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”), is not available for the resale of securities initially issued by a shell company unless and until the issuer has ceased to be a shell company, is subject to the reporting requirements of the Exchange Act, has filed all required reports during the preceding twelve months, and has filed with the SEC the information that would be required in a registration statement on Form 10, and at least one year has elapsed since that information was filed. Accordingly, holders of our restricted securities, including the shares of Series J Preferred Stock issued as the Merger Consideration and the shares of common stock issuable upon conversion of those shares, will be unable to rely on Rule 144 for at least one year following the filing of this Current Report, and thereafter only if we remain current in our reporting obligations. If we fail to file any required report on a timely basis, that period may be extended. In addition, we may not use a registration statement on Form S-8 to register securities issued under employee benefit plans until at least sixty days after we have filed the Form 10 information, and we may be unable to use certain abbreviated registration forms. These limitations may reduce the liquidity of our securities, may make it more difficult for us to raise capital or to compensate employees with equity, and may adversely affect the price at which our securities trade.
Conversion of our outstanding preferred stock, including the shares issued as the Merger Consideration, will dilute holders of our common stock.
In connection with the Closing, we issued 47,500 shares of Series J Preferred Stock, having an aggregate stated value of $4,750,000, as the Merger Consideration, and an additional 3,518 shares of Series J Preferred Stock, having an aggregate stated value of $351,800, in satisfaction of the Satisfied Obligations. Shares of Series J Preferred Stock were outstanding prior to the Closing, and shares of our Series H Convertible Preferred Stock, par value $0.001 per share (“Series H Preferred Stock”) also remain outstanding. Each share of Series J Preferred Stock is convertible into shares of our common stock on the terms set forth in the Series J Certificate of Designation, and we are obligated to reserve shares of common stock for issuance on conversion. The number of shares of common stock issuable on conversion of our outstanding preferred stock is substantial, and the issuance of those shares will dilute the ownership and voting interests of holders of our common stock and may adversely affect the market price of our common stock. The conversion price may be subject to adjustment on the occurrence of specified events, including dilutive issuances and stock splits, combinations and recapitalizations, and any such adjustment could increase the number of shares issuable on conversion. Sales of shares of common stock issued on conversion, or the perception that such sales may occur, could further depress the market price of our common stock. Holders of our common stock have no preemptive rights and will not be able to prevent this dilution.
Holders of our preferred stock vote together with our common stock on an as-converted basis and may be able to influence or control matters submitted to stockholders.
The holders of the Series J Preferred Stock are entitled to vote together with the holders of our common stock, on an as-converted to common stock basis, on all matters on which holders of our common stock are entitled to vote, subject to any applicable beneficial ownership limitation set forth in the Series J Certificate of Designation. The shares of Series J Preferred Stock issued as the Merger Consideration were issued to the Seller and are transferable in equal shares to the Seller Shareholders following the liquidation of the Seller. As a result, the Seller Shareholders and the other holders of our preferred stock may hold a significant percentage of our voting power on an as-converted basis without holding any shares of our common stock. Those holders may be able to influence or control the election of directors and the outcome of other matters submitted to a vote of our stockholders, including amendments to our organizational documents, the approval of significant corporate transactions and any proposed change of control. The interests of those holders may differ from the interests of our other stockholders, and this concentration of voting power may delay or prevent a transaction that other stockholders would consider favorable, including a transaction in which holders of our common stock might receive a premium.
There is a limited trading market for our common stock, our common stock has experienced trading tier downgrades, and our common stock is subject to the penny stock rules.
Our common stock is quoted on the over-the-counter market and is not listed on any national securities exchange. Our shares of common stock are quoted on the OTCID Basic Market, having resumed quotation on that market after having been downgraded to the OTC Expert Market on July 17, 2024. Trading in our common stock has been limited and sporadic, the bid and asked prices have been volatile, and an established public trading market for our common stock may not exist or be sustained. Our common stock may in the future be subject to further trading tier changes or restrictions based on our reporting status, financial condition or other factors. As a result, holders may be unable to sell shares at prevailing quoted prices, or at all, and quoted prices may not reflect the value of our business. Our common stock is also subject to the penny stock rules under the Exchange Act, which require broker-dealers effecting transactions in our common stock to deliver a standardized risk disclosure document, to disclose the compensation received by the broker-dealer and the salesperson, to provide monthly account statements, and to make and document a suitability determination for the purchaser before effecting a transaction. These requirements may discourage broker-dealers from effecting transactions in our common stock, may reduce the number of broker-dealers willing to make a market in our common stock, and may further limit the liquidity of our common stock. We do not intend to pay cash dividends on our common stock for the foreseeable future, and holders should not expect to receive a return on their investment other than through appreciation in the market price of our common stock, which may not occur.
The Reverse Stock Split may not result in a sustained increase in the market price of our common stock, and it may reduce the liquidity of our common stock.
We effected the Reverse Stock Split with the expectation that the resulting higher per share price may improve the marketability and liquidity of our common stock and make it more attractive to institutional investors. The effect of a reverse stock split on the market price of a company’s common stock cannot be predicted with certainty, and the market price of our common stock may be affected by factors unrelated to the number of shares outstanding. There can be no assurance that the market price per share following the Reverse Stock Split will increase in proportion to the reduction in the number of outstanding shares, or that any increase will be sustained. If the market price does not increase proportionately, our total market capitalization will decline. The Reverse Stock Split also substantially reduced the number of outstanding shares of our common stock, which may reduce trading volume and further limit the liquidity of our common stock, and may increase the number of holders owning odd lots of fewer than 100 shares, who may incur greater transaction costs when selling. In addition, because the Reverse Stock Split did not reduce the number of authorized shares of common stock, the number of authorized but unissued shares available for issuance increased substantially relative to the number of shares outstanding, which increases the potential for dilution to holders of our common stock and could be used to make an acquisition of the Company more difficult.
Our conclusion that we are the accounting acquirer in the Merger may be challenged, and the accounting treatment of the acquisition may result in charges that adversely affect our reported results.
As described under “Accounting Treatment of the Merger” in Item 2.01 above, we have concluded that we are the accounting acquirer and that the Merger is to be accounted for as a business combination. That conclusion requires significant judgment, and the SEC may disagree with it. Because we were a shell company immediately prior to the Closing, and because the Merger was effected as a reverse triangular merger in which the consideration consisted entirely of our convertible preferred stock rather than cash, the identification of the accounting acquirer is subject to particular scrutiny. If PGS were instead determined to be the accounting acquirer, the transaction would be accounted for as a reverse acquisition or a reverse recapitalization, the historical financial statements of PGS rather than our own would become our historical financial statements, no goodwill would be recognized, and the basis of presentation of our financial statements for future periods and the unaudited pro forma financial information giving effect to the acquisition would differ materially from those we expect to report. In addition, the fair value of the consideration transferred, the allocation of that consideration between the business of PGS and the Patents, the fair value of the non-controlling interest attributable to Mr. Wanke’s retained interest, and the amount of goodwill or other intangible assets recognized each require significant judgment. Any change in these determinations, or any subsequent impairment of goodwill or acquired intangible assets, could result in charges that adversely affect our reported results of operations.
Risks Related to Our Corporate Structure and Governance
Each of our Audit Committee, Compensation Committee and Nomination Committee consists of the same two directors, which may not provide the same level of independent oversight available at listed companies.
Our common stock is not listed on a national securities exchange, and we are therefore not subject to the corporate governance requirements applicable to listed companies, including requirements relating to the composition and charters of audit, compensation and nominating committees and the independence of audit committee members under Rule 10A-3 under the Exchange Act. The Board has established an Audit Committee, a Compensation Committee and a Nomination Committee. Charles Benton and John Mercadante serve as members of our Audit Committee, with Mr. Benton serving as its chair. Charles Benton and John Mercadante serve as members of our Compensation Committee, with Mr. Mercadante serving as its chair. John Mercadante and Charles Benton serve as members of our Nomination Committee. Effective November 1, 2026, Mr. Benton also serves as chair of the Nomination Committee, as described below. Mr. Benton and Mr. Mercadante are our independent directors, and Sebastian Giordano, our Chairman, Chief Executive Officer and Chief Financial Officer, is not independent. Because each of our Audit Committee, Compensation Committee and Nomination Committee consists of the same two directors, who are our only independent directors, those committees do not provide the breadth of independent review available where committees have a larger number of independent members. Following the Closing, our business involves continuing arrangements with related parties, including the employment of the holder of the retained minority interest in PGS and the lease of PGS’s operating facility from an entity affiliated with him, and those arrangements are subject to review under this committee structure. We may be unable to attract additional qualified independent directors, particularly if we are unable to continue to maintain directors’ and officers’ liability insurance on acceptable terms. These limitations may make our securities less attractive to investors and may increase the risk that conflicts of interest are not identified or are not resolved on terms favorable to us.
The same individual serves as our chairman and chief executive officer, which concentrates authority in a single person.
The offices of chairman of the Board and chief executive officer are held by the same individual, and we have not designated a lead independent director. Combining these roles concentrates authority over the conduct of Board meetings, the setting of the Board’s agenda and the day-to-day management of our business in a single person, and reduces the Board’s ability to provide independent oversight of management. Our executive management team consists of a small number of individuals who are responsible for identifying, evaluating and negotiating acquisitions, for arranging financing, for overseeing the integration and operation of PGS, and for our public reporting and compliance obligations. Their attention will be divided among these responsibilities. We rely on their judgment in matters, including the pursuit of additional acquisitions, in which stockholders have no direct role, and we have limited internal resources to test that judgment independently. If our management were to devote insufficient attention to any of these matters, or were to become unavailable, our business and our ability to satisfy our obligations as a public reporting company could be adversely affected.
The Board may issue additional shares of preferred stock with rights senior to our common stock without stockholder approval.
Our articles of incorporation authorize the Board to issue shares of preferred stock in one or more series and to fix the designations, powers, preferences, rights, qualifications, limitations and restrictions of each series, including dividend rights, voting rights, conversion rights, liquidation preferences and redemption rights, without any further vote or action by our stockholders. A substantial number of shares of preferred stock remains authorized and unissued, and a substantial number of shares of common stock remains authorized and unissued. The Series J Preferred Stock issued as the Merger Consideration was designated and issued under this authority. The Board may in the future designate and issue additional series of preferred stock with dividend, liquidation, conversion, voting or other rights senior to those of our common stock, which could dilute the economic and voting interests of holders of our common stock, reduce the amount available for distribution to holders of our common stock on a liquidation, restrict our ability to pay dividends on our common stock, and adversely affect the market price of our common stock. The issuance of preferred stock could also be used to make it more difficult for a third party to acquire control of us, including in a transaction that holders of our common stock might consider favorable, and could have the effect of entrenching our management.
Financial Information
The information set forth in Item 9.01 of this Current Report on Form 8-K concerning the financial information of PGS and the Company is incorporated herein by reference. The unaudited pro forma condensed combined financial information giving effect to the Merger is set forth in Exhibit 99.5 hereto and is incorporated herein by reference.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Information with respect to the Company’s management’s discussion and analysis of financial condition and results of operations is set forth in (i) our most recent Annual Report on Form 10-K filed with the SEC on March 30, 2026 (the “Form 10-K”) under Item 7 titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” beginning on page 13, and (ii) our most recent Quarterly Report on Form 10-Q filed with the SEC on August 19, 2026 (the “Form 10-Q”) under Part I, Item 2 titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” beginning on page 27, each of which is incorporated herein by reference.
The Management’s Discussion and Analysis of Financial Condition and Results of Operations of PGS for the year ended December 31, 2025, and for the six months ended June 30, 2026, are filed as Exhibits 99.2 and 99.4 hereto, respectively, and are incorporated herein by reference.
Properties
Neither the Company nor PGS owns any real property. Our principal executive offices are located at 110 Chestnut Ridge Road, Suite 444, Montvale, New Jersey 07645. PGS conducts all of its operations from a single leased facility at 2029 Pat Booker Road, Universal City, Texas 78148, in the San Antonio metropolitan area, consisting of an approximately 4,000 square foot metal building on approximately 0.673 acres in Bexar County, Texas. PGS uses the facility for administrative and sales functions, for the storage of inventory and installation supplies, for the staging and fabrication of film systems, and for the parking and servicing of its installation vehicles, and has funded leasehold improvements to the facility having an aggregate cost of approximately $110,600. We believe the facility is adequate for our current operations.
The facility is occupied under a Commercial Lease Agreement dated July 21, 2021, and effective as of April 19, 2021 (the “Lease”), between MDW Management, LLC and PGS (under its former name, Mobile Tint, LLC, d/b/a A-1 Glass). In connection with the Closing, the Lease was amended effective November 1, 2026 (the “Amendment to Lease”) to terminate the corporate guaranty previously provided by C-Bond Systems, Inc., to obtain the landlord’s agreement to the change of control of the tenant resulting from the transactions described in Item 1.01 above, and to exercise the first of two five-year renewal options. As so amended, the term continues through April 19, 2031, with one remaining five-year renewal option, at a monthly minimum rent of $5,600, which is not subject to the two percent (2%) escalation otherwise provided in the Lease. Additional rent is $1,258.20 per month, consisting of real estate taxes based on 2025 taxes and subject to annual adjustment, for total monthly rent of $6,858.20. Insurance payments are no longer included in additional rent, as PGS directly maintains the insurance required under the Lease.
PGS is not a party to any other material real property lease, and the foregoing description is qualified in its entirety by reference to the Lease and the Amendment to Lease, copies of which are filed as Exhibits 10.1 and 10.8 hereto.
As conditions to the Closing, the Purchase Agreement required evidence that all liens on the assets of PGS and the Seller had been terminated and released, including liens filed by merchant cash advance lenders, and that PGS had been released as a maker under three secured promissory notes dated February 24, 2025 held by Badders and Mercer. Those notes, together with expense advances made to PGS, were satisfied in full at the Closing through the issuance of the 3,518 shares of Series J Preferred Stock described in the “Introductory Note” above, and each of Badders and Mercer delivered a satisfaction and release discharging PGS as a maker. Each of those conditions was satisfied or waived at or prior to the Closing.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information with respect to the beneficial ownership of our common stock and our outstanding series of preferred stock as of November 1, 2026, giving effect to the issuance of the shares of Series J Preferred Stock constituting the Merger Consideration and the shares of Series J Preferred Stock issued in satisfaction of the Satisfied Obligations, by (i) each stockholder known by us to be the beneficial owner of more than 5% of our capital stock, (ii) each of our directors and executive officers, and (iii) all of our directors and executive officers as a group. The percentage ownership information is based on 1,188,366 shares of common stock, 32,374 shares of Series H Preferred Stock outstanding as of November 1, 2026 and 161,442 shares of Series J Preferred Stock outstanding as of November 1, 2026. Information with respect to beneficial ownership has been furnished by each director, officer, or beneficial owner of more than 5% of our common stock. We have determined beneficial ownership in accordance with the rules of the SEC. Unless otherwise specified in the notes to this table, the address for each person is c/o Transportation and Logistics Systems, Inc., 110 Chestnut Ridge Road, Suite 444, Montvale, New Jersey 07645.
Shares of Common Stock Beneficially Owned | Shares of Series J Preferred Stock Beneficially Owned | Shares of Series H Preferred Stock Beneficially Owned | ||||||||||||||||||||||
| Name and address of beneficial owner | Amount and nature of beneficial ownership | Percent of class(1) | Amount and nature of beneficial ownership | Percent of class (2) | Amount and nature of beneficial ownership | Percent of class (3) | ||||||||||||||||||
| Directors and Executive Officers | ||||||||||||||||||||||||
| Sebastian Giordano(4) | 61,130 | 4.99 | % | 15,332 | 9.50 | % | - | - | ||||||||||||||||
| Charles Benton(5) | 25,968 | 2.14 | % | 1,262 | 0.78 | % | - | - | ||||||||||||||||
| John Mercadante(6) | 62,136 | 4.99 | % | 18,643 | 11.55 | % | - | - | ||||||||||||||||
| All directors and executive officers as a group (3 persons) | 149,234 | 11.42 | % | 35,237 | 21.83 | % | - | - | ||||||||||||||||
| 5% Stockholders | ||||||||||||||||||||||||
| Joseph Corbisiero(7) | 60,534 | 4.99 | % | - | - | 32,374 | 100 | % | ||||||||||||||||
| Badcer Ops, Inc.(8) | 62,414 | 4.99 | % | 47,500 | 29.42 | % | ||||||||||||||||||
| * | less than 1%. | |
| (1) | Applicable percentage ownership is based on 1,188,366 shares of common stock outstanding as of November 1, 2026. | |
| (2) | Applicable percentage ownership is based on 161,442 shares of Series J Preferred Stock outstanding as of November 1, 2026. | |
| (3) | Applicable percentage ownership is based on 32,374 shares of Series H Preferred Stock outstanding as of November 1, 2026. | |
| (4) | Includes 24,426 shares of common stock held directly by Mr. Giordano and 36,704 shares of common issuable upon the conversion of a portion of his 15,332 shares of Series J Preferred Stock, at a conversion price of $5.00 per share. Mr. Giordano is prohibited from converting his shares of Series J Preferred Stock if, after giving effect to the issuance of such shares of common stock, such holder together with its affiliates would beneficially own more than 4.99% of the outstanding common stock, and the number of shares shown reflects that limitation. |
| (5) | Consists of 728 shares of common and 25,240 shares of common issuable upon the conversion of 1,262 shares of Series J Preferred Stock, at a conversion price of $5.00 per share. | |
| (6) | Consists of 5,274 shares of common stock held in two accounts and 56,862 shares of common issuable upon the conversion of a portion of his 18,643 shares of Series J Preferred Stock, at a conversion price of $5.00 per share. Mr. Mercadante is prohibited from converting his shares of Series J Preferred Stock if, after giving effect to the issuance of such shares of common stock, such holder together with its affiliates would beneficially own more than 4.99% of the outstanding common stock, and the number of shares shown reflects that limitation. | |
| (7) | Mr. Joseph Corbisiero was the chief executive officer of Freight Connections until December 1, 2023. Includes 35,783 shares of common stock held directly by Mr. Corbisiero and 24,751 shares of common issuable upon the conversion of a portion of his 32,374 shares of Series H Preferred Stock. Mr. Corbisiero is prohibited from converting his shares of Series H Preferred Stock if, after giving effect to the issuance of such shares of common stock, such holder together with its affiliates would beneficially own more than 4.99% of the outstanding common stock, and the number of shares shown reflects that limitation. | |
| (8) | The Seller holds no outstanding shares of common stock. The shares of common stock shown are issuable upon the conversion of a portion of the Seller’s 47,500 shares of Series J Preferred Stock and reflect the 4.99% beneficial ownership limitation applicable to that conversion. The Seller received those shares as the Merger Consideration, and they are transferable in equal shares to its shareholders, Mercer and Badders, following the liquidation of the Seller. In addition, 1,759 shares of Series J Preferred Stock were issued directly to each of Badders and Mercer in satisfaction of the Satisfied Obligations. Jonathan Juchno is deemed to have voting and investment control over the securities held by the Seller and disclaims beneficial ownership except to the extent of his pecuniary interest therein. The address of the Seller is 1111 Brickell Avenue, Suite 2920, Miami, Florida 33133. |
Directors and Executive Officers
The following table sets forth the names, ages and positions of all directors and executive officers of the Company as of the Closing Date. No changes were made to the Board or the Company’s executive officers in connection with the Closing. Each director holds office until the next annual meeting of stockholders and until his successor is elected and qualified, or until his earlier resignation or removal.
| Name | Age | Position | ||
| Sebastian Giordano | 69 | Chairman of the Board, Chief Executive Officer, Chief Financial Officer and Treasurer (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer) | ||
| John Mercadante, Jr. | 82 | Director and Secretary | ||
| Charles Benton | 76 | Director |
Biographical Information
Sebastian Giordano, Mr. Giordano, age 69, serves as Chairman of the Board, Chief Executive Officer, Chief Financial Officer and Treasurer of the Company, and is the Company’s principal executive officer, principal financial officer and principal accounting officer. Since 2002, Mr. Giordano has been the Chief Executive Officer of Ascentaur, LLC (“Ascentaur”), providing C-Level consulting services to a diverse roster of predominantly technology-centric clients, including start-ups, turnarounds, and established businesses across many industries, including providing such consulting services to TLSS from 2020 through 2021, prior to becoming the Company’s Chief Executive Officer and Chairman in January 2022 and its Chief Financial Officer in March 2024. In that capacity he has directed the wind-down of the Company’s legacy logistics and transportation operations, the restructuring of its debts and obligations, including the exchange of outstanding preferred stock, notes and warrants for shares of Series J Preferred Stock, and the negotiation of the acquisition described in Item 2.01 above. Mr. Giordano is a party to the Retention Agreement and the Deferred Compensation Agreement described under “Executive Compensation” below. During the past five years, he has served on the Board of AYRO, Inc. (Nasdaq: AYRO), as a member of the Audit Committee. On August 22, 2025, AYRO changed its name and business to StableX Technologies, Inc. (Nasdaq: SBLX), and then again, on April 29, 2026, it changed its corporate name and ticker symbol to Fabric.AI, Inc. (Nasdaq: FABC). FABC is a fabless semiconductor company focused on the design and development of optical interconnect technologies and other system-critical semiconductor solutions for artificial intelligence (“AI”) data center infrastructure. From December 13, 2024 to May 1, 2026, Mr. Giordano served as a member of the Audit and Nominating Committees for GreenPower Motor Company, Inc. (Nasdaq: GP), a company that designs, builds and distributes a full suite of high-floor and low-floor all-electric medium and heavy-duty vehicles, including transit buses, school buses, shuttles, cargo van, and a cab and chassis.
John Mercadante, Jr., Mr. Mercadante, age 82, serves as a director and as Secretary of the Company, and served as Chairman of the Board and Chief Executive Officer of the Company immediately prior to Mr. Giordano’s appointment. He has extended credit to the Company on several occasions, including a $500,000 loan under the Company’s 2023 credit facility and unsecured promissory notes issued in February 2024 in the principal amounts of $64,534 and $319,195, all of which were settled in exchange for shares of Series J Preferred Stock effective June 1, 2025. Mr. Mercadante is a named defendant in the stockholder derivative action described under “Legal Proceedings” below, in which he denies each allegation of wrongdoing. Mr. Mercadante served as the Chairman of the Board, Chief Executive Officer and Chief Financial Officer of the Company from April 16, 2019 until January 3, 2024. Since January 2022, Mr. Mercadante has been a consultant and a manager of his personal investments. Mr. Mercadante co-founded Leisure Line, Inc., a motor coach company serving New York City and Atlantic City, New Jersey, in 1970 and served as its Chief Executive Officer for a ten-year period through the sale of the company to Golden Nugget in 1980. In May 1996, Mr. Mercadante was a co-founder of Coach USA (NYSE: CUI). He served as a director of the company from its initial public offering in May 1996 until it was acquired by the Stagecoach Group in July 1999. During this period, he simultaneously held his dual operational roles as the company’s President and Chief Operating Officer (COO).
Charles Benton, Mr. Benton, age 76, serves as a director of the Company. He extended credit to the Company in February 2024 in the form of an unsecured promissory note in the principal amount of $3,109, which was settled in exchange for shares of Series J Preferred Stock effective June 1, 2025. Mr. Benton has served as a director and Chairman of the Audit Committee of Vision Hydrogen Corp. (OTC: VIHD), a company focused on the production, storage, and distribution of hydrogen for the green energy economy supply chain, since January 2019. From February 2014 to January 2018, Mr. Benton served as Chairman of the Audit Committee of the Board of Directors of WPCS International Incorporated (Nasdaq: WPCS), a design-build engineering firm focused on the deployment of wireless networks and related services including site design, technology integration, electrical contracting, construction, and maintenance, and served as Chairman of the Board from April 2017 through January 2018.
There are no family relationships among any of the Company’s directors or executive officers. Mr. Mercadante was Chief Executive Officer of Prime EFS and Shypdirect, and Mr. Giordano was Chief Executive Officer of TLSS-FC and Freight Connections and Chief Executive Officer and Chief Financial Officer of Cougar Express, in each case at the time those entities filed for bankruptcy. Other than the foregoing and the stockholder derivative action described under “Legal Proceedings” below, to which Mr. Giordano and Mr. Mercadante are parties, there are no legal proceedings of the type required to be disclosed by Item 401(f) of Regulation S-K with respect to any director or executive officer of the Company during the past ten years.
Because our common stock is not listed on a national securities exchange, we are not subject to the committee composition and independence requirements applicable to listed companies. The Board has established an Audit Committee, a Compensation Committee and a Nomination Committee, with Charles Benton and John Mercadante serving as the members of the Audit Committee, with Mr. Benton serving as its chair, John Mercadante and Charles Benton serving as the members of the Nomination Committee, with Mr. Benton serving as its chair, and Mr. Benton and Mr. Mercadante serving as members of the Compensation Committee, with Mr. Mercadante serving as its chair. As disclosed in the Company’s periodic reports, management has concluded that the Company’s disclosure controls and procedures are ineffective and that its internal control over financial reporting would be substantially improved if the Company had adequate accounting staffing.
Executive and Director Compensation
Information with respect to the compensation of the Company’s named executive officers and directors is set forth in (i) the Form 10-K under Item 11 titled “Executive Compensation” beginning on page 21, and (ii) the Form 10-Q in the section titled “Employment agreements” beginning on page 21, each of which is incorporated herein by reference.
Certain Relationships and Related Transactions, and Director Independence
Information with respect to director independence is set forth under “Risks Related to Our Corporate Structure and Governance” above and is incorporated herein by reference.
Information with respect to the Company’s transactions with related persons is set forth in the Form 10-K under Item 13 titled “Certain Relationships and Related Transactions, and Director Independence” beginning on page 23, which is incorporated herein by reference.
Legal Proceedings
Information with respect to the Company’s legal proceedings is set forth in (i) the Form 10-K under Item 3 titled “Legal Proceedings” beginning on page 9, and (ii) the Form 10-Q under Part II, Item 1 titled “Legal Proceedings” beginning on page 32, each of which is incorporated herein by reference.
Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters
Our common stock is quoted on the OTCID Basic Market under the symbol “TLSS.” Quoted prices for our common stock from and after the effective date of the Reverse Stock Split reflect the Reverse Stock Split, and quoted prices for prior periods do not.
As of November 1, 2026, the Company had 1,188,366 shares of common stock issued and outstanding, held of record by 46 holders.
We have never declared or paid any cash dividends on our common stock. We do not anticipate paying any cash dividends on our common stock in the foreseeable future. We currently intend to retain all available funds and any future earnings to fund the development and growth of our business. Any future determination to pay dividends will be at the discretion of the Board and will depend upon our financial condition, results of operations, capital requirements, restrictions contained in any financing instruments and such other factors as the Board deems relevant.
Recent Sales of Unregistered Securities
The information set forth in the “Introductory Note” under the heading “The Merger” is incorporated herein by reference.
Description of Securities
General
Our authorized capital stock consists of 50,000,000,000 shares of common stock, par value $0.001 per share, and 10,000,000 shares of preferred stock, par value $0.001 per share.
As of November 1, 2026, the Company has one class of securities registered under Section 12 of the Exchange Act, its common stock, par value $0.001 per share (the “common stock”).
Common Stock
As of November 1, 2026, 1,188,366 shares of common stock were issued and outstanding. The description of the Company’s common stock contained in Exhibit 4.11 to the Form 10-K, titled “Description of Our Securities Pursuant to Section 12 of the Securities Exchange Act of 1934,” is incorporated herein by reference.
Preferred Stock
Our Amended and Restated Articles of Incorporation authorize the Board to issue shares of preferred stock in one or more classes or series and to fix the designations, powers, preferences and rights, and the qualifications, limitations and restrictions, of each class or series, including dividend rights and rates, conversion rights, voting rights, terms of redemption, redemption prices, liquidation preferences and the number of shares constituting any class or series, in each case without further vote or action by our stockholders.
In addition to the Series H Preferred Stock and Series J Preferred Stock described below, the Company has designated Series B Convertible Preferred Stock (1,700,000 shares designated), Series D Preferred Stock (1,250,000 shares designated), Series E Convertible Preferred Stock (562,250 shares designated), Series G Convertible Preferred Stock (1,000,000 shares designated), Series H Convertible Preferred Stock (35,000 shares designated) and Series I Preferred Stock. No shares of Series B, Series D, Series E, Series G or Series I Preferred Stock are issued or outstanding, and all outstanding shares of Series E Preferred Stock and Series G Preferred Stock were exchanged for shares of Series J Preferred Stock effective June 1, 2025.
Preferred Stock — Series H Convertible Preferred Stock
On September 20, 2022, the Company filed the Certificate of Designation of Preferences, Rights and Limitations of Series H Convertible Preferred Stock with the Secretary of State of the State of Nevada, designating 35,000 shares of the Company’s authorized and unissued preferred stock as Series H Convertible Preferred Stock. As of the date of this Current Report, 32,374 shares of Series H Preferred Stock were issued and outstanding, all of which are held by a single holder. The Series H Preferred Stock has no stated value and no voting rights. Subject to a beneficial ownership limitation of 4.99% of the outstanding common stock, which the holder and the Company may by mutual consent increase to not more than 9.99%, each share of Series H Preferred Stock is convertible into 2 shares of common stock. Upon our liquidation, dissolution or winding up, each holder of Series H Preferred Stock is entitled to receive the same amount that a holder of common stock would receive on an as-converted basis, without regard to the beneficial ownership limitation. That right is preferential to the right of holders of common stock but is subordinate to the rights of the holders of any other series of our preferred stock, including the Series J Preferred Stock.
The foregoing description is qualified in its entirety by reference to the full text of the Certificate of Designation of Preferences, Rights and Limitations of Series H Convertible Preferred Stock, a copy of which is filed as Exhibit 4.3 and incorporated herein by reference.
Preferred Stock — Series J Senior Convertible Preferred Stock
On May 5, 2025, the Company filed with the Secretary of State of the State of Nevada the Certificate of Designation of Preferences, Rights and Limitations of Series J Senior Convertible Preferred Stock (the “Series J Certificate of Designation”), which became effective upon filing and designated 1,000,000 shares of the Company’s authorized and unissued preferred stock as Series J Senior Convertible Preferred Stock. On September 5, 2025, the Company filed a Certificate of Amendment to the Series J Certificate of Designation with the Secretary of State of the State of Nevada. The Series J Preferred Stock was designated by resolution of the Board pursuant to the authority granted to the Board under the Company’s Amended and Restated Articles of Incorporation and Chapter 78 of the Nevada Revised Statutes. The material terms of the Series J Preferred Stock, as designated and amended, are summarized below.
Par Value and Authorized Shares. The Series J Preferred Stock has a par value of $0.001 per share and a stated value of $100 per share. Immediately prior to the Closing, 110,424 shares of Series J Preferred Stock were issued and outstanding, and following the issuance of the 47,500 shares of Series J Preferred Stock constituting the Merger Consideration and the 3,518 shares of Series J Preferred Stock issued in satisfaction of the Satisfied Obligations, 161,442 shares of Series J Preferred Stock are issued and outstanding.
Ranking. With respect to preferences as to dividends, distributions and payments upon our liquidation, dissolution and winding up, the Series J Preferred Stock ranks senior to all shares of our capital stock that were outstanding on the date the shares of Series J Preferred Stock were issued, including our common stock and our Series H Preferred Stock.
Dividend Rights. Beginning on June 1, 2025 and on each successive six-month anniversary, holders of Series J Preferred Stock are entitled to receive dividends, in either cash or stock at our option, equal to ten percent (10%) of the aggregate stated value of the shares held by each holder. Those dividends accrue and compound daily on the basis of a 360-day year. In addition, if we declare or make any dividend or other distribution of our assets, or rights to acquire our assets, to holders of common stock, by way of return of capital or otherwise, each holder of Series J Preferred Stock is entitled to participate in that distribution to the same extent as if the holder had held the number of shares of common stock acquirable upon complete conversion of its Series J Preferred Stock, without regard to any limitation on conversion, immediately before the applicable record date.
Voting Rights. Holders of Series J Preferred Stock are entitled to vote on all matters on which holders of our common stock are entitled to vote, voting together with the common stock as a single class on an as-converted basis, which assumes that each holder has converted its shares of Series J Preferred Stock into shares of common stock. In addition, so long as any shares of Series J Preferred Stock are outstanding, we may not, without the affirmative vote of the holders of a majority of the then-outstanding shares of Series J Preferred Stock voting as a separate class, (i) alter or change adversely the powers, preferences or rights given to the Series J Preferred Stock or alter or amend the Series J Certificate of Designation, (ii) amend our articles of incorporation or any other charter document in any manner that adversely affects any rights of the Series J Preferred Stock, or (iii) enter into any agreement with respect to any of the foregoing.
Conversion Rights and Mechanics. At any time from and after the date of issuance, a holder may convert all or any part of its outstanding shares of Series J Preferred Stock, at the holder’s option, into shares of common stock. The conversion price is $5.00 per share, subject to proportional adjustment upon any stock split, stock dividend, stock combination or similar transaction, and each share of Series J Preferred Stock is accordingly convertible into 20 shares of common stock. We have the right, at any time and with the written consent of the holders of a majority of the outstanding shares of Series J Preferred Stock, to lower the conversion price to any amount, subject to any applicable rules and regulations of the trading market on which our common stock is then quoted or listed.
Beneficial Ownership Limitation. A holder of Series J Preferred Stock may not convert its shares if, after giving effect to the issuance of the conversion shares, the holder together with its affiliates would beneficially own more than 4.99% of the outstanding common stock. A holder may increase that limitation to 9.99% upon notice to the Company, with the increase becoming effective on the 61st day after the notice is delivered. In addition, a holder may not convert its shares of Series J Preferred Stock if the conversion would result in the issuance to that holder of a number of shares of common stock equal to more than ten percent (10%) of the trading volume of the common stock, provided that this limitation does not apply if the conversion price at the time of conversion is greater than $0.40 per share.
Liquidation Preference. In the event of any liquidation, dissolution or winding up of the Company, each holder of Series J Preferred Stock is entitled to receive an amount in cash equal to one hundred twenty percent (120%) of the aggregate stated value of the shares of Series J Preferred Stock held by that holder, together with any accrued and unpaid dividends. That preference ranks senior to our common stock and to our Series H Preferred Stock and is payable before any distribution is made to the holders of those classes. Based on the 161,442 shares of Series J Preferred Stock outstanding following the Closing, the aggregate stated value of the Series J Preferred Stock is $16,144,200 and the aggregate liquidation preference, exclusive of accrued and unpaid dividends, is $19,373,040.
Redemption Rights. The shares of Series J Preferred Stock are redeemable upon the occurrence of certain triggering events. Upon such a triggering event, holders of Series J Preferred Stock have the option to cause the Company to redeem all or part of their shares at a price per share equal to one hundred ten percent (110%) of the stated value of those shares. The Certificate of Amendment filed on September 5, 2025 amended the definition of a triggering event to exclude events, facts or circumstances that occurred prior to, or were in existence as of, the date of the certificate of amendment. The amendment also increased the indebtedness default threshold from $50,000 to $250,000. Because these redemption rights are outside our control and are subject to the occurrence of uncertain future events, the Series J Preferred Stock is presented at redemption value as temporary equity, outside of the stockholders’ deficit section of our consolidated balance sheets.
Anti-Dilution Protections. The conversion price of the Series J Preferred Stock is subject to proportional adjustment upon the occurrence of any stock split, stock dividend, stock combination or similar transaction. The Series J Certificate of Designation provides for an adjustment to the conversion price upon an issuance or deemed issuance of common stock or common stock equivalents at a price below the then-applicable conversion price (a “dilutive issuance”). Upon a dilutive issuance, the conversion price is reduced based on a formula that multiplies the conversion price by a fraction, the numerator of which is the number of shares of common stock outstanding immediately before such dilutive offering and the denominator of which is the number of shares of common stock outstanding immediately after such dilutive offering. The Company may also lower the conversion price with the written consent of the holders of a majority of the outstanding shares of Series J Preferred Stock.
Transfer Restrictions. The shares of Series J Preferred Stock issued as the Merger Consideration were issued without registration under the Securities Act and constitute restricted securities. Those shares were issued in book-entry form in the name of the Seller and are transferable in equal shares to the shareholders of the Seller following its liquidation. The shares issued in satisfaction of the Satisfied Obligations are likewise restricted securities and were issued in book-entry form in the names of Badders and Mercer. The Company may place orders restricting transfer against those shares on the records of its transfer agent, and the book-entry positions and any certificates representing them bear a legend to the effect that the securities were issued in a transaction exempt from registration under the Securities Act and may not be transferred, pledged, hypothecated or otherwise disposed of unless the transferor first satisfies the Company that the proposed transfer does not violate the registration requirements of that Act, which may require delivery of an opinion of counsel acceptable to the Company, a no-action letter from the SEC or equivalent evidence. As described under “Risk Factors” above, because the Company was a shell company, Rule 144 is not available for the resale of these shares until the conditions of Rule 144(i) have been satisfied.
Lock-Up and Registration Rights. The shares of Series J Preferred Stock issued as the Merger Consideration are not subject to any lock-up agreement, and neither the Purchase Agreement nor the Series J Certificate of Designation grants the Seller or the Seller Shareholders any demand or piggyback registration rights with respect to those shares or the shares of common stock issuable upon their conversion. Under the Purchase Agreement, the Company agreed to use commercially reasonable efforts to obtain and maintain the listing of the shares of common stock issuable upon conversion of the Series J Preferred Stock on each market or exchange on which the common stock is then listed for trading.
Reserved Shares. The Company is required to reserve out of its authorized and unissued shares of common stock a sufficient number of shares to permit the conversion in full of the outstanding shares of Series J Preferred Stock. Of the 50,000,000,000 shares of common stock authorized, 1,188,366 shares were issued and outstanding as of the date of this Current Report, and the conversion in full of the 161,442 outstanding shares of Series J Preferred Stock would require the issuance of 3,228,840 shares of common stock. The Company accordingly has a sufficient number of authorized and unissued shares of common stock available to satisfy the conversion in full of all outstanding shares of Series J Preferred Stock.
The foregoing description is qualified in its entirety by reference to the full text of the Series J Certificate of Designation and the Certificate of Amendment thereto, copies of which are filed as Exhibit 4.1 and Exhibit 4.2, respectively, and each of which is incorporated herein by reference.
Warrants and Options
As of the date of this Current Report, the Company had no outstanding warrants to purchase shares of its capital stock and no outstanding options to purchase shares of its capital stock. Warrants to purchase up to an aggregate of 172,871 shares of common stock were cancelled between May 2025 and November 2025 in exchange for shares of Series J Preferred Stock, and no warrants were issued thereafter. The Company does not have any equity compensation plan and has not granted any stock options or other equity awards. Under the Wanke Employment Agreement, the Company has agreed to grant Mr. Wanke an option to purchase shares of common stock having a value of $730,000, subject to the approval of the Board or its Compensation Committee, as described in Item 1.01 above. None of the Company’s outstanding indebtedness is convertible into equity securities of the Company. Accordingly, the only outstanding securities of the Company convertible into shares of common stock are the Series J Preferred Stock and the Series H Preferred Stock described above.
Transfer Agent
The transfer agent and registrar for our common stock is Equiniti Trust Company, LLC, which may be contacted by telephone at 1-866-883-3382.
Indemnification of Directors and Officers
We are incorporated under the laws of the State of Nevada. Sections 78.7502 and 78.751 of the Nevada Revised Statutes permit a Nevada corporation to indemnify any person who is or was a director, officer, employee or agent of the corporation, or who serves or served in any such capacity at the corporation’s request for another entity, against expenses, including attorneys’ fees, judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with any threatened, pending or completed action, suit or proceeding brought by reason of that position, if the person is not liable under Section 78.138 of the Nevada Revised Statutes or acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal proceeding, had no reasonable cause to believe the conduct was unlawful. Indemnification of expenses is required to the extent the person has been successful on the merits or otherwise, and expenses may be paid as incurred and in advance of final disposition upon an undertaking by a current director or officer to repay the amounts advanced if it is ultimately determined that the person is not entitled to indemnification. In an action by or in the right of the corporation, indemnification may not be made for any claim as to which the person has been adjudged liable to the corporation, except to the extent a court determines that the person is fairly and reasonably entitled to indemnity for expenses. These rights are not exclusive of any other rights to which an indemnified person may be entitled.
Article V of our Amended and Restated Bylaws requires us to indemnify and hold harmless, to the fullest extent permitted by Nevada law, each person who is or was a director or officer of the Company, or who serves or served at our request as a director, officer, manager or trustee of another entity, against all costs, charges, expenses, liabilities and losses (including attorney’s fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) incurred in connection with any such proceeding. That right continues after the person ceases to serve, inures to the benefit of the person’s heirs, executors and administrators, and is a contract right that includes the right to advancement of defense expenses upon delivery of the undertaking described above. If a claim is not paid in full within thirty days after a written claim is received, the claimant may bring suit to recover the unpaid amount and, if successful, the expense of prosecuting that claim. Article V also permits us to maintain insurance on behalf of our directors, officers, employees and agents against any liability, whether or not we would have the power to indemnify against that liability, and we maintain directors’ and officers’ liability insurance. We tendered the complaint in the stockholder derivative action described under “Legal Proceedings” above, in which two of our current directors are named as defendants, to our directors’ and officers’ liability carrier for defense and indemnity purposes, and that coverage is subject to a $250,000 self-insured retention. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers or controlling persons, we have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
There has been no change in the Company’s certifying accountant, and there have been no disagreements with the Company’s accountants on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, during the Company’s two most recent fiscal years or any subsequent interim period.
Financial Statements and Supplementary Data
The information set forth in Item 9.01 of this Report is incorporated herein by reference.
Financial Statements and Exhibits
The information set forth in Item 9.01 of this Report is incorporated herein by reference.
| Item 3.02 | Unregistered Sales of Equity Securities |
The information set forth in Item 1.01 and under the heading “Recent Sales of Unregistered Securities” in the Form 10 Information above is incorporated herein by reference.
| Item 3.03 | Material Modification to Rights of Security Holders |
As a result of the Merger, 47,500 shares of Series J Preferred Stock were issued to the Seller as the Merger Consideration, and an additional 3,518 shares of Series J Preferred Stock were issued to the Seller Shareholders in satisfaction of the Satisfied Obligations. The material terms and general effect upon the rights of holders of Series J Preferred Stock are discussed in Item 2.01 under the heading “Description of Securities – Preferred Stock – Series J Senior Convertible Preferred Stock,” which is incorporated herein by reference.
| Item 5.01 | Changes in Control of Registrant |
No change in control of the Company occurred in connection with the Closing. The Board and the Company’s executive officers were unchanged, and the shares of Series J Preferred Stock issued at the Closing represent less than twenty-five percent of the Company’s outstanding voting power on an as-converted basis. The Company’s acquisition of control of PGS is described in the “Introductory Note” and in Item 2.01 above, each of which is incorporated herein by reference.
| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers |
No director or executive officer of the Company resigned, was removed or was appointed in connection with the Closing, and the Company did not enter into or materially amend any compensatory plan, contract or arrangement with any director or executive officer in connection with the Closing. Pursuant to the Purchase Agreement, the manager and the officers of PGS resigned effective as of the Effective Time, and the managers and officers of PGS from and after the Effective Time were appointed by Acquisition Sub, as described in Item 1.01 above. PGS is a subsidiary of the Company and is not the registrant.
| Item 5.03 | Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. |
No amendment to the Company’s Amended and Restated Articles of Incorporation or Amended and Restated Bylaws was effected in connection with the transactions described in this Current Report, and there was no change in the Company’s fiscal year.
| Item 5.05 | Amendments to the Registrant’s Code of Ethics, or Waiver of a Provision of the Code of Ethics. |
In connection with the Merger, on November 1, 2026, the Board approved and adopted a new Code of Business Conduct and Ethics applicable to all employees, officers, and directors of the Company, including its Chief Executive Officer, Chief Financial Officer and other executive and senior financial officers. A copy of the Code of Business Conduct and Ethics is filed as Exhibit 14.1 hereto.
| Item 5.06 | Change in Shell Company Status. |
Immediately prior to the Closing, the Company was a “shell company” as defined in Rule 12b-2 under the Exchange Act. The Company ceased all of its revenue generating operations in February 2024 following the wind-down of its legacy logistics and transportation businesses, generated no revenues in any period thereafter, and reported its status as a shell company in its periodic reports filed with the SEC, including its Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2026. As a result of the completion of the acquisition described in Item 2.01 above, through which the Company acquired an indirect eighty percent (80%) membership interest in PGS, an operating business, the Company has ceased to be a shell company. The information set forth in Item 2.01 above, including the Form 10 Information contained therein, is incorporated into this Item 5.06 by reference.
| Item 7.01 | Regulation FD Disclosure. |
On November 5, 2026, the Company issued a press release announcing the closing of the Merger. A copy of the press release is furnished herewith as Exhibit 99.6. The Company undertakes no obligation to update, supplement or amend the materials furnished under this Item 7.01.
The information in this Item 7.01, including Exhibit 99.6, is being furnished pursuant to Item 7.01 and shall not be deemed to be filed for purposes of Section 18 of the Exchange Act, or otherwise be subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act or the Exchange Act, whether made before or after the date hereof and regardless of any general incorporation language in such filing.
| Item 9.01 | Financial Statements and Exhibits |
(a) Financial Statements of Business Acquired.
The audited financial statements of PGS and the related notes thereto as of December 31, 2024 and 2025, and the related audited statements of operations, members’ equity and cash flows for the years ended December 31, 2024 and 2025, together with the report of Salberg & Company, P.A., an independent registered public accounting firm, are set forth on Exhibit 99.1 hereto and incorporated herein by reference.
The unaudited condensed financial statements of PGS as of June 30, 2026 and the related notes are set forth on Exhibit 99.3 hereto and are incorporated herein by reference.
(b) Pro Forma Financial Information.
The unaudited pro forma condensed combined financial information as of and for the year ended December 31, 2025 and as of and for the six months ended June 30, 2026 is attached as Exhibit 99.5 hereto and is incorporated herein by reference.
(d) Exhibits.
Exhibit Number |
Description of Exhibit | |
| 2.1‡ | Member Interest and Asset Exchange Agreement, dated as of April 1, 2026, by and among Transportation and Logistics Systems, Inc., TLSS Acquisition, Inc., TLSS Reverse PGS, LLC, Badcer Ops, Inc., Jeff Badders, Mercer Street Global Opportunity Fund, LLC, Patriot Glass Solutions, LLC and Michael Wanke (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on April 7, 2026) | |
| 2.2‡ | First Amendment to Member Interest and Asset Exchange Agreement, dated as of June 1, 2026 (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on June 5, 2026) | |
| 2.3‡ | Second Amendment to Member Interest and Asset Exchange Agreement, dated as of July 7, 2026 (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on July 10, 2026) | |
| 2.4‡ | Notice of Extension of Closing Date, dated as of July 31, 2026 (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on August 6, 2026) | |
| 2.5‡ | Third Amendment to Member Interest and Asset Exchange Agreement, dated as of August 19, 2026 (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on August 24, 2026) | |
| 2.6‡ | Fourth Amendment to Member Interest and Asset Exchange Agreement, dated as of September 22, 2026 (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on September 23, 2026) | |
| 2.7* | Fifth Amendment to Member Interest and Asset Exchange Agreement, dated as of November 1, 2026 | |
| 2.8* | Merger Closing Agreement, by and among Transportation and Logistics Systems, Inc., TLSS Acquisition, Inc., TLSS Reverse PGS, LLC, Badcer Ops, Inc., Jeff Badders, Mercer Street Global Opportunity Fund, LLC, Patriot Glass Solutions, LLC and Michael Wanke, dated as of November 1, 2026 | |
| 3.1‡ | Amended and Restated Articles of Incorporation of Loran Connection Corp. (now known as Transportation and Logistics Systems, Inc.), as filed with the Nevada Secretary of State on January 25, 2012 (incorporated by reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K for the year ended March 31, 2015, filed with the SEC on June 30, 2015) | |
| 3.2‡ | Certificate of Change to the Amended and Restated Articles of Incorporation of PetroTerra Corp. (now known as Transportation and Logistics Systems, Inc.), as filed with the Nevada Secretary of State on December 18, 2013 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on December 24, 2013) | |
| 3.3‡ | Certificate of Change to the Amended and Restated Articles of Incorporation of PetroTerra Corp. (now known as Transportation and Logistics Systems, Inc.), as filed with the Nevada Secretary of State on February 14, 2017 (incorporated by reference to Exhibit 3.5 to the Company’s Registration Statement on Form S-1 filed with the SEC on July 26, 2017) | |
| 3.4‡ | Certificate of Change to the Amended and Restated Articles of Incorporation of PetroTerra Corp. (now known as Transportation and Logistics Systems, Inc.), as filed with the Nevada Secretary of State on July 16, 2018 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on July 23, 2018) | |
| 3.5‡ | Certificate of Change to the Amended and Restated Articles of Incorporation of Transportation and Logistics Systems, Inc., as filed with the Nevada Secretary of State on April 15, 2021 (incorporated by reference to Exhibit 3.5 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021, filed with the SEC on November 15, 2021) | |
| 3.6‡ | Certificate of Amendment to the Amended and Restated Articles of Incorporation of Transportation and Logistics Systems, Inc., as filed with the Nevada Secretary of State on December 1, 2023 (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed with the SEC on January 3, 2024) |
| 3.7‡ | Certificate of Correction, as filed with the Nevada Secretary of State on November 25, 2024, to the Certificate of Change of the Company dated December 27, 2023 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on November 29, 2024) | |
| 3.8‡ | Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on December 28, 2022) | |
| 3.9‡ | Certificate of Change of Transportation and Logistics Systems, Inc. filed with the Secretary of State of the State of Nevada on September 18, 2026 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 8, 2026) | |
| 3.10* | Certificate of Merger of TLSS Reverse PGS, LLC into Patriot Glass Solutions, LLC, as filed with the Secretary of State of the State of Texas on October 30, 2026, effective November 1, 2026 | |
| 4.1‡ | Certificate of Designation of Preferences, Rights and Limitations of Series J Senior Convertible Preferred Stock (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on May 7, 2025) | |
| 4.2‡ | Certificate of Amendment to Certificate of Designation of Preferences, Rights and Limitations of Series J Senior Convertible Preferred Stock (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the SEC on September 9, 2025) | |
| 4.3‡ | Certificate of Designation of Preferences, Rights and Limitations of Series H Convertible Preferred Stock (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the SEC on September 20, 2022) | |
| 10.1* | Commercial Lease Agreement, dated July 21, 2021, between MDW Management, LLC and Patriot Glass Solutions, LLC (formerly Mobile Tint, LLC d/b/a A-1 Glass) | |
| 10.2* | Letter Agreement, dated December 11, 2023 and effective as of May 8, 2023, between C-Bond Systems, Inc. and CB Nanoshield, identified in the Assignment of Distributor Agreement as the Distributor Agreement dated January 2, 2024, as assigned to Badcer Ops, Inc. | |
| 10.3* | Patent Assignment, dated as of November 1, 2026, by Badcer Ops, Inc. in favor of TLSS Acquisition, Inc. | |
| 10.4* | Patent License Agreement, dated as of November 1, 2026, between TLSS Acquisition, Inc. and Patriot Glass Solutions, LLC | |
| 10.5* | Trademark Assignment Agreement, dated as of November 1, 2026, between Badcer Ops, Inc. and Patriot Glass Solutions, LLC | |
| 10.6* | Assignment of Distributor Agreement, dated as of November 1, 2026, between Badcer Ops, Inc. and Patriot Glass Solutions, LLC | |
| 10.7†* | Employment Agreement, dated as of November 1, 2026, between Patriot Glass Solutions, LLC and Michael Wanke | |
| 10.8* | First Amendment to Commercial Lease Agreement, dated as of November 1, 2026, between MDW Management, LLC and Patriot Glass Solutions, LLC | |
| 14.1* | Code of Business Conduct and Ethics of Transportation and Logistics Systems, Inc. | |
| 21.1* | Subsidiaries of the Registrant | |
| 99.1* | Audited financial statements of Patriot Glass Solutions, LLC as of and for the years ended December 31, 2025 and 2024, and the related notes thereto | |
| 99.2* | Management’s Discussion and Analysis of Financial Condition and Results of Operations of Patriot Glass Solutions, LLC for the years ended December 31, 2025 and 2024 | |
| 99.3* | Unaudited condensed financial statements of Patriot Glass Solutions, LLC as of June 30, 2026 and for the six months ended June 30, 2026 | |
| 99.4* | Management’s Discussion and Analysis of Financial Condition and Results of Operations of Patriot Glass Solutions, LLC for the six months ended June 30, 2026 and 2025 | |
| 99.5* | Unaudited Pro Forma Condensed Consolidated Combined Financial Information for the six months ended June 30, 2026 and the year ended December 31, 2025 | |
| 99.6* | Press Release, dated November 5, 2026 | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
| * | Filed herewith. | |
| ‡ | Previously filed with the SEC and incorporated herein by reference as indicated. Certain of the exhibits or schedules to this Exhibit have been omitted in accordance with Item 601(a)(5) of Regulation S-K. The Registrant agrees to furnish a copy of all omitted exhibits and schedules to the SEC upon its request. | |
| † | Management contract or compensatory plan or arrangement. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: November 5, 2026
| TRANSPORTATION AND LOGISTICS SYSTEMS, INC. | ||
| /s/ Sebastian Giordano | ||
| Name: | Sebastian Giordano | |
| Title: | Chief Executive Officer | |
Exhibit 99.1
PATRIOT GLASS SOLUTIONS, LLC
FINANCIAL STATEMENTS
DECEMBER 31, 2025 and 2024
PATRIOT GLASS SOLUTIONS, LLC
INDEX TO FINANCIAL STATEMENTS
December 31, 2025 and 2024
CONTENTS
| Report of Independent Registered Public Accounting Firm (PCAOB ID No. 106) | F-2 | |
| Financial Statements: | ||
| Balance Sheets - As of December 31, 2025 and 2024 | F-3 | |
| Statements of Operations - For the Years Ended December 31, 2025 and 2024 | F-4 | |
| Statements of Changes in Members’ Equity - For the Years Ended December 31, 2025 and 2024 | F-5 | |
| Statements of Cash Flows – For the Years Ended December 31, 2025 and 2024 | F-6 | |
| Notes to Financial Statements | F-7 to F-17 | |
| F-1 |
Report of Independent Registered Public Accounting Firm
To the Members and Director of:
Patriot Glass Solutions, LLC
Opinion on the Financial Statements
We have audited the accompanying balance sheets of Patriot Glass Solutions, LLC (the “Company”) as of December 31, 2025 and 2024, the related statements of operations, changes in members equity (deficit) and cash flows for each of the two years in the period ended December 31, 2025 and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has a working capital deficit and accumulated deficit. These matters raise substantial doubt about the Company’s ability to continue as a going concern. Management’s Plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ Salberg & Company, P.A.
SALBERG & COMPANY, P.A.
We have served as the Company’s auditor since 2025.
Boca Raton, Florida
July 31, 2026
| F-2 |
PATRIOT GLASS SOLUTIONS, LLC
BALANCE SHEETS
| December 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash | $ | 192,538 | $ | 17,647 | ||||
| Accounts receivable, net | 303,858 | 191,653 | ||||||
| Inventory | 26,438 | 45,532 | ||||||
| Prepaid expenses and other current assets | 44,534 | 37,850 | ||||||
| Contract assets | - | 4,759 | ||||||
| Total Current Assets | 567,368 | 297,441 | ||||||
| OTHER ASSETS: | ||||||||
| Property and equipment, net | 161,411 | 162,776 | ||||||
| Right-of-use asset, net | 37,678 | 97,249 | ||||||
| Total Other Assets | 199,089 | 260,025 | ||||||
| TOTAL ASSETS | $ | 766,457 | $ | 557,466 | ||||
| LIABILITIES AND MEMBERS’ EQUITY (DEFICIT) | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Notes payable, net of discount - current portion | $ | 20,248 | $ | 287,468 | ||||
| Notes payable, related parties | 291,000 | - | ||||||
| Accounts payable | 27,705 | 113,292 | ||||||
| Accrued expenses | 244,654 | 335,686 | ||||||
| Accrued expenses - related parties | 66,809 | 16,800 | ||||||
| Due to related party | 18,200 | 24,200 | ||||||
| Contract liabilities | 11,648 | 18,252 | ||||||
| Lease liability, current portion - related party | 37,678 | 58,788 | ||||||
| Total Current Liabilities | 717,942 | 854,486 | ||||||
| LONG-TERM LIABILITIES: | ||||||||
| Notes payable, net of current portion | 74,667 | 32,628 | ||||||
| Lease liability, net of current portion - related party | - | 37,678 | ||||||
| Total Long-term Liabilities | 74,667 | 70,306 | ||||||
| Total Liabilities | 792,609 | 924,792 | ||||||
| Commitments and Contingencies (See Note 8) | ||||||||
| MEMBERS’ EQUITY (DEFICIT): | ||||||||
| Members’ equity | 619,228 | 700,098 | ||||||
| Accumulated deficit | (645,380 | ) | (1,067,424 | ) | ||||
| Total Members’ Equity (Deficit) | (26,152 | ) | (367,326 | ) | ||||
| Total Liabilities and Members’ Equity (Deficit) | $ | 766,457 | $ | 557,466 | ||||
See accompanying notes to the financial statements.
| F-3 |
PATRIOT GLASS SOLUTIONS, LLC
STATEMENTS OF OPERATIONS
| For the Year Ended | ||||||||
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| SALES, net | $ | 2,607,600 | $ | 3,056,670 | ||||
| OPERATING EXPENSES: | ||||||||
| Cost of sale (excluding depreciation and amortization expense shown separately below) | 1,183,993 | 1,641,947 | ||||||
| Compensation and related benefits | 448,984 | 699,263 | ||||||
| Professional fees | 17,951 | 39,413 | ||||||
| Management fee - related party | - | 316,572 | ||||||
| Depreciation and amortization expense | 50,917 | 101,490 | ||||||
| General and administrative expenses | 457,561 | 486,275 | ||||||
| Impairment loss - intangible assets | - | 178,911 | ||||||
| Impairment loss - goodwill | - | 350,491 | ||||||
| Total Operating Expenses | 2,159,406 | 3,814,362 | ||||||
| INCOME (LOSS) FROM OPERATIONS | 448,194 | (757,692 | ) | |||||
| OTHER INCOME (EXPENSES): | ||||||||
| Gain on debt extinguishment, net | 72,355 | - | ||||||
| Interest expense | (79,496 | ) | (182,349 | ) | ||||
| Interest expense - related party | (19,009 | ) | - | |||||
| Total Other Expenses, net | (26,150 | ) | (182,349 | ) | ||||
| NET INCOME (LOSS) | $ | 422,044 | $ | (940,041 | ) | |||
See accompanying notes to the financial statements.
| F-4 |
PATRIOT GLASS SOLUTIONS, LLC
STATEMENTS OF CHANGES IN MEMBERS’ EQUITY (DEFICIT)
FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024
| Total | ||||||||||||
| Members’ | Accumulated | Members’ | ||||||||||
| Equity | Deficit | Equity (Deficit) | ||||||||||
| Balance, December 31, 2023 | $ | 836,805 | $ | (127,383 | ) | $ | 709,422 | |||||
| Distribution to former parent | (136,707 | ) | - | (136,707 | ) | |||||||
| Net loss | - | (940,041 | ) | (940,041 | ) | |||||||
| Balance, December 31, 2024 | 700,098 | (1,067,424 | ) | (367,326 | ) | |||||||
| Distribution to parent | (80,870 | ) | - | (80,870 | ) | |||||||
| Net income | - | 422,044 | 422,044 | |||||||||
| Balance, December 31, 2025 | $ | 619,228 | $ | (645,380 | ) | $ | (26,152 | ) | ||||
See accompanying notes to the financial statements.
| F-5 |
PATRIOT GLASS SOLUTIONS, LLC
STATEMENTS OF CASH FLOWS
| For the Year Ended | ||||||||
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net income (loss) | $ | 422,044 | $ | (940,041 | ) | |||
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||
| Depreciation and amortization expense | 50,917 | 101,490 | ||||||
| Amortization of debt discount to interest expense | 10,538 | 11,991 | ||||||
| Non-cash interest expense | 9,956 | - | ||||||
| Non-cash gain on debt extinguishment | (72,355 | ) | - | |||||
| Lease costs | 783 | (51 | ) | |||||
| Impairment loss on goodwill and other intangible assets | - | 529,402 | ||||||
| Provision for credit losses | 52,417 | 32,195 | ||||||
| Change in operating assets and liabilities: | ||||||||
| Accounts receivable | (164,622 | ) | 201,772 | |||||
| Inventory | 19,094 | 136,131 | ||||||
| Prepaid expenses and other assets | (6,684 | ) | (26,400 | ) | ||||
| Contract assets | 4,759 | (2,359 | ) | |||||
| Accounts payable | (75,487 | ) | 32,493 | |||||
| Accrued expenses | (91,032 | ) | 193,991 | |||||
| Accrued expenses - related parties | 50,009 | 16,800 | ||||||
| Contract liabilities | (6,604 | ) | (482,468 | ) | ||||
| NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | 203,733 | (195,054 | ) | |||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Purchases of property and equipment | (49,552 | ) | (42,157 | ) | ||||
| NET CASH USED IN INVESTING ACTIVITIES | (49,552 | ) | (42,157 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds from related party advances | 4,000 | 49,200 | ||||||
| Repayment of related party advances | (10,000 | ) | (25,000 | ) | ||||
| Proceeds from notes payable | 46,446 | 400,391 | ||||||
| Repayment of notes payable | (159,736 | ) | (197,480 | ) | ||||
| Proceeds from notes payable - related party | 140,000 | - | ||||||
| Proceeds from former parent company advances | - | 13,000 | ||||||
| Repayment of former parent company advances | - | (149,707 | ) | |||||
| NET CASH PROVIDED BY FINANCING ACTIVITIES | 20,710 | 90,404 | ||||||
| NET INCREASE (DECREASE) IN CASH | 174,891 | (146,807 | ) | |||||
| CASH, beginning of year | 17,647 | 164,454 | ||||||
| CASH, end of year | $ | 192,538 | $ | 17,647 | ||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||||||||
| Cash paid for: | ||||||||
| Interest | $ | 59,002 | $ | 68,958 | ||||
| Income taxes | $ | - | $ | - | ||||
| SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||||||
| Distribution to former parent | $ | - | $ | 136,707 | ||||
| Increase in note payable - related party and decrease in notes payable | $ | 60,030 | $ | - | ||||
| Increase in note payable - related party and decrease in accounts payable | $ | 10,100 | $ | - | ||||
| Increase in note payable - related party for distribution to parent | $ | 80,870 | $ | - | ||||
See accompanying notes to the financial statements.
| F-6 |
PATRIOT GLASS SOLUTIONS, LLC
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025 and 2024
NOTE 1 – NATURE OF ORGANIZATION
Nature of Organization
Patriot Glass Solutions, LLC, is a Texas limited liability company doing business as A1 Glass Coating (the “Company” or “Patriot Glass”). On November 29, 2023, the Company changed the name to Patriot Glass from Mobile Tint LLC. Patriot Glass provides quality window tint solutions for auto, home, and business owners across Texas, specializing in automotive window tinting, residential window film, and commercial window film that stop harmful UV rays from passing through its window films for reduced glare, comfortable temperatures, and lower energy bills. Patriot Glass also carries products that offer forced-entry protection and films that protect glass from scratches, graffiti, other types of vandalism, and even bullets, including C-Bond BRS, a ballistic-resistant film system.
On January 30, 2025, C-Bond Systems, Inc. (“C-Bond”), the former 80% owner and parent of the Company, entered into that certain Debt Forgiveness, Equity Redemption and Strict Foreclosure Agreement (the “Agreement”), by and between the Company, C-Bond, C-Bond Systems, LLC, a subsidiary of C-Bond Systems, Inc. (“C-Bond LLC”), Badcer Ops, Inc. (“Badcer”), and Michael Wanke, the 20% owner of the Company, and creditors, Jeff Badders, Badders Children’s Trust (“Badders Trust”), Mercer Street Global Opportunity Fund, LLC (“Mercer”). The closing of the transactions contemplated by the Agreement (the “Closing”) occurred on January 30, 2025.
As settlement of all outstanding debt instruments owed to the parties in this Agreement and associated liens, and pursuant to Section 9-620 of the Uniform Commercial Code of the State of Texas, at the Closing the Company, amongst other things, C-Bond, and C-Bond LLC (collectively, the “Debtors”), voluntarily transferred, conveyed and assigned to Badcer all of the Debtors’ legal, equitable and beneficial right, title and interest in and to all assets of the Debtors, including, but not limited to, the following: (i) the 80% of the Membership Interest (as defined in the original Operating Agreement of the Company, dated as of July 2021) and the Units (as defined in such Operating Agreement) comprising such 80% of the Membership Interests of the Company, which was held by C-Bond; (ii) 100% of the membership interests of C-Bond LLC, which were held by C-Bond; (iii) all of the Company’s accounts receivable; and (iv) certain patents; among other assets.
The Company did not elect to apply any push-down accounting due to the change of control between C-Bond and Badcer. Therefore, all acquisition-related adjustments have been reflected on the parent company level.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
This summary of significant account policies of the Company is presented to assist in understanding the Company’s financial statements. The financial statements and the notes are the representation of the Company’s management, who are responsible for their integrity and objectivity.
The accompanying financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (the “U.S. GAAP”).
Going Concern
These financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying financial statements, the Company had net income (loss) of $422,044 and $(940,041) for the years ended December 31, 2025 and 2024, respectively. Net cash provided by (used in) operations was $203,733 and $(195,054) for the years ended December 31, 2025 and 2024, respectively. Additionally, as of December 31, 2025, the Company had an accumulated deficit, members’ deficit, and working capital deficit of $645,380, $26,152 and $150,574, respectively. These factors raise substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months from the issuance date of this report. Management cannot provide assurance that the Company will ultimately achieve consistently profitable operations or raise additional debt and/or equity capital. The Company is seeking to raise capital through additional debt and/or equity financings to fund its operations in the future. Although the Company has historically raised capital from the issuance of promissory notes, there is no assurance that it will be able to continue to do so. If the Company is unable to raise additional capital or secure additional lending in the near future, management expects that the Company may need to curtail its operations. These financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP 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. Actual results could differ from those estimates. Estimates during the years ended December 31, 2025 and 2024 include estimates for allowance for credit losses on accounts receivable, estimates used in the calculation of progress towards completion on uncompleted jobs, the useful life of property and equipment, assumptions used in assessing impairment of long-term assets, the estimate of the fair value lease liability and related right-of-use asset, and the valuation allowances for deferred tax assets.
| F-7 |
PATRIOT GLASS SOLUTIONS, LLC
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025 and 2024
Fair Value of Financial Instruments and Fair Value Measurements
The Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurement (“ASC 820”), requires companies to determine fair value based on the price that would be received to sell the asset or paid to transfer the liability to a market participant. ASC 820 emphasizes that fair value is a market-based measurement, not an entity-specific measurement.
The guidance requires that assets and liabilities carried at fair value be classified and disclosed in one of the following categories:
| ● | Level 1: Quoted market prices in active markets for identical assets or liabilities. |
| ● | Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. |
| ● | Level 3: Unobservable inputs that are not corroborated by market data. |
The Company did not identify any other assets or liabilities that are required to be presented on the balance sheets at fair value, on a recurring basis, in accordance with ASC Topic 820.
The carrying amounts reported in the balance sheets for cash, accounts receivable, prepaid expenses and other current assets, contract assets and liabilities, notes payable, accounts payable, accrued expenses, due to related party, and lease liabilities approximate their fair market value based on the short-term maturity of these instruments.
Cash and Cash Equivalents
For purposes of the statements of cash flows, the Company considers all highly liquid instruments with a maturity of three months or less at the purchase date and money market accounts to be cash equivalents. The Company had no cash equivalents as of December 31, 2025 and 2024.
Accounts Receivable
Pursuant to ASC 326, “Financial Instruments - Credit Losses”, the Company recognizes an allowance for losses on accounts receivable and notes receivable in an amount equal to the estimated probable losses net of recoveries under the current expected credit loss method. The allowance is based on an analysis of historical bad debt experience, current receivables aging and expected future write-offs, as well as an assessment of specific identifiable customer accounts and notes receivable considered at risk or uncollectible. In accordance with ASC 326, an allowance is maintained for estimated forward-looking losses resulting from the possible inability of customers to make required payments (current expected losses). The expense associated with the allowance for doubtful accounts on accounts receivable is recognized in general and administrative expenses.
Inventory
Inventory, consisting of finished goods, are stated at the lower of cost and net realizable value utilizing the first-in, first-out (FIFO) method. A reserve is established when management determines that certain inventories may not be saleable. If inventory costs exceed expected net realizable value due to obsolescence or quantities in excess of expected demand, the Company will record reserves for the difference between the cost and the net realizable value. These reserves are recorded based on estimates and included in cost of sales.
Property and Equipment
Property and equipment are stated at cost and are depreciated using the straight-line method over their estimated useful lives, which range from one to seven years. Leasehold improvements are depreciated over the shorter of the useful life or lease term including scheduled renewal terms. Maintenance and repairs are charged to expense as incurred. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. The Company examines the possibility of decreases in the value of these assets when events or changes in circumstances reflect the fact that their recorded value may not be recoverable.
Goodwill and Intangible Assets
On July 22, 2021, the Company recorded goodwill as the excess of purchase price paid by the Company’s former parent over the fair value of identifiable net assets acquired by its former parent company. Goodwill represented the future economic benefit arising from other assets acquired that could not be individually identified and separately recognized. Any goodwill arising from the Company’s acquisition were attributable to the value of potential expanded market opportunity with new customers. Additionally, other intangible assets acquired had either an identifiable or indefinite useful life. Intangible assets with identifiable useful lives were amortized on a straight-line basis over their economic or legal life, whichever was shorter. The Company’s amortizable intangible assets were being amortized over a useful life of 5 years and included customer relations and a non-compete agreement.
| F-8 |
PATRIOT GLASS SOLUTIONS, LLC
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025 and 2024
The Company assessed goodwill for impairment on an annual basis or more frequently when events and circumstances occur indicating that the recorded goodwill may be impaired. The Company regularly monitored business conditions and other factors including, but not limited to, adverse industry or economic trends and lower projections of profitability that may impact future operating results. The process of evaluating the potential impairment of goodwill requires significant judgment. In performing its annual or interim goodwill impairment test, the Company is permitted to first assess qualitative factors to determine whether it is more likely than not that the fair value of any of our reporting units is less than its carrying amount, including goodwill. In performing the qualitative assessment, the Company considered certain events and circumstances specific to its sole reporting unit, such as macroeconomic conditions, industry and market considerations, overall financial performance and cost factors when evaluating whether it is more likely than not that the fair value of its reporting unit is less than its carrying amount. The Company is also permitted to bypass the qualitative assessment and proceed directly to the quantitative test. If the Company chooses to undertake the qualitative assessment and conclude that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company would then proceed to the quantitative impairment test. In the quantitative assessment, the Company compares the fair value of the reporting unit to its carrying amount, which includes goodwill. Fair value is estimated using an income approach based on discounted cash flow methodologies that incorporate significant assumptions including projected revenues, operating results, probability-adjusted cash flows, discount rates and other market participant assumptions. If the fair value exceeds the carrying value, no impairment loss exists. If the fair value is less than the carrying amount, a goodwill impairment loss is measured and recorded. The Company assessed goodwill for impairment on an annual basis as of December 31 or more frequently when events and circumstances occur indicating that recorded goodwill may be impaired.
During the fourth quarter of fiscal 2024, the Company identified triggering events during its annual goodwill and long-lived asset impairment assessment of its reporting unit and certain other assets within its reporting unis, including indefinite-lived (trademarks) and definite-lived intangible assets (customer relations and non-compete agreements). Triggering events included a) the loss of funding sources to implement the Company’s growth plan, b) a decrease in sales due to a slowdown in school-related tinting projects in Texas, and c) a downward revision to the Company’s internal forecasts, including a decline in projected sales and profit margins. As a result, during the fourth quarter, the Company performed a quantitative impairment test. The fair value of the Company’s reporting unit is typically estimated using a discounted cash flow method. The fair value of the Company’s indefinite and definite lived intangibles was determined using the discounted cash flow method which required the Company to estimate the future cash flows as well as to select a risk-adjusted discount rate to measure the present value of the anticipated cash flows. When determining future cash flow estimates, the Company considered historical results, adjusted to reflect current and anticipated operating conditions. Under its discounted cash flow method, the Company estimated cash flows for its reporting unit over a discrete period (five years). Estimating the fair value of its reporting unit and its indefinite-lived intangible assets requires the Company to make assumptions and estimates in areas such as future economic conditions, industry-specific conditions, product pricing, and necessary capital expenditures.
Changes in the carrying amount of goodwill and other intangible assets during the year ended December 31, 2024 were as follows:
| Goodwill | Other Intangible Assets | Total | ||||||||||
| Balance at December 31, 2023, net | $ | 350,491 | $ | 229,414 | $ | 579,905 | ||||||
| Amortization | - | (50,503 | ) | (50,503 | ) | |||||||
| Impairment losses | (350,491 | ) | (178,911 | ) | (529,402 | ) | ||||||
| Balance at December 31, 2024 | $ | - | $ | - | $ | - | ||||||
Based on the outcome of impairment assessments, during the year ended December 31, 2024, the Company recognized asset full impairment charges as follows:
| Year Ended December 31, 2024 | ||||
| Goodwill impairment | $ | 350,491 | ||
| Intangible asset impairment | 178,911 | |||
| Total | $ | 529,402 | ||
Impairment of Long-Lived Assets
In accordance with ASC Topic 360, the Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable, or at least annually. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value.
Warranty Liability
The Company provides limited warranties on its products for product defects for periods ranging from 12 months to the life of the product. Warranty costs may include the cost of product replacement, refunds, labor costs and other costs. Allowances for estimated warranty costs are recorded during the period of sale. The determination of such allowances requires the Company to make estimates of product warranty claim rates and expected costs to repair or to replace the products under warranty. The Company currently establishes warranty reserves based on historical warranty costs for each product line combined with liability estimates based on the prior 12 months’ sales activities. If actual return rates and/or repair and replacement costs differ significantly from the Company’s estimates, adjustments to recognize additional cost of sales may be required in future periods. During the years ended December 31, 2025 and 2024, warranty costs were de minimis.
| F-9 |
PATRIOT GLASS SOLUTIONS, LLC
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025 and 2024
Revenue Recognition
The Company follows ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). This standard establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most of the existing revenue recognition guidance. ASC 606 requires an entity to 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 and requires certain additional disclosures.
Revenues from contracts for the distribution and installation of window film solutions are recognized over time on the basis of the Company’s estimates of the progress towards completion of contracts using various output or input methods depending on the type of contract terms including (1) the ratio of number of labor hours spent compared to the number of estimated labor hours to complete a job, (2) using the milestone method, or (3) using a units completed method. These methods are used because management considers these to be the best available measure of progress on these contracts. We use the same method for similar types of contracts. The asset, “contract assets” represents revenues recognized in excess of amounts billed. The liability, “contract liabilities,” represents billings in excess of revenues recognized.
Product sales, consisting of the sale of rolls of window film and C-Bond Solutions, are recognized at a point in time when the product is shipped to the customer and title is transferred and are recorded net of any discounts or allowances.
Revenues from the auto window tinting are recognized is recognized upon completion of the job, which generally occurs in one day.
Cost of Sales
Cost of revenues from fixed-price contracts for the distribution and installation of window film solutions include all direct material, sub-contractor, labor and certain other direct costs, as well as those indirect costs related to contract performance, such as indirect labor and fringe benefits. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Changes in job performance, job conditions and estimated profitability may result in revisions to cost and income, which are recognized in the period in which the revisions are determined. Changes in estimated job profitability resulting from job performance, job conditions, claims, change orders, and settlements, are accounted for as changes in estimates in the current period.
Shipping and Handling Costs
Shipping and handling costs incurred for product shipped to customers are included in general and administrative expenses and amounted to $10,673 and $23,795 for the years ended December 31, 2025 and 2024, respectively. Shipping and handling costs charged to customers are included in sales.
Advertising Costs
The Company may participate in various advertising programs. All costs related to advertising of the Company’s products are expensed in the period incurred. For the years ended December 31, 2025 and 2024, advertising costs charged to operations were $12,895 and $48,416, respectively, and are included in general and administrative expenses on the accompanying statements of operations.
Federal and State Income Taxes
The Company is taxed as a limited liability company under Subchapter K of the Internal Revenue Code. As such, the Company is generally not subject to income taxes. Instead, net income or loss is reported by its members who are responsible for any income taxes which may be due.
The Company follows the accounting guidance for uncertainty in income taxes using the provisions of ASC 740 “Income Taxes”. Using that guidance, tax positions initially need to be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. As of December 31, 2025 and 2024, the Company had no uncertain tax positions that qualify for either recognition or disclosure in the financial statements. Tax years that remain subject to examination are the years ending on and after December 31, 2021. The Company recognizes interest and penalties related to uncertain income tax positions in other expense. However, no such interest and penalties were recorded as of December 31, 2025 and 2024.
Leases
The Company accounts for leases in accordance with ASC 842. The lease standard requires certain leases to be reported on the balance sheets as right-of-use assets and lease liabilities. The Company elected the practical expedients permitted under the transition guidance of this standard that retained the lease classification and initial direct costs for any leases that existed prior to adoption of the standard. The Company does not reassess whether any contracts entered into prior to adoption are leases or contain leases.
The Company categorizes leases with contractual terms longer than twelve months as either operating or finance. Finance leases are generally those leases that would allow the Company to substantially utilize or pay for the entire asset over its estimated life. Assets acquired under finance leases are recorded in property and equipment, net. All other leases are categorized as operating leases. The Company does not have any finance leases as of December 31, 2025 and 2024. The Company’s leases generally have terms that range from three to four years for property and equipment and five years for property. The Company elected the accounting policy to include both the lease and non-lease components of our agreements as a single component and account for them as a lease.
| F-10 |
PATRIOT GLASS SOLUTIONS, LLC
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025 and 2024
Lease liabilities are recognized at the present value of the fixed lease payments using a discount rate based on the Company’s current borrowing rate. Lease assets are recognized based on the initial present value of the fixed lease payments, reduced by landlord incentives, plus any direct costs from executing the leases. Leasehold improvements are capitalized at cost and amortized over the lesser of their expected useful life or the lease term.
When the Company has the option to extend the lease term, terminate the lease before the contractual expiration date, or purchase the leased asset, and it is reasonably certain that the Company will exercise the option, the Company considers these options in determining the classification and measurement of the lease. Costs associated with operating lease assets are recognized on a straight-line basis within operating expenses over the term of the lease.
Distribution to Former Parent
As of December 31, 2024, the Company wrote off $136,707 of amounts due from the Company’s former parent. Such write off was reflected as a distribution to former parent, which is reflect on the accompanying statement of members equity (deficit). Also, see Note 7 for distribution to current parent company.
Segment Reporting
On January 1, 2024, the Company adopted FASB ASU 2023-07, Segment Reporting (ASC 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses among other disclosure requirements. The Company operates as a single operating segment as a distributor and installer of window film and window film solutions. In accordance with ASC 280, the Company’s chief operating decision maker has been identified as the Chief Executive Officer, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company and decides how to allocate resources based on loss from operations, managing cash flows and evaluating general and administrative expenses. Existing guidance, which is based on a management approach to segment reporting, establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about products and services, major customers, and the countries in which the entity holds material assets and reports revenue. All material operating units qualify for aggregation under “Segment Reporting” due to their similarities in economic characteristics such as nature of services performed. Since the Company operates in one segment, all financial information required by “Segment Reporting” can be found in the accompanying notes to financial statements.
Risk and Uncertainties
The Company operates in an industry that is subject to intense competition and changes in consumer and commercial demand. The Company’s operations are subject to significant risk and uncertainties including financial and operational risks including the potential risk of business failure.
The Company has experienced, and in the future expects to continue to experience, variability in sales and earnings. The factors expected to contribute to this variability include, among others, (i) the cyclical nature of the business, (ii) general economic conditions in the various local markets in which the Company competes, including a potential general downturn in the economy, and (iii) the volatility of prices in connection with the Company’s products and services. These factors, among others, make it difficult to project the Company’s operating results on a consistent basis.
Other accounting standards that have been issued or proposed recently issued accounting pronouncements by FASB that do not require adoption until a future date are not expected to have a material impact on the financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures.
Recent Accounting Pronouncements
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), which requires entities to provide more detailed disaggregation of expenses in the income statement, focusing on the nature of the expenses rather than their function. The new disclosures will require entities to separately present expenses for significant line items, including but not limited to, depreciation, amortization, and employee compensation. Entities will also be required to provide a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, disclose the total amount of selling expenses and, in annual reporting periods, provide a definition of what constitutes selling expenses. This pronouncement is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company does not expect the adoption of this new guidance to have a material impact on the financial statements.
In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The amendments in this update provide a practical expedient for entities estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC 606. The practical expedient allows entities to estimate expected credit losses by assuming that the conditions existing as of the balance sheet date will remain unchanged for the remaining life of current accounts receivable and current contract assets. As a result, entities are not required to incorporate forecasts of future economic conditions when measuring expected credit losses for these short-term financial assets. The guidance is effective for fiscal years beginning after December 15, 2025, including interim periods within those fiscal years, with early adoption permitted. The Company does not expect the adoption of this new guidance to have a material impact on the financial statements.
| F-11 |
PATRIOT GLASS SOLUTIONS, LLC
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025 and 2024
In September 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”). The amendments simplify the accounting for internal-use software development costs by removing the existing project stage model and replacing it with a principles-based framework for determining when software development costs should be capitalized. Under the new guidance, capitalization of internal-use software costs begins when (i) management has authorized and committed to funding the software project and (ii) it is probable that the project will be completed and the software will be used to perform its intended function. ASU 2025-06 also incorporates guidance related to website development costs and clarifies the presentation and disclosure requirements for capitalized software development costs. This pronouncement is effective for annual reporting periods beginning after December 15, 2027, including interim periods within those annual periods, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this guidance will have on its financial statements and related disclosures.
NOTE 3 – ACCOUNTS RECEIVABLE
On December 31, 2025 and 2024, accounts receivable consisted of the following:
| December 31, 2025 | December 31, 2024 | |||||||
| Accounts receivable | $ | 400,277 | $ | 238,565 | ||||
| Less: allowance for credit losses | (96,419 | ) | (46,912 | ) | ||||
| Accounts receivable, net | $ | 303,858 | $ | 191,653 | ||||
For the years ended December 31, 2025 and 2024, credit loss expense amounted to $52,417 and $32,195, respectively.
NOTE 4 – INVENTORY
On December 31, 2025 and 2024, inventory consisted of the following:
| December 31, 2025 | December 31, 2024 | |||||||
| Finished goods | $ | 26,438 | $ | 45,532 | ||||
| Total Inventory | $ | 26,438 | $ | 45,532 | ||||
For the years ended December 31, 2025 and 2024, the Company did not record any allowance for slow moving inventory.
NOTE 5 – PROPERTY AND EQUIPMENT
On December 31, 2025 and 2024, property and equipment consisted of the following:
| Useful Life | December 31, 2025 | December 31, 2024 | ||||||||
| Machinery and equipment | 5 – 7 years | $ | 73,411 | $ | 73,411 | |||||
| Furniture and office equipment | 3 – 7 years | 2,061 | 2,061 | |||||||
| Vehicles | 1 – 5 years | 156,654 | 110,207 | |||||||
| Leasehold improvements | 3 – 5 years | 113,750 | 110,645 | |||||||
| 345,876 | 296,324 | |||||||||
| Less: accumulated depreciation | (184,465 | ) | (133,548 | ) | ||||||
| Property and equipment, net | $ | 161,411 | $ | 162,776 | ||||||
For the years ended December 31, 2025 and 2024, depreciation expense is included in general and administrative expenses and amounted to $50,917 and $50,987, respectively.
NOTE 6 – NOTES PAYABLE
On December 31, 2025 and 2024, notes payable consisted of the following:
| December 31, 2025 | December 31, 2024 | |||||||
| Notes payable | $ | 94,915 | $ | 330,634 | ||||
| Less: unamortized debt discount | - | (10,538 | ) | |||||
| Notes payable, net | 94, 915 | 320,096 | ||||||
| Less: current portion of notes payable, net of discount | (20,248 | ) | (287,468 | ) | ||||
| Notes payable – long-term | $ | 74,667 | $ | 32,628 | ||||
| F-12 |
PATRIOT GLASS SOLUTIONS, LLC
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025 and 2024
Merchant loans
On June 17, 2024, the Company entered into a Merchant Loan (the “June 2024 Merchant Loan”) with a lender in the principal amount of $85,000 and received net proceeds of $81,550, net of fees of $3,450, which was reflected as a debt discount to be amortized into interest expense over the term of the note. The June 2024 Merchant Loan required a weekly payment of principal and interest of $2,988 through March 19, 2025 for an effective interest rate of 85.9%. In February 2025, the Company defaulted on the June 2024 Merchant loan. On May 22, 2025, the Company entered into a settlement agreement with the lender for a payment of $22,500. On December 31, 2025 and 2024, the principal amount due on the June 2024 Merchant Loan amounted to $0 and $43,973, respectively.
On July 31, 2024, the Company entered into a Merchant Loan (the “July 2024 Merchant Loan”) with a lender in the principal amount of $75,000 and received net proceeds of $73,030, net of fees of $1,970, which was reflected as a debt discount to be amortized into interest expense over the term of the note. The July 2024 Merchant Loan required a weekly payment of principal and interest of $3,022 through April 2025. In February 2025, the Company defaulted on the July 2024 Merchant loan. On May 21, 2025, the Company entered into a settlement agreement with the lender for a payment of $24,500. On December 31, 2025 and 2024, the principal amount due on the July 2024 Merchant Loan amounted to $0 and $45,115, respectively.
On September 19, 2024, the Company entered into a Merchant Loan (the “September 2024 Merchant Loan”) with a lender in the principal amount of $70,000 and received net proceeds of $65,100, net of fees of $4,900, which was reflected as a debt discount to be amortized into interest expense over the term of the note. The September 2024 Merchant Loan required a weekly payment of principal and interest of $4,287 through September 2025. In February 2025, the Company defaulted on the September Merchant Loan. On April 25, 2025, the Company entered into a settlement agreement with the lender for a payment of $15,000. On December 31, 2025 and 2024, the principal amount due on the September 2024 Merchant Loan amounted to $0 and $50,627. respectively.
On October 14, 2024, the Company entered into a Merchant Loan (the “October 2024 Merchant Loan”) with a lender in the principal amount of $50,000 and received net proceeds of $45,000, net of fees of $5,000, which was reflected as a debt discount to be amortized into interest expense over the term of the note. The October 2024 Merchant Loan required a weekly payment of principal and interest of $4,167 through October 2025. In February 2025, the Company defaulted on the October Merchant Loan. In April 2025, the Company entered into a settlement agreement with the lender for a payment of $5,000, which was paid by Badcer (See Note 7). On December 31, 2025 and 2024, the principal amount due on the October 2024 Merchant Loan amounted to $0 and $35,224. respectively.
On November 6, 2024, the Company entered into a Merchant Loan (the “November 2024 Merchant Loan”) with a lender in the principal amount of $50,000 and received net proceeds of $44,555, net of fees of $5,445, which will be reflected as a debt discount to be amortized into interest expense over the term of the note. The November 2024 Merchant Loan required a weekly payment of principal and interest of $5,354 through February 2025. In April 2025, the Company entered into a settlement agreement with the lender for a payment of $55,030, which was repaid by Badcer using proceeds from a related party note payable (See Note 7). On December 31, 2025 and 2024, the principal amount due on the October 2024 Merchant Loan amounted to $0 and $45,074. respectively.
For the years ended December 31, 2025 and 2024, in connection with the merchant settlement agreements discussed above, the Company recorded a gain on debt extinguishment of $72,355 and $0, respectively, which is included in other income (expenses) on the accompanying statements of operations.
Promissory notes and equipment and vehicle loans
On July 22, 2021, the Company assumed vehicle and equipment loans in the amount of $95,013. These loans bear interest at rates ranging from 6.79% to 8.24% and are payable monthly through April 2025. On December 31, 2025 and 2024, notes payable related to these vehicle and equipment loans amounted to $0 and $2,798, respectively.
During the year ended December 31, 2023, in connection with the acquisition of a vehicle and an air conditioner unit, the Company entered into three vehicle and equipment loans in the original aggregate amount of $117,721. These loans bear interest at rates ranging from 10.0% to 35.1% and are payable monthly through September 2028. On December 31, 2025 and 2024, notes payable related to the vehicle and equipment loans amounted to $20,098 and $41,602, respectively.
On February 21, 2024, the Company entered into a Promissory Note (the “February 2024 Note”) with a lender in the principal amount of $50,000 and received net proceeds of $49,000, net of original issue discount of $1,000, which was reflected as a debt discount to be amortized into interest expense over the term of the note. The February 2024 Note bears interest at an effective rate of 33.4% per annum and all outstanding principal and accrued and unpaid interest is due on August 21, 2025. On December 31, 2025 and 2024, the principal amount due on the February 2024 Note was $0 and $25,286, respectively.
On July 24, 2024, in connection with the acquisition of a vehicle, the Company entered into a vehicle loan in the amount of $42,157. The loan bears interest at 8.96% and is payable monthly through August 2029. On December 31, 2025 and 2024, note payable related to this vehicle amounted to $32,811 and $40,935, respectively.
| F-13 |
PATRIOT GLASS SOLUTIONS, LLC
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025 and 2024
On April 1, 2025, in connection with the acquisition of a vehicle, the Company entered into a vehicle loan in the amount of $46,446. The loan bears interest at 11.34% per annum and is payable monthly through April 2031. On December 31, 2025 and 2024, note payable related to this vehicle amounted to $42,006 and $0, respectively.
For the years ended December 31, 2025 and 2024, amortization of debt discounts related to all of the above notes payable amounted to $10,538 and $11,991, respectively, which has been included in interest expense on the accompanying statements of operations.
On December 31, 2025, future annual maturities of notes payable are as follows:
| December 31, | Amount | |||
| 2026 | $ | 20,248 | ||
| 2027 | 22,999 | |||
| 2028 | 23,297 | |||
| 2029 | 15,127 | |||
| 2030 | 9,751 | |||
| Thereafter | 3,493 | |||
| Total notes payable on December 31, 2025 | $ | 94,915 | ||
NOTE 7 – RELATED PARTY TRANSACTIONS
Note Payable – Related Party
On February 24, 2025, the Company and Badcer, the Company’s 80% owner, a related party, (the Makers”) entered into secured promissory notes with Mercer in the aggregate amount of $151,000 (the “Mercer Promissory Notes”). The Mercer Promissory Notes bear interest at 8.0% per annum and were due on February 24, 2026. The Mercer Promissory Notes are secured by the assets of the Company and are currently in default.
On February 24, 2025, the Makers entered into a secured promissory note with Jeff Badders in the amount of aggregate amount of $140,000 (the “Badders Promissory Note”). The Badders Promissory Note bears interest at 8.0% per annum and was due on February 24, 2026. The Badders Promissory Note is secured by the assets of the Company and is currently in default.
None of the proceeds from the above promissory notes were deposited into the Company and proceeds from the promissory notes were used to fund the operations of Badcer, pay expenses of Badcer and the Company and to pay certain merchant lenders pursuant to merchant loan settlement agreements (See Note 6). The Makers are jointly and severally liable for the obligations under the Mercer Promissory Notes and Badders Promissory Note in the amount of $291,000.
In connection with the merchant loan settlement agreements, in March and April 2025, Badcer paid an aggregate amount of $60,030 to merchant lenders on behalf of the Company using funds Badcer received from the Mercer and Badders Promissory Notes.
From February to March 2025, the Company received cash proceeds of $140,000 from Badcer for working capital purposes using funds Badcer received from the Mercer and Badders Promissory Notes.
During the year ended December 31, 2025, Badcer paid $10,100 to vendors on behalf of the Company using funds Badcer received from the Mercer and Badders Promissory Notes.
The Company evaluated the terms of the above-mentioned Mercer and Badders Promissory Notes in accordance with ASC 460, Guarantees, and concluded that as of December 31, 2025, a loss is probable since it is highly likely that the Company will be required to pay or settle the amounts due to Mercer and Jeff Badders. Accordingly, the Company increased the notes payable – related party by $80,870, which represents the difference between the total amounts of promissory notes due to Mercer and Jeff Badders in excess of the funds received by or paid on behalf of the Company. The increase in note payable – related party was offset by the recording of a distribution to parent in members’ equity (deficit) for the amount retained by Badcer that the Company may be required to pay. The Company has not been required to make a payment under this agreement to date.
As of December 31, 2025, note payable – related party amounted to $291,000 and accrued interest amounted to $19,009, which is included in accrued expenses – related parties on the accompanying balance sheet.
Accrued expenses – related parties
In connection with the operating lease between MDW Management, LLC, a company owned by Mr. Wanke and his wife and the Company (See Note 11), for the year ended December 31, 2025 and 2024, the Company recorded rent expense of $74,400 and $67,200, respectively, which is included in general and administrative expenses on the accompanying statements of operations. As of December 31, 2025 and 2024, lease payments due to MD Management amounted to $47,800 and $16,800, respectively, which is included in accrued expenses – related parties on the accompanying balance sheets.
| F-14 |
PATRIOT GLASS SOLUTIONS, LLC
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025 and 2024
Due to related party
During the year ended December 31, 2025, Mike Wanke, the Company’s sole operating member, advanced the Company $4,000 and was repaid $10,000. During the year ended December 31, 2024, Mike Wanke, the Company’s sole operating member, advanced the Company $49,200 and was repaid $25,000. The advances are due on demand and are non-interest bearing.
As of December 31, 2025 and 2024, amounts due to related party amounted to $18,200 and $24,200, respectively.
Management fee – former Parent.
During the year ended December 31, 2024, the Company paid a management fee of $316,572 to its former parent company, which is included in management fee – related party on the accompanying statement of operations.
NOTE 8 – COMMITMENTS AND CONTINGENCIES
Legal Matters
From time to time, the Company may be involved in litigation related to claims arising out of its operations in the normal course of business. As of December 31, 2025, the Company is not involved in any other pending or threatened legal proceedings that it believes could reasonably be expected to have a material adverse effect on its financial condition, results of operations, or cash flows.
See Note 7 for contingencies related to the Mercer Promissory Notes and Badders Promissory Note.
NOTE 9 – CONCENTRATIONS
Concentrations Of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of trade accounts receivable and cash deposits. The Company places its cash in banks at levels that, at times, may exceed federally insured limits. On December 31, 2025, the Company had no cash in bank in excess of FDIC insured levels of $250,000.
Geographic Concentrations of Sales
During the years ended December 31, 2025 and 2024, all sales were in the United States.
Customer Concentrations
For the year ended December 31, 2025, no customer accounted for over 10% of total sales For the year ended December 31, 2024, one customer accounted for 23.0% of total sales. On December 31, 2025, three customers accounted for 60.5% (24.3%, 23.4% and 12.8%, respectively) of the total accounts receivable balance. On December 31, 2024, two customers accounted for 37.8% (21.4% and 16.4%, respectively) of the total accounts receivable balance.
Vendor concentrations
Generally, the Company purchases substantially all of its inventory from four suppliers. The loss of these suppliers may have a material adverse effect on the Company’s results of operations and financial condition. However, the Company believes that, if necessary, alternate vendors could supply similar products in adequate quantities to avoid material disruptions to operations.
NOTE 10 – REVENUE RECOGNITION
The revenue that the Company recognizes arises from purchase requests the Company receives from its customers. The Company’s performance obligations under purchase order or a signed proposal correspond to each job for the distribution and installation of window film solutions. As a result, each purchase order or signed proposal generally may contain more than one performance obligation based on the specific job. Control of the Company’s products transfers to its customers when the customer is able to direct the use of, and obtain substantially all of the benefits from, the Company’s products, which generally occurs when the job or a specific portion of the job is completed. Once this occurs, the Company has satisfied its performance obligation and the Company recognizes revenue. Revenues from contracts for the distribution and installation of window film solutions are recognized over time on the basis of the Company’s estimates of the progress towards completion of contracts using various output of input methods including (1) the ratio of number of labor hours spent compared to the number of estimated labor hours to complete a job, (2) using the milestone method, or (3) using a units completed method. These methods are used because management considers these methods to be the best available measure of progress on these contracts. Revenues from the auto window tinting are recognized is recognized upon completion of the job, which generally occurs in one day. Product sales, consisting of the sale of roll of window film and C-Bond Solutions, are recognized at a point in time when the product is shipped to the customer and title is transferred and are recorded net of any discounts or allowances.
| F-15 |
PATRIOT GLASS SOLUTIONS, LLC
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025 and 2024
Transaction Price
The Company agrees with its customers on the selling price of each transaction. This transaction price is generally based on the product, market conditions, including supply and demand balances, labor costs, and freight. Any sales tax, value added tax, and other tax the Company collects concurrently with its revenue-producing activities are excluded from revenue.
Revenue Disaggregation
The Company tracks its revenue by product and timing of revenue recognition. The following table summarizes our revenue by product for the years ended December 31, 2025 and 2024:
| For the Years Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Window tint installation and sales recognized over time | $ | 2,245,303 | $ | 2,746,164 | ||||
| Auto window tinting recognized upon completion | 281,852 | 273,032 | ||||||
| Sale of window film and window protection products recognized upon shipment | 80,445 | 37,474 | ||||||
| Total | $ | 2,607,600 | $ | 3,056,670 | ||||
NOTE 11 – OPERATING LEASE RIGHT-OF-USE (“ROU”) ASSET AND OPERATING LEASE LIABILITY
In connection with the 2021 Exchange Agreement between in the Company and C-Bond Systems, Inc., the Company entered into a Commercial Lease Agreement dated July 21, 2021, by and between landlord MDW Management, LLC, a company owned by Mr. Wanke and his wife and the Company (the “Lease”). The term of the Lease is 60 months, at a minimum monthly rent of $5,600 (not including tax), with two five-year options for the tenant to renew. The lease has not been renewed to date and is currently on a month-to-month basis.
In adopting ASC Topic 842, Leases (Topic 842) on January 1, 2019, the Company had elected the ‘package of practical expedients’, which permitted it not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs (see Note 2).
During the years ended December 31, 2025 and 2024, in connection with its related party property operating lease, the Company recorded rent expense of $74,400 and $67,200, respectively, which is expensed during the year and included in general and administrative expenses on the accompanying statements of operations.
The significant assumption used to determine the present value of the lease liability was a discount rate of 6.79% which was based on the Company’s estimated incremental borrowing rate.
On December 31, 2025 and 2024, right-of-use asset (“ROU”) is summarized as follows:
| December 31, 2025 | December 31, 2024 | |||||||
| Office lease right-of-use asset | $ | 279,162 | $ | 279,162 | ||||
| Less: accumulated amortization | (241,484 | ) | (181,913 | ) | ||||
| Balance of ROU asset | $ | 37,678 | $ | 97,249 | ||||
On December 31, 2025 and 2024, operating lease liability related to the ROU asset are summarized as follows:
December 31, 2025 | December 31, 2024 | |||||||
| Lease liability related to office lease right-of-use asset | $ | 37,678 | $ | 96,466 | ||||
| Less: current portion of lease liability | (37,678 | ) | (58,788 | ) | ||||
| Lease liability – long-term | $ | - | $ | 37,678 | ||||
On December 31, 2025, future minimum base lease payments due under non-cancelable operating lease are as follows:
| Twelve months ended December 31, | Amount | |||
| 2026 | $ | 39,200 | ||
| Total minimum non-cancelable operating lease payments | 39,200 | |||
| Less: discount to fair value | (1,522 | ) | ||
| Total lease liability on December 31, 2025 | $ | 37,678 | ||
| F-16 |
PATRIOT GLASS SOLUTIONS, LLC
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025 and 2024
NOTE 12 – SUBSEQUENT EVENTS
The Company has evaluated subsequent events through July 31, 2026, the date the financial statements were available to be issued. Based on this evaluation, no events other than those disclosed below have occurred that require disclosure or adjustment to the financial statements as of and for the year ended December 31, 2025.
On April 1, 2026, the Company and Transportation and Logistics Systems, Inc. (OTC OID: TLSS), (“TLSS”), a publicly traded holding company, TLSS Acquisition, Inc., a wholly-owned subsidiary of TLSS, (the “Acquisition Sub”), and TLSS Reverse PGS, LLC, a Texas limited liability company and a wholly-owned subsidiary of the Acquisition Sub (“Reverse”), entered into a Member Interest and Asset Exchange Agreement (the “Agreement”) with Badcer Ops (the “Seller”), Jeff Badders and Mercer, as the shareholders of the Seller (the “Seller Shareholders”), and Michael Wanke (“Wanke”), the sole Manager and twenty percent (20%) owner of the Company. The Agreement provides for a reverse triangular merger of Reverse with and into the Company, with the Company as the surviving entity, pursuant to which the Seller’s eighty percent (80%) membership interest in the Company and four (4) nanotechnology patents (the “Patents”) will be exchanged, transferred and assigned to the Acquisition Sub in exchange for the Merger Consideration to be paid by TLSS.
The Seller is Badcer Ops, Inc., a Nevada corporation, whose shareholders are Mercer and Mr. Jeff Badders, an individual (together, the “Seller Shareholders”).
The closing of the transaction is expected to occur no later than August 4, 2026, ten (10) days after audited financials for the Company or year-end 2024 and year-end 2025 and unaudited financials for the Company for the first quarter of 2026 are completed and provided to TLSS, subject to the satisfaction or waiver of certain closing conditions, including, among others: (i) the completion of satisfactory due diligence by TLSS; (ii) the accuracy of the representations and warranties of the parties; (iii) the procurement of acceptable landlord consent to the assignment of and amendments to the Company’s lease for its operating facilities; (iv) delivery of certain financial statements; and (v) other customary closing conditions as set forth in the Agreement.
The remaining 20% membership interest in the Company is currently held by and will be retained by Mr. Michael Wanke, the sole Manager of the Company. It is a condition of closing that Mr. Wanke will enter into an employment agreement with the Company, the terms of which are to be agreed upon prior to the expiration of the due diligence period.
| F-17 |
Exhibit 99.2
Management’s Discussion and Analysis of Financial Condition and Results of Operations of Patriot Glass Solutions, LLC for the years ended December 31, 2025 and 2024
The Current Report on Form 8-K contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, contained in this Report, including statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans and objectives of management and expected market growth, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “could,” “will,” “would,” “should,” “expect,” “plan,”, “anticipate,” “believe,” “estimate,” “intend,” “predict,” “seek,” “contemplate,” “project,” “continue,” “potential,” “ongoing” or the negative of these terms or other comparable terminology. These forward-looking statements include, but are not limited to, statements about:
| ● | our ability to obtain additional funds for our operations; |
| ● | our ability to obtain and maintain intellectual property protection for our products and our ability to operate our business without infringing the intellectual property rights of others; |
| ● | our reliance on third party distributors; |
| ● | the initiation, timing, progress and results of any research and development programs; |
| ● | our dependence on current and future collaborators for developing new products; |
| ● | the rate and degree of market acceptance of our commercial products; |
| ● | the implementation of our business model and strategic plans for our business; |
| ● | our estimates of our expenses, losses, future revenue and capital requirements, including our needs for additional financing; |
| ● | our reliance on third party suppliers to supply the materials and components for our products; |
| ● | our ability to attract and retain qualified key management and technical personnel; |
| ● | our financial performance; |
| ● | the impact of government regulation and developments relating to our competitors or our industry; and |
These statements relate to future events or our future operational or financial performance, and involve known and unknown 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. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed in our SEC filings.
Any forward-looking statement in the Current Report on Form 8-K reflects our current view with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our business, results of operations, industry, and future growth. Given these uncertainties, you should not place undue reliance on these forward-looking statements. No forward-looking statement is a guarantee of future performance. You should read this Report completely and with the understanding that our actual future results may be materially different from any future results expressed or implied by these forward-looking statements. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.
This Report also may contain estimates, projections and other information concerning our industry, our business and the markets for certain glass strengthening solutions and window film mounting solutions, including data regarding the estimated size of those markets and their projected growth rates. Information that is based on estimates, forecasts, projections, or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances reflected in this information. Unless otherwise expressly stated, we obtained these industry, business, market and other data from reports, research surveys, studies and similar data prepared by third parties, industry, and general publications, government data and similar sources. In some cases, we do not expressly refer to the sources from which these data are derived.
You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date of this Report. Except as required by law, we do not undertake any obligation to update or release any revisions to these forward-looking statements to reflect any events or circumstances, whether as a result of new information, future events, changes in assumptions or otherwise, after the date hereof.
Overview
We provide quality window tint solutions for auto, home, and business owners across Texas, specializing in automotive window tinting, residential window film, and commercial window film that stop harmful UV rays from passing through its window films for reduced glare, comfortable temperatures, and lower energy bills. Patriot Glass also carries products that offer forced-entry protection and films that protect glass from scratches, graffiti, other types of vandalism, and even bullets, including C-Bond BRS, a ballistic-resistant film system.
The following discussion highlights our results of operations and the principal factors that have affected our financial condition as well as our liquidity and capital resources for the periods described and provides information that management believes is relevant for an assessment and understanding of the statements of financial condition and results of operations presented herein. The following discussion and analysis are based on Patriot Glass financial statements contained in this Report, which have been prepared in accordance with United States generally accepted accounting principles (“GAAP”). You should read the discussion and analysis together with such financial statements and the related notes thereto.
Going Concern
The Patriot Glass financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying financial statements, the Company had net income (loss) of $422,044 and $(940,041) for the years ended December 31, 2025 and 2024, respectively. Net cash provided by (used in) operations was $203,733 and $(195,054) for the years ended December 31, 2025 and 2024, respectively. Additionally, as of December 31, 2025, the Company had an accumulated deficit, members’ deficit, and working capital deficit of $645,380, $26,152 and $150,574, respectively. These factors raise substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months from the issuance date of this report. Management cannot provide assurance that the Company will ultimately achieve consistently profitable operations or raise additional debt and/or equity capital. The Company is seeking to raise capital through additional debt and/or equity financings to fund its operations in the future. Although the Company has historically raised capital from the issuance of promissory notes, there is no assurance that it will be able to continue to do so. If the Company is unable to raise additional capital or secure additional lending in the near future, management expects that the Company may need to curtail its operations. The Patriot Glass financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
Critical Accounting Estimates
The following discussion and analysis of Patriot Glass financial condition and results of operations are based upon the financial statements of Patriot Glass as of December 31, 2025 and 2024, and for the years ended December 31, 2025 and 2024, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. Management continually evaluates such estimates, including those related to critical estimates for estimates used in the calculation of percentage of completion on uncompleted jobs, assumptions used in assessing impairment of long-term assets, and the fair value of non-cash equity transactions. Management bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Any future changes to these estimates and assumptions could cause a material change to our reported amounts of revenues, expenses, assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions. Management believes the following critical accounting policies affect our more significant judgments and estimates used in the preparation of the Patriot Glass financial statements.
Revenue recognition
We follow the Financial Accounting Standards Board’s (the “FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”). This standard establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most of the existing revenue recognition guidance. ASC 606 requires an entity to 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 and requires certain additional disclosures.
Revenues from contracts for the distribution and installation of window film solutions are recognized over time on the basis of the Company’s estimates of the progress towards completion of contracts using various output or input methods depending on the type of contract terms including (1) the ratio of number of labor hours spent compared to the number of estimated labor hours to complete a job, (2) using the milestone method, or (3) using a units completed method. These methods are used because management considers these to be the best available measure of progress on these contracts. We use the same method for similar types of contracts. The asset, “contract assets” represents revenues recognized in excess of amounts billed. The liability, “contract liabilities,” represents billings in excess of revenues recognized.
Product sales, consisting of the sale of rolls of window film and C-Bond Solutions, are recognized at a point in time when the product is shipped to the customer and title is transferred and are recorded net of any discounts or allowances.
Revenues from the auto window tinting are recognized upon completion of the job, which generally occurs in one day.
See Note 2 to the Patriot Glass audited and unaudited financial statements for a summary of significant accounting policies and recent accounting pronouncements.
Results of Operations
The following comparative analysis on results of operations was based primarily on the comparative financial statements, footnotes and related information for the periods identified below and should be read in conjunction with the financial statements and the notes to those statements for the years ended December 31, 2025 and 2024, which are included elsewhere in this report on Form 8-K.
Comparison of Results of Operations for the Years ended December 31, 2025 and 2024
Sales
For the year ended December 31, 2025, sales amounted to $2,607,600 as compared to $3,056,670 for the year ended December 31, 2024, a decrease of $449,070, or 14.7%, primarily attributable to a decrease in window tint installation and services to school districts in Texas of $500,861. The Texas Education Agency (TEA) mandated that each school district and open-enrollment charter school install either entry-resistant film or fencing on ground-floor windows that would allow access, glass doors, and windows adjacent to glass doors. Additionally, we had an increase in sales from the sales of C-Bond Secure multi-purpose and BRS ballistic resistant glass protection systems of $42,971 and an increase in auto window tinting recognized of $8,820.
Operating Expenses
For the year ended December 31, 2025, operating expenses amounted to $2,159,406 as compared to $3,814,362 for the year ended December 31, 2024, a decrease of $1,654,956, or 43.4%. For the years ended December 31, 2025 and 2024, operating expenses consisted of the following:
| Year Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Cost of sales (excluding depreciation and amortization expense shown separately below) | $ | 1,183,993 | $ | 1,641,947 | ||||
| Compensation and related benefits | 448,984 | 699,263 | ||||||
| Professional fees | 17,951 | 39,413 | ||||||
| Management fee – related party | - | 316,572 | ||||||
| Depreciation and amortization expense | 50,917 | 101,490 | ||||||
| General and administrative expenses | 457,561 | 486,275 | ||||||
| Impairment loss – intangible assets and goodwill | - | 529,402 | ||||||
| Total | $ | 2,159,406 | $ | 3,814,362 | ||||
Cost of Sales (excluding depreciation and amortization expense)
Cost of sales is comprised primarily of cost of raw materials such as film, labor, subcontractor costs, equipment rental, and supplies. For the year ended December 31, 2025, cost of sales (excluding depreciation and amortization expense) amounted to $1,183,993, or 45.4% of net sales, as compared to $1,641,947, or 53.7% of net sales, for the year ended December 31, 2024, a decrease of $457,954, or 27.9%. These decreases were related to a decrease in net sales as discussed above. The percentage of cost of sales as a percentage of net sales fluctuates based on type of job (commercial, residential, auto, or product sales).
Compensation and related benefits
For the year ended December 31, 2025, compensation and related benefits decreased by $250,279, or 35.8%, as compared to the year ended December 31, 2024. This decrease was primarily due to an overall decrease in executive compensation and related benefits of $86,511 and an increase in office and sales compensation and related benefits of $163,768.
Professional fees
For the year ended December 31, 2025, professional fees decreased by $21,462, or 54.4%, as compared to the year ended December 31, 2024. This decrease was primarily related to a decrease in accounting fees of $31,653, offset by an increase in other professional fees of $10,191.
Management fee – related party
For the year ended December 31, 2025, management fee – related party decreased by $316,572, or 100.0%, as compared to the year ended December 31, 2024. In 2025, the former parent company did not charge a
management fee.
Depreciation and amortization
For the year ended December 31, 2025, depreciation and amortization decreased by $50,573, or 49.8%, as compared to the year ended December 31, 2024. This decrease was primarily to a decrease in amortization expense from the amortization of intangible assets, which were written off in 2024. Accordingly, no amortization expense was recorded in 2025.
General and administrative
For the year ended December 31, 2025, general and administrative expenses decreased by $28,714, or 5.9%, as compared to the year ended December 31, 2024. The decrease is primarily attributable to a decrease in advertising and promotion expense of $35,521, offset by an increase in other general and administrative expenses of $6,807.
Impairment loss – intangible assets and goodwill
During the year ended December 31, 2025 and 2024, we recorded an impairment loss of $0 and $529,402, respectively, from the write off of intangible assets and goodwill. During the fourth quarter of fiscal 2024, Patriot Glass identified triggering events during its annual goodwill and long-lived asset impairment assessment of its reporting unit and certain other assets within its reporting unis, including indefinite-lived (trademarks) and definite-lived intangible assets (customer relations and non-compete agreements). Triggering events included a) the loss of funding sources to implement the Company’s growth plan, b) a decrease in sales due to a slowdown in school-related tinting projects in Texas, and c) a downward revision to the Company’s internal forecasts, including a decline in projected sales and profit margins. As a result, during the fourth quarter, the Company performed a quantitative impairment test and impaired these assets.
Income (Loss) from Operations
For the year ended December 31, 2025 and 2024, income (loss) from operations amounted to $448,194 and $(757,692), respectively, a positive change of $1,205,886, or 159.1%.
Other Income (Expenses), net
For the year ended December 31, 2025, other expenses, net amounted to $26,150 as compared to $182,349 for the year ended December 31, 2024, a decrease of $156,199, or 85.7%. This change was primarily due to a decrease in interest expense of $83,844 related to an average decrease in interest-bearing debt during the period, and the recording of a gain on debt extinguishment of $72,355 related to the conversion of debt and accounts payable to Series J preferred stock during 2025.
Net Income (Loss)
Due to factors discussed above, for the year ended December 31, 2025 and 2024, net income (loss) amounted to $422,044 and $(940,041), respectively.
Liquidity and Capital Resources
Liquidity is the ability of an enterprise to generate adequate amounts of cash to meet its needs for cash requirements. We had cash of $192,538 as of December 31, 2025.
Our primary uses of cash have been for fees paid for direct materials and supplies, subcontractor fees, compensation and related benefits, fees paid to third parties for professional services, and general and administrative expenses. Historically, we have received funds from the sales of products, from various financing activities such as debt financings. The following trends are reasonably likely to result in changes in our liquidity over the near to long term:
| ● | An increase in working capital requirements to finance our current business, | |
| ● | Addition of administrative and sales personnel needed for business growth; | |
| ● | The cost of being a public company; | |
| ● | Marketing expense for building brand; | |
| ● | Capital requirements for production capacity. |
Until such time as Patriot Glass generates substantial product and service revenues to offset operational expenses, Patriot Glass expects to finance its cash needs through a combination of public and private equity offerings and debt financings. Patriot Glass may be unable to raise capital or enter into such other arrangements when needed or on favorable terms or at all. A failure to raise capital or enter into such other arrangements as and when needed would have a negative impact on its financial condition.
Additional cash liquidity is generated from product sales. However, to date, we cannot provide any assurances that we will be profitable. We believe that the existing cash and cash equivalents of Patrit Glass will not be sufficient to fund our current operating plans.
Cash Flows
The following table shows a summary of our cash flows for the years ended December 31, 2025 and 2024.
| Year Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Net cash provided by (used in) operating activities | $ | 203,733 | $ | (195,054 | ) | |||
| Net cash used in investing activities | (49,552 | ) | (42,157 | ) | ||||
| Net cash provided by (used in) financing activities | 20,710 | 90,404 | ||||||
| Net increase (decrease) in cash | 174,891 | (146,807 | ) | |||||
| Cash - beginning of the year | 17,647 | 164,454 | ||||||
| Cash - end of the year | $ | 192,538 | $ | 17,647 | ||||
Years Ended December 31, 2025 and 2024
Net Cash Provided by (Used in) m Operating Activities:
Net cash provided by operating activities was $203,733 for the year ended December 31, 2025 as compared to net cash used in operating activities of $(195,054) for the year ended December 31, 2024, a positive change of $398,787.
Net cash flow provided by operating activities for the year ended December 31, 2025 primarily reflected net income of $422,044, which was then adjusted for the add-back (deduction) of non-cash items consisting of depreciation of $50,917, amortization of debt discount of $10,538, add back of non-cash interest of $9,956 provision for credit losses of $52,417, and a non-cash gain on debt extinguishment of $(72,355), and changes in operating assets and liabilities consisting primarily of an increase in accounts receivable of $164,622, a decrease in accounts payable of $75,487, a decrease in accrued expenses of $91,032, and an increase in accrued expenses – related parties of $50,009.
Net cash used in operating activities for the year ended December 31, 2024 primarily reflected a net loss of $940,041, which was then adjusted for the add-back (deduction) of non-cash items primarily consisting of depreciation and amortization of $101,490, amortization of debt discount of $11,991, impairment loss on goodwill and intangible assets of $529,402, and provision for credit losses of $32,195, and changes in operating assets and liabilities consisting primarily of a decrease in accounts receivable of $201,772, a decrease in inventory of $136,131, an increase in prepaid expenses and other current assets of $26,400, an increase in accounts payable of $32,493, an increase in accrued expenses of $193,991, an increase in accrued expenses – related party of $16,800, and a decrease in contract liabilities of $482,468.
Net Cash Provided by (Used in) Investing Activities:
Net cash used in investing activities was $49,552 for the year ended December 31, 2025 as compared to net cash used in investing activities of $42,157 for the year ended December 31, 2024.
During the years ended December 31, 2025 and 2024, we used cash for the purchase of property and equipment.
Net Cash Provided by (Used in) Financing Activities:
Net cash provided by financing activities was $20,710 for the year ended December 31, 2025 as compared to net cash provided by financing activities of $90,404 for the year ended December 31, 2024.
During the year ended December 31, 2025, we received net proceeds from notes payable of $46,446, received proceeds from related party advances of $4,000 and proceeds of $140,000 from notes payable – related parties of $140,000. These proceeds were offset by the repayment of notes payable of $159,736 and the repayment of related party advances of $10,000.
During the year ended December 31, 2024, we received net proceeds from notes payable of $400,391, received proceeds from related party advances of $49,200 and proceeds of $13,000 from dormer parent company advances of $13,000. These proceeds were offset by the repayment of notes payable of $197,480, the repayment of related party advances of $25,000, and the repayment of former parent company advances of $149,707.
Off-balance Sheet Arrangements
Patriot Glass does not have any off-balance sheet arrangements during the periods presented as defined in the rules and regulations of the SEC.
Exhibit 99.3
PATRIOT GLASS SOLUTIONS, LLC
FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
| F-1 |
PATRIOT GLASS SOLUTIONS, LLC
INDEX TO FINANCIAL STATEMENTS
June 30, 2026
(Unaudited)
CONTENTS
| Financial Statements: | |
| Balance Sheets - As of June 30, 2026 (Unaudited) and December 31, 2025 | F-3 |
| Statements of Operations - For the Six Months Ended June 30, 2026 and 2025 (Unaudited) | F-4 |
| Statements of Changes in Members’ Equity - For the Six Months Ended June 30, 2026 and 2025 (Unaudited) | F-5 |
| Statements of Cash Flows – For the Six Months Ended June 30, 2026 and 2025 (Unaudited) | F-6 |
| Notes to Unaudited Financial Statements | F-7 to F-15 |
| F-2 |
PATRIOT GLASS SOLUTIONS, LLC
BALANCE SHEETS
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash | $ | 309,762 | $ | 192,538 | ||||
| Accounts receivable, net | 127,814 | 303,858 | ||||||
| Inventory | 29,675 | 26,438 | ||||||
| Prepaid expenses and other current assets | 95,338 | 44,534 | ||||||
| Total Current Assets | 562,589 | 567,368 | ||||||
| OTHER ASSETS: | ||||||||
| Property and equipment, net | 132,898 | 161,411 | ||||||
| Right-of-use asset, net | 5,545 | 37,678 | ||||||
| Total Other Assets | 138,443 | 199,089 | ||||||
| TOTAL ASSETS | $ | 701,032 | $ | 766,457 | ||||
| LIABILITIES AND MEMBERS’ EQUITY (DEFICIT) | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Notes payable, net of discount - current portion | $ | 22,182 | $ | 20,248 | ||||
| Notes payable, related parties | 291,000 | 291,000 | ||||||
| Accounts payable | 86,351 | 27,705 | ||||||
| Accrued expenses | 274,899 | 244,654 | ||||||
| Accrued expenses - related parties | 66,411 | 66,809 | ||||||
| Due to related party | - | 18,200 | ||||||
| Contract liabilities | - | 11,648 | ||||||
| Lease liability, current portion - related party | 5,545 | 37,678 | ||||||
| Total Current Liabilities | 746,388 | 717,942 | ||||||
| LONG-TERM LIABILITIES: | ||||||||
| Notes payable, net of current portion | 63,457 | 74,667 | ||||||
| Total Long-term Liabilities | 63,457 | 74,667 | ||||||
| Total Liabilities | 809,845 | 792,609 | ||||||
| Commitments and Contingencies (See Note 8) | ||||||||
| MEMBERS’ DEFICIT: | ||||||||
| Members’ equity | 619,228 | 619,228 | ||||||
| Accumulated deficit | (728,041 | ) | (645,380 | ) | ||||
| Total Members’ Deficit | (108,813 | ) | (26,152 | ) | ||||
| Total Liabilities and Members’ Deficit | $ | 701,032 | $ | 766,457 | ||||
See accompanying notes to the unaudited financial statements.
| F-3 |
PATRIOT GLASS SOLUTIONS, LLC
STATEMENTS OF OPERATIONS
(Unaudited)
| For the Six Months Ended | ||||||||
| June 30, | ||||||||
| 2026 | 2025 | |||||||
| SALES, net | $ | 1,037,355 | $ | 1,239,300 | ||||
| OPERATING EXPENSES: | ||||||||
| Cost of sale (excluding depreciation and amortization expense shown separately below) | 595,577 | 572,857 | ||||||
| Compensation and related benefits | 172,480 | 256,165 | ||||||
| Professional fees | 136,116 | 11,201 | ||||||
| Depreciation and amortization expense | 28,512 | 25,243 | ||||||
| General and administrative expenses | 162,729 | 167,802 | ||||||
| Total Operating Expenses | 1,095,414 | 1,033,268 | ||||||
| (LOSS) INCOME FROM OPERATIONS | (58,059 | ) | 206,032 | |||||
| OTHER INCOME (EXPENSES): | ||||||||
| Gain on debt extinguishment, net | - | 72,355 | ||||||
| Interest expense | (13,045 | ) | (60,647 | ) | ||||
| Interest expense - related party | (11,557 | ) | (7,286 | ) | ||||
| Total Other Income (Expenses), net | (24,602 | ) | 4,422 | |||||
| NET (LOSS) INCOME | $ | (82,661 | ) | $ | 210,454 | |||
See accompanying notes to the unaudited financial statements.
| F-4 |
PATRIOT GLASS SOLUTIONS, LLC
STATEMENTS OF CHANGES IN MEMBERS’ DEFICIT
FOR THE SIX MONTHS ENDED JUNE 30, 2026 AND 2025
(Unaudited)
| Total | ||||||||||||
| Members’ | Accumulated | Members’ | ||||||||||
| Equity | Deficit | Deficit | ||||||||||
| Balance, December 31, 2025 | 619,228 | (645,380 | ) | (26,152 | ) | |||||||
| Net loss | - | (82,661 | ) | (82,661 | ) | |||||||
| Balance, June 30, 2026 (unaudited) | $ | 619,228 | $ | (728,041 | ) | $ | (108,813 | ) | ||||
| Total | ||||||||||||
| Members’ | Accumulated | Members’ | ||||||||||
| Equity | Deficit | Deficit | ||||||||||
| Balance, December 31, 2024 | 700,098 | (1,067,424 | ) | (367,326 | ) | |||||||
| Distribution to parent | (80,870 | ) | - | (80,870 | ) | |||||||
| Net income | - | 210,454 | 210,454 | |||||||||
| Balance, June 30, 2025 (unaudited) | $ | 619,228 | $ | (856,970 | ) | $ | (237,742 | ) | ||||
See accompanying notes to the unaudited financial statements.
| F-5 |
PATRIOT GLASS SOLUTIONS, LLC
STATEMENTS OF CASH FLOWS
(Unaudited)
| For the Six Months Ended | ||||||||
| June 30, | ||||||||
| 2026 | 2025 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net Iloss) income | $ | (82,661 | ) | $ | 210,454 | |||
| Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||||||||
| Depreciation expense | 28,513 | 25,243 | ||||||
| Amortization of debt discount to interest expense | - | 10,441 | ||||||
| Non-cash interest expense | - | 9,956 | ||||||
| Non-cash gain on debt extinguishment | - | (72,355 | ) | |||||
| Lease costs | - | 783 | ||||||
| Provision for credit losses | - | - | ||||||
| Change in operating assets and liabilities: | ||||||||
| Accounts receivable | 176,044 | (25,967 | ) | |||||
| Inventory | (3,237 | ) | 636 | |||||
| Prepaid expenses and other assets | (50,804 | ) | (2,595 | ) | ||||
| Accounts payable | 58,646 | (16,232 | ) | |||||
| Accrued expenses | 30,245 | (67,086 | ) | |||||
| Accrued expenses - related parties | (398 | ) | 44,486 | |||||
| Contract liabilities | (11,648 | ) | 143,273 | |||||
| NET CASH PROVIDED BY OPERATING ACTIVITIES | 144,700 | 261,037 | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Purchases of property and equipment | - | (46,446 | ) | |||||
| NET CASH USED IN INVESTING ACTIVITIES | - | (46,446 | ) | |||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds from related party advances | - | 4,000 | ||||||
| Repayment of related party advances | (18,200 | ) | (10,000 | ) | ||||
| Proceeds from notes payable | - | 46,446 | ||||||
| Repayment of notes payable | (9,276 | ) | (141,274 | ) | ||||
| Proceeds from notes payable - related party | - | 140,000 | ||||||
| NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES | (27,476 | ) | 39,172 | |||||
| NET INCREASE IN CASH | 117,224 | 253,763 | ||||||
| CASH, beginning of period | 192,538 | 17,647 | ||||||
| CASH, end of period | $ | 309,762 | $ | 271,410 | ||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||||||||
| Cash paid for: | ||||||||
| Interest | $ | 13,045 | $ | 3,089 | ||||
| Income taxes | $ | - | $ | - | ||||
| SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||||||
| Increase in note payable - related party and decrease in notes payable | $ | - | $ | 60,030 | ||||
| Increase in note payable - related party and decrease in accounts payable | $ | - | $ | 5,100 | ||||
| Increase in note payable - related party for distribution to parent | $ | - | $ | 80,870 | ||||
See accompanying notes to the unaudited financial statements.
| F-6 |
PATRIOT GLASS SOLUTIONS, LLC
NOTES TO UNAUDITED FINANCIAL STATEMENTS
JUNE 30, 2026
NOTE 1 – NATURE OF ORGANIZATION
Nature of Organization
Patriot Glass Solutions, LLC, is a Texas limited liability company doing business as A1 Glass Coating (the “Company” or “Patriot Glass”). On November 29, 2023, the Company changed the name to Patriot Glass from Mobile Tint LLC. Patriot Glass provides quality window tint solutions for auto, home, and business owners across Texas, specializing in automotive window tinting, residential window film, and commercial window film that stop harmful UV rays from passing through its window films for reduced glare, comfortable temperatures, and lower energy bills. Patriot Glass also carries products that offer forced-entry protection and films that protect glass from scratches, graffiti, other types of vandalism, and even bullets, including C-Bond BRS, a ballistic-resistant film system.
On January 30, 2025, C-Bond Systems, Inc. (“C-Bond”), the former 80% owner and parent of the Company, entered into that certain Debt Forgiveness, Equity Redemption and Strict Foreclosure Agreement (the “Agreement”), by and between the Company, C-Bond, C-Bond Systems, LLC, a subsidiary of C-Bond Systems, Inc. (“C-Bond LLC”), Badcer Ops, Inc. (“Badcer”), and Michael Wanke, the 20% owner of the Company, and creditors, Jeff Badders, Badders Children’s Trust (“Badders Trust”), Mercer Street Global Opportunity Fund, LLC (“Mercer”). The closing of the transactions contemplated by the Agreement (the “Closing”) occurred on January 30, 2025.
As settlement of all outstanding debt instruments owed to the parties in this Agreement and associated liens, and pursuant to Section 9-620 of the Uniform Commercial Code of the State of Texas, at the Closing the Company, amongst other things, C-Bond, and C-Bond LLC (collectively, the “Debtors”), voluntarily transferred, conveyed and assigned to Badcer all of the Debtors’ legal, equitable and beneficial right, title and interest in and to all assets of the Debtors, including, but not limited to, the following: (i) the 80% of the Membership Interest (as defined in the original Operating Agreement of the Company, dated as of July 2021) and the Units (as defined in such Operating Agreement) comprising such 80% of the Membership Interests of the Company, which was held by C-Bond; (ii) 100% of the membership interests of C-Bond LLC, which were held by C-Bond; (iii) all of the Company’s accounts receivable; and (iv) certain patents; among other assets.
The Company did not elect to apply any push-down accounting due to the change of control between C-Bond and Badcer. Therefore, all acquisition-related adjustments have been reflected on the parent company level.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
This summary of significant account policies of the Company is presented to assist in understanding the Company’s financial statements. The unaudited financial statements and the notes are the representation of the Company’s management, who are responsible for their integrity and objectivity.
The accompanying unaudited financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (the “U.S. GAAP”) for interim financial information and with the instructions Article 8-03 of Regulation S-X. Operating results for interim periods are not necessarily indicative of results that may be expected for the fiscal year as a whole. Certain information and note disclosure normally included in financial statements prepared in accordance with U.S. GAAP has been condensed or omitted from these statements pursuant to such accounting principles and, accordingly, they do not include all the information and notes necessary for comprehensive financial statements. Management acknowledges its responsibility for the preparation of the accompanying unaudited financial statements which reflect all adjustments, consisting of normal recurring and non-recurring adjustments, considered necessary in its opinion for a fair statement of its financial position and the results of its operations for the periods presented. These unaudited financial statements should be read in conjunction with the summary of significant accounting policies and notes to the financial statements for the years ended December 31, 2025 and 2024 included elsewhere in this filing.
Going Concern
These unaudited financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying unaudited financial statements, the Company had net (loss) income of $(82,661) and $210,454 for the six months ended June 30, 2026 and 2025, respectively. Net cash provided by operations was $144,700 and $261,037 for the six months ended June 30, 2026 and 2025, respectively. Additionally, as of June 30, 2026, the Company had an accumulated deficit, members’ deficit, and working capital deficit of $728,041, $108,813 and $183,799, respectively. These factors raise substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months from the issuance date of this report. Management cannot provide assurance that the Company will ultimately achieve consistently profitable operations or raise additional debt and/or equity capital. The Company is seeking to raise capital through additional debt and/or equity financings to fund its operations in the future. Although the Company has historically raised capital from the issuance of promissory notes, there is no assurance that it will be able to continue to do so. If the Company is unable to raise additional capital or secure additional lending in the near future, management expects that the Company may need to curtail its operations. These unaudited financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
| F-7 |
PATRIOT GLASS SOLUTIONS, LLC
NOTES TO UNAUDITED FINANCIAL STATEMENTS
JUNE 30, 2026
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP 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. Actual results could differ from those estimates. Estimates during the six months ended June 30, 2026 and 2025 include estimates for allowance for credit losses on accounts receivable, estimates used in the calculation of progress towards completion on uncompleted jobs, the useful life of property and equipment, assumptions used in assessing impairment of long-term assets, the estimate of the fair value lease liability and related right-of-use asset, and the valuation allowances for deferred tax assets.
Fair Value of Financial Instruments and Fair Value Measurements
The Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurement (“ASC 820”), requires companies to determine fair value based on the price that would be received to sell the asset or paid to transfer the liability to a market participant. ASC 820 emphasizes that fair value is a market-based measurement, not an entity-specific measurement.
The guidance requires that assets and liabilities carried at fair value be classified and disclosed in one of the following categories:
| ● | Level 1: Quoted market prices in active markets for identical assets or liabilities. |
| ● | Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. |
| ● | Level 3: Unobservable inputs that are not corroborated by market data. |
The Company did not identify any other assets or liabilities that are required to be presented on the balance sheets at fair value, on a recurring basis, in accordance with ASC Topic 820.
The carrying amounts reported in the balance sheets for cash, accounts receivable, prepaid expenses and other current assets, contract assets and liabilities, notes payable, accounts payable, accrued expenses, due to related party, and lease liabilities approximate their fair market value based on the short-term maturity of these instruments.
Cash and Cash Equivalents
For purposes of the statements of cash flows, the Company considers all highly liquid instruments with a maturity of three months or less at the purchase date and money market accounts to be cash equivalents. The Company had no cash equivalents as of June30, 2026 and December 31, 2025.
Accounts Receivable
Pursuant to ASC 326, “Financial Instruments - Credit Losses”, the Company recognizes an allowance for losses on accounts receivable and notes receivable in an amount equal to the estimated probable losses net of recoveries under the current expected credit loss method. The allowance is based on an analysis of historical bad debt experience, current receivables aging and expected future write-offs, as well as an assessment of specific identifiable customer accounts and notes receivable considered at risk or uncollectible. In accordance with ASC 326, an allowance is maintained for estimated forward-looking losses resulting from the possible inability of customers to make required payments (current expected losses). The expense associated with the allowance for doubtful accounts on accounts receivable is recognized in general and administrative expenses.
Inventory
Inventory, consisting of finished goods, are stated at the lower of cost and net realizable value utilizing the first-in, first-out (FIFO) method. A reserve is established when management determines that certain inventories may not be saleable. If inventory costs exceed expected net realizable value due to obsolescence or quantities in excess of expected demand, the Company will record reserves for the difference between the cost and the net realizable value. These reserves are recorded based on estimates and included in cost of sales.
Property and Equipment
Property and equipment are stated at cost and are depreciated using the straight-line method over their estimated useful lives, which range from one to seven years. Leasehold improvements are depreciated over the shorter of the useful life or lease term including scheduled renewal terms. Maintenance and repairs are charged to expense as incurred. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. The Company examines the possibility of decreases in the value of these assets when events or changes in circumstances reflect the fact that their recorded value may not be recoverable.
Impairment of Long-Lived Assets
In accordance with ASC Topic 360, the Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable, or at least annually. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value.
| F-8 |
PATRIOT GLASS SOLUTIONS, LLC
NOTES TO UNAUDITED FINANCIAL STATEMENTS
JUNE 30, 2026
Warranty Liability
The Company provides limited warranties on its products for product defects for periods ranging from 12 months to the life of the product. Warranty costs may include the cost of product replacement, refunds, labor costs and other costs. Allowances for estimated warranty costs are recorded during the period of sale. The determination of such allowances requires the Company to make estimates of product warranty claim rates and expected costs to repair or to replace the products under warranty. The Company currently establishes warranty reserves based on historical warranty costs for each product line combined with liability estimates based on the prior 12 months’ sales activities. If actual return rates and/or repair and replacement costs differ significantly from the Company’s estimates, adjustments to recognize additional cost of sales may be required in future periods. During the six months ended June 30, 2026 and 2025, warranty costs were de minimis.
Revenue Recognition
The Company follows ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). This standard establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most of the existing revenue recognition guidance. ASC 606 requires an entity to 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 and requires certain additional disclosures.
Revenues from contracts for the distribution and installation of window film solutions are recognized over time on the basis of the Company’s estimates of the progress towards completion of contracts using various output or input methods depending on the type of contract terms including (1) the ratio of number of labor hours spent compared to the number of estimated labor hours to complete a job, (2) using the milestone method, or (3) using a units completed method. These methods are used because management considers these to be the best available measure of progress on these contracts. We use the same method for similar types of contracts. The asset, “contract assets” represents revenues recognized in excess of amounts billed. The liability, “contract liabilities,” represents billings in excess of revenues recognized.
Product sales, consisting of the sale of rolls of window film and C-Bond Solutions, are recognized at a point in time when the product is shipped to the customer and title is transferred and are recorded net of any discounts or allowances.
Revenues from the auto window tinting are recognized upon completion of the job, which generally occurs in one day.
Cost of Sales
Cost of revenues from fixed-price contracts for the distribution and installation of window film solutions include all direct material, sub-contractor, labor and certain other direct costs, as well as those indirect costs related to contract performance, such as indirect labor and fringe benefits. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Changes in job performance, job conditions and estimated profitability may result in revisions to cost and income, which are recognized in the period in which the revisions are determined. Changes in estimated job profitability resulting from job performance, job conditions, claims, change orders, and settlements, are accounted for as changes in estimates in the current period.
Shipping and Handling Costs
Shipping and handling costs incurred for product shipped to customers are included in general and administrative expenses and amounted to $5,044 and $5,998 for the six months ended June 30, 2026 and 2025, respectively. Shipping and handling costs charged to customers are included in sales.
Advertising Costs
The Company may participate in various advertising programs. All costs related to advertising of the Company’s products are expensed in the period incurred. For the six months ended June 30, 2026 and 2025, advertising costs charged to operations were $6,094 and $5,035, respectively, and are included in general and administrative expenses on the accompanying unaudited statements of operations.
Federal and State Income Taxes
The Company is taxed as a limited liability company under Subchapter K of the Internal Revenue Code. As such, the Company is generally not subject to income taxes. Instead, net income or loss is reported by its members who are responsible for any income taxes which may be due.
The Company follows the accounting guidance for uncertainty in income taxes using the provisions of ASC 740 “Income Taxes”. Using that guidance, tax positions initially need to be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. As of June 30, 2026 and December 31, 2025, the Company had no uncertain tax positions that qualify for either recognition or disclosure in the financial statements. Tax years that remain subject to examination are the years ending on and after December 31, 2021. The Company recognizes interest and penalties related to uncertain income tax positions in other expense. However, no such interest and penalties were recorded as of June 30, 2026 and December 31, 2025.
| F-9 |
PATRIOT GLASS SOLUTIONS, LLC
NOTES TO UNAUDITED FINANCIAL STATEMENTS
JUNE 30, 2026
Leases
The Company accounts for leases in accordance with ASC 842. The lease standard requires certain leases to be reported on the balance sheets as right-of-use assets and lease liabilities. The Company elected the practical expedients permitted under the transition guidance of this standard that retained the lease classification and initial direct costs for any leases that existed prior to adoption of the standard. The Company does not reassess whether any contracts entered into prior to adoption are leases or contain leases.
The Company categorizes leases with contractual terms longer than twelve months as either operating or finance. Finance leases are generally those leases that would allow the Company to substantially utilize or pay for the entire asset over its estimated life. Assets acquired under finance leases are recorded in property and equipment, net. All other leases are categorized as operating leases. The Company does not have any finance leases as of June 30, 2026 and December 31, 2025. The Company’s leases generally have terms that range from three to four years for property and equipment and five years for property. The Company elected the accounting policy to include both the lease and non-lease components of our agreements as a single component and account for them as a lease.
Lease liabilities are recognized at the present value of the fixed lease payments using a discount rate based on the Company’s current borrowing rate. Lease assets are recognized based on the initial present value of the fixed lease payments, reduced by landlord incentives, plus any direct costs from executing the leases. Leasehold improvements are capitalized at cost and amortized over the lesser of their expected useful life or the lease term.
When the Company has the option to extend the lease term, terminate the lease before the contractual expiration date, or purchase the leased asset, and it is reasonably certain that the Company will exercise the option, the Company considers these options in determining the classification and measurement of the lease. Costs associated with operating lease assets are recognized on a straight-line basis within operating expenses over the term of the lease.
Segment Reporting
On January 1, 2024, the Company adopted FASB ASU 2023-07, Segment Reporting (ASC 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses among other disclosure requirements. The Company operates as a single operating segment as a distributor and installer of window film and window film solutions. In accordance with ASC 280, the Company’s chief operating decision maker has been identified as the Chief Executive Officer, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company and decides how to allocate resources based on loss from operations, managing cash flows and evaluating general and administrative expenses. Existing guidance, which is based on a management approach to segment reporting, establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about products and services, major customers, and the countries in which the entity holds material assets and reports revenue. All material operating units qualify for aggregation under “Segment Reporting” due to their similarities in economic characteristics such as nature of services performed. Since the Company operates in one segment, all financial information required by “Segment Reporting” can be found in the accompanying notes to unaudited financial statements.
Risk and Uncertainties
The Company operates in an industry that is subject to intense competition and changes in consumer and commercial demand. The Company’s operations are subject to significant risk and uncertainties including financial and operational risks including the potential risk of business failure.
The Company has experienced, and in the future expects to continue to experience, variability in sales and earnings. The factors expected to contribute to this variability include, among others, (i) the cyclical nature of the business, (ii) general economic conditions in the various local markets in which the Company competes, including a potential general downturn in the economy, and (iii) the volatility of prices in connection with the Company’s products and services. These factors, among others, make it difficult to project the Company’s operating results on a consistent basis.
Other accounting standards that have been issued or proposed recently issued accounting pronouncements by FASB that do not require adoption until a future date are not expected to have a material impact on the financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures.
Recent Accounting Pronouncements
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), which requires entities to provide more detailed disaggregation of expenses in the income statement, focusing on the nature of the expenses rather than their function. The new disclosures will require entities to separately present expenses for significant line items, including but not limited to, depreciation, amortization, and employee compensation. Entities will also be required to provide a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, disclose the total amount of selling expenses and, in annual reporting periods, provide a definition of what constitutes selling expenses. This pronouncement is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company does not expect the adoption of this new guidance to have a material impact on the financial statements.
In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The amendments in this update provide a practical expedient for entities estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC 606. The practical expedient allows entities to estimate expected credit losses by assuming that the conditions existing as of the balance sheet date will remain unchanged for the remaining life of current accounts receivable and current contract assets. As a result, entities are not required to incorporate forecasts of future economic conditions when measuring expected credit losses for these short-term financial assets. The guidance is effective for fiscal years beginning after December 15, 2025, including interim periods within those fiscal years, with early adoption permitted. The adoption of this new guidance had no impact on the financial statements.
| F-10 |
PATRIOT GLASS SOLUTIONS, LLC
NOTES TO UNAUDITED FINANCIAL STATEMENTS
JUNE 30, 2026
In September 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”). The amendments simplify the accounting for internal-use software development costs by removing the existing project stage model and replacing it with a principles-based framework for determining when software development costs should be capitalized. Under the new guidance, capitalization of internal-use software costs begins when (i) management has authorized and committed to funding the software project and (ii) it is probable that the project will be completed and the software will be used to perform its intended function. ASU 2025-06 also incorporates guidance related to website development costs and clarifies the presentation and disclosure requirements for capitalized software development costs. This pronouncement is effective for annual reporting periods beginning after December 15, 2027, including interim periods within those annual periods, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this guidance will have on its financial statements and related disclosures.
NOTE 3 – ACCOUNTS RECEIVABLE
On June 30, 2026 and December 31, 2025, accounts receivable consisted of the following:
| June 30, 2026 | December 31, 2025 | |||||||
| Accounts receivable | $ | 198,793 | $ | 400,277 | ||||
| Less: allowance for credit losses | (70,979 | ) | (96,419 | ) | ||||
| Accounts receivable, net | $ | 127,814 | $ | 303,858 | ||||
For the six months ended June 30, 2026 and 2025, credit loss expense amounted to $0 and $0, respectively.
NOTE 4 – INVENTORY
On June 30, 2026 and December 31, 2025, inventory consisted of the following:
| June 30, 2026 | December 31, 2025 | |||||||
| Finished goods | $ | 29,675 | $ | 26,438 | ||||
| Total Inventory | $ | 29,675 | $ | 26,438 | ||||
For the six months ended June 30, 2026 and 2025, the Company did not record any allowance for slow moving inventory.
NOTE 5 – PROPERTY AND EQUIPMENT
On June 30, 2026 and December 31, 2025, property and equipment consisted of the following:
| Useful Life | June 30, 2026 | December 31, 2025 | ||||||||
| Machinery and equipment | 5 – 7 years | $ | 73,411 | $ | 73,411 | |||||
| Furniture and office equipment | 3 – 7 years | 2,061 | 2,061 | |||||||
| Vehicles | 1 – 5 years | 156,654 | 156,654 | |||||||
| Leasehold improvements | 3 – 5 years | 113,750 | 113,750 | |||||||
| 345,876 | 345,876 | |||||||||
| Less: accumulated depreciation | (212,978 | ) | (184,465 | ) | ||||||
| Property and equipment, net | $ | 132,898 | $ | 161,411 | ||||||
For the six months ended June 30, 2026 and 2025, depreciation expense is included in general and administrative expenses and amounted to $28,513 and $25,243, respectively.
NOTE 6 – NOTES PAYABLE
On June 30, 2026 and December 31, 2025, notes payable consisted of the following:
| June 30, 2026 | December 31, 2025 | |||||||
| Notes payable | $ | 85,639 | $ | 94,915 | ||||
| Less: current portion of notes payable, net of discount | (22,182 | ) | (20,248 | ) | ||||
| Notes payable – long-term | $ | 63,457 | $ | 74,667 | ||||
| F-11 |
PATRIOT GLASS SOLUTIONS, LLC
NOTES TO UNAUDITED FINANCIAL STATEMENTS
JUNE 30, 2026
Merchant loans
On June 17, 2024, the Company entered into a Merchant Loan (the “June 2024 Merchant Loan”) with a lender in the principal amount of $85,000 and received net proceeds of $81,550, net of fees of $3,450, which was reflected as a debt discount to be amortized into interest expense over the term of the note. The June 2024 Merchant Loan required a weekly payment of principal and interest of $2,988 through March 19, 2025 for an effective interest rate of 85.9%. In February 2025, the Company defaulted on the June 2024 Merchant loan. On May 22, 2025, the Company entered into a settlement agreement with the lender for a payment of $22,500. On June 30, 2026 and December 31, 2025, the principal amount due on the June 2024 Merchant Loan amounted to $0.
On July 31, 2024, the Company entered into a Merchant Loan (the “July 2024 Merchant Loan”) with a lender in the principal amount of $75,000 and received net proceeds of $73,030, net of fees of $1,970, which was reflected as a debt discount to be amortized into interest expense over the term of the note. The July 2024 Merchant Loan required a weekly payment of principal and interest of $3,022 through April 2025. In February 2025, the Company defaulted on the July 2024 Merchant loan. On May 21, 2025, the Company entered into a settlement agreement with the lender for a payment of $24,500. On June 30, 2026 and December 31, 2025, the principal amount due on the July 2024 Merchant Loan amounted to $0.
On September 19, 2024, the Company entered into a Merchant Loan (the “September 2024 Merchant Loan”) with a lender in the principal amount of $70,000 and received net proceeds of $65,100, net of fees of $4,900, which was reflected as a debt discount to be amortized into interest expense over the term of the note. The September 2024 Merchant Loan required a weekly payment of principal and interest of $4,287 through September 2025. In February 2025, the Company defaulted on the September Merchant Loan. On April 25, 2025, the Company entered into a settlement agreement with the lender for a payment of $15,000. On June 30, 2026 and December 31, 2025, the principal amount due on the September 2024 Merchant Loan amounted to $0.
On October 14, 2024, the Company entered into a Merchant Loan (the “October 2024 Merchant Loan”) with a lender in the principal amount of $50,000 and received net proceeds of $45,000, net of fees of $5,000, which was reflected as a debt discount to be amortized into interest expense over the term of the note. The October 2024 Merchant Loan required a weekly payment of principal and interest of $4,167 through October 2025. In February 2025, the Company defaulted on the October Merchant Loan. In April 2025, the Company entered into a settlement agreement with the lender for a payment of $5,000, which was paid by Badcer (See Note 7). On June 30, 2026 and December 31, 2025, the principal amount due on the October 2024 Merchant Loan amounted to $0.
On November 6, 2024, the Company entered into a Merchant Loan (the “November 2024 Merchant Loan”) with a lender in the principal amount of $50,000 and received net proceeds of $44,555, net of fees of $5,445, which will be reflected as a debt discount to be amortized into interest expense over the term of the note. The November 2024 Merchant Loan required a weekly payment of principal and interest of $5,354 through February 2025. In April 2025, the Company entered into a settlement agreement with the lender for a payment of $55,030, which was repaid by Badcer using proceeds from a related party note payable (See Note 7). On June 30, 2026 and December 31, 2025, the principal amount due on the October 2024 Merchant Loan amounted to $0.
For the six months ended June 30, 2026 and 2025, in connection with the merchant settlement agreements discussed above, the Company recorded a gain on debt extinguishment of $0 and $72,355, respectively, which is included in other income (expenses) on the accompanying unaudited statements of operations.
Promissory notes and equipment and vehicle loans
During the year ended December 31, 2023, in connection with the acquisition of a vehicle and an air conditioner unit, the Company entered into three vehicle and equipment loans in the original aggregate amount of $117,721. These loans bear interest at rates ranging from 10.0% to 35.1% and are payable monthly through September 2028. On June 30, 2026 and December 31, 2025, notes payable related to the vehicle and equipment loans amounted to $16,845 and $20,098, respectively.
On February 21, 2024, the Company entered into a Promissory Note (the “February 2024 Note”) with a lender in the principal amount of $50,000 and received net proceeds of $49,000, net of original issue discount of $1,000, which was reflected as a debt discount to be amortized into interest expense over the term of the note. The February 2024 Note bears interest at an effective rate of 33.4% per annum and all outstanding principal and accrued and unpaid interest was due on August 21, 2025. On June 30, 2026 and December 31, 2025, the principal amount due on the February 2024 Note was $0, respectively.
On July 24, 2024, in connection with the acquisition of a vehicle, the Company entered into a vehicle loan in the amount of $42,157. The loan bears interest at 8.96% and is payable monthly through August 2029. On June 30, 2026 and December 31, 2025, note payable related to this vehicle amounted to $28,941 and $32,811, respectively.
On April 1, 2025, in connection with the acquisition of a vehicle, the Company entered into a vehicle loan in the amount of $46,446. The loan bears interest at 11.34% per annum and is payable monthly through April 2031. On June 30, 2026 and December 31, 2025, note payable related to this vehicle amounted to $39,853 and $42,006, respectively.
| F-12 |
PATRIOT GLASS SOLUTIONS, LLC
NOTES TO UNAUDITED FINANCIAL STATEMENTS
JUNE 30, 2026
For the six months ended June 30, 2026 and 2025, amortization of debt discounts related to all of the above notes payable amounted to $0 and $10,441, respectively, which has been included in interest expense on the accompanying unaudited statements of operations.
On June 30, 2026, future annual maturities of notes payable are as follows:
| June 30, | Amount | |||
| 2027 | $ | 22,182 | ||
| 2028 | 24,176 | |||
| 2029 | 20,208 | |||
| 2030 | 10,564 | |||
| 2031 | 8,509 | |||
| Total notes payable on June 30, 2026 | $ | 85,639 | ||
NOTE 7 – RELATED PARTY TRANSACTIONS
Note Payable – Related Party
On February 24, 2025, the Company and Badcer, the Company’s 80% owner, a related party, (the Makers”) entered into secured promissory notes with Mercer in the aggregate amount of $151,000 (the “Mercer Promissory Notes”). The Mercer Promissory Notes bear interest at 8.0% per annum and were due on February 24, 2026. The Mercer Promissory Notes are secured by the assets of the Company and are currently in default.
On February 24, 2025, the Makers entered into a secured promissory note with Jeff Badders in the amount of aggregate amount of $140,000 (the “Badders Promissory Note”). The Badders Promissory Note bears interest at 8.0% per annum and was due on February 24, 2026. The Badders Promissory Note is secured by the assets of the Company and is currently in default.
None of the proceeds from the above promissory notes were deposited into the Company and proceeds from the promissory notes were used to fund the operations of Badcer, pay expenses of Badcer and the Company and to pay certain merchant lenders pursuant to merchant loan settlement agreements (See Note 6). The Makers are jointly and severally liable for the obligations under the Mercer Promissory Notes and Badders Promissory Note in the amount of $291,000.
In connection with the merchant loan settlement agreements, in March and April 2025, Badcer paid an aggregate amount of $60,030 to merchant lenders on behalf of the Company using funds Badcer received from the Mercer and Badders Promissory Notes.
From February to March 2025, the Company received cash proceeds of $140,000 from Badcer for working capital purposes using funds Badcer received from the Mercer and Badders Promissory Notes.
During the year ended December 31, 2025, Badcer paid $10,100 to vendors on behalf of the Company using funds Badcer received from the Mercer and Badders Promissory Notes.
The Company evaluated the terms of the above-mentioned Mercer and Badders Promissory Notes in accordance with ASC 460, Guarantees, and concluded that as of December 31, 2025, a loss is probable since it is highly likely that the Company will be required to pay or settle the amounts due to Mercer and Jeff Badders. Accordingly, the Company increased the notes payable – related party by $80,870, which represents the difference between the total amounts of promissory notes due to Mercer and Jeff Badders in excess of the funds received by or paid on behalf of the Company. The increase in note payable – related party was offset by the recording of a distribution to parent in members’ equity (deficit) for the amount retained by Badcer that the Company may be required to pay. The Company has not been required to make a payment under this agreement to date.
As of June 30, 2026, note payable – related party amounted to $291,000 and accrued interest amounted to $30,566, which is included in accrued expenses – related parties on the accompanying unaudited balance sheet. As of December 31, 2025, note payable – related party amounted to $291,000 and accrued interest amounted to $19,009, which is included in accrued expenses – related parties on the accompanying unaudited balance sheet.
Accrued expenses – related parties
In connection with the operating lease between MDW Management, LLC, a company owned by Mr. Wanke and his wife and the Company (See Note 11), for the six months ended June 30, 2026 and 2025, the Company recorded rent expense of $37,200 and $37,200, respectively, which is included in general and administrative expenses on the accompanying unaudited statements of operations. As of June 30, 2026 and December 31, 2025, lease payments due to MD Management amounted to $35,845 and $47,800, respectively, which is included in accrued expenses – related parties on the accompanying balance sheets.
| F-13 |
PATRIOT GLASS SOLUTIONS, LLC
NOTES TO UNAUDITED FINANCIAL STATEMENTS
JUNE 30, 2026
Due to related party
During the six months ended June 30, 2026, Mike Wanke, the Company’s sole operating member, was repaid $18,200. During the year ended December 31, 2025, Mike Wanke, the Company’s sole operating member, advanced the Company $4,000 and was repaid $10,000. The advances are due on demand and are non-interest bearing.
As of June 30, 2026 and December 31, 2025, amounts due to related party amounted to $0 and $18,200, respectively.
NOTE 8 – COMMITMENTS AND CONTINGENCIES
Legal Matters
From time to time, the Company may be involved in litigation related to claims arising out of its operations in the normal course of business. As of June 30, 2026, the Company is not involved in any other pending or threatened legal proceedings that it believes could reasonably be expected to have a material adverse effect on its financial condition, results of operations, or cash flows.
See Note 7 for contingencies related to the Mercer Promissory Notes and Badders Promissory Note.
NOTE 9 – CONCENTRATIONS
Concentrations Of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of trade accounts receivable and cash deposits. The Company places its cash in banks at levels that, at times, may exceed federally insured limits. On June 30, 2026, the Company had no cash in bank in excess of FDIC insured levels of $250,000.
Geographic Concentrations of Sales
During the six months ended June 30, 2026 and 2025, all sales were in the United States.
Customer Concentrations
For the six months ended June 30, 2026, one customer accounted for 14.2% of total sales. For the six months ended June 30, 2025, one customer accounted for 21.4% of total sales. On June 30, 2026, three customers accounted for 37.6% (16.4%, 10.8% and 10.4%, respectively) of the total accounts receivable balance. On December 31, 2025, three customers accounted for 60.5% (24.3%, 23.4% and 12.8%, respectively) of the total accounts receivable balance.
Vendor concentrations
Generally, the Company purchases substantially all of its inventory from four suppliers. The loss of these suppliers may have a material adverse effect on the Company’s results of operations and financial condition. However, the Company believes that, if necessary, alternate vendors could supply similar products in adequate quantities to avoid material disruptions to operations.
NOTE 10 – REVENUE RECOGNITION
The revenue that the Company recognizes arises from purchase requests the Company receives from its customers. The Company’s performance obligations under purchase order or a signed proposal correspond to each job for the distribution and installation of window film solutions. As a result, each purchase order or signed proposal generally may contain more than one performance obligation based on the specific job. Control of the Company’s products transfers to its customers when the customer is able to direct the use of, and obtain substantially all of the benefits from, the Company’s products, which generally occurs when the job or a specific portion of the job is completed. Once this occurs, the Company has satisfied its performance obligation and the Company recognizes revenue. Revenues from contracts for the distribution and installation of window film solutions are recognized over time on the basis of the Company’s estimates of the progress towards completion of contracts using various output of input methods including (1) the ratio of number of labor hours spent compared to the number of estimated labor hours to complete a job, (2) using the milestone method, or (3) using a units completed method. These methods are used because management considers these methods to be the best available measure of progress on these contracts. Revenues from the auto window tinting are recognized is recognized upon completion of the job, which generally occurs in one day. Product sales, consisting of the sale of roll of window film and C-Bond Solutions, are recognized at a point in time when the product is shipped to the customer and title is transferred and are recorded net of any discounts or allowances.
Transaction Price
The Company agrees with its customers on the selling price of each transaction. This transaction price is generally based on the product, market conditions, including supply and demand balances, labor costs, and freight. Any sales tax, value added tax, and other tax the Company collects concurrently with its revenue-producing activities are excluded from revenue.
Revenue Disaggregation
The Company tracks its revenue by product and timing of revenue recognition. The following table summarizes our revenue by product for the six months ended June 30, 2026 and 2025:
| For the Six Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Window tint installation and sales recognized over time | $ | 863,526 | $ | 1,041,458 | ||||
| Auto window tinting recognized upon completion | 160,892 | 147,420 | ||||||
| Sale of window film and window protection products recognized upon shipment | 12,937 | 50,422 | ||||||
| Total | $ | 1,037,355 | $ | 1,239,300 | ||||
| F-14 |
PATRIOT GLASS SOLUTIONS, LLC
NOTES TO UNAUDITED FINANCIAL STATEMENTS
JUNE 30, 2026
NOTE 11 – OPERATING LEASE RIGHT-OF-USE (“ROU”) ASSET AND OPERATING LEASE LIABILITY
In connection with the 2021 Exchange Agreement between in the Company and C-Bond Systems, Inc., the Company entered into a Commercial Lease Agreement dated July 21, 2021, by and between landlord MDW Management, LLC, a company owned by Mr. Wanke and his wife and the Company (the “Lease”). The term of the Lease is 60 months, at a minimum monthly rent of $5,600 (not including tax), with two five-year options for the tenant to renew. The lease has not been renewed to date and is currently on a month-to-month basis.
In adopting ASC Topic 842, Leases (Topic 842) on January 1, 2019, the Company had elected the ‘package of practical expedients’, which permitted it not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs (see Note 2).
During the six months ended June 30, 2026 and 2025, in connection with its related party property operating lease, the Company recorded rent expense of $74,400 and $67,200, respectively, which is expensed during the period and included in general and administrative expenses on the accompanying unaudited statements of operations.
The significant assumption used to determine the present value of the lease liability was a discount rate of 6.79% which was based on the Company’s estimated incremental borrowing rate.
On June 30, 2026 and December 31, 2025, right-of-use asset (“ROU”) is summarized as follows:
| June 30, 2026 | December 31, 2025 | |||||||
| Office lease right-of-use asset | $ | 279,162 | $ | 279,162 | ||||
| Less: accumulated amortization | (273,617 | ) | (241,484 | ) | ||||
| Balance of ROU asset | $ | 5,545 | $ | 37,678 | ||||
On June 30, 2026 and December 31, 2025, operating lease liability related to the ROU asset are summarized as follows:
June 30, 2026 | December 31, 2025 | |||||||
| Lease liability related to office lease right-of-use asset | $ | 5,545 | $ | 37,678 | ||||
| Less: current portion of lease liability | (5,545 | ) | (37,678 | ) | ||||
| Lease liability – long-term | $ | - | $ | - | ||||
On June 30, 2026, future minimum base lease payments due under non-cancelable operating lease are as follows:
| Twelve months ended June 30, | Amount | |||
| 2027 | $ | 5,600 | ||
| Total minimum non-cancelable operating lease payments | 5,600 | |||
| Less: discount to fair value | (55 | ) | ||
| Total lease liability on June 30, 2026 | $ | 5,545 | ||
NOTE 12 – SUBSEQUENT EVENTS
The Company has evaluated subsequent events through September 30, 2026, the date the financial statements were available to be issued. Based on this evaluation, no events other than those disclosed below have occurred that require disclosure or adjustment to the financial statements as of and for the period ended June 30, 2026.
On April 1, 2026, the Company and Transportation and Logistics Systems, Inc. (OTC OID: TLSS), (“TLSS”), a publicly traded holding company, TLSS Acquisition, Inc., a wholly-owned subsidiary of TLSS, (the “Acquisition Sub”), and TLSS Reverse PGS, LLC, a Texas limited liability company and a wholly-owned subsidiary of the Acquisition Sub (“Reverse”), entered into a Member Interest and Asset Exchange Agreement (the “Agreement”) with Badcer Ops (the “Seller”), Jeff Badders and Mercer, as the shareholders of the Seller (the “Seller Shareholders”), and Michael Wanke (“Wanke”), the sole Manager and twenty percent (20%) owner of the Company. The Agreement provides for a reverse triangular merger of Reverse with and into the Company, with the Company as the surviving entity, pursuant to which the Seller’s eighty percent (80%) membership interest in the Company and four (4) nanotechnology patents (the “Patents”) will be exchanged, transferred and assigned to the Acquisition Sub in exchange for the Merger Consideration to be paid by TLSS.
The Seller is Badcer Ops, Inc., a Nevada corporation, whose shareholders are Mercer and Mr. Jeff Badders, an individual (together, the “Seller Shareholders”).
The closing of the transaction occurred on October 1, 2026.
The remaining 20% membership interest in the Company is currently held by and will be retained by Mr. Michael Wanke, the sole Manager of the Company. It is a condition of closing that Mr. Wanke will enter into an employment agreement with the Company, the terms of which are to be agreed upon prior to the expiration of the due diligence period.
| F-15 |
Exhibit 99.4
Management’s Discussion and Analysis of Financial Condition and Results of Operations of Patriot Glass Solutions, LLC for the six months ended June 30, 2026 and 2025
The Current Report on Form 8-K contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, contained in this Report, including statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans and objectives of management and expected market growth, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “could,” “will,” “would,” “should,” “expect,” “plan”, “anticipate,” “believe,” “estimate,” “intend,” “predict,” “seek,” “contemplate,” “project,” “continue,” “potential,” “ongoing” or the negative of these terms or other comparable terminology. These forward-looking statements include, but are not limited to, statements about:
| ● | our ability to obtain additional funds for our operations; |
| ● | our ability to obtain and maintain intellectual property protection for our products and our ability to operate our business without infringing the intellectual property rights of others; |
| ● | our reliance on third party distributors; |
| ● | the initiation, timing, progress and results of any research and development programs; |
| ● | our dependence on current and future collaborators for developing new products; |
| ● | the rate and degree of market acceptance of our commercial products; |
| ● | the implementation of our business model and strategic plans for our business; |
| ● | our estimates of our expenses, losses, future revenue and capital requirements, including our needs for additional financing; |
| ● | our reliance on third party suppliers to supply the materials and components for our products; |
| ● | our ability to attract and retain qualified key management and technical personnel; |
| ● | our financial performance; |
| ● | the impact of government regulation and developments relating to our competitors or our industry; and |
These statements relate to future events or our future operational or financial performance, and involve known and unknown 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. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed in our SEC filings.
Any forward-looking statement in this Report reflects our current view with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our business, results of operations, industry, and future growth. Given these uncertainties, you should not place undue reliance on these forward-looking statements. No forward-looking statement is a guarantee of future performance. You should read this Report completely and with the understanding that our actual future results may be materially different from any future results expressed or implied by these forward-looking statements. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.
The Current Report on Form 8-K also may contain estimates, projections and other information concerning our industry, our business and the markets for certain glass strengthening solutions and window film mounting solutions, including data regarding the estimated size of those markets and their projected growth rates. Information that is based on estimates, forecasts, projections, or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances reflected in this information. Unless otherwise expressly stated, we obtained these industry, business, market and other data from reports, research surveys, studies and similar data prepared by third parties, industry, and general publications, government data and similar sources. In some cases, we do not expressly refer to the sources from which these data are derived.
You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date of this Report. Except as required by law, we do not undertake any obligation to update or release any revisions to these forward-looking statements to reflect any events or circumstances, whether as a result of new information, future events, changes in assumptions or otherwise, after the date hereof.
Overview
We provide quality window tint solutions for auto, home, and business owners across Texas, specializing in automotive window tinting, residential window film, and commercial window film that stop harmful UV rays from passing through its window films for reduced glare, comfortable temperatures, and lower energy bills. Patriot Glass also carries products that offer forced-entry protection and films that protect glass from scratches, graffiti, other types of vandalism, and even bullets, including C-Bond BRS, a ballistic-resistant film system.
The following discussion highlights our results of operations and the principal factors that have affected our financial condition as well as our liquidity and capital resources for the periods described and provides information that management believes is relevant for an assessment and understanding of the statements of financial condition and results of operations presented herein. The following discussion and analysis are based on Patriot Glass financial statements as of June 30, 2026 and for the six months ended June 30, 2026 and 2025, contained in this Current Report on Form 8/K, which have been prepared in accordance with United States generally accepted accounting principles (“GAAP”). You should read the discussion and analysis together with such financial statements and the related notes thereto.
Going Concern
The Patriot Glass financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying unaudited financial statements, the Company had net (loss) income of $(82,661) and $210,454 for the six months ended June 30, 2026 and 2025, respectively. Net cash provided by operations was $144,700 and $261,037 for the six months ended June 30, 2026 and 2025, respectively. Additionally, as of June 30, 2026, the Company had an accumulated deficit, members’ deficit, and working capital deficit of $728,041, $108,813 and $183,799, respectively. These factors raise substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months from the issuance date of this report. Management cannot provide assurance that the Company will ultimately achieve consistently profitable operations or raise additional debt and/or equity capital. The Company is seeking to raise capital through additional debt and/or equity financings to fund its operations in the future. Although the Company has historically raised capital from the issuance of promissory notes, there is no assurance that it will be able to continue to do so. If the Company is unable to raise additional capital or secure additional lending in the near future, management expects that the Company may need to curtail its operations. The Patriot Glass financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
Critical Accounting Estimates
The following discussion and analysis of Patriot Glass financial condition and results of operations are based upon the financial statements of Patriot Glass, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. Management continually evaluates such estimates, including those related to critical estimates for estimates used in the calculation of percentage of completion on uncompleted jobs, assumptions used in assessing impairment of long-term assets, and the fair value of non-cash equity transactions. Management bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Any future changes to these estimates and assumptions could cause a material change to our reported amounts of revenues, expenses, assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions. Management believes the following critical accounting policies affect our more significant judgments and estimates used in the preparation of the Patriot Glass financial statements.
Revenue recognition
We follow the Financial Accounting Standards Board’s (the “FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”). This standard establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most of the existing revenue recognition guidance. ASC 606 requires an entity to 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 and requires certain additional disclosures.
Revenues from contracts for the distribution and installation of window film solutions are recognized over time on the basis of the Company’s estimates of the progress towards completion of contracts using various output or input methods depending on the type of contract terms including (1) the ratio of number of labor hours spent compared to the number of estimated labor hours to complete a job, (2) using the milestone method, or (3) using a units completed method. These methods are used because management considers these to be the best available measure of progress on these contracts. We use the same method for similar types of contracts. The asset, “contract assets” represents revenues recognized in excess of amounts billed. The liability, “contract liabilities,” represents billings in excess of revenues recognized.
Product sales, consisting of the sale of rolls of window film and C-Bond Solutions, are recognized at a point in time when the product is shipped to the customer and title is transferred and are recorded net of any discounts or allowances.
Revenues from the auto window tinting are recognized upon completion of the job, which generally occurs in one day.
See Note 2 to the Patriot Glass audited and unaudited financial statements for a summary of significant accounting policies and recent accounting pronouncements.
Results of Operations
The following comparative analysis on results of operations was based primarily on the comparative financial statements, footnotes and related information for the periods identified below and should be read in conjunction with the financial statements and the notes to those statements for the six months ended June 30, 2026 and 2025, which are included elsewhere in this report on Form 8-K.
Comparison of Results of Operations for the Six Months ended June 30, 2026 and 2025
Sales
For the six months ended June 30, 2026, sales amounted to $1,037,355 as compared to $1,239,300 for the six months ended June 30, 2025, a decrease of $201,945, or 16.3%, primarily attributable to a decrease in window tint installation and services to school districts in Texas of $177,932. The Texas Education Agency (TEA) mandated that each school district and open-enrollment charter school install either entry-resistant film or fencing on ground-floor windows that would allow access, glass doors, and windows adjacent to glass doors. Additionally, we had an increase in auto window tinting recognized of $13,472, offset by a decrease in sales from the sales of C-Bond Secure multi-purpose and BRS ballistic resistant glass protection systems of $37,485.
Operating Expenses
For the six months ended June 30, 2026, operating expenses amounted to $1,095,414 as compared to $1,033,268 for the six months ended June 30, 2025, an increase of $62,146, or 6.0%. For the six months ended June 30, 2026 and 2025, operating expenses consisted of the following:
| Six Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Cost of sale (excluding depreciation and amortization expense shown separately below) | $ | 595,577 | $ | 572,857 | ||||
| Compensation and related benefits | 172,480 | 256,165 | ||||||
| Professional fees | 136,116 | 11,201 | ||||||
| Depreciation and amortization expense | 28,512 | 25,243 | ||||||
| General and administrative expenses | 162,729 | 167,802 | ||||||
| Total | $ | 1,095,414 | $ | 1,033,268 | ||||
Cost of sales (excluding depreciation and amortization expense)
Cost of sales is comprised primarily of cost of raw materials such as film, labor, subcontractor costs, equipment rental, and supplies. For the six months ended June 30, 2026, cost of sales (excluding depreciation and amortization expense) amounted to $595,577, or 57.4% of net sales, as compared to $572,857, or 46.2% of net sales, for the six months ended June 30, 2025, an increase of $22,720, or 4.0%. The percentage of cost of sales as a percentage of net sales fluctuates based on type of job (commercial, residential, auto or product sales).
Compensation and related benefits
For the six months ended June 30, 2026, compensation and related benefits decreased by $83,685, or 32.7%, as compared to the six months ended June 30, 2025. This decrease was primarily due to an overall decrease in executive compensation and related benefits of $15,451 and an increase in office and sales compensation and related benefits of $68,234.
Professional fees
For the six months ended June 30, 2026, professional fees increased by $124,915, or 1,115.2%, as compared to the six months ended June 30, 2025. This increase was primarily related to an increase in accounting fees of $117,960 related to fees incurred for the audit of our 2025 and 2024 financial statements and outside accounting fees, and an increase in other professional fees of $6,955.
Depreciation and amortization
For the six months ended June 30, 2026, depreciation and amortization increased by $3,269, or 13.0%, as compared to the six months ended June 30, 2025. This increase was primarily to an increase in depreciable property and equipment.
General and administrative
For the six months ended June 30, 2026, general and administrative expenses decreased by $5,073, or 3.0%, as compared to the six months ended June 30, 2025.
Income (Loss) from Operations
For the six months ended June 30, 2026 and 2025, (loss) income from operations amounted to $(58,059) and $206,032, respectively, a negative change of $264,091, or 128.2%.
Other Income (Expenses), net
For the six months ended June 30, 2026, other expenses, net amounted to $(24,602) as compared to other income, net of $4,422 for the six months ended June 30, 2025, a negative change of $29,024, or 656.3%. This change was primarily due to a decrease in interest expense of $43,331 related to an average decrease in interest-bearing debt during the period, and the recording of a gain on debt extinguishment of $72,355 related to the conversion of debt and accounts payable to Series J preferred stock during the 2025 period as compared to $0 during the 2026 period.
Net (Loss) Income
Due to factors discussed above, for the six months ended June 30, 2026 and 2025, net (loss) income amounted to $(82,661) and $210,454, respectively.
Liquidity and Capital Resources
Liquidity is the ability of an enterprise to generate adequate amounts of cash to meet its needs for cash requirements. We had cash of $309,762 and $192,538 as of June 30, 2026 and December 31, 2025, respectively.
Our primary uses of cash have been for fees paid for direct materials and supplies, subcontractor fees, compensation and related benefits, fees paid to third parties for professional services, and general and administrative expenses. Historically, we have received funds from the sales of products, from various financing activities such as debt financings. The following trends are reasonably likely to result in changes in our liquidity over the near to long term:
| ● | An increase in working capital requirements to finance our current business, | |
| ● | Addition of administrative and sales personnel needed for business growth; | |
| ● | The cost of being a public company; | |
| ● | Marketing expense for building brand; | |
| ● | Capital requirements for production capacity. |
Until such time as Patriot Glass generates substantial product and service revenues to offset operational expenses, Patriot Glass expects to finance its cash needs through a combination of public and private equity offerings and debt financings. Patriot Glass may be unable to raise capital or enter into such other arrangements when needed or on favorable terms or at all. A failure to raise capital or enter into such other arrangements as and when needed would have a negative impact on its financial condition.
Additional cash liquidity is generated from product sales. However, to date, we cannot provide any assurances that we will be profitable. We believe that the existing cash and cash equivalents of Patrit Glass will not be sufficient to fund our current operating plans.
Cash Flows
For the six months ended June 30, 2026 and 2025
The following table shows a summary of our cash flows for the six months ended June 30, 2026 and 2025.
| Six Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Net cash provided by (used in) operating activities | $ | 144,700 | $ | 261,037 | ||||
| Net cash used in investing activities | - | (46,446 | ) | |||||
| Net cash provided by (used in) financing activities | (27,476 | ) | 39,172 | |||||
| Net increase (decrease) in cash | 117,224 | 253,763 | ||||||
| Cash - beginning of the period | 192,538 | 17,647 | ||||||
| Cash - end of the period | $ | 309,762 | $ | 271,410 | ||||
Six Months Ended June 30, 2026 and 2025
Net Cash Provided by Operating Activities:
Net cash provided by operating activities was $144,700 for the six months ended June 30, 2026 as compared to $261,037 for the six months ended June 30, 2025, decrease of $116,337.
Net cash flow provided by operating activities for the six months ended June 30, 2026 primarily reflected a net loss of $82,661, which was then adjusted for the add-back of non-cash items consisting of depreciation of $28,513, and changes in operating assets and liabilities consisting primarily of a decrease in accounts receivable of $176,044, an increase in inventory of $3,237, an increase in prepaid expenses and other current assets of $50,804, a decrease in contract liabilities of $11,648, an increase in accounts payable of $58,646, an increase in accrued expenses of $30,245, and a decrease in accrued expenses – related party of $398.
Net cash flow provided by operating activities for the six months ended June 30, 2025 primarily reflected net income of $210,454, which was then adjusted for the add-back (deduction) of non-cash items primarily consisting of depreciation of $25,243, amortization of debt discount of $10,441, non-cash interest expense of $9,956, non-cash gain on debt extinguishment of $72,355, and non-cash lease costs of $783, and changes in operating assets and liabilities consisting primarily of an increase in accounts receivable of $25,967, a decrease in inventory of $636, an increase in prepaid expenses and other current assets of $2,595, a decrease in accounts payable of $16,232, a decrease in accrued expenses of $67,086, an increase in accrued expenses – related party of $44,486 and an increase in contract liabilities of $143,273.
Net Cash Provided by (Used in) Investing Activities:
Net cash used in investing activities was $0 for the six months ended June 30, 2026 as compared to net cash used in investing activities of $46,446 for the six months ended June 30, 2025.
During the six months ended June 30, 2025, we used cash for the purchase of property and equipment for $46,446.
Net Cash Provided by (Used in) Financing Activities:
Net cash used in financing activities was $(27,476) for the six months ended June 30, 2026 as compared to net cash provided by financing activities of $39,172 for the six months ended June 30, 2025.
During the six months ended June 30, 2026, we used cash for the repayment of notes payable of $9,276 and the repayment of related party advances of $18,200.
During the six months ended June 30, 2025, we received net proceeds from notes payable of $46,446, received proceeds from related party advances of $4,000 and proceeds of $140,000 from notes payable – related parties of $140,000. These proceeds were offset by the repayment of notes payable of $141,274 and the repayment of related party advances of $10,000.
Off-balance Sheet Arrangements
Patriot Glass does not have any off-balance sheet arrangements during the periods presented as defined in the rules and regulations of the SEC.
Exhibit 99.5
TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED BALANCE SHEETS
June 30, 2026
(Unaudited)
| Transportation and Logistics Systems. Inc. and Subsidiaries | Patriot Glass Solutions, LLC | |||||||||||||||||||||||
December 31, 2025 | December 31, 2025 | Reverse Split Debit (Credit) | Acquisition of Patriot Glass, LLC Debit (Credit) | Conversion of Patriot Glass Debt Debit (Credit) | Pro Forma December 31, 2025 | |||||||||||||||||||
| ASSETS | ||||||||||||||||||||||||
| CURRENT ASSETS: | ||||||||||||||||||||||||
| Cash | $ | 29,082 | $ | 309,762 | $ | - | $ | - | $ | - | $ | 338,844 | ||||||||||||
| Accounts receivable, net | - | 127,814 | - | - | - | 127,814 | ||||||||||||||||||
| Inventory | - | 26,438 | - | - | - | 26,438 | ||||||||||||||||||
| Prepaid expenses and other current assets | 1,500 | 95,338 | - | - | - | 96,838 | ||||||||||||||||||
| Total Current Assets | 30,582 | 559,352 | - | - | - | 589,934 | ||||||||||||||||||
| OTHER ASSETS: | ||||||||||||||||||||||||
| Property and equipment, net | - | 132,898 | - | - | - | 132,898 | ||||||||||||||||||
| Intangible assets | - | - | - | 570,878 | - | 570,878 | ||||||||||||||||||
| Right-of-use asset, net | - | 5,545 | - | - | - | 5,545 | ||||||||||||||||||
| Total Other Assets | - | 138,443 | - | 570,878 | - | 709,321 | ||||||||||||||||||
| TOTAL ASSETS | $ | 30,582 | $ | 697,795 | $ | - | $ | 570,878 | $ | - | $ | 1,299,255 | ||||||||||||
| LIABILITIES AND SHAREHOLDERS’ DEFICIT | ||||||||||||||||||||||||
| CURRENT LIABILITIES: | ||||||||||||||||||||||||
| Notes payable, net of discount - current portion | $ | 175,000 | $ | 21,486 | $ | - | $ | - | $ | - | $ | 196,486 | ||||||||||||
| Notes payable - related parties | - | 291,000 | - | - | (291,000 | ) | - | |||||||||||||||||
| Accounts payable | 344,847 | 70,875 | - | - | - | 415,722 | ||||||||||||||||||
| Accrued expenses | 1,226,130 | 274,899 | - | - | - | 1,501,029 | ||||||||||||||||||
| Accrued expenses - related parties | - | 66,411 | - | - | - | 66,411 | ||||||||||||||||||
| Deferred compensation and related benefits | 289,998 | - | - | - | - | 289,998 | ||||||||||||||||||
| Lease liability, current portion - related party | - | 5,545 | - | - | - | 5,545 | ||||||||||||||||||
| Liabilities of discontinued operations | 7,128,698 | - | - | - | - | 7,128,698 | ||||||||||||||||||
| Total Current Liabilities | 9,164,673 | 730,216 | - | - | (291,000 | ) | 9,603,889 | |||||||||||||||||
| LONG-TERM LIABILITIES: | ||||||||||||||||||||||||
| Notes payable, net of current portion | - | 63,457 | - | - | - | 63,457 | ||||||||||||||||||
| Total Long-term Liabilities | - | 63,457 | - | - | - | 63,457 | ||||||||||||||||||
| Total Liabilities | 9,164,673 | 793,673 | - | - | (291,000 | ) | 9,667,346 | |||||||||||||||||
| Series J convertible preferred stock, par value $0.001 per share; 1,000,000 shares designated; 110,424 and 160,834 (pro forma) shares issued and outstanding at June 30, 2026, respectively ($12,146,640 and $17,691,740 (pro forma) redemption value as of June 30, 2026) | 12,146,640 | - | - | 5,225,000 | 320,100 | 17,691,740 | ||||||||||||||||||
| Commitments and Contingencies (See Note 6) | ||||||||||||||||||||||||
| SHAREHOLDERS’ DEFICIT: | ||||||||||||||||||||||||
| Preferred stock, par value $0.001; authorized 10,000,000 shares: | ||||||||||||||||||||||||
| Series B convertible preferred stock, par value $0.001 per share; 1,700,000 shares designated; No shares issued and outstanding at June 30, 2026 (No per share liquidation value) | - | - | - | - | - | - | ||||||||||||||||||
| Series D convertible preferred stock, par value $0.001 per share; 1,250,000 shares designated; No shares issued and outstanding at June 30, 2026 ($6.00 per share liquidation value) | - | - | - | - | - | - | ||||||||||||||||||
| Series E convertible preferred stock, par value $0.001 per share; 562,250 shares designated; No shares issued and outstanding at June 30, 2026 ($13.34 per share liquidation value) | - | - | - | - | - | - | ||||||||||||||||||
| Series G convertible preferred stock, par value $0.001 per share; 1,000,000 shares designated; No shares issued and outstanding at June 30, 2026 ($10.00 per share liquidation value) | - | - | - | - | - | - | ||||||||||||||||||
| Series H convertible preferred stock, par value $0.001 per share; 35,000 shares designated; 32,374 shares issued and outstanding at June 30. 2026 (No per share liquidation value) | 32 | - | - | - | - | 32 | ||||||||||||||||||
| Common stock, par value $0.001 per share; 50,000,000,000 shares authorized; 5,889,437,474 and 1,178,887 (pro forma) shares issued and outstanding at June 30, 2026, respectively | 5,889,437 | - | (5,888,259 | ) | - | - | 1,178 | |||||||||||||||||
| Additional paid-in capital | 121,194,905 | 619,228 | 5,888,259 | (5,369,228 | ) | (29,100 | ) | 122,304,064 | ||||||||||||||||
| Accumulated deficit | (148,365,105 | ) | (715,106 | ) | - | 715,106 | - | (148,365,105 | ) | |||||||||||||||
| Total Shareholders’ Deficit | (21,280,731 | ) | (95,878 | ) | - | (4,654,122 | ) | (29,100 | ) | (26,059,831 | ) | |||||||||||||
| Total Liabilities and Shareholders’ Deficit | $ | 30,582 | $ | 697,795 | $ | - | $ | 570,878 | $ | - | $ | 1,299,255 | ||||||||||||
See accompanying notes to pro forma consolidated financial statements.
| F-1 |
TRANSPORTATION AND LOGISTICS SYSTEMS INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaaudited)
| Transportation and Logistics Systems. Inc. and Subsidiaries | Patriot Glass Solutions, LLC | Pro Forma | ||||||||||||||
| For the Year Ended December 31, 2025 | For the Year Ended December 31, 2025 | Acquisition of Patriot Glass, LLC Debit (Credit) | For the Year Ended December 31, 2025 | |||||||||||||
| REVENUES | $ | - | $ | 2,607,600 | $ | - | $ | 2,607,600 | ||||||||
| OPERATING EXPENSES: | ||||||||||||||||
| Cost of sale (excluding depreciation and amortization expense shown separately below) | - | 1,183,993 | 1,183,993 | |||||||||||||
| Compensation and related benefits | 673,026 | 448,984 | - | 1,122,010 | ||||||||||||
| Legal and professional fees | 714,873 | 17,951 | - | 732,824 | ||||||||||||
| Depreciation and amortization expense | - | 50,917 | 50,917 | |||||||||||||
| General and administrative expenses | 19,977 | 457,561 | - | 477,538 | ||||||||||||
| Total Operating Expenses | 1,407,876 | 2,159,406 | - | 3,567,282 | ||||||||||||
| LOSS FROM OPERATIONS | (1,407,876 | ) | 448,194 | - | (959,682 | ) | ||||||||||
| OTHER INCOME (EXPENSES): | ||||||||||||||||
| Gain on debt extinguishment, net | 1,988,931 | 72,355 | - | 2,061,286 | ||||||||||||
| Interest expense | (32,849 | ) | (79,496 | ) | - | (112,345 | ) | |||||||||
| Interest expense - related parties | (106,563 | ) | (19,009 | ) | - | (125,572 | ) | |||||||||
| Total Other Income (Expenses), net | 1,849,519 | (26,150 | ) | - | 1,823,369 | |||||||||||
| INCOME (LOSS) BEFORE INCOME TAXES | 441,643 | 422,044 | - | 863,687 | ||||||||||||
| Provision for income taxes | - | - | - | - | ||||||||||||
| INCOME (LOSS) FROM CONTINUING OPERATIONS | 441,643 | 422,044 | - | 863,687 | ||||||||||||
| DISCONTINUED OPERATIONS: | ||||||||||||||||
| Loss from discontinued operations, net of tax | (407,810 | ) | - | - | (407,810 | ) | ||||||||||
| LOSS FROM DISCONTINUED OPERATIONS | (407,810 | ) | - | - | (407,810 | ) | ||||||||||
| NET INCOME (LOSS) | 33,833 | 422,044 | - | 455,877 | ||||||||||||
| Deemed contribution on exchange of equity instruments | 800,380 | - | - | 800,380 | ||||||||||||
| Accrued dividends | (730,906 | ) | - | (504,100 | ) | (1,235,006 | ) | |||||||||
| NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ | 103,307 | $ | 422,044 | $ | (504,100 | ) | $ | 21,251 | |||||||
| NET INCOME (LOSS) PER COMMON SHARE - BASIC AND DILUTED | ||||||||||||||||
| Net income (loss) per share from continuing operations -basic and diluted | $ | 0.43 | $ | 0.36 | ||||||||||||
| Net loss per share from discontinued operations – basic and diluted | (0.35 | ) | (0.35 | ) | ||||||||||||
| Net income (loss) per share - basic and diluted | $ | 0.09 | $ | 0.02 | ||||||||||||
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||||||||||||||
| Basic | 1,177,887 | - | - | 1,177,887 | ||||||||||||
| Diluted | 1,177,887 | - | - | 1,177,887 | ||||||||||||
See accompanying notes to pro forma consolidated financial statements.
| F-2 |
TRANSPORTATION AND LOGISTICS SYSTEMS INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| Transportation and Logistics Systems. Inc. and Subsidiaries | Patriot Glass Solutions, LLC | Pro Foram | ||||||||||||||
| For the Six Months Ended June 30, 2026 | For the Six Months Ended June 30, 2026 | Acquisition of Patriot Glass, LLC Debit (Credit) | For the Six Months Ended June 30, 2026 | |||||||||||||
| REVENUES | $ | - | $ | 1,037,355 | $ | - | $ | 1,037,355 | ||||||||
| OPERATING EXPENSES: | ||||||||||||||||
| Cost of sale (excluding depreciation and amortization expense shown separately below) | - | 594,467 | 594,467 | |||||||||||||
| Compensation and related benefits | 289,998 | 172,480 | - | 462,478 | ||||||||||||
| Legal and professional fees | 169,003 | 136,116 | - | 305,119 | ||||||||||||
| Depreciation and amortization expense | - | 28,512 | 28,512 | |||||||||||||
| General and administrative expenses | 1,957 | 161,024 | - | 162,981 | ||||||||||||
| Total Operating Expenses | 460,958 | 1,092,599 | - | 1,553,557 | ||||||||||||
| LOSS FROM OPERATIONS | (460,958 | ) | (55,244 | ) | - | (516,202 | ) | |||||||||
| OTHER INCOME (EXPENSES): | ||||||||||||||||
| Gain on debt extinguishment, net | - | - | - | - | ||||||||||||
| Interest expense | (5,418 | ) | (12,350 | ) | - | (17,768 | ) | |||||||||
| Interest expense - related parties | - | (11,557 | ) | - | (11,557 | ) | ||||||||||
| Total Other Income (Expenses), net | (5,418 | ) | (23,907 | ) | - | (29,325 | ) | |||||||||
| LOSS BEFORE INCOME TAXES | (466,376 | ) | (79,151 | ) | - | (545,527 | ) | |||||||||
| Provision for income taxes | - | - | - | - | ||||||||||||
| LOSS FROM CONTINUING OPERATIONS | (466,376 | ) | (79,151 | ) | - | (545,527 | ) | |||||||||
| DISCONTINUED OPERATIONS: | ||||||||||||||||
| Loss from discontinued operations, net of tax | (179,483 | ) | - | - | (179,483 | ) | ||||||||||
| LOSS FROM DISCONTINUED OPERATIONS | (179,483 | ) | - | - | (179,483 | ) | ||||||||||
| NET LOSS | (645,859 | ) | (79,151 | ) | - | (725,010 | ) | |||||||||
| Accrued dividends | (554,137 | ) | - | (252,050 | ) | (806,187 | ) | |||||||||
| NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ | (1,199,996 | ) | $ | (79,151 | ) | $ | (252,050 | ) | $ | (1,531,197 | ) | ||||
| NET LOSS PER COMMON SHARE - BASIC AND DILUTED | ||||||||||||||||
| Net loss per share from continuing operations -basic and diluted | $ | (0.87 | ) | $ | (1.15 | ) | ||||||||||
| Net loss per share from discontinued operations – basic and diluted | (0.15 | ) | (0.15 | ) | ||||||||||||
| Net loss per share - basic and diluted | $ | (1.02 | ) | $ | (1.30 | ) | ||||||||||
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||||||||||||||
| Basic | 1,177,887 | - | - | 1,177,887 | ||||||||||||
| Diluted | 1,177,887 | - | - | 1,177,887 | ||||||||||||
See accompanying notes to pro forma consolidated financial statements.
| F-3 |
Exhibit 99.6
TLSS Completes Acquisition of 100% Ownership
of Four C-Bond Nanotechnology Patents and
Majority Interest in Patriot Glass Solutions
Major Milestone Establishes New Operating Platform
Focused on Safety & Security Technologies
MONTVALE, NEW JERSEY – (AccessWire) – November 5, 2026 – Transportation and Logistics Systems, Inc. (OTCID: TLSS) (“TLSS” or the “Company”) today announced the completion of its previously announced acquisition of an 80% membership interest in Patriot Glass Solutions, LLC (“PGS”) and 100% ownership of four United States patents related to glass-strengthening nanotechnology. The transaction, which was effective as of November 1, 2026, represents a significant milestone in TLSS’s strategic transformation and establishes a new operating platform focused on safety and security technologies. As a result of the transaction, the Company has ceased to be a shell company.
Transaction Summary
Under the terms of the transaction, a wholly-owned subsidiary of TLSS acquired an 80% membership interest in Patriot Glass Solutions, together with 100% ownership of four United States patents related to nanotechnology-based glass strengthening and protection technologies, which are licensed to PGS on a non-exclusive basis. The merger consideration consisted of 47,500 shares of Series J Senior Convertible Preferred Stock, having a stated value of $100 per share and an aggregate stated value of $4.75 million. In addition, the Company issued 3,518 shares of Series J Senior Convertible Preferred Stock, having an aggregate stated value of $351,800, in satisfaction of certain secured promissory notes and expense advances of PGS.
The remaining 20% membership interest in PGS continues to be held by Michael Wanke, founder and Chief Executive Officer of Patriot Glass Solutions. In connection with the closing, Mr. Wanke entered into a three-year employment agreement and will continue to lead the day-to-day operations of PGS as Chief Executive Officer.
Chairman and CEO Commentary
Sebastian Giordano, Chairman and Chief Executive Officer of TLSS, stated:
“This is much more than the completion of an acquisition. This transaction represents a significant milestone in TLSS’s strategic transformation and the first step towards establishing a new operating platform focused on safety and security technologies. With PGS, we believe the combination of proprietary technology, established customer relationships and a national dealer network provides a foundation for future growth.
We expect to provide additional information in future public disclosures regarding our overall strategy, PGS organic growth initiatives and opportunities to leverage the patents to support future product development and commercialization across safety and security market segments. The Company will continue to address its remaining legacy matters, and we believe this transaction can help put the Company on a path to building long-term shareholder value.”
About Patriot Glass Solutions
Based in the San Antonio metropolitan area, Patriot Glass Solutions is the North American distributor of C-Bond products and markets, sells and installs nanotechnology-based glass strengthening and ballistic-resistant window film systems designed to help protect building occupants and property against ballistic attack, forced entry, blast events, severe weather and flying debris.
PGS serves educational institutions, airports, federal, state and local government agencies, law enforcement organizations, healthcare facilities, commercial property owners and residential customers through direct sales efforts and a nationwide network of more than 35 authorized dealers and distributors.
C-Bond technologies have been utilized in more than 150 schools and at facilities including Los Angeles International Airport, George Bush Intercontinental Airport, the Federal Bureau of Investigation, the Los Angeles Police Department and the Houston Fire Department.
The company’s principal product lines include:
| ● | C-Bond BRS ballistic-resistant systems | |
| ● | C-Bond Secure forced-entry protective systems | |
| ● | Solar, decorative, reflective and specialty window film solutions |
About Transportation and Logistics Systems, Inc.
Transportation and Logistics Systems, Inc. is building a safety and security technology platform focused on protecting people, property and public spaces through advanced technologies, strategic acquisitions and scalable distribution channels. Following the closing of the Patriot Glass Solutions acquisition, the Company operates through its 80%-owned subsidiary Patriot Glass Solutions and intends to pursue additional opportunities across adjacent safety and security market segments. Additional information regarding the transaction is contained in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 5, 2026.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of applicable federal securities laws. Forward-looking statements include statements regarding future growth, product development, acquisition opportunities, dealer expansion, commercialization of intellectual property, integration activities, financing initiatives and future operating performance.
These statements are based upon current expectations and involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied. Such risks include, among others, substantial doubt about the ability of the Company and PGS to continue as going concerns; the Company’s dependence on a single operating business in which it holds an 80% interest; the Company’s ability to successfully integrate Patriot Glass Solutions, execute its strategic objectives, obtain financing, expand operations and realize anticipated benefits from the acquisition; dilution from conversion of the Company’s outstanding preferred stock; limitations on resales of the Company’s restricted securities resulting from its former shell company status; and the Company’s ability to address existing legacy matters. Additional risks are described in the Company’s filings with the Securities and Exchange Commission, including its Current Report on Form 8-K relating to the transaction.
The Company undertakes no obligation to update forward-looking statements except as required by law.
Investor Contact
Transportation and Logistics Systems, Inc.
Email: info@tlss-inc.com
Phone: (833) 764-1443
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