Universal Token (UTKN) cuts losses in Q2 2026 but flags going concern risk

Rhea-AI Filing Summary

Universal Token, Inc., an AI and blockchain company focused on real world asset tokenization, reported another pre‑revenue quarter for the period ended June 30, 2026. Revenues were $0 for both the three- and six-month periods in 2026 and 2025.

The company recorded a six-month net loss of $36,361, sharply lower than $315,552 a year earlier, as professional fees and general and administrative expenses were reduced. Total assets were $1,151,003, driven mainly by capitalized software development costs of $1,143,500. Cash was only $27, with current assets of $2,697 versus current liabilities of $22,128, resulting in a working capital deficit and an accumulated deficit of $571,580.

The company disclosed a going concern uncertainty, citing recurring losses, negative operating cash flows and the need for additional equity or debt financing. During the first half of 2026 it relied on related-party funding, including $44,000 in loans due in 2028 and $5,264 of short-term advances. Management also reported a material weakness in internal control over financial reporting and concluded disclosure controls and procedures were not effective.

Positive

• Operating expenses declined significantly, reducing the six-month net loss from $315,552 in 2025 to $36,361 in 2026, reflecting substantial cuts in professional and general and administrative costs.
• The company continues to build its platform, with capitalized software development costs reaching $1,143,500 as of June 30, 2026, indicating ongoing investment in its blockchain infrastructure.

Negative

• There is explicit substantial doubt about the company’s ability to continue as a going concern due to ongoing losses, $0 revenue, minimal cash of $27, and an accumulated deficit of $571,580.
• Disclosure controls and procedures were deemed not effective as of June 30, 2026 because of a material weakness in internal control over financial reporting and insufficient experienced accounting personnel.
• The business remains pre‑revenue, generating $0 revenue for both the three- and six-month periods in 2026 and 2025, while still incurring operating losses.
• Liquidity is very limited, with current assets of $2,697 against current liabilities of $22,128 and reliance on related-party loans and advances totaling $49,264.

Filing Explained

At June 30, 2026, financing increased related-party obligations but did not increase reported common shares; software-cost expense timing still depends on placement in service.

Universal Token filed an unaudited Form 10-Q covering the six months ended June 30, 2026. At that date, common shares remained at 101,561,000; 2026 financing was $44,000 of related-party loans and $5,264 of advances, so disclosed funding increased obligations without a reported common-share increase.

The loans are unsecured, carry no interest, and are due December 31, 2028; the advances are unsecured, carry no interest, and are due on demand.

The filing also reports $1,143,500 of capitalized software-development costs at June 30, including $10,000 capitalized during the first six months. Those costs are to be amortized straight-line when the software is placed in service, so the timing of that expense remains tied to a milestone the filing does not date.

Key Figures

Cash: $27 Total assets: $1,151,003 Software development costs: $1,143,500 +5 more

8 metrics

Cash $27 Cash balance as of June 30, 2026

Total assets $1,151,003 Consolidated total assets at June 30, 2026

Software development costs $1,143,500 Capitalized internal-use software development as of June 30, 2026

Net loss (six months 2026) $36,361 Consolidated net loss for the six months ended June 30, 2026

Net loss (six months 2025) $315,552 Consolidated net loss for the six months ended June 30, 2025

Accumulated deficit $571,580 Accumulated deficit at June 30, 2026

Related-party loans $44,000 Unsecured, non-interest-bearing loans from significant shareholder, due December 31, 2028

Current liabilities $22,128 Accounts payable, accrued expenses and related-party advances at June 30, 2026

Key Terms

real world asset tokenization, going concern, internal control over financial reporting, software development costs, +1 more

5 terms

real world asset tokenization financial

"intends to utilize real world asset tokenization to create a virtual investment vehicle"

The conversion of ownership rights in physical or financial assets into digital tokens recorded on a secure digital ledger, so pieces of an asset can be bought, sold or traded like shares. It matters to investors because it can turn large, hard-to-sell items — like real estate, art or loans — into smaller, tradable pieces, increasing liquidity, broadening access and speeding up transfers in a way similar to slicing a cake so more people can buy a slice.

going concern financial

"which raise substantial doubt about its ability to continue as a going concern"

Going concern is the accounting assumption that a company will keep operating and meeting its obligations for the foreseeable future. The phrase matters most when a company or its auditors disclose substantial doubt about it, a formal warning that the business may not have enough resources to continue without raising money, restructuring, or selling assets. That language in a filing or press release signals elevated financial risk.

internal control over financial reporting financial

"material weakness in our internal controls over financial reporting, including our failure"

Internal control over financial reporting is a company’s system of procedures and checks designed to make sure its financial statements are accurate and complete, like a set of guardrails and verification steps that catch mistakes or fraud before numbers are published. Investors care because strong controls make reported results more trustworthy, lower the risk of surprise restatements or regulatory problems, and give greater confidence when valuing the company or comparing it to peers.

software development costs financial

"Universal Token incurred and capitalized software development costs of $10,000 and $500,000"

fair value hierarchy financial

"It establishes a fair value hierarchy based on the level of independent, objective evidence"

FAQ

How did Universal Token (UTKN) perform financially for the six months ended June 30, 2026?

Universal Token reported a net loss of $36,361 for the six months ended June 30, 2026, compared with $315,552 a year earlier. The smaller loss reflects sharply lower professional and general and administrative expenses, while the company still generated no revenue.

Did Universal Token (UTKN) generate any revenue in Q2 2026?

No, Universal Token generated $0 revenue for both the three- and six-month periods ended June 30, 2026. The company remains in development, focusing on AI and blockchain tools and tokenization platforms without yet converting that activity into commercial sales.

What is Universal Token’s (UTKN) liquidity position as of June 30, 2026?

As of June 30, 2026, Universal Token had $27 in cash and total current assets of $2,697 versus current liabilities of $22,128. This creates a working capital deficit and highlights heavy dependence on external and related-party financing to fund operations.

Does Universal Token (UTKN) face a going concern risk?

Yes, management stated that there is substantial doubt about Universal Token’s ability to continue as a going concern. Factors include recurring losses, negative cash flows, minimal cash, and uncertainty about raising sufficient equity or debt financing to support its business plan.

What related-party financing did Universal Token (UTKN) use in the first half of 2026?

During the six months ended June 30, 2026, Universal Token borrowed $44,000 in unsecured, non‑interest‑bearing loans from a significant shareholder and director, due December 31, 2028, and received $5,264 in short-term advances for expenses, also unsecured and non‑interest‑bearing.

What internal control issues did Universal Token (UTKN) disclose in Q2 2026?

Universal Token reported a material weakness in internal control over financial reporting, including lack of formal accounting policies and insufficient experienced accounting staff. As a result, management concluded disclosure controls and procedures were not effective as of June 30, 2026.

How much has Universal Token (UTKN) invested in software development?

Universal Token had capitalized $1,143,500 of software development costs as of June 30, 2026, up from $1,133,500 at December 31, 2025. These costs relate to building its proprietary blockchain-based platform for real world asset tokenization.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☑ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 for the quarterly period ended June 30, 2026

☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 for the transition period from ____________ to ____________.

Commission file number:  000-54457

UNIVERSAL TOKEN, INC.

(Exact name of registrant as specified in its charter)

Wyoming		87-2595314
(State of incorporation)		(IRS Employer Identification No.)
30 N Gould St #60803 Sheridan, WY 82801 USA
(Address of principal executive offices) (Zip Code)
(727) 692-3348
(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered	Ticker symbol
N/A	N/A	N/A

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to the filing requirements for the past 90 days. Yes þ   No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ   No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer”, "accelerated filer,” "smaller reporting company” and "emerging growth company” in rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☑	Smaller reporting company	☑
		Emerging growth company	☑

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ☐   No ☑

As of August 11, 2026, there were 101,561,000 issued and outstanding shares of common stock.

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	16
Item 4.	Controls and Procedures	16
PART II. OTHER INFORMATION		17
Item 1.	Legal Proceedings	17
Item 1A.	Risk Factors	17
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	17
Item 3.	Defaults Upon Senior Securities	17
Item 4.	Mine Safety Disclosures	17
Item 5.	Other Information	18
Item 6.	Exhibits	18
	Signatures	19

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

UNIVERSAL TOKEN, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

(UNAUDITED) 

		June 30, 2026				December 31, 2025
ASSETS
CURRENT ASSETS
Cash		$	27			$	1,842
Other current assets			2,670				11,088
Total current assets			2,697				12,930
NON-CURRENT ASSETS
Intangible assets			4,806				4,806
Software development			1,143,500				1,133,500
Total non-current assets			1,148,306				1,138,306
TOTAL ASSETS		$	1,151,003			$	1,151,236
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses			16,864				30,000
Advances payable, related party			5,264				—
Total current liabilities			22,128				30,000
Non-current liabilities:
Loans payable, related party			44,000				—
Total non-current liabilities			44,000				—
TOTAL LIABILITIES		$	66,128			$	30,000
STOCKHOLDERS' EQUITY
Preferred stock; $0.001 par value, 100,000,000 shares authorized and 10,000,000 shares issued and outstanding			10,000				10,000
Common stock; $0.001 par value, 750,000,000 and 750,000,000 shares authorized, 101,561,000 and 101,561,000 shares issued and outstanding, respectively			101,561				101,561
Additional paid-in capital			1,544,894				1,544,894
Accumulated deficit			(571,580	)			(535,219	)
Total Stockholders’ Equity Attributable to Parent			1,084,875				1,121,236
Equity Attributable to Noncontrolling interest			(7	)			(7	)
Total Stockholders' Equity			1,084,868				1,121,229
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	1,151,003			$	1,151,236

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

3 

UNIVERSAL TOKEN, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

		For the Three Months Ended June 30,								For the Six Months Ended June 30,
		2026				2025				2026				2025
REVENUES
Sales		$	—			$	—			$	—			$	—
OPERATING EXPENSES
Professional fees			13,990				193,085				25,989				281,420
General and administrative			4,646				28,341				10,372				33,159
Total operating expenses			18,636				221,426				36,361				314,579
Operating Loss			(18,636	)			(221,426	)			(36,361	)			(314,579	)
OTHER EXPENSES
Other expenses			—				(165	)			—				(973	)
Total other expenses			—				(165	)			—				(973	)
Consolidated Net Loss		$	(18,636	)		$	(221,591	)		$	(36,361	)		$	(315,552	)
Consolidated net loss attributable to noncontrolling interest			—				—				—				1
Consolidated Net Loss Attributable to Parent		$	(18,636	)		$	(221,591	)		$	(36,361	)		$	(315,551	)
OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation			—				294				—				352
Consolidated Other Comprehensive Loss		$	(18,636	)		$	(221,297	)		$	(36,361	)		$	(315,199	)
BASIC AND DILUTED LOSS PER COMMON SHARE		$	(0.00	)		$	(0.00	)		$	(0.00	)		$	(0.00	)
BASIC AND DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING			101,561,000				101,264,386				101,561,000				101,224,227

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

4 

UNIVERSAL TOKEN, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(UNAUDITED) 

		Preferred Stock							Common Stock							Additional Paid-in				Accumulated				Accumulated Other Comprehensive				Total Stockholders' Equity Attributable				Noncontrolling				Total Stockholders'
		Shares			Amount				Shares			Amount				Capital				Deficit				Income (Loss)				to Parent				Interest				Equity
Balance, March 31, 2026		10,000,000			$	10,000			101,561,000			$	101,561			$	1,544,894			$	(552,944	)		$	—			$	1,103,511			$	(7	)		$	1,103,504
Net loss for the three months ended June 30, 2026		—				—			—				—				—				(18,636	)			—				(18,636	)			—				(18,636	)
Balance, June 30, 2026		10,000,000			$	10,000			101,561,000			$	101,561			$	1,544,894			$	(571,580	)		$	—			$	1,084,875			$	(7	)		$	1,084,868

		Preferred Stock							Common Stock							Additional Paid-in				Accumulated				Accumulated Other Comprehensive				Total Stockholders' Equity Attributable				Noncontrolling				Total Stockholders'
		Shares			Amount				Shares			Amount				Capital				Deficit				Income (Loss)				to Parent				Interest				Equity
Balance, December 31, 2025		10,000,000			$	10,000			101,561,000			$	101,561			$	1,544,894			$	(535,219	)		$	—			$	1,121,236			$	(7	)		$	1,121,229
Net loss for the six months ended June 30, 2026		—				—			—				—				—				(36,361	)			—				(36,361	)			—				(36,361	)
Balance, June 30, 2026		10,000,000			$	10,000			101,561,000			$	101,561			$	1,544,894			$	(571,580	)		$	—			$	1,084,875			$	(7	)		$	1,084,868

		Preferred Stock							Common Stock							Additional Paid-in				Accumulated				Accumulated Other Comprehensive				Total Stockholders' Equity Attributable				Noncontrolling				Total Stockholders'
		Shares			Amount				Shares			Amount				Capital				Deficit				Income (Loss)				to Parent				Interest				Equity
Balance, March 31, 2025		10,000,000			$	10,000			101,235,000			$	101,235			$	991,020			$	(272,932	)		$	3,467			$	832,790			$	(6	)		$	832,784
Common stock issued for cash		—				—			200,000				200				339,800				—				—				340,000				—				340,000
Currency translation		—				—			—				—				—				—				294				294				—				294
Net loss for the three months ended June 30, 2025		—				—			—				—				—				(221,591	)			—				(221,591	)			—				(221,591	)
Balance, June 30, 2025		10,000,000			$	10,000			101,435,000			$	101,435			$	1,330,820			$	(494,523	)		$	3,761			$	951,493			$	(6	)		$	951,487

		Preferred Stock							Common Stock							Additional Paid-in				Accumulated				Accumulated Other Comprehensive				Total Stockholders' Equity Attributable				Noncontrolling				Total Stockholders'
		Shares			Amount				Shares			Amount				Capital				Deficit				Income (Loss)				to Parent				Interest				Equity
Balance, December 31, 2024		10,000,000			$	10,000			100,690,000			$	100,690			$	(90,935	)		$	(178,971	)		$	3,409			$	(155,807	)		$	(5	)		$	(155,802	)
Common stock issued for cash		—				—			550,000				550				934,450				—				—				935,000				—				935,000
Common stock issued for related party debt		—				—			195,000				195				487,305				—				—				487,500				—				487,500
Currency translation		—				—			—				—				—				—				352				352				—				352
Net loss for six months ended June 30, 2025		—				—			—				—				—				(315,552	)			—								(1	)			(315,551	)
Balance, June 30, 2025		10,000,000			$	10,000			101,435,000			$	101,435			$	1,330,820			$	(494,523	)		$	3,761			$	951,493			$	(6	)		$	951,487

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

5 

UNIVERSAL TOKEN, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

		For the Six Months Ended June 30,
		2026				2025
Cash flows from operating activities:
Net loss		$	(36,361	)		$	(315,552	)
Adjustments to reconcile net loss to net cash used in operating activities:
Currency translation			—				352
Changes in operating assets and liabilities:
Other current assets			8,418				(2,583	)
Accounts payable and accrued expenses			(13,136	)			(4,123	)
Advances payable, related party			5,264				—
Net cash used in operating activities			(35,815	)			(321,906	)
Cash flows from investing activities:
Software development costs			(10,000	)			(500,000	)
Net cash used in investing activities			(10,000	)			(500,000	)
Cash flows from financing activities:
Common stock issued for cash			—				935,000
Loans from related party			44,000				—
Repayment of loans from related party			—				(162,726	)
Net cash provided by financing activities			44,000				772,274
Net change in cash			(1,815	)			(49,632	)
Cash, beginning of period			1,842				67,784
Cash, end of period		$	27			$	18,152
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest		$	—			$	—
Cash paid for taxes		$	—			$	—
NON-CASH FINANCING ACTIVITIES:
Common stock issued for related party debt		$	—			$	487,500

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

6 

UNIVERSAL TOKEN, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

The unaudited consolidated financial statements presented are those of Universal Token, Inc. and its wholly owned subsidiary United Heritage, Sociedad Anonmima De Capital Variable (“UHS”) , collectively, “Universal Token”, or the “Company”. During the year ended December 31, 2025, UHS disposed of its wholly owned subsidiary Universa Hub Africa (“UHA”). Universal Token was incorporated on August 31, 2021, under the laws of the State of Wyoming under the name Eco Bright Future, Inc., the name was changed to Universal Token, Inc. in October 2025. UHS was incorporated on July 12, 2023, under the laws of the country of El Salvador and UHA was incorporated on March 28, 2019, under the laws of the country of Tunisia.

The Company is an artificial intelligence and blockchain technology company that intends to utilize real world asset tokenization to create a virtual investment vehicle on the blockchain linked to tangible assets such as real estate, precious metals, art and collectibles. The Company intends to provide digital assets from El Salvador, tokenize assets and develop blockchain tools for entry to countries such as the United Arab Emirates.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include all accounts of the Company and its wholly owned subsidiaries. All inter-company accounts and transactions have been eliminated in consolidation. The accompanying unaudited interim consolidated financial statements of Universal Token have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited consolidated financial statements and notes thereto contained in Universal Token’s Annual Report on Form 10-K for the year ending December 31, 2025 filed with the SEC.

In the opinion of management, the accompanying unaudited interim consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, necessary to present fairly the financial position and the results of operations for the interim period presented herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year or for any future period. Notes to the financial statements which would substantially duplicate the disclosure contained in the audited consolidated financial statements for fiscal 2025 as reported in the Form 10-K have been omitted.

Cash Equivalents

Universal Token considers all highly liquid investments with maturities of three months or less when purchased to be cash equivalents.

Use of Estimates

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

Revenue Recognition Policy

Universal Token recognizes revenue in accordance with the provisions of Accounting Series Codification (“ASC”) 606, Revenue From Contracts With Customers (“ASC 606”), which provides guidance on the recognition, presentation, and disclosure of revenue in financial statements. ASC 606 outlines the basic criteria that must be met to recognize revenue and provides guidance for disclosure related to revenue recognition policies. In general, the Company recognizes revenue based on the allocation of the transaction price to each performance obligation as each performance obligation in a contract is satisfied.

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The Company intends to provide digital assets from El Salvador for sale, tokenize assets for sale and develop blockchain tools for sale that will provide entry to the market for countries such as Tunisia and United Arab Emirates. During 2026, the Company plans to enter into agreements in connection with its blockchain products in Indonesia, and United Arab Emirates. Revenue recognition for the sale of digital and tokenized assets will be based on the allocation of the transaction price to each performance obligation as each performance obligation in a contract is satisfied, title or access to digital assets are transferred and amounts are due are collected or collectible.

Universal Token did not recognize any revenue during the six months ended June 30, 2026 and 2025.

Accounts Receivable

Trade accounts receivable are recorded at invoiced amounts. Universal Token does not provide any unusual contractual trade terms, sales incentive programs or discounts. Allowances for doubtful accounts are established for estimated losses resulting from the inability of customers to make required payments. Allowances are determined based on a review of specific customer accounts where collection is doubtful, as well as an assessment of the collectability of total receivables. Receivables are written off against the allowance when it is determined that the amounts will not be recovered. Due to exceptional collections history, Universal Token has not had any bad debt write-offs and there were no allowances for doubtful accounts as of June 30, 2026 or December 31, 2025. There were no outstanding receivables as of June 30, 2026 or December 31, 2025.

Software Development Costs

In accordance with ASC 350-40, Internal Use Software, Universal Token capitalizes certain internal use software development costs associated with creating and enhancing internally developed software related to its platforms. Software development activities generally consist of three stages (i) the research and planning stage, (ii) the application and development stage, and (iii) the post-implementation stage. Costs incurred in the planning and post-implementation stages of software development, or other maintenance and development expenses that do not meet the qualification for capitalization are expensed as incurred. Costs incurred in the application and infrastructure development stage, including significant enhancements and upgrades, are capitalized. Capitalized costs include personnel and related employee benefits expenses for employees or consultants who are directly associated with and who devote time to software projects, and external direct costs of materials obtained in developing the software. These software development costs, when placed in service, will be amortized on a straight-line basis over the estimated useful life upon initial release of the software or additional features. See Note 2 for further details.

Stock-Based Compensation

Universal Token records stock-based compensation using the fair value method. Equity instruments issued to employees and the cost of the services received as consideration are accounted for in accordance with ASC 718, Stock Compensation and are measured and recognized based on the fair value of the equity instruments issued. All transactions with non-employees in which goods or services are the consideration received for the issuance of equity instruments are accounted for in accordance with ASC 515, Equity-Based Payments to Non-Employees, based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. There were no outstanding stock-based compensation plans or awards issued as of June 30, 2026 and December 31, 2025.

Fair Value of Financial Instruments 

ASC 820, Fair Value Measurements (“ASC 820”) and ASC 825, Financial Instruments (“ASC 825”), requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. It establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument's categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. It prioritizes the inputs into three levels that may be used to measure fair value:

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Level 1 - Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2 - Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 3 - Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

The carrying values of cash, other current assets, property, accounts payable and accrued expenses approximate fair value. Pursuant to ASC 820 and 825, the fair value of cash is determined based on "Level 1" inputs, which consist of quoted prices in active markets for identical assets.

New Accounting Pronouncements

Universal Token has implemented all new accounting pronouncements that are in effect and that may impact its consolidated financial statements. The Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its consolidated financial position or results of operations.

Basic and Diluted Loss Per Share

Universal Token presents basic earnings per share (EPS) on the face of the statements of operation. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period including convertible debt, stock options, and warrants, using the treasury stock method, and convertible debt instrument, using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive.

The calculation of basic and diluted net loss per share is as follows:

Schedule of antidilutive securities excluded from computation of earnings per share
		For the Three Months Ended June 30,								For the Six Months Ended June 30,
		2026				2025				2026				2025
Basic Loss Per Share:
Numerator:
Net loss		$	(18,636	)		$	(221,591	)		$	(36,361	)		$	(315,552	)
Denominator:
Weighted average common shares outstanding:
Basic			101,561,000				101,264,386				101,561,000				101,224,227
Diluted			101,561,000				101,264,386				101,561,000				101,224,227
Net income (loss) per common share:
Basic		$	(0.00	)		$	(0.00	)		$	(0.00	)		$	(0.00	)
Diluted		$	(0.00	)		$	(0.00	)		$	(0.00	)		$	(0.00	)

9 

Income Taxes

Universal Token records income taxes under the asset and liability method, whereby deferred tax assets and liabilities are recognized based on the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and attributable to operating loss and tax credit carryforwards. Accounting standards regarding income taxes requires a reduction of the carrying amounts of deferred tax assets by a valuation allowance, if based on the available evidence, it is more likely than not that such assets will not be realized. Accordingly, the need to establish valuation allowances for deferred tax assets is assessed at each reporting period based on a “more likely than not” realization threshold. This assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of statutory carryforward periods, the Company’s experience with operating loss and tax credit carryforwards not expiring unused, and tax planning alternatives.

Significant judgment is required in evaluating the Company’s tax positions and determining its provision for income taxes. During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. Accounting standards regarding uncertainty in income taxes provides a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more than 50% likely, based solely on the technical merits, of being sustained on examinations. Universal Token considers many factors when evaluating and estimating its tax positions and tax benefits, which may require periodic adjustments and which may not accurately anticipate actual outcomes.

NOTE 2 - SOFTWARE DEVELOPMENT COSTS

The Company is developing an open-source platform and developer infrastructure to enable access to a global economy using real-world asset tokenization built on a proprietary blockchain. Research and planning phase costs are expensed as incurred. Costs incurred in the application and infrastructure development stage, including significant enhancements and upgrades, are capitalized. These costs to date have only included external consultants, but in the future could include Company personnel and related employee benefits expenses for employees who are directly associated with and who devote time to software projects and external direct costs of materials obtained in developing the software.

Universal Token incurred and capitalized software development costs of $10,000 and $500,000 during the six months ended June 30, 2026 and 2025, respectively. Total capitalized software development costs totaled $1,143,500 and $1,133,500 as of June 30, 2026 and December 31, 2025, respectively. Upon completion, the Company will amortize its software development costs on a straight-line basis over the estimated useful life.

NOTE 3 - RELATED PARTY TRANSACTIONS

During the six months ended June 30, 2026, the Company borrowed a total of $44,000 in loans from a significant shareholder and director of the Company. The loans are due December 31, 2028, unsecured and do not bare interest. The balance of the loans was $44,000 and $0 as of June 30, 2026 and December 31, 2025, respectively.

During the six months ended June 30, 2026, a significant shareholder and director of the Company advanced a total of $5,264 for the payment of expenses. The advances are short-term, due on demand, are unsecured and do not bare interest. The balance of the advances was $5,264 and $0 as of June 30, 2026 and December 31, 2025, respectively.

NOTE 4 - GOING CONCERN

Universal Token's consolidated financial statements are prepared using Generally Accepted Accounting Principles applicable to a going concern that contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, Universal Token has recently accumulated losses since its inception and has had negative cash flows from operations, which raise substantial doubt about its ability to continue as a going concern. Management's plans with respect to alleviating the adverse financial conditions that caused management to express substantial doubt about Universal Token 's ability to continue as a going concern are as follows:

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The ability to continue Universal Token’s operations depends on its ability to generate and grow revenue and results of operations as well as our ability to access capital markets when necessary to accomplish strategic objectives. We expect to continue to incur losses for the immediate future and will need additional equity or debt financing until we can achieve profitability and positive cash flows from operating activities. Our future capital requirements for operations will depend on many factors, including the ability to generate revenues and obtain capital.

There can be no assurance that Universal Token will be able to achieve its business plans, raise any more required capital or secure the financing necessary to achieve its current operating plan. The ability of Universal Token to continue as a going concern is dependent upon its ability to successfully accomplish the plan described in the preceding paragraph and eventually attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

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

FORWARD-LOOKING STATEMENTS AND FACTORS THAT MAY AFFECT FUTURE RESULTS

This Quarterly Report on Form 10-Q contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they do not materialize or prove correct, could cause our results to differ materially from those expressed or implied by such forward-looking statements. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including, but not limited to, statements concerning: our plans, strategies and objectives for future operations; new products or developments; future economic conditions, performance or outlook; the outcome of contingencies; expected cash flows or capital expenditures; our beliefs or expectations; activities, events or developments that we intend, expect, project, believe or anticipate will or may occur in the future; and assumptions underlying any of the foregoing. Forward-looking statements may be identified by their use of forward-looking terminology, such as “believes,” “expects,” “may,” “should,” “would,” “will,” “intends,” “plans,” “estimates,” “anticipates,” “projects” and similar words or expressions. You should not place undue reliance on these forward-looking statements, which reflect our management’s opinions only as of the date of the filing of this Quarterly Report on Form 10-Q and are not guarantees of future performance or actual results.

Overview

The Company is an artificial intelligence and blockchain technology company that intends to utilize real world asset tokenization to create a virtual investment vehicle on the blockchain linked to tangible assets such as real estate, precious metals, art and collectibles. The Company intends to provide digital assets from El Salvador, tokenize assets and develop blockchain tools for entry to countries such as the United Arab Emirates.

Going Concern

At June 30, 2026, we had $2,697 in current assets, $1,151,003 in total assets, $22,128 in current liabilities, $44,000 in non-current liabilities, $66,128 in total liabilities and a $571,580 accumulated deficit. Our current liquidity resources are not sufficient to fund the anticipated level of operations for at least the next 12 months from the date these consolidated financial statements were issued. As a result, there is substantial doubt regarding the Company’ ability to continue as a going concern.

The ability to continue Universal Token’s operations depends on its ability to generate and grow revenue and results of operations as well as our ability to access capital markets when necessary to accomplish strategic objectives. We expect to continue to incur losses for the immediate future and will need additional equity or debt financing until we can achieve profitability and positive cash flows from operating activities. Our future capital requirements for operations will depend on many factors, including the ability to generate revenues and obtain capital.

There is no assurance that we will ever be profitable or that debt or equity financing will be available to us. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should we be unable to continue as a going concern. There is no assurance we will be successful in any of these goals.

Results of Operations

For the Three months ended June 30, 2026 and 2025

Revenues

We did not recognize any revenues during the three months ended June 30, 2026 and 2025.

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Operating Expenses

Operating expenses were $18,636 during the three months ended June 30, 2026, compared to $221,426 during the three months ended June 30, 2025. Operating expenses consisted of $13,990 and $193,085 in professional fees and $4,646 and $28,341 in general and administrative expenses during the three months ended June 30, 2026 and 2025, espectively. The $179,095 decrease in professional fees is the result of decreases in consulting, audit and legal fees from decreases operations and development activity. General and administrative expenses decreased $23,695 during the three months ended June 30, 2026 compared to the comparable 2025 period, also from decreased operations and development activity.

Other Income and Expenses

Total other expenses were $0 and $165 during the three months ended June 30, 2026 and 2025, respectively.

Net Income (Loss)

As a result of the above, we recognized net losses of $18,636 and $221,591 for the three months ended June 30, 2026 and 2025, respectively.

We anticipate losses from operations will increase during the next twelve months due to anticipated increased payroll expenses as we add necessary staff to continue planned operations and increases in legal and accounting expenses associated with maintaining a reporting company. We expect that we will continue to have net losses from operations for several years until revenues become sufficient to offset operating expenses.

For the Six months ended June 30, 2026 and 2025

Revenues

We did not recognize any revenues during the six months ended June 30, 2026 and 2025.

Operating Expenses

Operating expenses were $36,361 during the six months ended June 30, 2026, compared to $314,579 during the six months ended June 30, 2025. Operating expenses consisted of $25,989 and $281,420 in professional fees and $10,372 and $33,159 in general and administrative expenses during the six months ended June 30, 2026 and 2025, respectively. The $255,431 decrease in professional fees is the result of decreases in consulting, audit and legal fees from decreases operations and development activity. General and administrative expenses decreased $22,797 during the six months ended June 30, 2026 compared to the comparable 2025 period, also from decreased operations and development activity.

Other Income and Expenses

Total other expenses were $0 and $973 during the six months ended June 30, 2026 and 2025, respectively.

Net Loss

As a result of the above, we recognized net losses of $36,361 and $315,552 for the six months ended June 30, 2026 and 2025, respectively.

We anticipate losses from operations will increase during the next twelve months due to anticipated increased payroll expenses as we add necessary staff to continue planned operations and increases in legal and accounting expenses associated with maintaining a reporting company. We expect that we will continue to have net losses from operations for several years until revenues become sufficient to offset operating expenses.

Liquidity and Capital Resources of the Company

Total Assets

Total assets consisted of $2,697 and $12,930 of current assets and $1,148,306 and $1,138,306 in non-current assets as of June 30, 2026 and December 31, 2025.

13 

Current Assets

Current assets as of June 30, 2026 totaled $2,697, consisting of $27 in cash and prepaid assets of $2,670. Current assets as of December 31, 2025 totaled $12,930, consisting of $1,842 in cash and prepaid assets of $11,088.

Non-Current Assets

Non-current assets as of June 30, 2026 and December 31, 2025 totaled $1,148,306 and $1,138,306, respectively, consisting of $1,143,500 and $1,133,500 in software development costs and $4,806 and $4,806 in intangible assets, respectively.

Total Liabilities

Total liabilities consisted of $22,128 and $30,000 of current liabilities and $44,000 and $0 in non-current liabilities as of June 30, 2026 and December 31, 2025, respectively.

Current Liabilities

Total current liabilities as of June 30, 2026 and December 31, 2025 was $22,128 and $30,000 and consisted of accounts payable and accrued expenses totaling $16,894 and $30,000, respectively, and advances payable, related party totaling $5,264 and $0, respectively.

Non- Current Liabilities

Non-current liabilities as of June 30, 2026 and December 31, 2025 consisted of related party loans totaling $44,000 and $0, respectively.

Net Cash Used in Operating Activities

During the six months ended June 30, 2026, our operating activities used net cash of $35,815. Uses of cash during the six months ended June 30, 2026 are mainly due to the $36,361 net loss, partially offset by $546 in net changes in operating assets and liabilities.

During the six months ended June 30, 2025, our operating activities used net cash of $321,906. Uses of cash during the six months ended June 30, 2025 are mainly due to the $315,552 in net loss as well as $6,706 in net changes in operating assets and liabilities. Uses are partially offset by $352 in non-cash currency translation.

Net Cash Used in Investing Activities

During the six months ended June 30, 2026 and 2025, we used $10,000 and $500,000 in cash investing activities, respectively, all from software development costs.

Net Cash Provided by Financing Activities

During the six months ended June 30, 2026, we received $44,000 in related party loans.

During the six months ended June 30, 2025, we received $935,000 from the sale of common stock and repaid $162,726 in related party advances.

At June 30, 2026 and December 31, 2025, we had working capital deficits of $19,431 and 17,070, respectively.

Off-Balance Sheet Arrangements

We had no off-balance sheet arrangements of any kind as of June 30, 2026.

14 

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. We continuously evaluate our critical accounting policies and estimates. We base our estimates on historical experience and on various assumptions that we believe 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. Actual results may differ materially from these estimates under different assumptions or conditions.

We believe the following critical accounting policies are important to the portrayal of our financial condition and results of operations and require our management’s subjective or complex judgment because of the sensitivity of the methods, assumptions and estimates used in the preparation of our financial statements.

Revenue Recognition Policy

Universal Token recognizes revenue in accordance with the provisions of Accounting Series Codification (“ASC”) 606, Revenue From Contracts With Customers (“ASC 606”), which provides guidance on the recognition, presentation, and disclosure of revenue in financial statements. ASC 606 outlines the basic criteria that must be met to recognize revenue and provides guidance for disclosure related to revenue recognition policies. In general, the Company recognizes revenue based on the allocation of the transaction price to each performance obligation as each performance obligation in a contract is satisfied.

The Company intends to provide digital assets from El Salvador for sale, tokenize assets for sale and develop blockchain tools for sale that will provide entry to the market for countries such as Tunisia and United Arab Emirates. During 2025, the Company plans to enter into agreements in connection with its blockchain products in Indonesia. Revenue recognition for the sale of digital and tokenized assets will be based on the allocation of the transaction price to each performance obligation as each performance obligation in a contract is satisfied, title or access to digital assets are transferred and amounts are due are collected or collectible.

Accounts Receivable

Trade accounts receivable are recorded at invoiced amounts. Universal Token does not provide any unusual contractual trade terms, sales incentive programs or discounts. Allowances for doubtful accounts are established for estimated losses resulting from the inability of customers to make required payments. Allowances are determined based on a review of specific customer accounts where collection is doubtful, as well as an assessment of the collectability of total receivables. Receivables are written off against the allowance when it is determined that the amounts will not be recovered.

Software Development Costs

In accordance with ASC 350-40, Internal Use Software, Universal Token capitalizes certain internal use software development costs associated with creating and enhancing internally developed software related to its platforms. Software development activities generally consist of three stages (i) the research and planning stage, (ii) the application and development stage, and (iii) the post-implementation stage. Costs incurred in the planning and post-implementation stages of software development, or other maintenance and development expenses that do not meet the qualification for capitalization are expensed as incurred. Costs incurred in the application and infrastructure development stage, including significant enhancements and upgrades, are capitalized. Capitalized costs include personnel and related employee benefits expenses for employees or consultants who are directly associated with and who devote time to software projects, and external direct costs of materials obtained in developing the software. Software development costs, when placed in service, are amortized on a straight-line basis over their estimated useful life upon initial release of the software or additional features.

15 

Income Tax

We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act”) that are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act, is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial and Accounting Officer, as appropriate to allow timely decisions regarding required disclosure.

We carried out an evaluation under the supervision and with the participation of management, including our Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2026, the end of the period covered by this report. Based on that evaluation, our Principal Executive Officer and Principal Financial and Accounting Officer have concluded that our disclosure controls and procedures were not effective as of June 30, 2026 due to the material weakness in our internal controls over financial reporting, including our failure to design and maintain formal accounting policies, processes, and controls to analyze, and account for complex transactions as well as a need for additional accounting personnel who have the requisite experience in SEC reporting regulation.

Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, our principal executive officer and principal financial officer and effected by the Board, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP and includes those policies and procedures that:

	●	Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;
	●	Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
	●	Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.

Because of inherent limitations, our internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

16 

Changes in Internal Control over Financial Reporting

There were no changes in our internal controls over financial reporting during the first half of 2025, which were identified in connection with management’s evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the Exchange Act, which have materially affected, or are reasonable likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors

For information regarding risk factors, see “Part I. Item 1A. Risk Factors,” in our Annual Report on Form 10-K for the year ended December 31, 2025.

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

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

N/A

Item 5. Other Information

None.

17 

Item 6. Exhibits

EXHIBIT NO.		DESCRIPTION
31		CERTIFICATION OF PRINCIPAL EXECUTIVE AND FINANCIAL OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002.
32		CERTIFICATION OF PRINCIPAL EXECUTIVE AND FINANCIAL OFFICER PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002.
101.INS		Inline XBRL Instance Document
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

18 

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

	UNIVERSAL TOKEN INC.
	By:	/s/ George Athanasiadis
		Name:	George Athanasiadis
		Title:	Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature		Title		Date
/s/ Alexander Borodich		Chairman of the Board of Directors		August 11, 2026
Alexander Borodich
/s/ George Athanasiadis		Chief Executive Officer, President, Secretary and Director (Principal Executive Officer and Principal Financial and Accounting Officer)		August 11, 2026
George Athanasiadis

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