Form 10-Q Electronic Servitor Publ For: Mar 31
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
Commission file number:
(Exact name of registrant as specified in its charter)
| (State or Other Jurisdiction of Incorporation or Organization) |
(I.R.S. Employer Identification No.) | |
|
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| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including
area code:
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days).
Yes ¨
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 ¨
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 | ¨ |
| x | Smaller Reporting Company | ||
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(1) of the Exchange Act. ¨
Indicate by checkmark whether the registrant is
a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨
Securities registered pursuant to Section 12(b) of the Act: None
As of June 17, 2026, the Company had shares of its common stock, par value $.0001 per share, issued and outstanding.
TABLE OF CONTENTS
| PART I | ||
| Item 1. | Condensed Unaudited Financial Statements | 3 |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 16 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 18 |
| Item 4. | Controls and Procedures | 18 |
| PART II | ||
| Item 1. | Legal Proceedings | 19 |
| Item 1A. | Risk Factors | 19 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 19 |
| Item 3. | Defaults Upon Senior Securities | 19 |
| Item 4. | Mining Safety Disclosures | 19 |
| Item 5. | Other Information | 19 |
| Item 6. | Exhibits | 19 |
| Signatures | 20 |
| 2 |
PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ELECTRONIC SERVITOR PUBLICATION NETWORK, INC.
INDEX TO FINANCIAL STATEMENTS
| 3 |
ELECTRONIC SERVITOR PUBLICATION NETWORK, INC.
CONDENSED BALANCE SHEETS
| March 31, 2025 | December 31, 2024 | |||||||
| (Unaudited) | (Audited) | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | $ | ||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accruals | $ | $ | ||||||
| Loans payable | ||||||||
| Note payable | ||||||||
| Due to a related party | ||||||||
| Total current liabilities | ||||||||
| Commitments and contingencies | ||||||||
| Stockholders’ Deficit: | ||||||||
| Preferred stock, $ par value shares authorized; shares issued and outstanding | ||||||||
| Series A Preferred stock, $ par value shares authorized; shares issued and outstanding | ||||||||
| Common Stock, $ par value, shares authorized; and shares issued and outstanding, respectively. | ||||||||
| Additional paid in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Stockholders’ deficit | ( | ) | ( | ) | ||||
| Total Liabilities and Stockholders’ Deficit | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
| 4 |
ELECTRONIC SERVITOR PUBLICATION NETWORK, INC.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
| For the Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Revenue | $ | $ | ||||||
| Operating expenses: | ||||||||
| General and administrative | ||||||||
| Professional fees | ||||||||
| Stock based compensation | ||||||||
| Total operating expenses | ||||||||
| Loss from operations | ( | ) | ( | ) | ||||
| Other expense: | ||||||||
| Interest expense | ( | ) | ( | ) | ||||
| Total other expense | ( | ) | ( | ) | ||||
| Loss before provision for income taxes | ( | ) | ( | ) | ||||
| Provision for income taxes | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Loss per share, basic and diluted | $ | ) | $ | ) | ||||
| Weighted average shares outstanding, basic and diluted | ||||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
| 5 |
ELECTRONIC SERVITOR PUBLICATION NETWORK, INC.
CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
For the Three Months Ended March 31, 2025 and 2024
(Unaudited)
| Additional | Total | |||||||||||||||||||||||||||
| Preferred Stock | Common Stock | Paid-in | Accumulated | Stockholders' | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Stock option expense | – | – | ||||||||||||||||||||||||||
| Shares issued for services | – | |||||||||||||||||||||||||||
| Net loss | – | – | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance, March 31, 2025 | $ | 52,928,001 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||
| Additional | Total | |||||||||||||||||||||||||||
| Preferred Stock | Common Stock | Paid-in | Accumulated | Stockholders' | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||
| Balance, December 31, 2023 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Stock option expense | – | – | ||||||||||||||||||||||||||
| Shares issued for services | – | |||||||||||||||||||||||||||
| Net loss | – | – | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance, March 31, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
| 6 |
ELECTRONIC SERVITOR PUBLICATION NETWORK, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
| For the Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used by operating activities: | ||||||||
| Stock based compensation | ||||||||
| Common stock issued for services | ||||||||
| Changes in Operating Assets and Liabilities: | ||||||||
| Prepaids | ( | ) | ||||||
| Accounts payable and accruals | ||||||||
| Net cash used by operating activities | ( | ) | ( | ) | ||||
| Cash flows from Investing activities: | ||||||||
| Cash flows from Financing activities: | ||||||||
| Repayment of loans - related party | ( | ) | ||||||
| Net cash used by financing activities | ( | ) | ||||||
| Net change in cash | ( | ) | ( | ) | ||||
| Cash, beginning of period | ||||||||
| Cash, end of period | $ | $ | ||||||
| Cash Paid For: | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Cash paid for taxes | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
| 7 |
ELECTRONIC SERVITOR PUBLICATION NETWORK, INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2025
NOTE 1 – DESCRIPTION OF BUSINESS AND HISTORY
Description of business
The Company was originally incorporated on May 17, 2017, under the laws of the State of Delaware to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions. The Company’s common stock is listed on the OTC Expert Market under the stock ticker symbol “XESP.” The Company’s corporate office is located at 107 Chestnut St., Suite 100, Stillwater, MN 55082-5542. The URL of the Company’s website is https://www.electronicservitor.com.
The Company is a digital engagement company providing growth for B2B companies through its digital activation and engagement solutions for multiple verticals. The Company’s managed service product is powered by a sophisticated tech stack — the Digital Engagement Engine. The Company’s technology provides intelligent interaction management, dynamic content provisioning, and a logic-driven workflow that creates relevant digital experiences that accelerate an audience from awareness to action — driving growth for client companies.
On December 22, 2023, the Company entered into the following transactions:
| 1) | An Asset Purchase Agreement (the “Asset Purchase Agreement”) with Phitech Management, LLC, a limited liability company organized under the laws of Minnesota (“Phitech”); and | |
| 2) | An Agreement and Plan of Merger (the “Merger Agreement”) with Pointward Inc., a corporation organized under the laws of Delaware (“Pointward”). |
Pursuant to the terms of the Asset Purchase Agreement,
the Company has agreed to pay an aggregate purchase price of $
Pursuant to the terms of the Merger Agreement, the Company shall be the surviving corporation and all the outstanding capital stock of Pointward was converted into shares of the Company’s common stock. Accordingly, the Company issued shares of the Company’s common stock to the former holders of Pointward and the former stockholders of Pointward (not including any ownership of the Company’s capital stock held by such persons prior to the Merger) hold approximately 72% of the outstanding shares of the Company’s capital stock.
As a result of the transactions described above, the Company is strategically aligning its business to support its mission in becoming the premier content management and distribution platform for content providers in the global markets through the Company’s continued development and acquisitions of publication and monetization products, services, and technologies.
| 8 |
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The Company’s unaudited condensed financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”), and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and reflect all adjustments, consisting of normal recurring adjustments, which management believes are necessary to fairly present the financial position, results of operations and cash flows of the Company as of and for the three month period ended March 31, 2025 and not necessarily indicative of the results to be expected for the full year ending December 31, 2025. These unaudited condensed financial statements should be read in conjunction with the financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Concentrations of Credit Risk
The Company maintains its cash in bank deposit accounts, the balances of which at times may exceed federally insured limits. The Company continually monitors its banking relationships and consequently has not experienced any losses in its accounts. At times, such deposits may be in excess of the Federal Deposit Insurance Corporation insurable amount (“FDIC”).
Cash Equivalents
The Company considers all highly liquid investments
with a maturity of three months or less when purchased to be cash equivalents. There were
Under ASC 260 “Earnings Per Share,” the Company presents basic and diluted earnings (loss) per share (“EPS”) amounts on the face of the statements of operations. Basic EPS is computed by dividing income (loss) available to common stockholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) during the period. Shares issued during the period and shares reacquired during the period are weighted for the portion of the period that they were outstanding. The computation of diluted EPS is similar to the computation of basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued. As of March 31, 2025, there are potentially dilutive shares from warrants and potentially dilutive shares from vested options. As of March 31, 2024, there are potentially dilutive shares from warrants and 7,755,000 potentially dilutive shares from vested options. Additionally, diluted amounts are not presented when the effect of the computations is anti-dilutive due to the losses incurred. Accordingly, there is no difference in the amounts presented for basic and diluted loss per share.
| 9 |
Revenue Recognition
The Company recognizes revenue under ASC 606, “Revenue from Contracts with Customers” (“ASC 606”). The Company determines revenue recognition through the following steps:
| · | Identification of a contract with a customer; | |
| · | Identification of the performance obligations in the contract; | |
| · | Determination of the transaction price; | |
| · | Allocation of the transaction price to the performance obligations in the contract; and | |
| · | Recognition of revenue when or as the performance obligations are satisfied. |
Revenue is recognized when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. As a practical expedient, the Company does not adjust the transaction price for the effects of a significant financing component if, at contract inception, the period between customer payment and the transfer of goods or services is expected to be one year or less.
Stock-based Compensation
In June 2018, the FASB issued ASU 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. ASU 2018-07 allows companies to account for nonemployee awards in the same manner as employee awards. The guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within those annual periods. We adopted this ASU on January 1, 2019.
Fair value of financial instruments
The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America under U.S. GAAP and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:
| Level 1: | Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. |
| Level 2: | Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. |
| Level 3: | Pricing inputs that are generally unobservable inputs and not corroborated by market data. |
The carrying amount of the Company’s financial assets and liabilities, such as cash, accounts payable, accrued expenses and loans payable approximate their fair value because of the short maturity of those instruments. The Company had no financial instruments at March 31, 2025 and December 31, 2024 that required fair value hierarchy disclosure.
| 10 |
Income Taxes
Income taxes are provided for the tax effects of the transactions reported in the financial statements and consist of taxes currently due plus deferred taxes related primarily to tax net operating loss carryforwards. The deferred tax assets and liabilities represent the future tax return consequences of these differences, which will either be taxable or deductible when assets and liabilities are recovered or settled, as well as operating loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established against deferred tax assets when in the judgment of management, it is more likely than not that such deferred tax assets will not become available. Because the judgment about the level of future taxable income is dependent to a great extent on matters that may, at least in part, be beyond the Company’s control, it is at least reasonably possible that management’s judgment about the need for a valuation allowance for deferred taxes could change in the near term.
Tax benefits are recognized only for tax positions
that are more likely than not to be sustained upon examination by tax authorities. The amount recognized is measured as the largest amount
of benefit that is greater than 50 percent likely to be realized upon settlement. A liability for “unrecognized tax benefits”
is recorded for any tax benefits claimed in the Company’s tax returns that do not meet these recognition and measurement standards.
As of March 31, 2025 and December 31, 2024,
Operating Segments
Operating segments are defined as components of an entity for which discrete financial information is available that is regularly reviewed by the Chief Operating Decision Maker (“CODM”), or decision maker group, in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s CODM is its Chief Executive Officer. The Company has operating segment as of March 31, 2025.
Recently issued accounting pronouncements
The Company periodically reviews new accounting standards that are issued. Although some of these accounting standards may apply to the Company, the Company has not identified any new standards that it believes merit further discussion or change to adopted policies, and the Company expects that none will have a significant impact on its unaudited condensed financial statements.
NOTE 3 – GOING CONCERN
The accompanying unaudited condensed financial
statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities
in the normal course of business. As of March 31, 2025, the Company had an accumulated deficit of $
The Company's continuation as a going concern is dependent upon its ability to generate sufficient revenues, obtain additional financing, and ultimately achieve profitable operations and positive cash flows. Management intends to fund operations through revenue growth, equity financings, and, if necessary, advances from officers, directors, or principal stockholders. However, there can be no assurance that the Company will be successful in generating sufficient revenues, obtaining additional capital, or achieving profitable operations.
The accompanying unaudited condensed financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
| 11 |
NOTE 4 – NOTES PAYABLE
On May 19, 2022, the Company issued a note payable
for $
On May 20, 2022, the Company issued a note payable
for $
On June 10, 2022, the Company issued a note payable
to a third party for $
On October 18, 2022, the Company issued a note
payable for $
On January 6, 2023, the Company issued a note
payable for $
On March 13, 2023, the Company issued a note payable
for $
On May 11, 2023, the Company issued a note payable
to a third party for $
On May 15, 2023, the Company issued a note payable
for $
On September 1, 2023, the Company issued a note
payable to a third party for $
On September 6, 2023, the Company issued a note
payable for $
On September 15, 2023, the Company issued a note
payable for $
NOTE 5 – RELATED PARTY TRANSACTIONS
Forty 7 Select Holdings LLC (“Forty 7”)
has advanced the Company funds, to pay for general operating expenses. Forty 7 is controlled by Greg Shockey, an existing shareholder
of the Company. As of March 31, 2025 and December 31, 2024, the balance due to Forty 7 is $
On January 10, 2023, the Company issued a note
payable for $
Refer to Note 7 for options to purchase shares of common stock issued to related parties.
| 12 |
NOTE 6 – PREFERRED STOCK
The Company has designated shares of Series A Preferred Stock. The shares of Series A Preferred Stock have a par value of $ per share. The Series A Preferred Shares do not have a dividend rate or liquidation preference and are not convertible into shares of common stock. Series A Preferred Stock, voting together as a class, have the right to vote 60% of the Company’s voting shares on any and all shareholder matters (the “Majority Voting Rights”). Additionally, the Company shall not adopt any amendments to the Company’s Bylaws, Articles of Incorporation, as amended, make any changes to the Certificate of Designations establishing the Series A Preferred Stock, or effect any reclassification of the Series A Preferred Stock, without the affirmative vote of at least a majority of the outstanding shares of Series A Preferred Stock. However, the Company may, by any means authorized by law and without any vote of the holders of shares of Series A Preferred Stock, make technical, corrective, administrative or similar changes to such Certificate of Designations that do not, individually or in the aggregate, adversely affect the rights or preferences of the holders of shares of Series A Preferred Stock. Other than the Majority Voting Rights, the Series A Preferred Stock does not have any other dividend, liquidation, conversion, or redemption rights, whatsoever.
NOTE 7 – OPTIONS
A summary of the status of the Company’s outstanding stock options and changes during the year is presented below:
| Number of Options | Weighted Average Exercise Price | Weighted Average Remaining Contract Term | Aggregate Intrinsic Value | |||||||||||||
| Outstanding at December 31, 2023 | $ | $ | ||||||||||||||
| Granted | $ | – | – | $ | – | |||||||||||
| Cancelled | ( | ) | $ | – | – | $ | – | |||||||||
| Exercised | $ | – | – | $ | – | |||||||||||
| Outstanding at December 31, 2024 | $ | – | $ | |||||||||||||
| Granted | $ | – | – | $ | – | |||||||||||
| Cancelled | $ | – | – | $ | – | |||||||||||
| Exercised | $ | – | – | $ | – | |||||||||||
| Outstanding at March 31, 2025 | $ | – | $ | |||||||||||||
| Exercisable at March 31, 2025 | $ | $ | ||||||||||||||
| Range of Exercise Prices |
Number Outstanding 3/31/2025 |
Weighted Average Remaining Contractual Life |
Weighted Average Exercise Price | |||
| $ – $ | years | $ |
| 13 |
NOTE 8 – WARRANTS
A summary of the status of the Company’s outstanding stock warrants and changes during the year is presented below:
| Number of Warrants | Weighted Average Exercise Price | Weighted Average Remaining Contract Term | Aggregate Intrinsic Value | |||||||||||||
| Outstanding at December 31, 2023 | $ | $ | ||||||||||||||
| Granted | $ | – | $ | – | ||||||||||||
| Expired | – | $ | – | – | $ | – | ||||||||||
| Exercised | – | $ | – | – | $ | – | ||||||||||
| Outstanding at December 31, 2024 | $ | $ | ||||||||||||||
| Granted | $ | – | $ | – | ||||||||||||
| Expired | – | $ | – | – | $ | – | ||||||||||
| Exercised | – | $ | – | – | $ | – | ||||||||||
| Outstanding at March 31, 2025 | $ | $ | ||||||||||||||
NOTE 9 – INCOME TAX
The Company accounts for income taxes under ASC 740, Income Taxes. Deferred tax assets and liabilities are recognized for temporary differences between the financial reporting basis and tax basis of assets and liabilities and for net operating loss carryforwards. Deferred tax assets are reduced by a valuation allowance when management determines it is more likely than not that some or all of the deferred tax assets will not be realized.
For the three months ended March 31, 2025 and
2024, the Company incurred losses before income taxes of $
The effective income tax rate differs from the statutory federal income tax rate primarily due to the valuation allowance recorded against deferred tax assets.
| Schedule of income tax reconciliation | ||||||||||||||||
| March 31, 2025 | Rate | March 31, 2024 | Rate | |||||||||||||
| Loss before income taxes | $ | ( | ) | ( | ) | |||||||||||
| Expected federal tax benefit at 21% | $ | |||||||||||||||
| State tax benefit, net of federal effect | ||||||||||||||||
| Increase in valuation allowance | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income tax provision | $ | $ | ||||||||||||||
| 14 |
At March 31, 2025, the Company had estimated federal net operating loss carryforwards of approximately $3.8 million available to offset future taxable income. Utilization of these carryforwards may be limited under Section 382 of the Internal Revenue Code in the event of certain ownership changes
The Company recognizes interest and penalties related to uncertain tax positions as a component of income tax expense. As of March 31, 2025 and December 31, 2024, the Company had no unrecognized tax benefits and had not accrued any interest or penalties related to uncertain tax positions. Tax years remain subject to examination by taxing authorities for all years since inception.
NOTE 10 – SUBSEQUENT EVENTS
In accordance with ASC 855-10, Subsequent Events, management has performed an evaluation of subsequent events through the date that the unaudited condensed financial statements were issued and has determined that there are no material subsequent events to disclose in these unaudited condensed financial statements.
| 15 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following information should be read in conjunction with our financial statements and related notes thereto included in Part I, Item 1, above.
Forward Looking Statements
Certain matters discussed herein are forward-looking statements. Such forward-looking statements contained in this Form 10-Q involve risks and uncertainties, including statements as to:
| · | our future strategic plans | |
| · | our future operating results; | |
| · | our business prospects; | |
| · | our contractual arrangements and relationships with third parties; | |
| · | the dependence of our future success on the general economy; | |
| · | our possible future financings; and | |
| · | the adequacy of our cash resources and working capital. |
These forward-looking statements can generally be identified as such because the context of the statement will include words such as we “believe,” “anticipate,” “expect,” “estimate” or words of similar meaning. Similarly, statements that describe our future plans, objectives or goals are also forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties which are described in close proximity to such statements and which could cause actual results to differ materially from those anticipated. Shareholders, potential investors and other readers are urged to consider these factors in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included herein are only made as of the date of this Form 10-Q, and we undertake no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.
Executive Overview
Electronic Servitor Publication Network Inc. was incorporated on May 17, 2017 under the laws of the State of Delaware to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions. The Company is a digital engagement company providing growth for B2B companies through its digital activation and engagement solutions for multiple verticals. The Company’s managed service product is powered by a sophisticated tech stack — the Digital Engagement Engine. The Company’s technology provides intelligent interaction management, dynamic content provisioning, and a logic-driven workflow that creates relevant digital experiences that accelerate an audience from awareness to action — driving growth for client companies.
The Company’s corporate offices are located at 107 Chestnut Street East, Ste. 100, Stillwater, MN 55082-5524. The Company’s website is www.electronicservitor.com. The Company’s telephone number is (833) 991-0800.
The Company’s common stock is listed on the OTC Expert Market under the stock ticker symbol XESP.
The Company anticipates that it would need approximately $1,500,000 over the next 12 months to continue as a going concern, satisfy its capital commitments and continue its operations in accordance with its current business plan. In addition to revenues generated from sales, the Chief Executive Officer and several shareholders may fund the Company’s operations, if needed, during the next 12 months or until the Company can generate an ongoing source of capital sufficient to independently continue its operations.
For the period ended December 31, 2024, the Company’s independent auditors issued a report raising substantial doubt about the Company’s ability to continue as a going concern. The continuation of the Company as a going concern is dependent upon financial support from its principal stockholders, its ability to obtain necessary equity financing, or its ability to sell its services to generate consistent profitability.
| 16 |
Results of Operation for the Three Months Ended March 31, 2025 and 2024
For the three months ended March 31, 2025, the Company had revenues of nil. In comparison, for the three months ended March 31, 2024, the Company had revenues of $50,000.
Operating expenses were $164,228 for the three months ended March 31, 2025, consisting of $24,031 of general and administrative expense, $350 of professional fees, and $139,847 of non-cash stock-based compensation expense for the issuance of warrants. In comparison, for the three months ended March 31, 2024, operating expenses were $216,817, consisting of $30,970 of general and administrative expense, $46,000 of professional fees, and $139,847 of non-cash stock-based compensation expense for the issuance of warrants.
For the three months ended March 31, 2025, the Company posted a net loss of $170,479, compared to a net loss of $173,068 for three months ended March 31, 2024.
During the three months ended March 31, 2025, the Company used $3,381 of cash in operating activities. The Company did not use or generate any cash in financing or investing activities.
Liquidity and Capital Resources
The accompanying unaudited condensed financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company generated revenues of nil during the three months ended March 31, 2025 and had a net loss of $170,479 for the three months ended March 31, 2025. The Company has an accumulated deficit of $7,999,678 as of March 31, 2025. The Company requires capital for its contemplated operational and marketing activities. Obtaining additional financing, through an additional capital raise, the successful development of the Company’s contemplated plan of operations, and its transition to the attainment of continued profitable operations are necessary for the Company to continue operations.
The Company used $3,381 of cash from operations for the three months ended March 31, 2025. Net cash used in financing and operating activities for the three months ended March 31, 2025 was nil.
As of March 31, 2025, the Company had $51,176 in cash.
Critical Accounting Estimates and Policies
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Note 2 to the Financial Statements describes the significant accounting policies and methods used in the preparation of the Financial Statements. Estimates are used for, but not limited to, contingencies and taxes. Actual results could differ materially from those estimates. The following critical accounting policies are impacted significantly by judgments, assumptions, and estimates used in the preparation of the Financial Statements.
We are subject to various loss contingencies arising in the ordinary course of business. We consider the likelihood of loss or impairment of an asset or the incurrence of a liability, as well as our ability to reasonably estimate the amount of loss in determining loss contingencies. An estimated loss contingency is accrued when management concludes that it is probable that an asset has been impaired, or a liability has been incurred and the amount of the loss can be reasonably estimated. We regularly evaluate current information available to us to determine whether such accruals should be adjusted.
| 17 |
Off-Balance Sheet Arrangements
We have not entered into any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources and would be considered material to investors.
Recent Accounting Pronouncements
The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable to smaller reporting companies.
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) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are designed to be effective in providing reasonable assurance that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission (the “SEC”), and that such information is accumulated and communicated to our management to allow timely decisions regarding required disclosure. Our Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, they concluded that our disclosure controls and procedures were not effective for the quarterly period ended March 31, 2025.
The following aspects of the Company were noted as potential material weaknesses:
| · | timely and accurate reconciliation of accounts | |
| · | lack of segregation of duties |
In designing and evaluating disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute assurance of achieving the desired objectives. Also, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs.
Changes in Internal Controls
Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that no change occurred in the Company’s internal controls over financial reporting during the quarter ended March 31, 2025, that has materially affected, or is reasonably likely to materially affect, the Company’s internal controls over financial reporting.
| 18 |
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Other than as previously disclosed, we know of no other material, existing or pending legal proceedings against the Company, nor is it involved as a plaintiff in any material proceeding or pending litigation during the three months period ending March 31, 2025. Other than as previously disclosed, we know of no other proceedings in which our directors, officers or any affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest during the three months period ending March 31, 2025.
ITEM 1A. RISK FACTORS
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and, as such, are not required to provide the information under this Item.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINING SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
During the quarter
ended March 31, 2025,
ITEM 6. EXHIBITS
| No. | Description | ||
| 31.1 | Chief Executive Officer Section 302 Certification | ||
| 31.2 | Chief Financial Officer Section 302 Certification | ||
| 32.1 | Section 906 Certification | ||
| 101.INS | XBRL Instance Document | ||
| 101.SCH | XBRL Taxonomy Extension Schema Document | ||
| 101.CAL | XBRL Taxonomy Calculation Linkbase Document | ||
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | ||
| 101.LAB | XBRL Taxonomy Label Linkbase Document | ||
| 101.PRE | XBRL Taxonomy Presentation Linkbase Document |
| 19 |
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| ELECTRONIC SERVITOR PUBLICATION NETWORK INC. | |
| Dated: June 17, 2026 |
By: /s/ Peter Hager Peter Hager Chief Executive Officer |
|
By: /s/ Thomas Spruce Thomas Spruce Chief Financial Officer |
| 20 |
ATTACHMENTS / EXHIBITS
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