UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-KT

For the fiscal year ended _____________

For the transition period from July 1, 2025 to December 31, 2025

Commission File Number 333-274532

2029 Century Park East, Suite 400

Los Angeles, CA 90067

(Address of principal executive offices, including ZIP code)

(310) 494-6620

(Registrant’s telephone number, including area code)

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Exchange Act: None

Securities registered pursuant to Section 12(g) of the Exchange Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐     No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐     No ☒

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 ☒     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 ☒     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.

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

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to § 240.10D-1(b). ☐

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

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of December 31, 2025, the last business day of the registrant’s most recently completed second fiscal quarter of the transition period, was approximately $4,113,000, based upon 9,140,312 shares held by non-affiliates and the closing price of $0.45 per share of the registrant’s common stock as quoted on the OTCQB on December 23, 2025, the last date prior to December 31, 2025 on which a trade was reported.

As of September 9, 2026, there were 34,564,312 shares of the registrant’s common stock issued and outstanding, par value $0.001 per share.

EXPLANATORY NOTE — CHANGE IN FISCAL YEAR

On June 25, 2026, the Board of Directors of Nexscient, Inc. (the “Company,” “we,” “us” or “our”) approved a change in the Company’s fiscal year end from June 30 to December 31. The Company reported that determination on a Current Report on Form 8-K filed under Item 5.03 on June 25, 2026.

In accordance with Rule 13a-10 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), this Transition Report on Form 10-KT (this “Transition Report”) covers the six-month transition period from July 1, 2025 to December 31, 2025 (the “Transition Period”). Because the Transition Period is six months or longer, Rule 13a-10 requires that the transition report be filed on the form appropriate for an annual report of the Company. Following the Transition Period, the Company’s fiscal year begins on January 1 and ends on December 31 of each year, and the Company’s first full fiscal year on the new basis is the twelve months ending December 31, 2026.

Rule 13a-10 provides that where the determination to change the fiscal closing date is made after the close of the transition period, the transition report is due within the period specified for an annual report measured from the date of that determination. Because the Board made its determination on June 25, 2026, the due date for this Transition Report is measured from that date.

This Transition Report presents:

The Transition Period covers six months, while the fiscal years ended June 30, 2025 and June 30, 2024 each cover twelve months. Accordingly, results for the Transition Period are not directly comparable to the results of those fiscal years and are not necessarily indicative of results that may be expected for any full fiscal year. Management’s discussion and analysis in Item 7 compares the six months ended December 31, 2025 to the comparable unaudited six months ended December 31, 2024.

The financial statements included in this Transition Report present the Company as it existed at December 31, 2025, prior to the acquisition of Crestview BPO Pte. Ltd. (now TaskAlpha Pte. Ltd.) and its subsidiary Flipside Digital Content Company, Inc. (“Flipside AI”) on April 1, 2026. That acquisition, the related financings and the other events that occurred between December 31, 2025 and the date of this Transition Report are described in Item 1, Item 7 and Note 10 to the financial statements. The Company’s consolidated results of operations and financial position after the acquisition are reported in its Quarterly Report on Form 10-Q for the quarter ended June 30, 2026, filed with the SEC on August 14, 2026.

Unless otherwise indicated or the context otherwise requires, references in this Transition Report to “fiscal 2025” and “fiscal 2024” mean the fiscal years ended June 30, 2025 and June 30, 2024, respectively, and references to the “Transition Period” mean the six months ended December 31, 2025.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain information included in this Transition Report on Form 10-KT and other filings of the registrant under the Securities Act of 1933, as amended (the “Securities Act”), and the Exchange Act, as well as information communicated orally or in writing between the dates of such filings, contains or may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Forward-looking statements in this Transition Report, including without limitation statements related to our plans, strategies, objectives, expectations, intentions and adequacy of resources, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks, trends and uncertainties that could cause actual results to differ materially from expected results. Among these risks, trends and uncertainties are the availability of working capital to fund our operations, our ability to continue as a going concern, the competitive market in which we operate, our ability to complete and integrate acquisitions, the efficient and uninterrupted operation of our computer and communications systems, our ability to generate a profit and execute our business plan, the retention of key personnel, our ability to protect and defend our intellectual property, the effects of governmental regulation, and other risks identified in the registrant’s filings with the Securities and Exchange Commission from time to time.

In some cases, forward-looking statements can be identified by terminology such as “may,” “will,” “should,” “could,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of such terms or other comparable terminology. Although the registrant believes that the expectations reflected in the forward-looking statements contained herein are reasonable, the registrant cannot guarantee future results, levels of activity, performance or achievements. Moreover, neither the registrant nor any other person assumes responsibility for the accuracy and completeness of such statements. The registrant is under no duty to update any of the forward-looking statements contained herein after the date of this Transition Report.

NEXSCIENT, INC.

FORM 10-KT

FOR THE TRANSITION PERIOD FROM JULY 1, 2025 TO DECEMBER 31, 2025

TABLE OF CONTENTS

PART I

Item 1. Business.

Company Overview

Nexscient, Inc. is the parent company of Flipside AI, a Philippine data engineering business that provides data curation, annotation and validation services to developers of artificial intelligence systems. Through Flipside AI, we perform 2D and 3D annotation, LiDAR and sensor fusion annotation, video and temporal annotation, Vision-Language-Action captioning and reasoning, and data collection for customers that consist principally of AI companies operating in the autonomous driving, robotics and geospatial sectors and that are located principally in the United States and Europe. For the quarter ended June 30, 2026, our first quarter of consolidated operations, we generated revenue of $1,110,112.

We acquired Flipside AI on April 1, 2026 through the purchase of 100% of the equity interests of Crestview BPO Pte. Ltd., a Singapore company subsequently renamed TaskAlpha Pte. Ltd. (“TaskAlpha”), which owns 100% of Flipside Digital Content Company, Inc. (“Flipside AI”), a corporation organized under the laws of the Republic of the Philippines and registered with the Philippine Economic Zone Authority. Before the acquisition, and throughout the Transition Period and the other periods covered by the financial statements in this Transition Report, we were a development stage enterprise with no revenue-generating operations. Our consolidated operations now consist principally of the operations of Flipside AI.

Our strategy is to build on the Flipside AI platform, which supplies the high-quality training data on which AI applications depend, and to expand through internal development and synergistic acquisitions of, and investments in, businesses and technologies in machine learning, artificial intelligence and enterprise AI.

Corporate Information

Nexscient, Inc. was incorporated in the State of Delaware on March 14, 2023. Effective for the transition period covered by this Transition Report, our fiscal year end is December 31. Prior to the change described in the Explanatory Note above, our fiscal year end was June 30. Our principal office is located at 2029 Century Park East, Suite 400, Los Angeles, CA 90067. Our telephone number is (310) 494-6620 and our e-mail contact is [email protected]. Our website can be viewed at nexscient.ai. Information contained on, or accessible through, our website is not incorporated by reference into and does not form a part of this Transition Report.

Our wholly owned subsidiaries are TaskAlpha Pte. Ltd., a Singapore private limited company, and Flipside Digital Content Company, Inc., a Philippine corporation wholly owned by TaskAlpha.

Recent Developments

The financial statements included in this Transition Report are as of and for periods ended on or before December 31, 2025. The following developments occurred after the end of the Transition Period and are also described in Note 10 to the financial statements.

Acquisition of TaskAlpha and Flipside AI

On January 13, 2026, the Company entered into a Stock Purchase Agreement (as amended on March 30, 2026, the “Purchase Agreement”) with Arcadia Data Pte. Ltd. (“Arcadia”), Crestview BPO Pte. Ltd., Flipside AI and the selling shareholders named therein. The acquisition closed on April 1, 2026. The consideration transferred, measured for accounting purposes, was $2,609,694, consisting of $600,000 in cash, a $450,000 non-interest-bearing seller convertible note issued to Arcadia (recorded at a present value of $379,694 using an imputed rate of 9%), and 6,520,000 shares of common stock valued at $1,630,000, or $0.25 per share. An additional 326,000 shares valued at $81,500 were issued to the business broker and expensed as a transaction cost. The seller convertible note is payable in three annual installments of $150,000 on April 1, 2027, 2028 and 2029 and is convertible into common stock at $0.75 per share. In the acquisition the Company also acquired an Advance Payable Note in the principal amount of $840,000 delivered by Anthony De Luna, the founder and Chief Executive Officer of Flipside AI, secured by 1,120,000 of the acquisition shares held in escrow. The acquisition was accounted for as a business combination under ASC 805 with Nexscient as the accounting acquirer, resulting in provisional goodwill of $2,583,253 and identifiable intangible assets of $200,000. The closing was reported on a Current Report on Form 8-K filed April 1, 2026, and the audited financial statements of the acquired business and the pro forma financial information required by Rule 3-05 and Article 11 of Regulation S-X were filed on a Current Report on Form 8-K/A.

Management and board changes

On November 5, 2025, Michael J. Portera resigned as Chief Financial Officer and Fred E. Tannous, our Chief Executive Officer, was appointed Interim Chief Financial Officer. Effective April 1, 2026, Anthony De Luna was appointed Chief Technology Officer of the Company and a member of the Board of Directors, and Eric Sherb was appointed Chief Financial Officer and principal financial and accounting officer, serving under a consulting agreement between the Company and EMS Consulting Services, Inc., an entity controlled by Mr. Sherb. Effective June 30, 2026, Tarek N. Shoufani resigned as Chief Operating Officer and continues to serve as a non-employee director. Effective July 1, 2026, Jaime Fanlo was appointed to the Board of Directors as an independent director.

Financings

During the six months ended June 30, 2026, the Company sold 4,800,000 shares of common stock in private placements at $0.25 per share for aggregate gross proceeds of $1,200,000. On April 6, 2026, Arcadia advanced $200,000 to TaskAlpha under an unsecured loan bearing interest at 12% per annum, which matured on July 6, 2026 and has been extended to October 6, 2026 on its existing terms.

Settlement of deferred officer compensation

On June 30, 2026, the Company issued 816,000 shares of common stock to two of its officers in settlement of $204,000 of deferred wages, and paid $43,500 of deferred wages in cash.

Software impairment

During the quarter ended June 30, 2026, the Company recorded an impairment charge of $135,000, writing off in full the software acquired in February 2025, because following the acquisition of Flipside AI the Company is no longer pursuing commercialization of that software.

Director compensation

On July 1, 2026, the Company entered into director agreements with its three non-employee directors, Shoufani, Manlunas and Fanlo, and granted each of them 250,000 performance restricted stock units that vest upon the Company’s market capitalization reaching specified thresholds.

Change in fiscal year

See “Explanatory Note — Change in Fiscal Year” above.

Our Business — Flipside AI

Following the acquisition on April 1, 2026, our operating business is Flipside AI, which provides data curation, annotation and validation services that AI developers use to train, test and validate machine learning models. Flipside AI performs its services from its facilities in Quezon City, Metro Manila, Philippines, under master services agreements with its customers, and is registered with the Philippine Economic Zone Authority. Prior to the acquisition, the Company had no revenue-generating operations, and none of the financial statements included in this Transition Report reflect the operations of Flipside AI.

Services

Flipside AI’s services consist of human-in-the-loop data engineering for AI systems, including:

Services are delivered as a single performance obligation satisfied over time as annotation work is performed, generally under master services agreements and project statements of work with payment terms of 30 to 60 days. Revenue is recognized as the work is performed. For the quarter ended June 30, 2026, Flipside AI generated revenue of $1,110,112 with a gross margin of approximately 39%; cost of revenue consists principally of direct labor, consultancy fees and facility costs of the Philippine operations.

Customers and Markets

Flipside AI’s customers consist principally of AI companies operating in the autonomous driving, robotics and geospatial sectors, including global automotive OEMs, Tier-1 suppliers and developers of autonomous vehicle and physical AI systems. Revenue is attributed to the country in which the customer is located; for the quarter ended June 30, 2026, approximately half of revenue was derived from customers in the United States and half from customers in Europe, principally Finland, Sweden, the United Kingdom and Belgium. Revenue is concentrated: four customers each accounted for 10% or more of revenue for that quarter and 76% of revenue in the aggregate. The loss of, or a significant reduction in work from, any of these customers would have a material adverse effect on our results of operations.

We believe demand for high-quality annotated training data will continue to grow as AI models become more specialized and as physical AI applications — autonomous vehicles, robotics and geospatial intelligence — move from research into production. Preparing high-quality data remains one of the most time- and resource-intensive parts of developing AI systems, and many data teams lack the capacity to perform annotation and transformation at scale, which leads them to engage external partners with domain expertise and secure infrastructure.

Operations and Delivery

Flipside AI operates from leased facilities in the Philippines and employs its annotation, quality assurance, project management and administrative personnel directly. Work is performed on customer data under contractual confidentiality and data-handling requirements, with quality controlled through layered review and customer acceptance procedures. Flipside AI uses a combination of proprietary and third-party annotation tooling and operates in U.S. dollars, euros and pounds sterling with its customers while incurring substantially all of its costs in Philippine pesos, which exposes us to foreign currency risk.

Sales and Marketing

Flipside AI acquires customers principally through the industry relationships of its management, referrals from existing customers and direct outreach to AI developers in its target sectors. Our Chief Technology Officer, Anthony De Luna, who founded Flipside AI, leads customer development and is entitled under his employment agreement to a commission on revenue from customers he introduces. We intend to expand relationships with existing customers through a “land-and-expand” approach, to add new customers in the autonomous driving, robotics and geospatial sectors, and to develop new service capabilities around emerging customer needs and advances in AI technologies.

Competition

We operate in a highly competitive landscape that includes both specialized AI data service providers and large-scale information technology services firms. Key competitors include Appen, CloudFactory, Surge AI, Innodata, Invisible Technologies, Turing, Deepen.ai, Telus International, Sama and Scale AI, several of which are well-established players with significant market presence. In addition, we compete with global technology service providers such as Cognizant Technology Solutions, EXL, Genpact, Infosys and Tata Consultancy Services. Substantially all of our competitors have significantly greater financial, technical, marketing and other resources than we do. We intend to differentiate ourselves through the quality and domain specialization of Flipside AI’s work in sensor-fusion and physical AI data, cost-effective delivery from the Philippines, and our management’s global domain expertise.

Growth Strategy

Our growth strategy is to build on the Flipside AI platform by expanding its customer base and service capabilities, and to pursue additional acquisitions of, and investments in, synergistic businesses and technologies that can be integrated into a global collaborative network of AI-enabled intelligent enterprise solutions. We intend over time to shift the mix of our offerings from services toward technology-enabled, repeatable solutions, including AI data operations-as-a-service, which we expect would produce relatively higher recurring margins. Our ability to execute this strategy depends on our access to capital, as described in Item 7 and Note 3 to the financial statements.

Intellectual Property

Flipside AI relies on a combination of contractual provisions, confidentiality procedures, proprietary annotation tooling and workflows, and, where applicable, trade secret and copyright law to protect its proprietary technology and its customers’ data. In February 2025, the Company acquired software from i2 Analytics, Inc. pursuant to a Software Purchase Agreement; as of December 31, 2025, the acquired software had a carrying value of $135,000 and had not been placed in service. Following the acquisition of Flipside AI, the Company determined that it would no longer pursue commercialization of that software and wrote it off in full during the quarter ended June 30, 2026. We do not currently hold any issued patents. “Nexscient” is a registered trademark of the Company.

Human Capital

As of December 31, 2025, we had no full-time employees other than our executive officers, and we relied on independent contractors and consultants for software development, accounting and other functions. Following the acquisition of Flipside AI on April 1, 2026, substantially all of our employees are employed by Flipside AI in the Philippines. Flipside AI employs its data annotation and production, quality assurance, project management and administrative personnel directly. Flipside AI maintains an unfunded defined benefit retirement plan for its employees as required by Philippine law. Our executive officers are our Chief Executive Officer, who serves without a written employment agreement, our Chief Technology Officer, who serves under an employment agreement, and our Chief Financial Officer, who serves under a consulting agreement.

Government Regulation

We are subject to laws and regulations of general applicability, including those relating to data privacy and security, employment, taxation and the securities laws. The operations of Flipside AI in the Philippines subject us to Philippine labor, tax, data protection and foreign exchange regulations, including the requirements of the Philippine Economic Zone Authority under which Flipside AI is registered and the Data Privacy Act of 2012. Our customers’ contracts frequently impose confidentiality and data-handling obligations with which we must comply. We are also subject to reporting obligations under the Exchange Act.

Emerging Growth Company and Smaller Reporting Company Status

We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As an emerging growth company, we may take advantage of specified reduced reporting and other requirements that are otherwise applicable to public companies. Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies are required to comply. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies, but any such election to opt out is irrevocable. The Company has elected not to opt out of the extended transition period. As a result, our financial statements may not be comparable to those of companies that comply with new or revised accounting pronouncements as of public company effective dates.

We are also a “smaller reporting company” as defined in Rule 12b-2 of the Exchange Act and have elected to provide scaled disclosure in reliance on that status, including the omission of the disclosure otherwise required by Item 1A and Item 7A of this form.

Available Information

We file annual, quarterly and current reports and other information with the Securities and Exchange Commission (the “SEC”). The SEC maintains an Internet site at www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

Item 1A. Risk Factors.

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.

Item 1B. Unresolved Staff Comments.

None.

Item 1C. Cybersecurity.

Risk Management and Strategy

Governance

Item 2. Properties.

Our executive offices are located at 2029 Century Park East, Suite 400, Los Angeles, CA 90067. In November 2025, the Company entered into a lease agreement for this office space. The lease commenced on November 1, 2025 and expires on October 31, 2027, with monthly rent of $1,815 throughout the lease term. This lease replaced the Company’s prior office arrangement, which expired on October 31, 2025. Flipside AI leases office space and parking facilities in the Philippines under operating leases with remaining terms of approximately one to three years, from which it conducts its production operations. We do not own any real property. We believe our current facilities are adequate for our present needs and that additional space would be available on commercially reasonable terms if required.

Item 3. Legal Proceedings.

From time to time, the Company may become subject to various legal proceedings that are incidental to the ordinary conduct of its business. Although the Company cannot accurately predict the amount of any liability that may ultimately arise with respect to any of these matters, it makes provision for potential liabilities when it deems them probable and reasonably estimable. These provisions are based on current information and legal advice and may be adjusted from time to time according to developments.

As of the date of this Transition Report, we know of no material existing or pending legal proceedings against the Company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial stockholder, is an adverse party or has a material interest adverse to our interest.

Item 4. Mine Safety Disclosures.

Not applicable.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Market Information

The Company’s common stock was approved for trading on the OTCQB on August 2, 2024 and is quoted under the symbol “NXNT.” The following table sets forth the range of the high and low sale prices of the common stock for the periods indicated. Because the Company changed its fiscal year end from June 30 to December 31 as described in the Explanatory Note above, the periods below are presented on a calendar-quarter basis. The quotations reflect inter-dealer prices, without retail markup, markdown or commission, and may not represent actual transactions. Consequently, the information provided below may not be indicative of our common stock price under different conditions.

Holders

As of December 31, 2025, there were 21,663,312 shares of common stock issued and outstanding. As of August 14, 2026, there were 34,564,312 shares of common stock issued and outstanding held by 93 holders of record (as of July 2, 2026, per the Company’s transfer agent). The number of holders of record does not include beneficial owners whose shares are held in street name by brokers, banks and other nominees.

Dividends

We have not paid any cash dividends on our common stock since inception and presently anticipate that all earnings, if any, will be retained for development of our business and that no dividends on our common stock will be declared in the foreseeable future. Any future dividends will be subject to the discretion of our Board of Directors and will depend upon, among other things, future earnings, operating and financial condition, capital requirements, general business conditions and other pertinent facts. Therefore, there can be no assurance that any dividends on our common stock will be paid in the future.

Securities Authorized for Issuance Under Equity Compensation Plans

None. The Company does not maintain any equity compensation plan under which equity securities are authorized for issuance.

Recent Sales of Unregistered Securities

During the Transition Period, the Company issued the following securities that were not registered under the Securities Act:

Each of the foregoing issuances was made in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act and/or Rule 506(b) of Regulation D promulgated thereunder, to persons the Company reasonably believed to be accredited investors, without any general solicitation or advertising, and the securities issued bear a restrictive legend.

The Company’s issuances of unregistered securities after December 31, 2025, consisting of the shares issued in private placements, in the acquisition of Flipside AI, for services and in settlement of deferred wages, were reported in the Company’s Quarterly Reports on Form 10-Q for the quarters ended March 31, 2026 and June 30, 2026 and are described in Note 10 to the financial statements.

Issuer Purchases of Equity Securities

None.

Transfer Agent

Nexscient, Inc. has appointed VStock Transfer, LLC as its transfer agent. VStock’s address is 18 Lafayette Place, Woodmere, NY 11598.

Penny Stock Regulation

Our common stock is subject to the “penny stock” rules of the SEC. Penny stocks generally are equity securities with a price of less than $5.00 per share other than securities registered on national securities exchanges. The penny stock rules impose additional sales practice requirements on broker-dealers who sell such securities to persons other than established customers and accredited investors. For transactions covered by these rules, the broker-dealer must make a special suitability determination for the purchase of such securities and must have received the purchaser’s written consent to the transaction prior to the purchase. Additionally, for any transaction involving a penny stock, unless exempt, the rules require the delivery, prior to the transaction, of a disclosure schedule prescribed by the SEC relating to the penny stock market. Because of these rules, broker-dealers may be restricted in their ability to sell the Company’s common stock, which may affect the ability of holders to resell their shares.

Item 6. [Reserved].

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion of our financial condition and results of operations should be read in conjunction with the financial statements and related notes included elsewhere in this Transition Report. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements. See “Special Note Regarding Forward-Looking Statements.”

Overview

Nexscient, Inc. is an emerging growth company building a global collaborative network of AI-enabled intelligent enterprise solutions and technologies through internal development, synergistic acquisitions, and capital investments in companies involved in machine learning, artificial intelligence, and Industrial Internet of Things technologies. During the Transition Period and each of the other periods presented in this Transition Report, we were a development stage enterprise and had not generated any revenue. On April 1, 2026, we acquired TaskAlpha and Flipside AI, a data engineering business, and our consolidated results from that date consist principally of the operations of Flipside AI. Those results are reported in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2026 and are not reflected in the financial statements included in this Transition Report, which cover periods ended on or before December 31, 2025.

Change in fiscal year and basis of comparison

As described in the Explanatory Note above, on June 25, 2026 our Board of Directors approved a change in our fiscal year end from June 30 to December 31. This Transition Report covers the six-month transition period from July 1, 2025 to December 31, 2025.

The Transition Period is a six-month period, while each of the fiscal years ended June 30, 2025 and June 30, 2024 is a twelve-month period. A comparison of the Transition Period to either fiscal year would not be meaningful. Accordingly, the discussion below compares the audited six months ended December 31, 2025 to the unaudited six months ended December 31, 2024, and separately discusses the fiscal year ended June 30, 2025 compared to the fiscal year ended June 30, 2024. Our operations are not seasonal in nature; because we have not generated revenue, the length of the reporting period affects primarily the level of operating expenses recognized rather than any seasonal pattern.

Results of operations — six months ended December 31, 2025 (Transition Period) compared with six months ended December 31, 2024 (unaudited)

Revenues. We were in our development stage and did not generate any revenue during the six months ended December 31, 2025 or the six months ended December 31, 2024.

Research and development. Research and development expenses were $21,000 for the six months ended December 31, 2025, compared to $79,864 for the six months ended December 31, 2024, a decrease of $58,864, or 74%. The decrease reflects reduced third-party development activity on the Company’s platform as management redirected resources toward identifying and evaluating acquisition candidates, which culminated in the acquisition of Flipside AI in April 2026.

General and administrative. General and administrative expenses were $271,398 for the six months ended December 31, 2025, compared to $201,184 for the six months ended December 31, 2024, an increase of $70,214, or 35%. The increase was primarily attributable to higher non-cash consulting expense recognized on shares issued for services and to accrued officer compensation, partially offset by lower cash professional fees. Of total general and administrative expenses, $48,167 and $24,000 for the six months ended December 31, 2025 and 2024, respectively, represented non-cash amortization of prepaid stock-based compensation.

Interest expense. Interest expense was $24,070 for the six months ended December 31, 2025, compared to $6,341 for the six months ended December 31, 2024, and consists entirely of interest accrued on the Company’s 9% convertible debentures. The increase reflects the higher average principal amount of debentures outstanding, which grew from $265,000 at December 31, 2024 to $530,000 at December 31, 2025.

Net loss. Net loss was $316,468 for the six months ended December 31, 2025, compared to $287,389 for the six months ended December 31, 2024, an increase of $29,079, or 10%, principally as a result of the explanations described above.

Results of operations — fiscal year ended June 30, 2025 compared with fiscal year ended June 30, 2024

During the fiscal years ended June 30, 2025 and 2024, we incurred total operating expenses of $488,042 and $937,592, respectively, a decrease of $449,550, or 48%, as a result of reducing project development expenses and focusing on identifying acquisition candidates. Of these totals, $39,708 and $303,000, respectively, represented non-cash expense related to shares issued to consultants and advisors in lieu of cash. Interest expense of $41,662 in fiscal 2025 consists of $21,392 accrued on the 9% convertible debentures and $20,270 of amortization of the debt discount on a related-party loan issued with common shares. Net loss decreased from $937,592 in fiscal 2024 to $529,704 in fiscal 2025, a decrease of $407,888, or 44%.

Liquidity and capital resources

Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. Through December 31, 2025, we financed our operations primarily through sales of common stock and the issuance of convertible debentures. We had not generated any revenue and incurred losses in every period since inception.

As of December 31, 2025, we had cash of $28,459, a working capital deficit of $370,416, and an accumulated deficit of $1,877,530, and we had no revenue to cover our operating costs. This compares to cash of $100,470 and working capital of $95,385 as of June 30, 2025. The deterioration in working capital during the Transition Period resulted principally from the reclassification of $265,000 of convertible debentures from long-term to current as those debentures approached their two-year maturity, an increase of $102,000 in deferred officer wages payable, and the continued use of cash in operations.

As of December 31, 2025, the Company had $530,000 aggregate principal amount of unsecured 9% convertible debentures outstanding, of which $265,000 was classified as current and $265,000 as long-term, together with $45,462 of accrued and unpaid interest thereon. Our monthly cash operating burn during the Transition Period averaged approximately $22,000.

Developments since December 31, 2025. Our liquidity position and capital resources have changed substantially since the end of the Transition Period. During the six months ended June 30, 2026, we sold 4,800,000 shares of common stock in private placements for gross proceeds of $1,200,000, paid $600,000 in cash at the closing of the Flipside AI acquisition, and began consolidating the operations of Flipside AI. As reported in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2026, at that date we had consolidated cash of $489,216 and a working capital deficit of $484,674. Our consolidated obligations at June 30, 2026 included the $530,000 of convertible debentures, all of which mature within twelve months of that date; the seller convertible note, of which the first $150,000 installment is due April 1, 2027; borrowings of Flipside AI from Philippine financial institutions and individual lenders of $607,918, of which $558,700 matures within twelve months; and the $200,000 loan from Arcadia, which matured on July 6, 2026 and has been extended to October 6, 2026. Flipside AI generated revenue of $1,110,112 and was profitable for the quarter ended June 30, 2026. Our ability to fund operations and meet these obligations depends on the cash generated by Flipside AI, the renewal or refinancing of the subsidiary’s borrowings as they mature, and our continued access to additional capital. See “Going Concern” below and Note 3 to the financial statements.

Cash flows

Operating activities. Net cash used in operating activities was $132,011 for the six months ended December 31, 2025, compared to $261,779 for the six months ended December 31, 2024, a decrease of $129,768, or 50%. The decrease resulted principally from officer compensation being deferred and accrued rather than paid in cash during the Transition Period, which reduced cash used in operations by $102,000 relative to the prior-year period, together with $24,070 of accrued but unpaid debenture interest and $48,167 of non-cash amortization of prepaid stock-based compensation.

Investing activities. There were no investing activities during the six months ended December 31, 2025 or the six months ended December 31, 2024. For the fiscal year ended June 30, 2025, net cash used in investing activities was $47,500, representing partial cash consideration for the purchase of software.

Financing activities. Net cash provided by financing activities was $60,000 for the six months ended December 31, 2025, consisting of $50,000 from the issuance of convertible debentures and $10,000 from the sale of common stock. For the six months ended December 31, 2024, net cash provided by financing activities was $265,000 from the issuance of convertible debentures.

Going concern

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. The Company had not generated any revenue through December 31, 2025, incurred losses in every period since inception resulting in an accumulated deficit of $1,877,530 as of December 31, 2025, and had a working capital deficit of $370,416 as of that date. The acquisition of Flipside AI on April 1, 2026 introduced revenue-generating operations, and the subsidiary was profitable for the quarter ended June 30, 2026; however, at June 30, 2026 the Company had current liabilities in excess of current assets, including the convertible debentures, the short-term borrowings of Flipside AI and the Arcadia loan described above, and the Company expects to continue to require capital to service those obligations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the date the financial statements included in this Transition Report are issued.

Management’s plans include applying cash generated by the operations of Flipside AI to the servicing and repayment of these obligations, pursuing the renewal or refinancing of the subsidiary’s borrowings as they mature, and raising additional capital through the sale of equity securities or the issuance of convertible debt. The Company has historically funded its operations through private placements of common stock and the issuance of convertible debentures. After considering these plans, management concluded that substantial doubt about the Company’s ability to continue as a going concern has not been alleviated. There can be no assurance that any such financing will be available on acceptable terms, or at all. The financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts or to the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Off-balance sheet arrangements

We have no 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 that are material to stockholders.

Contractual obligations

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.

Critical accounting policies and estimates

See Note 2 — Summary of Significant Accounting Policies in the notes to the financial statements included in this Transition Report for a description of our significant accounting policies.

For the periods presented in this Transition Report, our critical accounting estimate relates to the valuation of common stock issued in non-cash transactions. Following the acquisition of Flipside AI, our critical accounting estimates also include the provisional fair values assigned to the assets acquired and liabilities assumed, including the fair value of the Advance Payable Note, the imputed discount on the seller convertible note, the allowance for credit losses and the retirement benefit obligation, as described in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2026. The valuation of shares was based on shares of common stock sold for cash during the periods presented, as the Company’s stock is thinly traded and not considered an active market. Management estimated the fair value to be $0.25 per share for share issuances during the Transition Period and during the fiscal year ended June 30, 2025. A different fair value estimate would change the amount of non-cash expense recognized and the corresponding amount credited to additional paid-in capital, but would not affect cash flows, total stockholders’ equity (deficit), or total assets.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.

Item 8. Financial Statements and Supplementary Data.

INDEX TO FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm

To the Board of Directors and stockholders of Nexscient, Inc. 

Opinion on the Financial Statements

We have audited the accompanying balance sheets of Nexscient, Inc. (the “Company”) as of December 31, 2025, June 30, 2025 and 2024 and the related statements of operations, stockholders’ equity (deficit), and cash flows for the six months ended December 31, 2025 and the years ended June 30, 2025 and 2024, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025, June 30, 2025 and 2024, and the results of its operations and its cash flows for the six months ended December 31, 2025 and the years ended June 30, 2025 and 2024, in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has historically incurred losses and has not generated revenues, has a working capital deficit, and has debt instruments coming due within one year, which raises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 /s/ dbbmckennon

We have served as the Company’s auditor since 2023.

Newport Beach, California

September 23, 2026

NEXSCIENT, INC.

Balance Sheets

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

NEXSCIENT, INC.

Statements of Operations

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

NEXSCIENT, INC.

Statements of Stockholders’ Equity (Deficit)

Unaudited — Six Months Ended December 31, 2024 (Comparative Period)

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

NEXSCIENT, INC.

Statements of Cash Flows

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

NEXSCIENT, INC.

Notes to Financial Statements