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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 September 30, 2025

☐	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: 000-54995

I-ON DIGITAL CORP.

(Exact name of registrant as specified in its charter)

(formerly known as I-ON Communications Corp.)

Delaware

46-3031328

(State or other jurisdiction

of incorporation or organization)

(I.R.S. Employer

Identification No.)

1244 N. Stone Street, Unit 3, Chicago, IL 60610

(Address of principal executive offices, including zip code)

(866) 440-2278

(Registrant’s telephone number, including area code)

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

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 and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” and “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 provided 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 November 13, 2025, I-ON Digital Corp. had [31,106,234] shares of common stock, par value $0.0001 per share, outstanding.

I-ON Digital Corp.

Table of Contents

Financial Statements (UNAUDITED)

Condensed Consolidated Balance Sheets (UNAUDITED)	3

Condensed Consolidated Statements of Operations (UNAUDITED)	4

Condensed Consolidated Statements of Stockholders’ Equity (UNAUDITED)	5

Condensed Consolidated Statements of Cash Flows (UNAUDITED)	6

Notes to Condensed Consolidated Financial Statements (UNAUDITED)	7

Part 1 – Financial Information

Item 1.

Financial Statements

Condensed Consolidated Balance Sheets

	September 30, 2025			December 31, 2024
	(Unaudited)
ASSETS

Current assets:
Cash and cash equivalents	$	106,735		$	270,095
Prepaid expenses		4,713			12,783
Total current assets		111,448			282,878

Non-current assets:
Intangible assets, net		18,042,980			18,139,265

Total non-current assets		18,042,980			18,139,265

Total Assets	$	18,154,428		$	18,422,143

Liabilities and Stockholders’ Equity

Current liabilities:
Accounts payable and accrued expenses	$	188,888		$	92,559
Accrued interest		660,000			660,000
Due to related parties		1,866,882			1,336,639
Loans payable, in default		550,000			550,000
Total current liabilities		3,265,770			2,639,198

Total liabilities		3,265,770			2,639,198

Commitments and contingencies		-			-

Stockholders’ equity:
Preferred stock-$0.0001 par value; 5,000,000 shares authorized
Preferred stock Series A - $0.0001 par value; 6,000 shares designated; 5,403 shares issued and outstanding at September 30, 2025 and December 31, 2024		-			-
Preferred stock Series C - $0.0001 par value; 910,000 shares designated; 745,000 shares issued and outstanding at September 30, 2025 and December 31, 2024		74			74
Preferred stock, value		74			74
Common stock - $0.0001 par value; 250,000,000 shares authorized; 31,106,234 shares issued and outstanding at September 30, 2025 and December 31, 2024		3,111			3,111
Additional paid-in-capital		21,186,274			21,186,274
Accumulated deficit		(6,300,801	)		(5,406,514	)
Total stockholders’ equity		14,888,658			15,782,945

Total Liabilities and Stockholders’ Equity	$	18,154,428		$	18,422,143

See accompanying notes to unaudited condensed consolidated financial statements.

I-ON Digital Corp.

Condensed Consolidated Statements of Operations (Unaudited)

	Three Months Ended September 30, 2025			Three Months Ended September 30, 2024			Nine Months Ended September 30, 2025			Nine Months Ended September 30, 2024

Net sales	$	356,335		$	-		$	356,335		$	32,625
Cost of sales		-			-			-			21,000
Gross profit		356,335			-			356,335			11,625

Operating expenses
Professional fees		127,348			142,890			437,289			334,469
General and administrative expenses		350,357			201,399			813,333			436,739
Total expenses from operations		477,705			344,289			1,250,622			771,208

Income (loss) from operations		(121,370	)		(344,289	)		(894,287	)		(759,583	)

Other income (expenses)
Gain on sale of intangible assets		-			3,795			-			3,795
Gain on exchange of intangible assets		-			25,682			-			25,682
Interest expenses		-			(160,623	)		-			(478,856	)
Income (loss) before income taxes		(121,370	)		(475,435	)		(894,287	)		(1,208,962	)

Provision for income taxes		-			-			-			-

Net income (loss)	$	(121,370	)	$	(475,435	)	$	(894,287	)	$	(1,208,962	)

Net income (loss) per share, basic and diluted	$	(0.00	)	$	(0.02	)	$	(0.03	)	$	(0.04	)

Weighted average number of shares outstanding, basic and diluted		31,106,234			27,410,234			31,106,234			27,410,234

See accompanying notes to unaudited condensed consolidated financial statements.

I-ON Digital Corp.

Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)

For the three and nine months ended September 30, 2025 and 2024

	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Capital		Earnings			Equity
					Preferred Stock																					Total
	Common Stock				Series A				Series A to be issued				Series B				Series C				Additional Paid-in		Retained			Company Stockholders’
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Capital		Earnings			Equity

Balance at December 31, 2023		27,410,234	$	2,741		4,600	$	-		803	$	176,342		-	$	-		910,000	$	91	$	21,010,285	$	(3,496,501	)	$	17,692,958
Net loss		-		-		-		-		-		-		-		-		-		-		-		(293,919	)		(293,919	)

Balance at March 31, 2024		27,410,234		2,741		4,600		-		803		176,342		-		-		910,000		91		21,010,285		(3,790,420	)		17,399,039
Net loss		-		-		-		-		-		-		-		-		-		-		-		(439,608	)		(439,608	)

Balance at June 30, 2024		27,410,234		2,741		4,600		-		803		176,342		-		-		910,000		91		21,010,285		(4,230,028	)		16,959,431
Net loss		-		-		-		-		-		-		-		-		-		-		-		(475,435	)		(475,435	)
Balance at September 30, 2024		27,410,234	$	2,741		4,600	$	-		803	$	176,342		-	$	-		910,000	$	91	$	21,010,285	$	(4,705,463	)	$	16,483,996

See accompanying notes to unaudited condensed consolidated financial statements.

					Preferred Stock																					Total
	Common Stock				Series A				Series A to be issued				Series B				Series C				Additional Paid-in		Retained			Company Stockholders’
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Capital		Earnings			Equity

Balance at December 31, 2024		31,106,234	$	3,111		5,403	$	-		-	$	-		-	$	-		745,000	$	74	$	21,186,274	$	(5,406,514	)	$	15,782,945
Net loss		-		-		-		-		-		-		-		-		-		-		-		(348,409	)		(348,409	)

Balance at March 31, 2025		31,106,234		3,111		5,403		-		-		-		-		-		745,000		74		21,186,274		(5,754,923	)		15,434,536
Balance		31,106,234		3,111		5,403		-		-		-		-		-		745,000		74		21,186,274		(5,754,923	)		15,434,536
Net loss		-		-		-		-		-		-		-		-		-		-		-		(424,508	)		(424,508	)

Balance at June 30, 2025		31,106,234		3,111		5,403		-		-		-		-		-		745,000		74		21,186,274		(6,179,431	)		15,010,028
Balance		31,106,234		3,111		5,403		-		-		-		-		-		745,000		74		21,186,274		(6,179,431	)		15,010,028
Net loss		-		-		-		-		-		-		-		-		-		-		-		(121,370	)		(121,370	)
Balance at September 30, 2025		31,106,234	$	3,111		5,403	$	-		-	$	-		-	$	-		745,000	$	74	$	21,186,274	$	(6,300,801	)	$	14,888,658
Balance		31,106,234	$	3,111		5,403	$	-		-	$	-		-	$	-		745,000	$	74	$	21,186,274	$	(6,300,801	)	$	14,888,658

See accompanying notes to unaudited condensed consolidated financial statements.

I-ON Digital Corp.

Condensed Consolidated Statements of Cash Flows (Unaudited)

	Nine Months Ended September 30, 2025			Nine Months Ended September 30, 2024

Cash flows from operating activities:
Net income (loss)	$	(894,287	)	$	(1,208,962	)
Adjustments to reconcile net income (loss) to net cash from operating activities:
Amortization		102,285			21,000
Accretion of debt discount		-			65,979
Gain on sale of intangible assets					(3,795	)
Changes in assets and liabilities:
Prepaid expenses and other current assets		8,070			928
Accrued expenses		96,329			(1,322	)
Accrued interest		-			412,877
Deferred revenue – related party		-			(32,625	)
Due to related party		6,002			-
Net cash provided by (used in) operating activities		(681,601	)		(745,920	)

Cash flows from investing activities:
Proceeds from sale of intangible assets		-			120,425
Payments for the purchase of intangible assets		(6,000	)		-
Gain on exchange of intangible assets		-			(25,682	)
Total net cash provided by (used in) investing activities		(6,000	)		94,743

Cash flows from financing activities:
Advances from related parties		559,241			815,061
Repayments to related parties		(35,000	)		-
Total net cash provided by (used in) financing activities		524,241			815,061

Net increase (decrease) in cash and cash equivalents		(163,360	)		163,884

Cash and cash equivalents, beginning of period		270,095			36,075

Cash and cash equivalents, end of period	$	106,735		$	199,959

Supplemental disclosure of cash flow information:
Interest paid	$	-		$	-
Taxes paid	$	-		$	-

Supplemental disclosure of non-cash flow information:
Continuing operations:
Issuance of common stock for intangible assets	$	-		$	-
Issuance of common stock for services	$	-		$	-

See accompanying notes to unaudited condensed consolidated financial statements.

I-ON Digital Corp.

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of September 30, 2025

NOTE 1. Organization and Operations

I-ON Digital Corp. (the “Company”) is engaged in providing digital-based enterprise solutions, including the digitization and distribution of digital tokens, primarily gold, and other asset-based digital securities on the block chain.

On December 15, 2023, the Company consummated its previously announced transaction contemplated by that certain Contribution and Exchange Agreement, dated as of October 30, 2023 (the “Contribution and Exchange Agreement”), by and between the Company and Orebits Acquisition Group, a Wyoming limited liability company (“OAG”), pursuant to which the Company acquired 910,000 shares of outstanding common stock of Orebits Corp. (“Orebits”), representing the 100% controlling interest in Orebits, in exchange for 910,000 shares of Series C Convertible Preferred Stock of the Company (“Series C Preferred Stock” and such transaction, the “Transaction”). As part of the Contribution and Exchange Agreement, upon and by virtue of the consummation of the Transaction, OAG transferred all its right, title and interest in and to approximately 9,700 Orebits.AU gold-backed digital assets to the Company, which at the time of consummation of the Transaction, had an estimated value of $17.6 million. The Transaction was accounted for as an acquisition of assets.

The acquisition of Orebits has had a significant impact on the Company’s consolidated balance sheets. Prior to consummation of the Transaction, Orebits carried only one asset –9,700 Orebits AU certificates having a post-transaction value of $17.6 million. As a result of the acquisition, then, the value of the assets on the consolidated balance sheets increased by $17,643,284 and there was no increase in liabilities.

NOTE 2. Summary of Significant Accounting Policies

The summary of significant accounting policies of the Company is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management, who is responsible for integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared by management in accordance with both accounting principles generally accepted in the United States (“GAAP”), and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Certain information and note disclosures normally included in audited financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading.

In the opinion of management, these unaudited condensed consolidated financial statements reflect all normal and recurring adjustments considered necessary to state fairly the results for the periods presented. The results for the period ended September 30, 2025 are not necessarily indicative of the results to be expected for the entire fiscal year ending December 31, 2025 or for any future period.

These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the Management’s Discussion and the audited consolidated financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2024.

Basis of Consolidation

The consolidated financial statements include the accounts of I-On Digital Corp. and its wholly owned subsidiary Orebits Corp, (collectively, the Company). All significant intercompany transactions and balances have been eliminated in consolidation. Subsidiaries are entities over which the Company has control, typically through a majority voting interest. The Company consolidates entities in which it holds a controlling financial interest, as defined by Accounting Standards Codification (ASC) 810, Consolidation. Investments in entities where the Company does not have control but has significant influence are accounted for under the equity method.

Going Concern

The accompanying consolidated financial statements have been prepared in conformity with GAAP, which contemplate continuation of the Company as a going concern. The Company has had limited revenues since the Company, under the prior ownership group, sold-off all of its subsidiaries in September 2022. In addition, the Company has reported recurring losses. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

As of September 30, 2025, the Company believes that its investment in the development of ION Digital Hybrid Blockchain Platform will allow it to project and plan forward for a period of increasing revenues based on fee-driven digitization activities involving both closely held and third-party gold claims. The Company has recently concluded negotiations, resulting in multiple term sheets, that were executed in the third quarter of 2025. Consummation of these transactions will be subject to successful completion efforts on the part of the Company.

The Company’s business prospects have changed since the new management took control of operations in January 2023. Since the new ownership took over the Company, management commenced new initiatives in technology development and acquisitions. Management currently intends to conduct one or more private placements during the balance of 2025 to raise up to $100 million. There can be no assurances that the Company will be successful in this or any of its endeavors. In addition, the Company is also funded by its related parties for its operations. It is expected that the related parties will continue funding the Company’s operations until we are able to raise capital or increase revenue to cover operating costs.

Use of Estimates in the Preparation of Financial Statements

The preparation of the 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 disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. As a result, actual results could materially differ from these estimates.

Revenue Recognition

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers. The core principle of the revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle: 1: Identify the contract with the customer; 2: Identify the performance obligations in the contract; 3: Determine the transaction price; 4: Allocate the transaction price to the performance obligations in the contract; and Step 5: Recognize revenue when the Company satisfies a performance obligation.

Revenue for the nine months ended September 30, 2024 ($32,625) were from related parties. See NOTE 7.

The Company’s primary source of revenue during the three and nine months ended September 30, 2025, consisted of fees earned by deploying assets owned and/or assets under management (AUM) and, more specifically, under its Master Treasury Lease and Custody Agreement (“MTLCA”) with GGBR Inc. (“GGBR”). Under the MTLCA arrangement, the Company, performing in its role as the Lessor under the MTLCA, facilitates GGBR’s minting, issuance, and management of digital tokens (“GoldFish Tokens”) collateralized against ION.au Gold-backed Digital Assets (“ION.au”) leased from the Company. Revenue is recognized when the Company’s performance obligations are satisfied, which occurs upon delivery of vault access to the ION.au. This represents the point at which the Company has provided the related access services, effectively allowing GGBR to create the Goldfish Token, for control and use of the Token by its customers. The transaction price is determined based on contractual terms with GGBR, including a base lease rate factor and a share of proceeds from token-related activities.

Consideration received in advance of performance is recorded as a contract liability and recognized as revenue when the performance obligations are satisfied. During the quarter ended September 30, 2025, the Company recognized $356,335 in revenue under the MTLCA.

The Company recorded no receivables or deferred revenue as of September 30, 2025 and December 31, 2024.

Cash and Cash Equivalents

The Company considers all money market funds and highly liquid financial investments with maturities of three months or less when acquired to be cash equivalents. As of September 30, 2025 and December 31, 2024 there were no cash equivalents.

Intangible Assets

Intangible assets represent non-physical assets that lack a physical substance but have value. These assets are typically long-term in nature and can include items such as patents, trademarks, copyrights, digital assets, and software. When the Company acquires an intangible asset, it is recorded either at fair value or at historical cost. The fair value is used if the asset is acquired from an entity not under common control in a business combination, and the historical cost is used if the asset is acquired from an entity under common control. Intangible assets with a finite life are amortized using the straight-line method over their estimated useful lives.

The estimated useful lives of the respective asset categories are as follows:

Development costs		3 years
Intangible assets excluding development costs		10 years
Other intangible assets – core technology platforms		3 to 5 years

The Company follows ASC 350-30-35 and recognizes costs incurred to renew or extend the term of a recognized intangible asset as an expense in the period in which they are incurred. These costs are not capitalized but are instead treated as operating expenses, ensuring that the financial statements accurately reflect the current period’s operational activities.

Digital assets are accounted for as indefinite-lived intangible assets, therefore, they are not amortized, but are assessed for impairment annually, or upon a triggering event that indicates it is more likely than not that the indefinite-lived intangible asset is impaired.

Impairment Analysis for Long-lived Assets and Intangible Assets

The Company’s long-lived assets and other assets (consisting of property and equipment and purchased intangible assets) are reviewed for impairment in accordance with the guidance of the FASB ASC 360, Property, Plant, and Equipment, FASB ASC 350, Intangibles, and FASB ASC 205 Presentation of Financial Statements. The Company tests for impairment losses on long-lived assets used in operations whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable or is less than fair value. If recoverability of an asset to be held and used is in question it is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the asset. If such asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. Impairment evaluations can involve management’s estimates on asset useful lives and future cash flows. Actual useful lives and cash flows could be different from those estimated by management which could have a material effect on our reporting results and financial positions. Fair value is determined through various valuation techniques including undiscounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. Whenever the exchange-traded price of digital assets declines below its carrying value, the Company has determined that impairment exists and records impairment equal to the amount by which the carrying value exceeds the fair value. Once an intangible asset is impaired, the loss is not reversed if the fair value subsequently increases.

Earnings Per Share

FASB ASC Topic 260, Earnings Per Share, requires a reconciliation of the numerator and denominator of the basic and diluted earnings (loss) per share (EPS) computations. Basic earnings (loss) per share are computed by dividing net earnings available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. In periods where losses are reported, the weighted-average number of common stock outstanding excludes common stock equivalents, because their inclusion would be anti-dilutive. As of September 30, 2025 and December 31, 2024, the Company had the following common stock equivalents:


Series A preferred stock convertible into 10,000 shares of common stock each			54,030,000
Series C preferred stock convertible into 20 shares of common stock each			14,900,000

Total common stock equivalents			68,930,000

Fair Value Measurements

The Company follows FASB ASC Topic 820, Fair Value Measurements. ASC 820 defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles and enhances disclosures about fair value measurements. Fair value is defined under ASC 820 as the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants.

ASC 820 establishes a hierarchy of valuation inputs based on the extent to which the inputs are observable in the marketplace. Observable inputs reflect market data obtained from sources independent of the reporting entity and unobservable inputs reflect the entity’s own assumptions about how market participants would value an asset or liability based on the best information available.

Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value.

The following describes the hierarchy of inputs used to measure fair value and the primary valuation methodologies used by the Company for financial instruments measured at fair value on a recurring basis.

The three levels of inputs are as follows:

	Level 1	Quoted prices in active markets for identical assets or liabilities that the Company has an ability to access as of the measurement date.

	Level 2	Inputs that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the same term of the assets or liabilities.

	Level 3	Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Our financial instruments include cash and cash equivalents, short-term financial instruments, short-term loans, accounts receivable, investments, accounts payables and debt. The carrying values of these financial instruments approximate their fair value due to their short maturities. The carrying amount of our debt approximates fair value because the interest rates on these instruments approximate the interest rate on debt with similar terms available to us.

Income Taxes

Income taxes are provided for the tax effects of transactions reported in the financial statements and consists of taxes currently due and deferred taxes. Deferred taxes are recognized for the differences between the basis of assets and liabilities for financial statement and income tax purposes.

The Company follows FASB ASC 740, Income Taxes, which require the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates, applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

FASB ASC 740-10-25 provides criteria for the recognition, measurement, presentation and disclosure of uncertain tax position. The Company must recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. The Company did not recognize additional liabilities for uncertain tax positions pursuant to FASB ASC 740-10-25 as of September 30, 2025.

Contingencies

Accounting guidance requires that the Company record an estimated loss from a loss contingency when information available prior to issuance of the consolidated financial statements indicates that it is probable that an asset has been impaired or a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. Accounting for contingencies such as legal matters requires significant judgment. Many of these legal matters can take years to resolve. Generally, as the time period increases over which the uncertainties are resolved, the likelihood of changes to the estimate of the ultimate outcome increases.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk are cash arising from its normal business activities. The Company has its cash in high credit quality institutions. At times, such investments may be in excess of the FDIC insurance limit of $250,000. As of September 30, 2025 and December 31, 2024, cash balances in excess of the FDIC limits were $0 and $20,095.

The Company currently does not provide for or issue extensions of credit to its clients, vendors or employees. If the Company’s board of directors elected to make a change in current policy, management, pursuant to policy and procedure implementation of the same, would establish methodologies for monitoring and assessing corresponding risks, inclusive of the potential for concentrations and the related adequacy of loss reserves going forward.

Segment Reporting

The Company operates as a single operating and reportable segment, a resource management expertise and services provider. Our Chief Executive Officer is our Chief Operating Decision Maker, (CODM) who evaluates performance and makes operating decisions about allocating resources (see NOTE 4).

Advertising

Costs associated with advertising and marketing expenses are expensed as incurred. The Company incurred $58,036 and $35,500 in advertising and marketing costs during the nine months ended September 30, 2025 and 2024, respectively. The Company incurred $7,200 and $24,500 in advertising and marketing costs during the three months ended September 30, 2025 and 2024, respectively.

Employee Stock Based Compensation

The Company accounts for its share-based compensation plan in accordance with FASB ASC 718, Stock Compensation, which establishes a fair value method of accounting for stock-based compensation plans. The Company records stock compensation expense based on the value of the number of shares vesting specified periods over three years.

Stock-based compensation issued to employees and members of our board of directors is measured at the date of grant based on the estimated fair value of the award, net of estimated forfeitures. The grant date fair value of a stock-based award is recognized as an expense over the requisite service period of the award on a straight-line basis.

For purposes of determining the variables used in the calculation of stock-based compensation issued to employees, the Company performs an analysis of current market data and historical data to calculate an estimate of implied volatility, the expected term of the option and the expected forfeiture rate. With the exception of the expected forfeiture rate, which is not an input, we use these estimates as variables in the Black-Scholes option pricing model. Depending upon the number of stock options granted any fluctuations in these calculations could have a material effect on the results presented in our statements of operations. In addition, any differences between estimated forfeitures and actual forfeitures could also have a material impact on our financial statements.

Recently Issued Accounting Pronouncements

In November 2024, the Financial Accounting Standards Board (“FASB”) issued ASU 2024-03, Income Statement—Reporting Comprehensive Income (Subtopic 220-40): Disaggregation of Income Statement Expenses. The update requires public business entities to disclose, in tabular form, certain natural expense categories—such as employee compensation, depreciation, amortization, and inventory or transaction-related costs—within relevant income statement captions.

The Company will adopt ASU 2024-03 at its effective date for annual periods beginning after December 15, 2026. Early adoption has not been elected. The Company is currently evaluating the impact of this standard on its future financial statement disclosures and does not expect it to have a material effect on the recognition or measurement of amounts reported in the consolidated financial statements. Upon adoption, the Company expects the enhanced expense disaggregation disclosures to provide greater transparency and comparability for investors and other financial statement users.

The Company has reviewed all the recent accounting pronouncements issued through the date of these financial statements and has determined that there have been no standards that had, or will have, a material impact on its consolidated financial statements.

NOTE 3. Treasury Lease and Custody Agreement

In July 2025, the Company entered into a Master Treasury Lease and Custody Agreement (“MTLCA”) with GGBR Inc. (“GGBR”). Under the agreement, GGBR agreed to lease, from the Company, up to 1,000,000 ION.au Gold-backed Digital Assets in connection with GGBR’s further issuance of tokenized digital assets (“GoldFishTokens”). The purpose of the arrangement is to support GGBR’s digital treasury operations and independently operated and proprietary tokenization platform.

Pursuant to the terms of the MTLCA, the Company retains ownership and/or management control of the underlying ION.au Gold-backed Digital Asset throughout the term of the lease. As a result, GGBR does not record the leased gold as an asset on its own balance sheet. GGBR is responsible for managing the minting, issuance, and redemption of GoldFish Tokens, for which, it pays a moderate discount to the current price of gold and an applicable fee from the minting of GoldFish Tokens.

During the quarter ended September 30, 2025, the GGBR commenced operations under the MTLCA and the Company, in turn, recognized $356,335 in revenue related to GoldFish Token lease activities.

As of September 30, 2025, all amounts due from GGBR related to such revenue had been collected, and no receivables were outstanding.

NOTE 4. Segment Reporting

The Company operates as a 1single operating and reportable segment, providing resource management expertise and services. Our Chief Executive Officer, who serves as our Chief Operating Decision Maker, evaluates the Company’s financial performance and makes resource allocation decisions considering our one geographical area and on a consolidated basis. Accordingly, the CODM considers the revenue, operating expenses, and other income (expenses) of our single operating segment as reported on the statement of operations and considers our current and total assets as recorded on the balance sheet. There are no additional expense or asset information that are supplemental to those disclosed in these consolidated financial statements that are regularly provided to the CODM.

NOTE 5. Prepaid Expenses

In August 2023, the Company signed an agreement with M2 Compliance LLC (“M2”) for M2 to provide EDGAR filing services for the Company. The term of the services was from August 19, 2023 to August 18, 2024 for an annual fee of $6,495. In August 2024, the Company paid $7,015 for the period from August 19, 2024 to August 18, 2025. During the three and nine months ended September 30, 2024 the Company amortized $1,689 and $4,937, respectively. The Company amortized $1,461 and $4,384 during the three and nine months ended September 30, 2025, respectively. As of September 30, 2025, it is fully amortized.

Also in August 2023, the Company paid the annual fees to OTC Markets for two categories of services. The fee was $9,780 and the Company amortized $815 and $5,705, respectively, of the fee during the three and nine months ended September 30, 2024. In October 2024, the Company paid the annual fee of $10,080 for the year from November 2024 to October 2025. The Company amortized $2,520 and $7,560, respectively, of the fee during the three and nine months ended September 30, 2025, leaving a remaining prepaid balance of $840 as of September 30, 2025.

In March 2025, the Company upgraded the OTC Markets services and paid the annual fee of $9,300 for the period from March 2025 to February 2026. The Company amortized $2,325 and $5,425 for the three and nine months ended September 30, 2025 leaving a remaining prepaid balance of $3,873 as of September 30, 2025.

As of September 30, 2025, the balance of prepaid expenses was $4,713.

NOTE 6. Intangible Assets

As of September 30, 2025, the net book value of the intangible assets was $18,042,980, which was made up of the assets described below.

Software to be Sold, Leased, or Marketed

In March 2023 the Company paid, through OAG (a related party), $84,000 to Oktane Media, a Company owned by Ken Park, the Company’s Chief Marketing Officer, for Nodalium Channel Partnership Agreement & Transaction Costs, through which the Company obtained a certain license that allowed the Company to resell the license. The license fee covered one year. The asset was amortized over the twelve months starting in April 2023. The Company amortized $0 and $21,000 during the three and nine months ended September 30, 2025 and 2024, respectively. The asset was fully amortized as of September 30, 2025.

Internal-use Software

In January 2023, the Company entered into a service agreement with Nodalium, Inc. (“Nodalium”) through which Nodalium would provide workflow automation for the KYC and AML onboarding of gold reserves. The consideration for this project was $80,000. During the nine and three months ended September 30, 2025, the Company recognized amortization of $20,000 and $6,667, respectively, and the remaining balance of the assets was $20,000 as of September 30, 2025. Having participated in the planning and development of the Company’s Core Architectural Platform and Digital Asset Ecosystem, I-ON will further develop and expand upon the Nodalium technology by adding new AI and web3-based workflow management components that have been additionally developed by other technology partners like Instruxi Limited.

In March 2023, the Company signed an agreement with Instruxi Limited, through which Instruxi Limited was to build a technology stack for the tokenization of precious metal, mineral, and/or commodity asset rights for unextracted deposits. The technology stack allows the Company to provide specialist consultation, through its ION’s Digital Architecture & Hybrid Blockchain Platform. The Company paid $329,142 for this software. During the nine and three months ended September 30, 2025 the Company recognized amortization of $82,285 and $27,428, respectively, and the remaining value of the assets was $137,143 as of September 30, 2025.

In August 2025, the Company engaged Instruxi Limited to upgrade and modify its existing technology platform. The total cost of the project is estimated to be approximately $50,000. As of September 30, 2025, the Company had incurred costs of $30,000 related to the project, of which $6,000 was capitalized for upgrades. The project was not yet completed or ready for use as of the end of the reporting period, accordingly, no amortization has been recognized as of September 30, 2025.

The Company expects to record amortization of $34,096 for the remainder of 2025 and $125,047, $2,000, and $2,000 for the years ending December 31, 2026, 2027, and 2028, respectively.

Indefinite-lived Intangible Assets

In February 2023, ION Acquisition Corp., a company owned 100% by Carlos Montoya, the Company’s Chief Executive Officer and controlling stockholder, signed a purchase agreement with Nahla Jacobs and Nahla Saleh Jacobs Trust and Orebits Acquisition Group LLC, to purchase 180 Orebits AU Certificates, valued at $335,700. ION Acquisition Corp. paid $85,700 in cash and issued 1,136,364 shares of its common stock for the transaction. ION Acquisition Corp. then contributed the 180 Orebits AU Certificates to the Company. In October 2023, the Company assessed the value of the Orebits AU Certificates and determined there was an impairment of $8,199, reducing the asset value to $327,501 as of December 31, 2023.

In December 2023, the Company obtained 9,699.7082 Orebits AU Certificates through the acquisition of Orebits as a result of the Contribution and Exchange Agreement with OAG, an entity owned and controlled by Carlos Montoya, CEO (see NOTE 1). Pursuant to the agreement, I-ON Digital Corp. issued 910,000 shares of Series C Preferred Stock in exchange for Orebits’ 100% ownership of 910,000 Orebits’ shares. The Company, having independently built the underlying ION Digital Hybrid Blockchain & Workflow Platform in anticipation of onboarding the Orebits AU certificates as a Gold Backed Digital Asset, recorded the 9,699.7082 Orebits AU Certificates at $17,643,284 ($1,818.95 per Orebits AU Certificate).

In July 2024, the Company sold 50 units of the Orebits AU Certificates in exchange for 2 units of Bitcoin (“BTC”). The selling price was $116,630 based on the value of BTC on the date of sale, and the carrying value of the 50 Orebits AU Certificates was $90,948, so the gain on exchange of the intangible assets was $25,682. On September 30, 2024, the Company sold the 2 units of BTC for cash of $120,425, which was the BTC selling price on the date of sale, resulting in a gain on sale of intangible assets of $3,795.

The Orebits AU Certificates have been determined to have an indefinite life, therefore no amortization has been recognized, instead the asset is evaluated for impairment in accordance with the Company’s policy for such. During the nine months ended September 30, 2025 no impairment was recognized, therefore as of September 30, 2025, the value of the indefinite-lived intangible assets were $17,879,837. As of September 30, 2025 489 Orebits AU Certificates were pledged as collateral for the Company’s loans payable (see NOTE 8).

NOTE 7. Related-Party Transactions

During 2023, the Company received $176,342 from IAC as consideration to acquire 803 shares of Series A Preferred Stock. The shares were issued in December 2024 therefore were recorded as Series A Preferred Stock to be issued as of March 31, 2024 (see NOTE 9).

As described in NOTE 6 the Company purchased certain intangible assets from related parties.

Through an entity controlled by Carlos Montoya, the Company’s CEO and controlling stockholder, Mr. Montoya currently pays substantially all the expenses for the Company’s operations and certain capital expenditures. For the nine months ended September 30, 2025 and 2024, the related party deposited cash into the Company and/or paid Company expenses of $440,341 and $815,061, respectively. The Company paid back $35,000 of the advances during the nine months ended September 20, 2025. These advances from the related party are repayable by the Company, unsecured, non-interest bearing and payable on demand. There are no written agreements for these advances. As of September 30, 2025 and December 31, 2024, the balance due to this related party was $1,741,980 and $1,336,639, respectively.

During the nine months ended September 30, 2025, the Company, on behalf of one of its related parties, Oktane Media LLC (“Oktane”), owned by the Company’s Chief Marketing Officer, conducted the payroll process for Oktane. The Company paid Oktane’s employee payroll, payroll taxes and employee benefits in the amount of $476,884. The Company got reimbursed the same amount from Oktane during the nine months ended September 30, 2025, with an additional advance of $6,002. Oktane Media LLC also charged $44,000 for the services it performed for the Company during the nine months ended September 30, 2025, and the Company paid $44,000. As of September 30, 2025, the Company owed Oktane $6,002.

On March 30, 2023, the Company sub-leased its Enterprise Workflow/Intelligent Automation Platform, as allowed under a relicensing provision within that certain master software license agreement, to I-ON Acquisition Corp., an entity owned by Carlos Montoya, the Company’s Chief Executive Officer, for annual fees of $130,500. The Company received the full amount at contract inception and recorded it as deferred revenue, to be recognized into revenue over the twelve-month licensing period starting in April 2023, as the Company’s single performance obligation was to allow I-ON Acquisition Corp. to utilize the software during the license period. The Company recognized revenue of $0 and $32,625 for the nine months ended September 30, 2025 and 2024, respectively.

In September 2025, the Company received $118,900 in advances from Orebits Acquisition Group LLC. As of September 30, 2025, the balance due to OAG was $118,900.

NOTE 8. Loans Payable, in Default

In November 2023, the Company issued promissory notes in the amount of $550,000, with a maturity date at the earlier of one year or 30 days from the closing date of a registered security token offering which was a planned offering yet to be approved by the Securities and Exchange Commission. The promissory notes had an effective (bonus) interest rate of 100% of the note principal, therefore the Company was recording interest of $550,000 ratably over the term of the promissory notes. In addition, the Company issued 550,000 warrants to purchase shares of common stock to the holders of the promissory notes as additional consideration (see NOTE 9). The value of the warrants was $87,970, which was recorded as a debt discount and increase to additional paid in capital at note inception. Further, as additional consideration, upon the closing date of an ION Digital Registered Security Token Offering, the Company would be required to issue Registered Tokens, which would be derived from the Offering, at the sum of which was to be equal to two and one-half times the principal of the promissory notes. Said tokens, all or in part, were to be convertible into the Company’s common stock at a 20% discount to the prevailing bid price on the date that the lender issues to the Company a notice of conversion.

Effective November 1, 2024, all promissory notes were amended to extend the maturity date to July 1, 2025 and the Company was responsible to pay an additional interest amount that was 10% of the total amount due at the time of amendment, or $110,000. The Company accounted for this modification as a debt extinguishment, therefore this additional cost of financing was recorded as a loss on debt extinguishment during the year ending December 31, 2024. In conjunction with the amendment, the Company pledged 489 of their Orebits AU Certificates as collateral for the loans (see NOTE 6). Further, the Company assigned the obligation for the issuance of any Registered Tokens to a related party and the holders of the promissory notes released the Company from such obligation recorded in the original promissory notes.

For the nine and three months ended September 30, 2024, the Company recorded interest expenses of $412,877 and $138,630, respectively, and amortized debt discount of $65,979 and $21,993, respectively, into interest expense related to the loans payable. The debt discount was fully amortized and all interest due on the note was recognized as of December 31, 2024, therefore no interest expense was recorded during the nine and three months ended September 30, 2025.

As of September 30, 2025 the balance of the loans payable balance was $550,000 and the balance of the interest accrued was $660,000, all of which was in default as the July 1, 2025 maturity date had passed.

NOTE 9. Stockholders’ Equity

Series A Preferred Stock

In September 2022, the Company established the Series A Preferred Stock. The authorized number of shares of Series A Preferred Stock is six thousand (6,000). Each share has a par value of $0.0001. Each share of Series A Preferred Stock is convertible into Ten Thousand (10,000) shares of Common Stock and were entitled to vote on matters as to which holders of the Common Stock shall be entitled to vote at a rate of one hundred (100) votes per share of Series A Preferred Stock, which was changed with an amendment on August 22, 2024 to ten thousand (10,000) votes per share of Series A Preferred Stock.

In May and September 2023, the Company received $100,000 and $71,342, respectively, for Series A preferred stock to be issued to IAC, a related party (see NOTE 7). The total of $171,342 was recorded as a liability because if the Company was not able to issue the stock, the funds would be returned. In September 2023, the Company decided to issue the stock and the total amount of $171,342 was reclassified to stock to be issued. In August 2023, the Company received an additional $5,000 from IAC for the stock to be issued. As of December 31, 2023 and September 30, 2024, the total shares of Series A preferred stock to be issued was 803 recorded at a value of $176,342.

During the year ending December 31, 2024, the Company recorded the issuance of their Series A Preferred Stock therefore increasing their Series A shares by 803 and reclassifying the value of $176,342 from Series A Preferred Stock to be issued to additional paid-in capital. As a result, as of December 31, 2024 and September 30, 2025, there were no shares of Series A preferred stock to be issued and no amount shown on the books.

As of September 30, 2025 there were 5,403 shares of Series A Preferred Stock issued and outstanding.

Series B Preferred Stock

In September 2022, the Company established the Series B Preferred Stock. The authorized number of shares of Series B Preferred Stock is six thousand (6,000) with a par value of $0.0001. Each share of Series B Preferred Stock is convertible into one thousand (1,000) shares of Common Stock and is entitled to vote on matters as to which holders of the Common Stock shall be entitled to vote at a rate of one thousand (1,000) votes per share of Series B Preferred Stock.

During the nine months ended September 30, 2025 and 2024, there were no Series B Preferred Stock transactions and as of September 30, 2025 and December 31, 2024 there were no Series B Preferred Stock issued and outstanding.

Series C Preferred Stock

In December 2023, the Company established the Series C Preferred Stock. The authorized number of shares of Series C Preferred Stock is 910,000 with a par value of $0.0001 per share. Each share of Series C Preferred Stock is convertible into twenty (20) shares of Common Stock and was entitled to vote on matters as to which holders of the Common Stock shall be entitled to vote at a rate one (1) vote per share of Series C Preferred Stock. In February 2025 the Company amended their Certificate of Designation for the Series C Preferred Stock and allow each share of Series C Preferred Stock to vote on matters as to which holders of the Common Stock shall be entitled to vote at a rate twenty (20) votes per share of Series C Preferred Stock.

During the nine months ended September 30, 2025 and 2024 there were no Series C Preferred Stock transactions and as of September 30, 2025 and December 31, 2024 there were 745,000 Series C Preferred Stock outstanding.

Series E Preferred Stock

On January 5, 2025, the Company established the Series E Preferred Stock. The Series E Preferred Stock is convertible at any time into shares of Common Stock at the rate of 500 shares of Common Stock for each share of Series E Preferred Stock. The Series E Preferred Stock votes on an as-converted basis, i.e. each share of Series E Preferred Stock is entitled to 500 votes on all matters submitted to a vote of stockholders.

During the nine months ended September 30, 2025 there were no Series E Preferred Stock transactions and as of September 30, 2025 there were no Series E Preferred Stock issued and outstanding.

Common Stock

During the nine months ended September 30, 2025 and 2024 there were no Common Stock transactions and as of September 30, 2025 and December 31, 2024, the Company had 31,106,234 shares of Common Stock issued and outstanding.

Warrants

In November 2023, the Company issued 550,000 warrants to purchase shares of Common Stock to the Holders of Promissory Notes as additional consideration for the loans (see NOTE 8). Pursuant to the underlying loan agreements, the warrant holders could purchase shares of Common Stock at the price of $0.07 per share. The total value of the warrants was $87,970 and the warrants were to expire on the maturity dates of the promissory notes. On November 1, 2024, 550,000 warrants were given up in a cashless exercise in exchange for 396,000 shares of Common Stock, therefore as of September 30, 2025, no warrants were issued or outstanding.

NOTE 10. Subsequent Events

The Company follows the guidance in FASB ASC 855-10 for the disclosure of subsequent events. The Company evaluated subsequent events through the date the financial statements were available to be issued and determined the Company did not have any reportable subsequent events except the following:

In October 2025, the related party, Orebits Acquisition Group LLC, owned by the Company’s CEO, funded $80,000 for the Company’s operations.

Item 2.

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

Forward Looking Statements

This quarterly report on Form 10-Q contains forward-looking statements that involve risks and uncertainties. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions.

While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested in this report. Except as required by applicable law, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our unaudited interim financial statements for the nine months ended September 30, 2025 and 2024 and as of September 30, 2025 are expressed in US dollars and are prepared in accordance with generally accepted accounting principles in the United States of America. They reflect all adjustments (all of which are normal and recurring in nature) that, in the opinion of management, are necessary for fair presentation of our interim financial information. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for any subsequent quarter. Our unaudited financial statements and notes included therein have been prepared on a basis consistent with and should be read in conjunction with our audited financial statements and notes for the year ended December 31, 2024, as filed in our annual report on Form 10-K.

The following discussion should be read in conjunction with our interim financial statements and the related notes that appear elsewhere in this quarterly report.

Business Overview

Organization and Corporate History

I-ON is a leading-edge provider of asset-digitization and securitization solutions engineered to provide a secure, fast, transparent, and institutional-grade ecosystem. We specialize in digitizing documentary evidence of ownership into secure, asset-backed digital certificates, thus bringing liquidity and recognized value to a diverse array of asset classes. Our cutting-edge technology includes a zero-trust, hybrid blockchain architecture that incorporates state-of-the-art smart contracts and sophisticated workflow management AI technologies. This system enables the digitization of ownership records for recoverable gold, precious metals, and mineral reserves, transforming them into digital certificates that facilitate wealth transfer through innovative asset-backed financial instruments.

In the fiscal year 2023, I-ON continued to expand its market presence and product offerings. We notably acquired Orebits’ gold digitization patent portfolio, trademarks, brand marks, and core intellectual property in the Orebits Transaction. This acquisition has allowed us to enhance our capabilities and broaden our service offerings, particularly through a new SaaS platform designed for banks, broker-dealers, and other financial intermediaries. This platform supports the receipt, management, and reporting of digital assets, reinforcing our commitment to innovation in the banking, financial technology, and mineral asset industries.

Results of Operations

Net Sales

The sales for the nine months ended September 30, 2025 and 2024 were $356,335 and $32,625, respectively, and the sales for the three months ended September 30, 2025 and 2024 were $356,335 and $0, respectively. During the prior year, the Company subleased its license to a related party for one year from April 2023 through March 2024 for an annual fee of $130,500. The Company received the full amount and recorded it as deferred revenue which was recognized ratably into revenue over the twelve-month licensing period beginning in April 2023, thus explaining the $32,625 of sales to related parties for the nine months ended September 30, 2024.

In July 2025, the Company entered into a Master Treasury Lease and Custody Agreement (“MTLCA”) with GGBR Inc. (“GGBR”). Under the agreement, the Company facilitates the minting, issuance, and related management of gold-backed digital assets (“GoldFin Tokens”) supported by gold leased from GGBR Inc. The purpose of the arrangement is to support the Company’s digital treasury operations and tokenization platform and resulted in $356,335 worth of revenue during the nine and three months ended September 30, 2025. The reason of the significant change in revenue was the MTLCA commenced in July 2025, so no revenue was recognized in the first two quarters (See Notes 2 and 3 above).

Cost of Sales

The cost of sales for the nine months ended September 30, 2025 and 2024 were $0 and $21,000, respectively, and the cost of sales for the three months ended September 30, 2025 and 2024 were $0 and $0, respectively. The costs recognized in the prior year for the license subleased to a related party was recognized over the same period revenue was generated, from April 2023 through March 2024. The Company incurred no costs during the current year related to the MTLCA with GGBR.

Gross Profit

The gross profit for the nine months ended September 30, 2025 and 2024 was $356,335 and $11,625, respectively, and the gross profit for the three months ended September 30, 2025 and 2024 was $356,335 and $0, respectively. This was explained in the Net Sales and Cost of Sales discussion above.

Operating Expenses

Operating expenses consist of professional fees and general and administrative expenses.

Operating expenses for the nine months ended September 30, 2025 was $1,250,622, containing $437,289 of professional fees and $813,333 of general and administrative expenses. Comparing with the nine months ended September 30, 2024, the operating expenses were $771,208, containing $334,469 of professional fees and $436,739 of general and administrative expenses.

Operating expenses for the three months ended September 30, 2025 was $477,705, containing $127,348 of professional fees and $350,357 of general and administrative expenses. Comparing with the three months ended September 30, 2024, the operating expenses were $344,289, containing $142,890 of professional fees and $201,399 of general and administrative expenses.

The increase in operating expenses was due to overall growth efforts to expand the Company’s operations and offerings which resulted in increased professional fees, marketing expenses, travel expenses, computer and internet expenses, payroll expenses, and amortization during the three and nine months ended September 30, 2025.

Other Income (Expense)

For the three and nine months ended September 30, 2024, the Company had interest expenses of $160,623 and $478,856, respectively. There were no such expenses for the three and nine months ended September 30, 2025, as the Company obtained loans of $550,000, recorded with debt discount at inception, in November 2023, which was amortized over the original loan term of one year, thus the Company did not recognize any interest or amortization of debt discount after December 31, 2024.

For the three and nine months ended September 30, 2024, the Company exchanged 50 units of Orebits for 2 units of Bitcoin, resulting in a gain on exchange of intangible assets of $25,682, and sold the 2 units of Bitcoin for cash of $120,425 resulting in a gain on sale of intangible assets of $3,795. No similar transactions happened during the current year.

Liquidity and Capital Resources

As of September 30, 2025 the Company had its cash of $106,735 and a working capital deficit of $3,154,322. The Company’s limited cash balance and working capital deficit raise substantial doubt about its ability to continue as a going concern without additional financing.

Operating Activities

Net cash used in operating activities was $681,601 for the nine months ended September 30, 2025, compared to $745,920 used during the same period in 2024. The decrease was primarily attributable to a lower net loss of $894,287 in 2025 compared to $1,208,962 in 2024, partially offset by changes in accrued expenses, prepaid expenses, and other working capital accounts.

Investing Activities

Net cash used in investing activities was $6,000 for the nine months ended September 30, 2025, consisting primarily of platform upgrades to the Company’s ION Digital Hybrid Blockchain Platform. In the prior-year period, investing activities provided $94,743, mainly from proceeds related to the sale of intangible assets.

Financing Activities

Net cash provided by financing activities totaled $524,241 for the nine months ended September 30, 2025, compared to $815,061 in the same period in 2024. The decrease was primarily due to lower advances received from related parties during the current period. The Company continues to rely on related party funding to support ongoing operations and development activities

Liquidity Outlook

The Company expects to require approximately $1.0 million to $1.5 million in cash over the next 12 months to fund operations and platform development. Management believes that anticipated revenues from recently executed term sheets, together with continued related party support and potential capital raises, will provide sufficient liquidity to meet operating needs during this period. The Company intends to conduct one or more private placements during the remainder of 2025 to raise up to $100 million; however, there can be no assurance that such financing will be successfully completed.

Capital Resources

The Company does not have any material commitments for capital expenditures as of September 30, 2025. Management anticipates that future investments in technology and compliance infrastructure will be required as operations expand. The Company does not maintain any credit facilities or external lines of credit.

Known Trends and Uncertainties

The Company’s liquidity is primarily dependent on its ability to generate revenues from digital asset activities, secure related party funding, and raise additional capital. The execution of multiple term sheets in the third quarter of 2025 is expected to generate future fee-based revenues, subject to completion of related transactions. While management believes these developments represent a positive trend, the Company’s recurring losses, working capital deficit, and reliance on external financing continue to present uncertainties that may affect future liquidity and capital resources.

Critical Accounting Estimates

Our financial statements are affected by the accounting policies used and the estimates and assumptions made by management during their preparation. A complete summary of these policies is included in Note 2 of the notes to our financial statements. We have identified below the accounting policies that are of particular importance in the presentation of our financial position, results of operations and cash flows, and which require the application of significant judgment by our management. Management has carefully considered the recently issued accounting pronouncements that altered generally accepted accounting principles and does not believe that any other new or modified principles will have a material impact on the Company’s reported financial position or operations in the near term.

Disclosure Controls and Procedures

As required by Rule 15d-15(b) under the Exchange Act, our management, including our principal executive and financial officer, carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 15d-15(e) under the Exchange Act) as of September 30, 2025, the last day of the period covered by this Quarterly Report. Based on this evaluation, our management, including our principal executive and financial officer, concluded that, as of September 30, 2025, our disclosure controls and procedures were not effective at the reasonable assurance level due to material weaknesses identified, as previously disclosed in our Form 10-K for the year ended December 31, 2024.

Limitations on Effectiveness of Controls

Our management, including our principal executive and financial officer, does not expect that our disclosure controls and procedures, or our system of internal control over financial reporting (as defined in Rule 15d-15(f) under the Exchange Act), will prevent or detect all errors and all fraud. A control system, no matter how well designed or operated, can provide only reasonable, but not absolute, assurance that the objectives of the system are met. The design of our control system reflects the fact that there are resource constraints, and that the benefits of such control system must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control failures and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the intentional acts of individuals, by collusion of two or more people, or by management override of the controls. The design of any system of controls is also based in part on certain assumptions about the likelihood of future events, and there can be no assurance that the design of any particular control will always succeed in achieving its objective under all potential future conditions.

Changes in Internal Control over Financial Reporting

There have not been any changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the three months ended September 30, 2025 that has materially affected, or is reasonably likely to materially affect our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1.

Legal Proceedings

None.

Item 1A.

Risk Factors

In addition to the Risk Factors contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 and filed with the SEC on May 11, 2025, the following Risk Factors should also be considered:

Technological Obsolescence and Protocol Risk

The rapid pace of innovation in blockchain and digital asset technologies means that platforms, protocols, or standards can become obsolete quickly. The Company’s products or services may be rendered less competitive or irrelevant if new, superior technologies emerge or if there are significant changes to underlying blockchain protocols (such as forks or upgrades). Failure to adapt to technological advancements could adversely affect the company’s market position and financial performance.

Counterparty and Custodial Risk

Digital asset companies often rely on third-party custodians, exchanges, or service providers. Failures, insolvencies, or breaches at these counterparties can result in loss of assets or business disruption. Additionally, the loss or compromise of private keys can result in irreversible loss of digital assets. The company may have limited recourse in the event of such losses.

Legal and Tax Uncertainty

The tax treatment of digital assets remains uncertain in many jurisdictions and is subject to change. The company may face unexpected tax liabilities, reporting obligations, or penalties due to evolving interpretations by tax authorities. Changes in tax law or policy could have a material adverse effect on the company’s business, financial condition, and results of operations.

Anti-Money Laundering (AML) and Know Your Customer (KYC) Compliance

Non-compliance with global AML/KYC standards can result in severe penalties, loss of banking relationships, or exclusion from key markets. The company is subject to complex and evolving AML/KYC regulations in multiple jurisdictions, and failure to maintain effective compliance programs could expose the company to regulatory enforcement actions and reputational harm.

Network and Consensus Attacks

Digital currencies and blockchain networks are susceptible to various attacks, such as 51% attacks, double-spending, or denial-of-service attacks, which can undermine trust in the platform and result in financial loss. Successful attacks could lead to a loss of assets, disruption of operations, and damage to the company’s reputation.

Token Volatility and Valuation Risk

The value of digital assets and tokens can be highly volatile, which may impact the company’s balance sheet, collateralization models, or the attractiveness of its products to customers and investors. Significant fluctuations in token prices could result in substantial losses or impair the company’s ability to operate effectively.

Jurisdictional and Cross-Border Risks

Operating in multiple jurisdictions exposes the company to conflicting laws, regulatory arbitrage, and the risk of being subject to enforcement actions in foreign countries, including potential extradition or asset seizure. Compliance with diverse and sometimes contradictory legal requirements increases operational complexity and risk.

Reputational Risk from Association with Illicit Activity

Even with robust compliance, digital asset companies may be inadvertently associated with illicit activities (such as ransomware or darknet markets), which can damage reputation and result in de-banking or regulatory scrutiny. Negative publicity or association with criminal activity could materially harm the company’s business and prospects.

Smart Contract and Code Vulnerabilities

Many digital asset platforms rely on smart contracts, which, if not properly audited, can contain bugs or vulnerabilities that may be exploited, leading to loss of funds or operational disruption. The company may be unable to prevent or mitigate losses resulting from such vulnerabilities.

Insurance Limitations

Insurance coverage for digital assets is limited and may not cover all types of losses, especially those resulting from cyberattacks, fraud, or regulatory actions. The Company may be unable to obtain adequate insurance at reasonable rates, or at all, which could leave it exposed to significant financial losses.

Forks and Airdrops

Blockchain forks or airdrops can create operational, legal, and tax complexities, including disputes over asset ownership, accounting treatment, and compliance with securities laws. The Company may face challenges in managing and accounting for such events, which could result in financial or legal exposure.

Item 2.

Unregistered Sales of Equity Securities

None.

Item 3.

Defaults Upon Senior Securities

None.

Item 4.

Mine Safety Disclosures

Not applicable.

Item 5.

Other Information

Rule 10b-5(1) Trading Plans. During the three months ended September 30, 2025, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

Item 6.

Exhibits

Exhibit Number		Exhibit Description

3.1		Certificate of Amendment to Certificate of Incorporation.

31.1		Certification of Chief Executive and Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act Of 2002

32.1		Certification of Chief Executive and Financial Officer Pursuant to 18 U.S.C. 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**

**		The certifications furnished herein are deemed to accompany this Form 10-Q and are not deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall they be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act.

104		Cover Page Interactive Data File (embedded within the Inline XBRL document

SIGNATURES

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

Date: November 14, 2025
	I-ON DIGITAL CORP.

	By:	/s/ Carlos X. Montoya
		Carlos X. Montoya
		Chairman, President (Principal Executive, Financial and Accounting Officer)

I-ON Digital Corp. 10-Q