# EDGAR Filing Document

**Accession Number:** 0002032545
**File Stem:** 0001493152-26-023708
**Filing Date:** 2026-5
**Character Count:** 109823
**Document Hash:** 1dad181abe7f7ba5f1e541995c4ac1c0
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001493152-26-023708.hdr.sgml**: 20260515

**ACCESSION NUMBER**: 0001493152-26-023708

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 62

**CONFORMED PERIOD OF REPORT**: 20260331

**FILED AS OF DATE**: 20260515

**DATE AS OF CHANGE**: 20260515

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** CALLAN JMB INC.
- **CENTRAL INDEX KEY:** 0002032545
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-BUSINESS SERVICES, NEC [7389]
- **ORGANIZATION NAME:** 07 Trade & Services
- **EIN:** 990931141
- **STATE OF INCORPORATION:** NV
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-42506
- **FILM NUMBER:** 26986721

**BUSINESS ADDRESS:**
- **STREET 1:** 244 FLIGHTLINE DRIVE
- **CITY:** SPRING BRANCH
- **STATE:** TX
- **ZIP:** 78070
- **BUSINESS PHONE:** (830) 438-0395

**MAIL ADDRESS:**
- **STREET 1:** 244 FLIGHTLINE DRIVE
- **CITY:** SPRING BRANCH
- **STATE:** TX
- **ZIP:** 78070

?xml version='1.0' encoding='ASCII'?

**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 March 31, 2026

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF

1934 For the transition period from ____________ to ____________

Commission file number: **001-42506**

**CALLAN JMB INC.**

(Exact name of registrant as specified in its charter)

---

| | |
|:---|:---|
| **Nevada** | **99-0931141** |
| (State or other jurisdiction of | (I.R.S. Employer |
| incorporation or organization) | Identification No.) |

---

**244 Flightline Drive**

**Spring Branch, Texas 78070-6241**

(Address of principal executive offices, including zip code)

**Tel: (830) 438-0395**

(Registrant's telephone number, including area code)

---

| | |
|:---|:---|
| **Title of each class** | **Name of each exchange on which registered** |
| Common Stock, par value $0.001 per share CJMB | The Nasdaq Stock Market LLC |

---

**Securities registered pursuant to Section 12(g) of the 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 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 definition of "large accelerated filer," "accelerated filer," "smaller reporting company," and emerging growth company in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ <br> Non-accelerated filer ☒ Smaller reporting company ☒ <br> Emerging growth company ☒

If an emerging growth company, indicate by check mark if this 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 ☒

As of May 14, 2026, the Company had 5,646,118 shares of common stock, $0.001 par value, issued and outstanding.

Documents Incorporated by Reference: **None**.

**CALLAN JMB INC.**

**FORM 10-Q**

**TABLE OF CONTENTS**

---

| | | |
|:---|:---|:---|
| **PART I** | **PART I** |  |
| Item 1. | [Unaudited Financial Statements](#px_001) |  |
|  | [Condensed Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025](#px_001) | 3 |
|  | [Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2026 and 2025](#px_002) | 4 |
|  | [Condensed Consolidated Statement of Stockholders' Equity for the Three Months ended March 31, 2026 and 2025](#px_003) | 5 |
|  | [Condensed Consolidated Statement of Cash Flows for the Three Months Ended March 31, 2026 and 2025](#px_004) | 6 |
|  | [Notes to Condensed Consolidated Financial Statements](#px_005) | 7 |
| Item 2. | [MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](#px_006) | 22 |
| Item 3. | [QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](#px_007) | 24 |
| Item 4. | [CONTROLS AND PROCEDURES](#px_008) | 24 |
| **[PART II](#px_009)** | **[PART II](#px_009)** |  |
| Item 1. | [LEGAL PROCEEDINGS](#px_010) | 25 |
| Item 1A. | [RISK FACTORS](#px_011) | 25 |
| Item 2. | [UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](#px_012) | 25 |
| Item 6. | [EXHIBITS](#px_013) | 25 |
| [SIGNATURES](#px_014) | [SIGNATURES](#px_014) | 26 |

---

**CALLAN JMB INC.** 

**CONDENSED CONSOLIDATED BALANCE SHEETS as of** 

**March 31, 2026 (Unaudited) AND December 31, 2025** 

---

| | | |
|:---|:---|:---|
|  | **March 31, 2026**<br>**(Unaudited)** |<br>**December 31, 2025** |
| Assets |  |  |
| Current Assets: |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $1415566 | $2130758 |
| &nbsp;&nbsp;&nbsp;Accounts receivable, net of allowance for credit losses of $60,807 and $61,675, respectively | 823599 | 343246 |
| &nbsp;&nbsp;&nbsp;Inventory | 218076 | 243285 |
| &nbsp;&nbsp;&nbsp;Other current assets | 577150 | 341311 |
| Total current assets | $3034391 | $3058600 |
| &nbsp;&nbsp;&nbsp;Right of use asset | 1878533 | 1917563 |
| &nbsp;&nbsp;&nbsp;Property and equipment, net of accumulated depreciation of $798,034 and $760,655, respectively | 797471 | 799538 |
| Total assets | $5710395 | $5775701 |
| Liabilities and Stockholders' Equity |  |  |
| Current Liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | $583261 | $564014 |
| &nbsp;&nbsp;&nbsp;Accrued expenses | 569775 | 502183 |
| &nbsp;&nbsp;&nbsp;Corporate taxes payable | 23363 | 23085 |
| &nbsp;&nbsp;&nbsp;Right of use liability – current | 338810 | 323935 |
| Total current liabilities | $1515209 | $1413217 |
| &nbsp;&nbsp;&nbsp;Right of use liability - non-current | 1886208 | 1663229 |
| &nbsp;&nbsp;&nbsp;Derivative Liability | 709445 | 371216 |
| Total long-term liabilities | $2595653 | $2034445 |
| Total liabilities | $4110862 | $3447662 |
| Commitments and Contingencies – Note 8 |  |  |
| Stockholders' Equity |  |  |
| &nbsp;&nbsp;&nbsp;Preferred stock- authorized 10,000,000 shares, $0.001par value; zero issued and outstanding as of March 31, 2026 and December 31, 2025 |  |  |
| &nbsp;&nbsp;&nbsp;Common stock- authorized 190,000,000 shares, par value $0.001 par value; 5,646,118 and 4,858,663 shares issued and outstanding, as of March 31, 2026 and December 31, 2025, respectively | 5646 | 4860 |
| &nbsp;&nbsp;&nbsp;Additional Paid in Capital | 15068955 | 12583193 |
| &nbsp;&nbsp;&nbsp;Accumulated Deficit | (13475068) | (10260014) |
| Total Stockholders' Equity | $1599533 | $2328039 |
| Total Liabilities and Stockholders' Equity | $5710395 | $5775701 |

---

**CALLAN JMB INC.**

**CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS**

**FOR THE THREE MONTHS ENDED MARCH 31, 2026 and 2025 (Unaudited)**

---

| | | |
|:---|:---|:---|
|  | **Three months ended** | **Three months ended** |
|  | **March 31, 2026** | **March 31, 2025** |
| Revenue | $1106143 | $1449377 |
| Cost of revenue | 678908 | 833437 |
| Gross profit | 427235 | 615940 |
| Operating expenses |  |  |
| Selling, general and administrative expenses | 2128423 | 1854316 |
| Loss from operations | (1701188) | (1238376) |
| Other income (expenses) |  |  |
| &nbsp;&nbsp;&nbsp;Interest income | 1892 | 2209 |
| &nbsp;&nbsp;&nbsp;Interest expense |  | (63) |
| &nbsp;&nbsp;&nbsp;ELOC facility transaction expenses | (1177223) |  |
| &nbsp;&nbsp;&nbsp;Changes in fair value of derivative liability | (338229) | - |
| Total other income (expenses) | (1513560) | 2146 |
| Loss before income taxes | (3214748) | (1236230) |
| Provision for income taxes | 306 | 4360 |
| Net Loss | $(3215054) | $(1240590) |
| Weighted average common shares outstanding - basic and diluted | 5454247 | 3862507 |
| Net Loss per common share - basic and diluted | $(0.59) | $(0.32) |

---

**CALLAN JMB INC.**

**CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025**

**(Unaudited)**

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Preferred Stock** | **Preferred Stock** | **Common Stock** | **Common Stock** | | | |
|  | **Shares** | **Amount** | **Shares** | **Amount** | **Additional**<br>**Paid in**<br>**Capital** |<br>**Accumulated**<br>**Deficit** | **Total**<br>**Stockholders'**<br>**Equity** |
| January 1, 2026 |  | $- | 4858663 | $4860 | $12583193 | $(10260014) | $2328039 |
| Net Loss |  |  |  |  |  | (3215054) | (3215054) |
| Issuance of ELOC Shares |  |  | 768705 | 768 | 2091454 |  | 2092222 |
| Stock based compensation |  |  |  |  | 394326 |  | 394326 |
| Restricted stock unit awards vesting |  |  | 18750 | 18 | (18) |  | - |
| March 31, 2026 |  | $- | 5646118 | $5646 | $15068955 | $(13475068) | $1599533 |

---

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Preferred Stock** | **Preferred Stock** | **Common Stock** | **Common Stock** | | | |
|  | **Shares** | **Amount** | **Shares** | **Amount** | **Additional**<br>**Paid in**<br>**Capital** |<br>**Accumulated**<br>**Deficit** | **Total**<br>**Stockholders'**<br>**Equity** |
| January 1, 2025 |  | $- | 3000000 | $3000 | $5464006 | $(2293648) | $3173358 |
| Net Loss |  |  |  |  |  | (1240590) | (1240590) |
| Common stock issued in initial public<br> offering, net of costs |  |  | 1280000 | 1280 | 3950588 |  | 3951868 |
| Common stock issued in initial public<br> offering (over allotment), net of costs |  |  | 163569 | 164 | 591956 |  | 592120 |
| Stock based compensation |  |  |  |  | 330825 |  | 330825 |
| March 31, 2025 |  | $- | 4443569 | $4444 | $10337375 | $(3534238) | $6807581 |

---

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

**CALLAN JMB INC.**

**CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS**

**FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025**

**(Unaudited)**

---

| | | |
|:---|:---|:---|
|  | **Three months ended** | **Three months ended** |
|  | **March 31, 2026** | **March 31, 2025** |
| **Cash flows from operating activities:** |  |  |
| **Net Loss** | $(3215054) | $(1240590) |
| **Adjustment to reconcile net loss to net cash used in operating activities:** |  |  |
| Changes in fair value of derivative liability | 338229 |  |
| Depreciation and amortization | 37379 | 37857 |
| Recovery from credit losses | (868) | (17120) |
| Other non-cash expenses relating to ELOC Facility | 1092222 |  |
| Stock based compensation | 394326 | 330825 |
| **Changes in operating assets and liabilities:** |  |  |
| &nbsp;&nbsp;&nbsp;Accounts receivable | (479485) | (194922) |
| &nbsp;&nbsp;&nbsp;Inventory | 25209 | (57684) |
| &nbsp;&nbsp;&nbsp;Tax refund receivable |  | 6377 |
| &nbsp;&nbsp;&nbsp;Prepaid insurance |  | (199491) |
| &nbsp;&nbsp;&nbsp;Other current assets | (235839) | (52785) |
| &nbsp;&nbsp;&nbsp;Right of use liability, net | 276884 | 4770 |
| &nbsp;&nbsp;&nbsp;Security Deposits and other assets |  | 3650 |
| &nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses | 86839 | (97639) |
| &nbsp;&nbsp;&nbsp;Deferred revenue |  | (89052) |
| &nbsp;&nbsp;&nbsp;Deferred tax liability |  | 4106 |
| &nbsp;&nbsp;&nbsp;Corporate taxes payable | 278 | - |
| **Net cash used in operating activities** | (1679880) | (1561698) |
| **Cash flows used in investing activities** |  |  |
| Purchase of property and equipment | (35312) | (15000) |
| **Net cash used in investing activities** | (35312) | (15000) |
| **Cash flows provided by financing activities:** |  |  |
| Related party loans |  | 18669 |
| Proceeds from IPO and overallotment, net |  | 4680013 |
| Proceeds from offering of ELOC shares | 1000000 | - |
| **Net cash provided by financing activities** | 1000000 | 4698682 |
| **Increase (decrease) in cash and cash equivalents** | (715192) | 3121984 |
| **Cash and cash equivalents at beginning of period** | 2130758 | 2097945 |
| **Cash and cash equivalents at end of period** | $1415566 | $5219929 |
| **Supplemental disclosures of cash flow information:** |  |  |
| &nbsp;&nbsp;&nbsp;Cash paid for interest | $- | $63 |
| &nbsp;&nbsp;&nbsp;Lease incentives reimbursement | 280115 |  |
| **Supplemental Schedule of Non-Cash Operating, Investing, and Financing Activities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Issuance of common stock for ELOC-related consideration and expenses | $1092222 | $- |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Right of use assets acquired and operating lease liabilities recognized for new lease arrangement | $38737 | $- |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restricted stock unit awards vesting | $18 | $- |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fair value of Stock Warrants issued at IPO | $- | $144358 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred offering costs charged to additional paid-in-capital | $- | $136025 |

---

**CALLAN JMB INC.**

**NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

**NOTE 1 – NATURE OF OPERATIONS**

Callan JMB Inc. (which may be referred to as "Callan", "Callan JMB", "CJMB", "Company," "we," "us," or "our") was formed on January 24, 2024, in the state of Nevada for the purposes of reorganizing and becoming a holding company for Coldchain Technology Services, LLC and Callan JMB Services (India) Private Limited. CTS was formed on December 27, 2006, in the state of Texas and is our main operating subsidiary engaged in a vertically integrated logistics and fulfillment ecosystem that utilizes advanced predictive technology for the supply chain by guaranteeing the safety, effectiveness, and potency of every product handled to ensure product integrity, and to provide immediate response in time sensitive industries while ensuring environmental responsibility. Callan JMB Services (India) Private Limited is domiciled in Pune, Maharashtra, India, is 99.9% owned by Callan JMB and had no operations or activities as of March 31, 2026. The Company's headquarters are located in Spring Branch, Texas.

The interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 2025 and notes thereto contained in the Company's Form 10-K filed with the Securities and Exchange Commission. The condensed consolidated balance sheet at December 31, 2025 has been derived from the audited financial statements at that date. The results of operations for the three months ended March 31, 2026 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2026.

*Liquidity and Capital Resources*

The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and other commitments in the normal course of business. As such, the financial statements do not include adjustments for the recoverability and classification of assets and their carrying amounts, or for the amount and classification of liabilities that may result should the Company be unable to continue as a going concern. The Company has incurred net losses of $(3,215,054) and $(1,240,590) for the three months ended March 31, 2026 and 2025, respectively, and an accumulated deficit of $(13,475,068) as of March 31, 2026.

The continuation of the Company as a going concern depends on continued financial support from its shareholders, the ability to raise equity or debt financing, and the attainment of profitable operations from the Company's future business. These factors raise substantial doubt regarding the Company's ability to continue as a going concern.

As discussed in Note 6, on July 24, 2025, the Company entered into an ELOC Purchase Agreement ("Equity Line of Credit," or the "ELOC Facility") with an investor, whereby the Company has the right, but not the obligation, to sell to the investor therein, up to an aggregate of $25.0 million of shares of the Company's common stock. The ELOC Facility has a term ending on (i) the first day of the month following the 18-month anniversary of the Commencement Date or (ii) the date the Investor has purchased the shares equal to the agreed investment amount. The Company will control the timing and amount of any sales of shares of common stock to Investor. Actual sales of shares of common stock to Investor as a drawdown under the ELOC Facility will depend on a variety of factors determined by the Company from time to time, which may include, among other things, market conditions, the trading price of the Company's common stock and determinations by the Company as to the appropriate sources of funding for our business and operations. Additionally, on March 10, 2026, the Company entered into an amendment to the ELOC Facility that extended the maturity date to April 1, 2027. As of March 31, 2026, the Company has raised $1.55 million, with $23.45 million remaining availability under the ELOC Facility. Since inception, CJMB has funded its operations through a combination of operating cash flows and external financing sources, including the ELOC Facility and other sources, such as funding from Mr. Wayne Williams, the Company's Chief Executive Officer and largest shareholder. Management intends to continue evaluating and utilizing available funding to support the Company's operations and growth, including operating cash flows and potential other sources of funding, such as equity or debt financing, as well as additional funding from Mr. Williams. Management believes that these liquidity sources, combined with its plan to explore various strategic initiatives, investment opportunities and cost reduction strategy, have alleviated substantial doubt regarding the Company's ability to continue as a going concern for the next twelve months from the issuance date of these condensed consolidated financial statements.

**NOTE 2 - RECLASSIFICATIONS**

Certain prior year amounts in the condensed consolidated financial statements and the notes thereto have been reclassified where necessary to conform to the current period's presentation. These reclassifications did not affect the prior period's total assets, total liabilities, stockholders' equity, net loss, or net cash used in operating activities.

**CALLAN JMB INC.**

**NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

**NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

*Principles of Consolidation and Basis of Presentation*

The Condensed Consolidated Financial Statements include all of the accounts of the Company and our subsidiaries. We have eliminated all significant intercompany transactions and balances in consolidation. In management's opinion, all adjustments, consisting only of normal recurring accruals, necessary for a fair statement of our Condensed Consolidated Balance Sheet as of March 31, 2026 and our Condensed Consolidated Statements of Operations for the three months ended March 31, 2026 and 2025 have been made. The results set forth in our Condensed Consolidated Statements of Operations for the three months ended March 31, 2026 and in our Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2026 are not necessarily indicative of the results to be expected for the full year. The Condensed Consolidated Balance Sheet as of December 31, 2025 was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States ("GAAP").

*Use of Estimates*

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions about future events that affect the amounts reported in the condensed consolidated financial statements and the accompanying notes. Management bases its estimates on historical experience and other assumptions that it believes to be reasonable at the time. Actual results could differ from those estimates and any such differences may be material to the financial statements. Significant estimates are contained in the accompanying financial statements for the useful lives for depreciation and amortization of long-lived assets, allowance for credit losses, fair value of financial instruments, stock based compensation and the incremental borrowing rate used in determining the right-of-use assets and operating lease liabilities.

*Cash and Cash Equivalents*

The Company places its cash with high credit quality financial institutions. The Company's account at these institutions are insured by the Federal Deposit Insurance Corporation ("FDIC") up to $250,000. All cash amounts in excess of $250,000 are unsecured. The Company has a deposit placement agreement for Insured Cash Sweep Service ("ICS"). This service is a secure, and convenient way to access FDIC protection on large deposits, earn a return, and enjoy flexibility. The Company believes that the ICS agreement will mitigate its credit risk as it relates to uninsured FDIC amounts in excess of $250,000. At March 31, 2026 and December 31, 2025, the Company's balances exceeded federally insured limits by approximately $1,001,505 and $1,701,861, respectively.

*Accounts Receivable*

Accounts receivable are recorded at the invoiced amount, which is the amount the Company expects to collect from its customers. Generally, payment is due from customers within 30-90 days of the invoice date. On a regular basis, the Company evaluates its accounts receivable and establishes the allowance for credit losses based on an evaluation of certain criteria and evidence of collection uncertainty including historical collection trends, reasonable expectations of future collections, current economic trends and changes in customer payment patterns. Past-due receivable balances are written off when the Company's collection efforts have been deemed unsuccessful. The Company maintains an allowance for credit losses to reserve for potential uncollectible receivables. The allowance for credit losses as of March 31, 2026 and December 31, 2025 are as follows:

---

| | | |
|:---|:---|:---|
|  | **March 31, 2026** | **December 31, 2025** |
| Beginning balance | $61675 | $64000 |
| Provision (recovery) for credit losses | (868) | 230190 |
| Related allowances for written off accounts receivable |  | (152568) |
| Reversal of allowance related to reinstated invoices previously charged off |  | (82000) |
| Others | - | 2053 |
| **Ending balance** | $**60807** | **61675** |

---

**CALLAN JMB INC.**

**NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

*Credit Concentration*

The concentration of credit risks in accounts receivable is due to several large customers comprising the Company's customer base throughout North America. The Company maintains policies over credit extension that include credit evaluations, credit limits and collection monitoring procedures on a customer-by-customer basis. However, the Company generally does not require collateral before services are performed.

The Company has several customers for the three months ended March 31, 2026 and 2025 that make up in excess of 10% of revenue as follows:

SCHEDULE OF CONCENTRATION OF RISK

---

| | | |
|:---|:---|:---|
| | **Three months ended** | **Three months ended** |
| <br>**Customer** | **March 31, 2026** | **March 31, 2025** |
| 1 | 67% | 56% |
| 2 | 13% | 14% |
| 3 | 11% | -% |

---

The Company has several customers as of March 31, 2026 and December 31, 2025 that make up in excess of 10% of accounts receivable as follows:

---

| | | |
|:---|:---|:---|
| **Customer** | **March 31, 2026** | **December 31, 2025** |
| 1 | 51% | 13% |
| 2 | 14% | -% |
| 3 | 5% | 11% |
| 4 | 19% | 48% |

---

The Company has several vendors as of March 31, 2026 and December 31, 2025 that make up in excess of 10% of accounts payable as follows:

---

| | | |
|:---|:---|:---|
| **Vendor** | **March 31, 2026** | **December 31, 2025** |
| 1 | 11% | 29% |
| 2 | 22% | 17% |
| 3 | 13% | -% |
| 4 | 12% | -% |

---

The Company has several vendors for the three months ended March 31, 2026 and 2025 that make up equal to or more than 10% of services rendered to us as follows:

---

| | | |
|:---|:---|:---|
| | **Three months ended** | **Three months ended** |
| <br>**Vendor** | **March 31, 2026** | **March 31, 2025** |
| 1 | -% | 11% |
| 2 | -% | 10% |
| 3 | 11% | -% |

---

**CALLAN JMB INC.**

**NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

*Inventory*

Inventory is stated at the lower of cost (using the *first*-in, *first*-out method ("FIFO")) or net realizable value. We continually analyze our slow moving and excess inventories. Based on historical and projected sales volumes and anticipated selling prices, we determined that establishing a reserve was not necessary at this time. Inventory that is in excess of current and projected use is reduced by an allowance to a level that approximates its estimate of future demand. Products that are determined to be obsolete are written down to net realizable value. The Company's inventory is comprised of raw materials for a customer's packaging needs as follows:

---

| | | |
|:---|:---|:---|
|  | **March 31, 2026** | **December 31, 2025** |
| Raw materials | $218076 | $243285 |

---

*Property and Equipment*

Property and equipment, net is stated at cost less accumulated depreciation. Expenditures for major renewals and improvements which extend the life or usefulness of the asset are capitalized. Items of an ordinary repair or maintenance nature are charged directly to operating expense as incurred. During the construction and development period of an asset, the costs incurred, including interest expense, are classified as construction-in-progress. When the asset is ready for its intended use, the asset is reclassified to an appropriate asset classification and depreciation, or amortization commences.

The Company depreciates and amortizes the capitalized cost of these assets, using the straight-line method as follows:

Asset Classification:

Computer equipment 3-5 years

Furniture and fixtures 5-8 years

Leasehold Improvements Limited to lease term

The Company recognized depreciation expense of $37,379 and $37,857 for the three months ended March 31, 2026 and 2025, respectively, in its condensed consolidated statements of operations, respectively. Fully depreciated assets are retained in property, plant and equipment and accumulated depreciation until they are removed from service.

The Company tests for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. An impairment in the carrying value of long-lived assets is recognized if the expected future undiscounted cash flows derived from the assets, or group of assets, are less than their carrying value. The Company did not record any impairment charges related to long-lived assets in the periods presented.

*Revenue Recognition*

The Company recognizes revenue when control of the promised goods or services is transferred to the Company's customers. Revenue is recorded at the transaction price, which is the amount that reflects the consideration the Company expects to receive in exchange for providing the goods or services. The Company's primary performance obligations in our contracts with customers are to provide services related to emergency preparedness or to deliver specialty packaging. Most of the Company's revenues are for services, which are recognized over time as the related time and materials are incurred at contractually agreed-upon rates. Product revenues are recognized at a point in time when the products are delivered and control transfers to the customer. The Company's payment terms vary by the type of customers and the products or services offered. The periods between invoicing and when payments are due are not significant. Amounts billed to customers related to shipping and handling are classified as revenue, and the Company's shipping and handling costs are included in costs of revenues.

**CALLAN JMB INC.**

**NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

*Disaggregation of Revenue*

The following table presents our disaggregated revenues by distribution channel:

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended March 31,** | **Three Months Ended March 31,** |
| Sales by distribution channel: | **2026** | **2025** |
| Emergency preparedness | $878596 | $941721 |
| Specialty packaging | 227547 | 507656 |
| Total | $1106143 | $1449377 |

---

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended March 31,** | **Three Months Ended March 31,** |
| Sales by customer type: | **2026** | **2025** |
| Governmental | $884667 | $1078501 |
| Non-governmental | 221476 | 370876 |
| Total | $1106143 | $1449377 |

---

*Emergency preparedness*

We provide comprehensive services primarily to state and local governments. These services include managing their building sites, medical stockpiles of equipment, supplies and responding to state or local emergencies. We also provide Quality Control/Assurance to safeguard vaccines, medical supplies, and equipment. Revenue is recognized when services are rendered, or medical supplies are shipped.

*Specialty Packaging.*

Our specialty temperature-regulating packaging solutions provide a better thermal system to maintain and protect products and ensure peak customer experience. In utilizing this packaging, customers yield the benefits of lower costs and overhead while improving process, agility, velocity, accuracy, and repeatability of complex fulfillment networks. Revenue is recorded when products are delivered, or services are rendered. Additionally, it also includes amounts billed to customers related to shipping and handling are classified as revenue and the Company's shipping and handling costs are included in costs of revenues as well as the Company's contract with a customer for cloud-based temperature monitoring software. The customer paid their contract in advance and therefore revenue is earned monthly over the term of the contract.

*Stock Warrants*

During the first quarter ended March 31, 2025, the Company granted 72,179 stock warrants to various individuals of the underwriting firm that assisted the Company with its initial public offering on February 4, 2025. The stock warrants were issued in lieu of cash for a portion of their services. There were no warrants issued during the first quarter ended March 31, 2026. The Company accounts for its warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant's specific terms and applicable authoritative guidance in ASC 480, "*Distinguishing Liabilities from Equity*" and ASC 815, "*Derivatives and Hedging*". The assessment considers whether the warrants are freestanding financial instruments that would require classification as a liability under ASC 480, as well as whether the warrants qualify for equity classification or require liability classification after consideration of the guidance and criteria outlined in ASC 815, including whether the warrants are indexed to the Company's own common shares and whether the warrant holders could potentially require "net cash settlement" in a circumstance outside of the Company's control, among other conditions that impact classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance. For issued warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. As of March 31, 2026, the Company's condensed consolidated balance sheet included equity classified warrants, reported as additional paid in capital.

*<u>Share-Based Compensation</u>*

The Company provides share-based compensation to its employees and Board of Directors. The Company is required to exercise judgment and make estimates when determining the (i) fair value of each award granted and (ii) projected number of awards expected to vest. The Company calculates the fair value of all share-based awards at the date of grant using the Black-Scholes option-pricing model for stock options and Monte Carlo simulation model for market-based awards. The Company uses the straight-line method to amortize this fair value as compensation cost over the requisite service period. Any forfeitures are recognized as they occur.

*Net Loss per Common Share*

The following table sets forth the number of potential shares of common stock that have been excluded from diluted net loss per share because their effect was anti-dilutive for the three months ended March 31, 2026 and March 31, 2025:

---

| | | |
|:---|:---|:---|
|  | **Three Months ended** | **Three Months ended** |
|  | **March 31,** | **March 31,** |
|  | **2026** | **2025** |
| Stock Options | 1287500 | 1275000 |
| Restricted Stock Awards | 531250 | 531250 |
| Stock Warrants | 72179 | 72179 |
| Total | 1890929 | 1878429 |

---

**CALLAN JMB INC.**

**NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

*Cost of Revenues*

Our cost of revenue primarily includes the amounts paid to outside service providers, monitoring, direct and indirect labor, warehouse rent and other related expenses.

*Advertising Expense*

Advertising costs primarily consist of trade shows, other promotional expenses and the cost to retain our marketing firm. Advertising costs are expensed as incurred. Advertising expense for the three months ended March 31, 2026 and 2025 was $75,250 and $140,949, respectively.

*Fair Value of Financial Instruments*

The Company accounts for its derivative instruments in accordance with the provisions of Accounting Standards Codification ("ASC") 820-10, Fair Value Measurement, which among other things provides the framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level I measurement) and the lowest priority to unobservable inputs (Level III measurements). The three levels of fair value hierarchy under ASC 820-10, Fair Value Measurement, are as follows:

Level I - Quoted prices are available in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

Level II - Significant observable inputs other than quoted prices in active markets for which inputs to the valuation methodology include: (1) Quoted prices for similar assets or liabilities in active markets; (2) Quoted prices for identical or similar assets or liabilities in inactive markets; (3) Inputs other than quoted prices that are observable; and (4) Inputs that are derived principally from or corroborated by observable market data by correlation or other means. If the asset or liability has a specified (contractual) term, the Level II input must be observable for substantially the full term of the asset or liability.

Level III - Significant unobservable inputs that reflect an entity's own assumptions that market participants would use in pricing the assets or liabilities.

The asset or liability fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

The Company's financial instruments primarily consist of cash and cash equivalents, accounts receivable, accounts payable and derivative liabilities.

The carrying amounts of cash and cash equivalents, accounts receivable, and accounts payable approximate their respective fair values because of the short-term maturities or expected settlement dates of these instruments.

The derivative liability is valued using a Monte Carlo simulation model utilizing a variety of inputs and assumptions such as volatility, risk-free rates, volume weighted average price and cash flow assumptions. This is considered a Level III valuation technique. Please see Note 6, "Equity – Equity Line of Credit" for information on these assumptions and fair value of this derivative liability as of March 31, 2026.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **March 31, 2026** | **Level 1** | **Level 2** | **Level 3** |
| Derivative liability at fair value | $709445 | $— | $— | $709445 |
| &nbsp;&nbsp;&nbsp;Total liability measured at fair value | $709445 | $— | $— | $709445 |

---

*Deferred Revenue*

Deferred revenue represents customer billings for services that are not yet rendered and is primarily related to a customer invoice billed before service was rendered and for billings of annual or multi-year service contracts. As of March 31, 2026 and December 31, 2025, the Company has no deferred revenue that can be recognized over the next year.

**CALLAN JMB INC.**

**NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)** 

*Income Tax*

The Company provides for income taxes and the related accounts under the asset and liability method. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates expected to be in effect during the year in which the basis differences reverse. Valuation allowances are established when management determines it is more likely than not that some portion, or all, of the deferred tax assets will not be realized.

*Leases*

The Company's leases predominantly relate to real estate equipment, such as vehicles and industrial equipment utilized in operations. Contracts are reviewed at inception to determine if the arrangement is a lease. The Company generally enters into long-term real estate leases with one to ten-year terms. In the normal course of business, the Company also enters into short-term leases having terms of one year or less. These leases are generally equipment leases entered into for short periods of time (e.g., daily, weekly, or monthly) to satisfy immediate and/or short-term operational needs of the business which can arise based upon the nature of particular services performed. The Company has elected not to recognize right-of-use ("ROU") assets and lease liabilities for these short-term leases. Operating leases with terms exceeding one year are recognized as ROU assets and lease liabilities and measured at the commencement date based on the present value of the future lease payments over the lease term. Certain of the Company's real estate leases contain escalating future lease payments. Escalating lease payments that are based upon explicit amounts contained in the lease or an index (e.g., consumer price index) are included in the Company's determination of future lease payments to determine the ROU asset and lease liability recognized at the commencement date. Any differences in the future lease payments from initial recognition are not anticipated to be material and will be recorded as variable lease cost in the period incurred. The variable lease cost will also include the Company's portion of property tax, utilities, and common area maintenance. A significant portion of the Company's real estate lease agreements include renewal periods at the Company's option. The Company includes these renewal periods in the lease term only when renewal is reasonably certain based upon facts and circumstances specific to the lease and known by the Company. The Company uses its incremental borrowing rate available at the lease commencement date in determining the present value of future lease payments as the implicit rate is typically not readily determinable. For operating leases, lease cost is recognized on a straight-line basis over the lease term and is included in cost of revenues or selling, general and administrative expenses depending on the use of the asset. As of March 31, 2026 and December 31, 2025, the Company did not have any leases that were classified as finance leases.

*Recent Accounting Pronouncements*

In November 2024, the FASB issued ASU 2024-03, Income Statement Reporting-Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40), Disaggregation of Income Statement Expenses. The standard update improves the disclosures about a public business entity's expenses by requiring more detailed information about certain types of costs and expenses in the notes to the financial statements. The guidance will be effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The standard updates are to be applied prospectively, with the option to apply them retrospectively. We are currently evaluating the impact of the new standard's disclosure requirements on our financial statements.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. This standard introduces a practical expedient for the application of the current expected credit loss ("CECL") model to current accounts receivable and contract assets. ASU 2025-05 is effective for annual periods beginning after December 15, 2025 and interim periods within those annual periods. The Company adopted ASU 2025-05 for the fiscal year and interim period beginning January 1, 2026 and elected the practical expedient. The adoption did not have a material impact on the consolidated financial statements and related disclosures.

In December 2025, the FASB issued ASU No. 2025-11, "Interim Reporting – Narrow-Scope Improvements," which is intended to improve the navigability of previous guidance and clarify when that guidance is applicable. Among other items, it establishes a principle under which an entity must disclose events since the end of the last annual reporting period that have a material impact on the entity. ASU 2025-11 is not intended to change the fundamental nature of interim reporting or expand or reduce current interim disclosure requirements. The guidance may be applied retrospectively or prospectively and will be effective for the Company for interim periods beginning in fiscal year 2028. The Company is currently evaluating the impact of this ASU but does not anticipate this adoption to have a material impact on the Company's financial statements.

The FASB issues ASUs to amend the authoritative literature in ASC. There have been a number of ASUs to date, including those above, that amend the original text of ASC. Management believes that those issued to date either (i) provide supplemental guidance, (ii) are technical corrections, (iii) are not applicable to us or (iv) are not expected to have a significant impact on our consolidated financial statements.

**CALLAN JMB INC.**

**NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

Accrued Expenses consists of followings:

---

| | | |
|:---|:---|:---|
|  | **(Unaudited)**<br>**March 31, 2026** |<br>**December 31, 2025** |
| Payroll and related costs | $273148 | $149312 |
| Credit card | 15406 | 14348 |
| Professional Fees | 60420 | 113139 |
| Insurance | 113582 | 145227 |
| Storage | 50258 | 46872 |
| Other | 56961 | 33285 |
| Total | $569775 | $502183 |

---

**NOTE 4 – RELATED PARTY TRANSACTIONS**

*Business Partner*

 

Health Hero America ("HHA") is a related party by virtue of common ownership of the Company. There were no transactions with the related party during the three months ended March 31, 2025. During the three months ended March 31, 2026, the Company provides certain labor services to HHA and recognized service revenue amounting to $5,162. As of March 31, 2026, and December 31, 2025, receivables arising from this transaction amounted to $22,003 and $16,789, respectively.

Outlaw Run Ranch ("ORR") is a related party by virtue of common ownership of the Company. The Company pays $9,800 per month to ORR for rent expense. As of March 31, 2026, and December 31, 2025, the Company has $10,503 owed to this related party. As of March 31, 2026 and December 31, 2025, operating lease liability relating to such lease agreement with this related party amounted to $369,422 and $389,630, respectively. See Note 8 for other key terms of the lease agreement.

Warehouse Asset Management is a related party by virtue of common ownership. The Company leases its headquarters, warehouse, other warehouse equipment and a box truck for $15,425 per month. As of March 31, 2026 and December 31, 2025, the Company has $15,425 and $0 owed to this related party, respectively. As of March 31, 2026 and December 31, 2025, operating lease liability relating to such lease agreement with this related party amounted to $592,593 and $625,805, respectively.

During the three months ended March 31, 2025 the Company awarded 100,000 stock options to the CEO's son as compensation for services rendered in a prior period and is subject to the same vesting condition as the Company's other stock option awards. 50,000 stock options have vested and are fully exercisable as of March 31, 2026 and 50,000 remain unvested. The key terms and fair value inputs and assumptions utilized for this stock option are disclosed in Note 7. The Company recognized $28,375 and $15,323 as an expense for the three months ended March 31, 2026 and 2025, respectively.

The Company has done an analysis under ASC 810 and has determined that the aforementioned related parties do not qualify as a Variable Interest Entity and therefore those entities were not consolidated in the preparation of the accompanying financial statements.

**CALLAN JMB INC.**

**NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

**NOTE 5 - SEGMENTS**

Operating segments are identified as components of an enterprise for which separate discrete financial information is available for evaluation by the Company's Chief Operating Decision Maker ("CODM") to make decisions with respect to resource allocation and assessment of performance. To date, the Company has viewed its operations and manages its business as one operating segment. The results of its operating segment are reviewed monthly by the Company's Chief Executive Officer and President, who has been identified as the CODM.

The CODM regularly assesses the performance of the single operating segment and reporting segment and decides how to allocate resources based on net income calculated on the same basis as net income reported in the Company's statements of operations. The CODM is also regularly provided with expense information at a level consistent with that disclosed in the Company's statements of operations.

**NOTE 6 - EQUITY**

During February 2025, we completed our initial public offering ("IPO") of 1,280,000 shares of common stock at a price of $4.00 per share, generating gross proceeds of $5,120,000. Additionally, the underwriters partially exercised their over-allotment option (the "green shoe"), purchasing approximately 164,000 shares at $4.00, resulting in additional gross proceeds of approximately $656,000. In total, the offering generated gross proceeds of approximately $5,776,000. After deducting underwriting discounts and commissions of approximately $1,000,000, we received net proceeds of approximately $4,500,000. In connection with the offering, we issued to the underwriters warrants to purchase up to 72,179 shares of our common stock at an exercise price of $4.80 per share. These warrants have a term of five years from the effective date of the registration statement. We also incurred $188,832 for deferred offering costs.

During the three months ended March 31, 2026, we did not issue any additional shares of common stock in public offerings. However, during the period, we issued 75,000 restricted stock units ("RSUs") as well as approximately 769,000 shares of common stock pursuant to our Equity Line of Credit ("ELOC") facility. These issuances include shares issued in connection with ELOC drawdowns during the quarter, as well as final settlement shares related to ELOC activity initiated during August 2025. Equity activity during the period also included the issuance of stock options to an employee. There were no other new option issuances, warrant issuances, or modifications to existing equity awards during the period.

As of March 31, 2026, the Company had the following equity awards outstanding. RSUs: 18,750 vested for the three months ended March 31, 2026 out of the 75,000 total. Performance based RSUs: 225,000 and market based RSUs: 250,000. Stock Options: 1,287,500 options outstanding. Underwriter Warrants: 72,179 warrants issued in February 2025 with a five-year term and an exercise price of $4.80 per share. All outstanding RSUs, options, and warrants remain subject to applicable vesting, lock-up, and control restrictions.

*Equity Line of Credit (ELOC)*

On July 24, 2025, the Company entered into an ELOC Purchase Agreement ("Equity Line of Credit," or the "ELOC Facility") with an investor, whereby the Company has the right, but not the obligation, to sell to the investor therein, up to an aggregate of $25.0 million of shares of the Company's common stock, par value $0.001 per share, subject to the terms and conditions set forth therein. The Purchase Agreement has a term ending on the earlier of (i) the first day of the month following the 18-month anniversary of the Commencement Date or (ii) the date the Investor has purchased the shares equal to the agreed investment amount. During the term, the Company may, at its discretion, deliver either Regular Purchase Notices for $500,000 to $2,000,000 per notice or Exempt Purchase Notices of up to $1,000,000 per notice. Each Regular Purchase is priced at 95% of the lowest daily VWAP during the applicable measurement period (or 80% if the Company's stock is not trading on the Nasdaq Capital Market). In connection with each Regular Purchase, the Company will provide an estimate of the number of the shares deliverable, based on 90% of the prior day's closing price. Each Exempt Purchase is priced similarly with an incremental 10% shares to be issued.

During the three months ended March 31, 2026, the Company issued shares of common stock pursuant to the Equity Line of Credit ("ELOC") facility in connection with both current-period drawdowns and the final settlement of ELOC activity initiated in a prior period.

In January 2026, the Company issued 171,868 shares of common stock as final settlement shares related to an ELOC raise initiated during the third quarter of 2025. These shares were issued pursuant to the contractual settlement provisions of the ELOC facility and did not result in additional cash proceeds during the current period.

**CALLAN JMB INC.**

**NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

On March 10, 2026, the Company entered into an amendment to its ELOC Facility wherein it extended the maturity to April 1, 2027. Additionally, certain amendments to the measurement period and the settlement price from 95% of the lowest daily VWAP to 95% of lowest closing price during the measurement period. During the three months ended March 31, 2026, the Company raised net proceeds of $915,000 (net of third party fees amounted to $85,000 which is reflected as part of ELOC facility transaction expenses in the statement of operations during the three months ended March 31, 2026) from the ELOC Facility and issued 596,837 common shares for such raise.

The Company will control the timing and amount of any sales of shares of common stock to Investor. Actual sales of shares of common stock to Investor as a drawdown under the ELOC Facility will depend on a variety of factors to be determined by the Company from time to time, which may include, among other things, market conditions, the trading price of the Company's common stock and determinations by the Company as to the appropriate sources of funding for our business and operations.

The Company has the right to terminate the ELOC Facility at any time after the Commencement Date, for any reason or for no reason by delivering notice to the Investor electing to terminate the agreement without any liability except in the event the Company has sold less than $7,500,000 to the Investor, the Company shall pay an additional fee of $250,000 that is payable either in cash or in shares of Common Stock at a price equal to 100% of the Closing Price on the date immediately preceding the date of receipt by the Investor of the Company Termination Notice. The ELOC Facility will also automatically terminate upon reaching the $25,000,000 available amount or at the Maturity Date without any action or notice on the part of any party and without any liability whatsoever of any party to any other party under the ELOC Facility.

The ELOC Facility contains customary representations, warranties, conditions and indemnification obligations of the parties. The representations, warranties and covenants contained in such agreements were made only for purposes of such agreements and as of specific dates, were solely for the benefit of the parties to such agreements and may be subject to limitations agreed upon by the contracting parties.

The Company accounted its ELOC Facility as a purchased put option and is either equity-classified or liability-classified instruments based on an assessment of the agreement's specific terms and applicable authoritative guidance in ASC 480, "Distinguishing Liabilities from Equity" and ASC 815, "Derivatives and Hedging". The assessment considers whether the purchased put option is a freestanding financial instrument that would require classification as a liability under ASC 480, as well as whether the purchased put option would qualify for equity classification or require a liability classification after consideration of the guidance and criteria outlined in ASC 815, including whether the purchased put option are indexed to the Company's own common shares and whether the holders could potentially require "net cash settlement" in a circumstance outside of the Company's control, among other conditions that impact classification. The Company also assessed embedded features in the ELOC Facility under the ASC 480 and ASC 815 guidance, management believed that these embedded features were not freestanding and are clearly and closely related to the host contract and as such do not require bifurcation from the purchased put option. This assessment, which requires the use of professional judgment, is conducted at the time of agreement. The Company assessed that the purchased put option is not under the scope of ASC 480 but is a derivative liability under ASC 815 as it does not meet the scope exception, indexation guidance and equity classification criteria under ASC 815 due to certain variability to the settlement price. As such, the Company accounted for the purchased put option as a derivative liability recognized at fair value at the inception date and each reporting period.

The fair value of the purchased put option was estimated on the date of agreement using Monte Carlo Simulation Model with the following assumptions at each measurement date:

---

| | | |
|:---|:---|:---|
|  | **Inception Date** | **March 31, 2026** |
| Expected life (in years) | 1.52 | 1.00 |
| Expected stock price volatility | 50.5% | 49.4% |
| Risk-free interest rate | 4.00% | 3.68% |
| Stock Price | 5.28 | 1.25 |

---

The risk-free interest rate was based on U.S. Treasury interest rates, the terms of which are consistent with the expected life of purchased put option. Expected volatility was derived using the Company's peer volatility calculated from its peer companies' volatilities over the time period commensurate with the expected life of the purchased put option. The expected life was calculated using the terms of the ELOC Facility.

**CALLAN JMB INC.**

**NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)** 

The Company recognized the fair value of the purchased put option as of March 31, 2026 in its balance sheet under the caption, "Derivative Liability." The change in the fair value of the Derivative Liability during the three months ended March 31, 2026 was $338,229 and was recognized in the Company's statement of operations.

---

| | | |
|:---|:---|:---|
|  | **March 31, 2026** | **December 31, 2025** |
| Derivative liability at fair value – beginning balance | $371216 | $- |
| Recognition of derivative liability arising from ELOC facility |  | 974309 |
| Changes in fair value of derivative liability during the period | 338229 | (603093) |
| Derivative liability at fair value – ending balance | $709445 | $371216 |

---

*Registration Rights Agreements*

In connection with the ELOC Facility, the Company also granted the Investor certain registration rights for shares of common stock issuable within the ELOC Facility, including (a) the ability of a holder to request that the Company file a Form S-1 registration statement; (b) the ability of a holder to request that the Company file a Form S-3 registration statement with respect to outstanding registrable securities if at any time the Company is eligible to use a Form S-3 registration statement; and (c) certain piggyback registration rights related to potential future equity offerings of the Company, subject to certain limitations.

On August 24, 2025, the Company filed a registration statement on Form S-1 related to the resale, from time to time, of up to 6,000,000 shares of Common Stock in connection with the ELOC Facility. The Registration Statement on Form S-1 was declared effective September 22, 2025.

**NOTE 7 - SHARE BASED COMPENSATION**

*<u>Overview</u>*

The Company grants share-based compensation awards to the Company's employees as provided by the 2024 Equity Incentive Plan ("2024 Plan"), which was approved by the Company's stockholders on October 24, 2024. The 2024 Plan provides that grants may be in any of the following forms: incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock, restricted stock units, and performance awards. The 2024 Plan will be administered and interpreted by the Compensation Committee of the Board of Directors. The Compensation Committee has the authority to determine the individuals to whom grants will be made under the 2024 Plan, determine the type, size and terms of the grants, determine the time when grants will be made and the duration of any applicable exercise or restriction period (subject to the limitations of the 2024 Plan) and deal with any other matters arising under the 2024 Plan. All the employees of the Company and its subsidiaries are eligible for grants under the 2024 Plan. Non-employee directors and consultants of the Company are also eligible to receive grants under the 2024 Plan.

The Company has reserved 2,000,000 shares of common stock for the granting of such awards. During the three months ended March 31, 2026 and March 31, 2025, the Company has recognized share-based compensation expense of $394,326 and $330,825, respectively. As of March 31, 2026, the Company has recognized $1,954,082 in share-based compensation expense since initial issuance in February 2025. Share-based compensation expense is recorded in selling, general and administrative expenses on the condensed consolidated statement of operations.

**CALLAN JMB INC.**

**NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

*<u>Stock Options</u>*

 

During the period, the Company granted 100,000 non-statutory stock options to an executive employee, pursuant to their employment agreement. Half of the options vest as of March 31, 2026 with the remaining options vesting in equal quarterly installments over a 12-month period by March 31, 2027. The options were granted under the Company's equity incentive plan and are subject to the same terms and conditions, including forfeiture provisions, as the Company's other stock option awards. The award is included in the stock option activity tables presented below.

A summary of nonstatutory stock option activity during the three months ended March 31, 2026 is included below.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Number of<br> Awards** | **Weighted-<br> Average<br> Exercise Price** | **Weighted-<br> Average<br> Remaining<br> Contractual<br> Term (in years)** | **Aggregate<br> Intrinsic Value** |
| Outstanding at December 31, 2025 | 1187500 | $4.00 | 9.11 |  |
| Granted | 100000 | $1.82 | 9.98 |  |
| Exercised |  |  |  |  |
| Forfeited | - | - |  |  |
| Outstanding at March 31, 2026 | 1287500 | $3.83 | 9.86 |  |
| Outstanding and exercisable | 638017 | $3.83 | 9.11 |  |

---

The fair value of each option granted was estimated on the date of grant using the Black-Scholes-Merton option-pricing model with the following assumptions:

---

| | | |
|:---|:---|:---|
|  | **2025** | **2026** |
| Expected life (in years) | 5.66 | 5.17 |
| Expected stock price volatility | 49.20% | 46.53% |
| Risk-free interest rate | 4.19% | 4.52% |
| Dividend rate | 0.00% | 0.00% |

---

The risk-free interest rate was based on U.S. Treasury interest rates, the terms of which are consistent with the expected life of the stock options. Expected volatility was derived using the Company's peer volatility calculated from its peer companies' volatilities over the time period commensurate with the expected life of the stock options. The expected life for the stock options granted was calculated using the midpoint assumption equal to the time from the grant date to the midpoint of the weighted average vesting date and the expiration date. The Company does not currently pay dividends on its common stock nor does it expect to in the foreseeable future.

The weighted average grant date fair value of options granted during the three months ended March 31, 2026 was $0.89 per share. As of March 31, 2026, there was $1,174,515 of unrecognized expense for unvested stock options that is expected to be recognized over a weighted average period of 1 year. During the three months ended March 31, 2026 and March 31, 2025, the Company recognized share-based compensation expense of $371,786 and $330,825, respectively, which is recorded in selling, general and administrative expenses on the condensed consolidated statement of operations.

*<u>Performance-Based Awards</u>*

During the first quarter ended March 31, 2025, the Company granted 225,000 performance-based stock awards to its Chief Executive Officer. The grant date fair value was $4.00 per share. The vesting is subject to the Company meeting certain business and financial goals by October 15, 2026. As of March 31, 2026, none of the performance-based awards were probable of vesting and thus no expense was recognized during the first quarter.

**CALLAN JMB INC.**

**NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

*<u>Market-Based Awards</u>*

During the first quarter ended March 31, 2025, the Company granted 250,000 market-based stock awards to its Chief Executive Officer. The weighted average grant date fair value was $0.04 per share, which was calculated using a Monte Carlo simulation model. The vesting is subject to the Company meeting certain market-based targets by October 15, 2026. The Company recognized $1,540 of expense during the first quarter ended March 31, 2026.

The fair value of each market-based awards granted was estimated on the date of grant using a Monte Carlo pricing model with the following assumptions:

SUMMARY OF FAIR VALUE OF EACH MARKET BASED AWARDS GRANTED

---

| | |
|:---|:---|
|  | **Grant Date** |
| Derived service period (years) | 1.44 – 1.48 |
| Dividend rate | -% |
| Risk-free interest rate | 4.08% |
| Expected stock price volatility | 41.56% |

---

The risk-free interest rate was based on U.S. Treasury interest rates, the terms of which are consistent with the expected life of the market-based awards. Expected volatility was derived using the Company's peer volatility calculated from its peer companies' volatilities over the time period commensurate with the expected life of the market-based awards. The expected life for the market-based awards granted was calculated using the midpoint assumption equal to the time from the grant date to the midpoint of the weighted average vesting date and the expiration date. The Company does not currently pay dividends on its common stock nor does it expect to in the foreseeable future.

SUMMARY OF MARKET-BASED AWARDS

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Performance-Based** | **Performance-Based** | **Market-Based** | **Market-Based** |
|  | **Number of Awards** | **Weighted- Average Grant Date Fair Value** | **Number of Awards** | **Weighted- Average Grant Date Fair Value** |
| Outstanding at December 31, 2025 | 225000 | $4.00 | 250000 | $0.04 |
| Granted |  |  |  |  |
| Change in units based on performance |  |  |  |  |
| Forfeited | - | - | - | - |
| Outstanding at March 31, 2026 | 225000 | $4.00 | 250000 | $0.04 |

---

*<u>Restricted Stock Units</u>*

During the three months ended March 31, 2026, the Company granted 75,000 restricted stock units ("RSUs") to its Board of Directors. The RSUs were awarded at a price equal to the market price of the Company's underlying common stock on the date of grant. One-fourth of the RSUs vests each calendar quarter of 2026. During the three months ended March 31, 2026, the Company recognized share-based compensation expense of $21,000, which is recorded in selling, general and administrative expenses on the condensed consolidated statement of operations. A total of 18,750 RSUs have fully vested as of March 31, 2026, resulting in the issuance of 18,750 shares of common stock. A total of 56,250 RSUs are expected to vest over the remainder of the year.

SCHEDULE OF RESTRICTED STOCK UNITS

---

| | | |
|:---|:---|:---|
|  | **March 31, 2026** | **March 31, 2026** |
|  | **Number of Awards** | **Weighted Average Grant Date Fair Value** |
| Beginning balance |  | $- |
| Issued RSUs during the period | 75000 | 1.12 |
| Vested RSUs during the period | (18750) | 1.12 |
| Remaining unvested RSUs | 56250 | $1.12 |

---

*<u>Stock Warrants</u>*

 

The grant date fair value of the Company's stock warrants was $2.00, which was calculated using the Black-Scholes Merton option-pricing model with the following assumptions:

---

| | |
|:---|:---|
|  | **February 2025 Grant Date** |
| Expected life (in years) | 5.0 |
| Expected stock price volatility | 56.83% |
| Risk-free interest rate | 4.16% |
| Dividend rate | 0% |

---

**CALLAN JMB INC.**

**NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

**NOTE 8 - COMMITMENTS AND CONTINGENCIES**

***Operating Leases***

The Company has various leases that expire between now and 2036. The Company's right-of-use assets and lease liabilities primarily represent lease payments that are fixed at the commencement of a lease and variable lease payments that are dependent on an index or rate. Lease payments are recognized as lease cost on a straight-line basis over the lease term, which is determined as the non-cancelable period, including periods in which termination options are reasonably certain of not being exercised and periods in which renewal options are reasonably certain of being exercised. The discount rate is determined using the Company's estimated incremental borrowing rate coinciding with the lease term at the commencement of a lease. The estimated incremental borrowing rate for the Company was determined to be between 3.0% - 10.6%. Rent expense for the three months ended March 31, 2026 and 2025 was $133,247 and $98,003, respectively. Additionally, in the normal course of business, the Company enters into short-term leases having terms of one year or less. These leases are generally equipment leases and storage areas entered into for short periods of time (e.g., daily, weekly, or monthly) to satisfy immediate and/or short-term operational needs of the business which can arise based upon the nature of particular services performed. Short term lease expenses relating to these agreements amounted to $249,584 and $139,632 for the three months ended March 31, 2026 and 2025, respectively. As of March 31, 2026, the weighted-average remaining operating lease term and discount rate are 6.4 years and 9.8%, respectively.

On October 21, 2024, the Company entered into a long-term lease agreement for corporate office space with a third party. This agreement commenced on April 1, 2025, and requires payments of $11,884 monthly, escalating 3% per annum for a term of 120 months, which ends March 31, 2035. The Company has the option to renew such lease for up to an additional one-year term. The Company accounted for such lease as operating lease as there were no purchase option nor transfer of title at the end of the lease. The Company recognized right of use assets and operating lease liabilities amounted to $988,436. Additionally, the Company was also granted a tenant improvement allowance of $280,115. The Company determined that the improvements are lessee improvements and accordingly, recognized the tenant improvement allowance as a lease incentive and a reduction to the initial recognized right of use assets and operating lease liabilities. During the three months ended March 31, 2026, the Company received reimbursement for the $280,115 tenant improvement allowance. On October 1, 2025, the Company entered into an amendment in its long-term lease agreement for its corporate office space with a third party and extended the term from April 1, 2025 to September 30, 2035, and the rent payment will commence on October 1, 2025 rather than April 1, 2025. The Company accounted for this amendment as a lease modification. There were no changes in the lease classification as a result of this modification and the Company continues to recognize such a lease as operating lease. The Company remeasured its right of use assets and operating lease liabilities using an updated incremental borrowing rate. The change in right of use assets and operating lease liabilities related to this lease modification resulted in a decrease of $76,520 for the year ended December 31, 2025.

On January 1, 2025, the Company entered into an amendment in its lease agreement with a third party wherein the Company is the lessee of certain commercial property. The amendment commenced on January 1, 2025, and extended the term from May 31, 2025 to December 31, 2029, and increase in monthly rent payments to from $3,650 monthly to $6,878 monthly subject to 3% increase per annum. The Company has the option to renew such lease to an additional one year term. Management determined that the renewal option is not reasonably certain to occur. The Company accounted for this amendment as a lease modification. There were no change in the lease classification as a result of this modification and the Company continues to recognize such a lease as operating lease. The Company remeasured its right of use assets and operating lease liabilities using an updated incremental borrowing rate. The change in right of use assets and operating lease liabilities related to this lease modification amounted to $324,104 for the year ended December 31, 2025.

On March 20, 2025, the Company entered into an amendment in its long-term lease agreement with a related party wherein the Company is the lessee of certain commercial property. The amendment commenced on April 1, 2025, and extended the term from December 31, 2025 to December 31, 2029, and increase the square footage of the leased property, a corresponding increase in monthly rent payments from $7,500 monthly to $9,800 monthly. The Company has the option to renew such lease for up to an additional six month extension and month-to-month thereafter. Management determined that the renewal option is not reasonably certain to occur. The Company accounted for this amendment as a lease modification. There were no change in the lease classification as a result of this modification and the Company continues to recognize such a lease as operating lease. The Company remeasured its right of use assets and operating lease liabilities using an updated incremental borrowing rate. The change in right of use assets and operating lease liabilities related to this lease modification amounted to $380,823 for the year ended December 31, 2025.

On February 24, 2026, the Company entered into a renewal lease agreement for office and storage space located in Blanco, Texas. The lease commenced on March 1, 2026 and expires on February 28, 2029, with a non-cancelable term of three years. The lease requires fixed monthly payments of $1,250 and the Company is responsible for certain utilities and other occupancy-related costs. The Company accounted for the lease as an operating lease under ASC 842. At lease commencement, the Company recognized an operating right-of-use asset of $38,737 and corresponding operating lease liabilities, measured based on the present value of future lease payments using the Company's incremental borrowing rate at commencement. The operating lease liabilities include both current and noncurrent portions and are included within operating lease liabilities on the condensed consolidated balance sheet as of March 31, 2026.

---

| | | |
|:---|:---|:---|
| | **Three months ended (Unaudited)** | **Three months ended (Unaudited)** |
| <br>**Lease cash flow information:** | **March 31, 2026** | **March 31, 2025** |
| Cash paid for amounts included in the measurement of lease liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Operating cash flows from operating leases | $133247 | $98003 |
| &nbsp;&nbsp;&nbsp;Lease incentives reimbursement | 280115 | - |
| &nbsp;&nbsp;&nbsp;Total | $413362 | $98003 |

---

SCHEDULE OF LEASE RELATED ASSETS AND LIABILITIES

---

| | | |
|:---|:---|:---|
| **Summary of lease-related assets and liabilities:** | **March 31, 2026**<br> **(Unaudited)** | **December 31, 2025**<br> **(Audited)** |
| Operating lease right-of-use assets | $2691377 | $2582496 |
| Accumulated amortization | (812844) | (664933) |
| Net operating ROU assets | $1878533 | $1917563 |
| Current operating liabilities | $338810 | $323935 |
| Noncurrent operating lease liabilities | 1886208 | 1663229 |
| &nbsp;&nbsp;&nbsp;Total operating lease liabilities | $2225018 | $1987164 |

---

**CALLAN JMB INC.**

**NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

---

| | |
|:---|:---|
| **Maturity of lease liabilities** | **March 31, 2026<br> (Unaudited)** |
| 2026 | $545587 |
| 2027 | 554998 |
| 2028 | 546692 |
| 2029 | 486756 |
| 2030 | 162910 |
| Thereafter | 789124 |
| Total future undiscounted lease payments | 3086067 |
| Less: interest | (861040) |
| Present value of lease liabilities | $2225018 |

---

 ****

***Legal Proceedings***

The Company may be subject to legal proceedings and claims arising from contracts or other matters from time to time in the ordinary course of business.

During May 2024, the Company was sent a demand letter alleging that the company breached the terms of a Customer Service Agreement with one of its vendors that it did business within a prior year. The vendor alleges that the Company improperly terminated the agreement without proper notice and therefore owes it $507,573. The Company responded to the vendor's demand letter and asserts that it only owes the vendor the sum of $85,000 which is recorded as part of its accounts payable as of December 31, 2023. During February 2025, the parties agreed to settle the matter for $240,800. The Company as of December 31, 2024, increased its accrued expenses by $155,800 to reflect the settled amount and the $240,800 was paid on February 26, 2025.

The Company is also subject to litigation by its former employee where the ultimate disposition or resolution is uncertain. Management believes that as of March 31, 2026, material losses arising from this litigation are not probable.

Management is not aware of any other pending or threatened litigation where the ultimate disposition or resolution could have a material adverse effect on its financial position, results of operations or liquidity.

**NOTE 9 – SUBSEQUENT EVENTS**

On April 7, 2026 Callan JMB Inc. (the "Company") received a deficiency letter (the "Notice") from the Listing Qualifications Department of The Nasdaq Stock Market LLC ("Nasdaq") notifying the Company that it is not in compliance with Nasdaq Listing Rule 5550(b)(1) which requires the Company to maintain a minimum of $2,500,000 in stockholders' equity for continued listing on The Nasdaq Capital Market (the "Stockholders' Equity Requirement").

In accordance with Nasdaq Listing Rules, the Company has been provided an initial period of 45 calendar days, or until May 22, 2026, to submit a plan to regain compliance with the Stockholders' Equity Requirement. Subsequent to the receipt of the Notice, and prior to that deadline, the Company intends to submit a plan to regain compliance with the Stockholders' Equity Requirement to Nasdaq. If the Company's compliance plan is accepted by Nasdaq, then Nasdaq may, in its discretion, grant the Company up to 180 calendar days from the date of the Notice, or until October 4, 2026, to evidence compliance.

Neither the Notice nor the Company's non-compliance have an immediate effect on the listing or trading of the Company's common stock, which will continue to trade under the symbol "CJMB." However, there can be no assurance that the Company's plan will be accepted or that if it is, the Company will be able to regain compliance.

The Company has evaluated subsequent events that occurred after March 31, 2026, through May 15, 2026. There have been no other events or transactions during this time which would have a material effect on these condensed consolidated financial statements.

**PART II**

**ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

*The following discussion and analysis is intended as a review of significant factors affecting our financial condition and results of operations for the periods indicated. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the accompanying notes thereto included elsewhere in this Quarterly Report on Form 10-Q. Unless the context requires otherwise, references in this Quarterly Report on Form 10-Q to "we," "us," and "our" refer to Callan JMB Inc.*

**Forward-Looking Statements**

**Overview**

Callan JMB is a vertically integrated logistics and fulfillment company which provides thermal management logistics solutions to the life sciences industry through a combination of proprietary packaging, information technology and specialized cold chain logistics knowhow. We provide a system that utilizes advanced predictive technology to revolutionize the supply chain by guaranteeing the safety, effectiveness, and potency of every product handled to ensure product integrity, and to provide immediate response in time-sensitive industries while ensuring environmental responsibility.

**Strategy**

Our strategy involves leveraging our core competitive strengths to develop and maintain ongoing relationships with a diversified group of customers while continuing to grow our service lines, ensuring that we can meet our customers' changing needs. We strive to be recognized as the premier provider of logistics and fulfillment of a broad range of value-added services based upon the breadth of those services, quality, responsiveness, customer service, information technologies, safety, and cost effectiveness.

We view our solutions as disruptive to the "older technologies" of dry ice and liquid nitrogen, in that our solutions are comprehensive and combine our competencies in configurations that are customized to our client's requirements. We provide comprehensive, reliable, economic alternatives to all existing logistics solutions and services utilized for frozen shipping in the life sciences industry (e.g., personalized medicine, cell therapies, stem cells, cell lines, vaccines, diagnostic materials, semen, eggs, embryos, cord blood, organs, bio-pharmaceuticals, infectious substances, and other commodities that require continuous exposure to cryogenic or frozen temperatures). As part of our services, we provide the ability to monitor, record and archive crucial information for each shipment that can be used for scientific and regulatory purposes.

***Seasonality***

Based on our industry and our historic trends, we expect our operations to vary seasonally. Typically, revenue will be highest in the third and fourth calendar quarters and lowest in the first and second calendar quarters. These seasonal variations result in fluctuations in shipment volumes due to customer demand, weather conditions and general economic activity. We also expect that our operating expenses may be higher during periods of adverse weather conditions, which can slow fulfillment and transportation activity and result in higher labor and operational costs.

**Results of Operations**

**Three Months Ended March 31, 2026, Compared to the Three Months Ended March 31, 2025**

The following table provides certain selected financial information for the periods presented:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **(Unaudited)** | **(Unaudited)** | | |
|  | **Three months ended March 31,** | **Three months ended March 31,** | | |
|  | **2026** | **2025** |<br>**Change** |<br>**Change %** |
| Revenue | $1106143 | $1449377 | $(343234) | -24% |
| Cost of Revenue | 678908 | 833437 | (154529) | -19% |
| Gross Profit | 427235 | 615940 | (188705) | -31% |
| Operating Expenses |  |  |  | 0% |
| Selling, General and administrative expenses | 2128423 | 1854316 | 274107 | 15% |
| Total operating expenses | 2128423 | 1854316 | 274107 | 15% |
| Loss from operations | (1701188) | (1238376) | (462812) | 37% |
| Other income (expense) | (1513560) | 2146 | (1515706) | -70629% |
| Loss before income taxes | (3214748) | (1236230) | (1978518) | 160% |
| Provision for income taxes | 306 | 4360 | (4054) | -93% |
| Net Loss | $(3215054) | $(1240590) | $(1974464) | 159% |

---

***Revenue***

Revenue for the three months ended March 31, 2026, was $1,106,143 as compared to $1,449,377 for the three months ended March 31, 2025, a decrease of $343,234. The decrease was primarily due to the non-renewal of a government contract and lower revenues from non-government customers compared to the prior year period.

*Cost of revenue*

Cost of revenue for the three months ended March 31, 2026, was $678,908 as compared to $833,437 for the three months ended March 31, 2025, a decrease of $154,529. The decrease was primarily due to lower revenue levels during the period.

***Operating Expenses***

*Selling, General and Administrative Expenses*

Our selling, general and administrative costs include personnel costs, consulting and professional fees, and other overhead expenses. Selling, general and administrative expenses for the three months ended March 31, 2026, were $2,128,423, compared to $1,854,316 for the three months ended March 31, 2025, an increase of $274,107. Operating expenses increased during the three months ended March 31, 2026, as compared to the prior year period. Payroll expenses increased approximately $87,400 primarily due to executive compensation increases pursuant to employee agreements, while Board of Directors compensation increased approximately $7,293 due to the recognition of a full quarter of director compensation in 2026 as compared to prorated amounts in the prior year period. Consulting and professional fees increased approximately $43,000 primarily due to the use of additional consultants and professional service providers in 2026 compared to the prior year period. Facility rental expense increased approximately $57,000 primarily due to lease expenses associated with the Company's new corporate office, which did not exist in the prior year period. Information technology support expenses increased approximately $9,697 due to expanded company support services, while dues and subscriptions increased approximately $47,800 primarily due to additional post-IPO subscriptions and public company compliance costs. The Company also recognized an increase in stock-based compensation expense of approximately $63,500. Partially mitigating these increases were decreases in travel and meals expense of approximately $24,000 and other facility expenses of approximately $14,000.

***Other income (expense)***

Other income (expense) for the three months ended March 31, 2026, was $(1,513,560) and $2,146 for the three months ended March 31, 2025, resulting in an increase in other expense of $1,515,706. The key driver for the decrease relates to changes in the fair value of the ELOC facility as well as related expenses. Refer to the discussion under Note 6 "Equity" for further information on the ELOC Facility. The change in the fair value of the Derivative Liability during the three months ended March 31, 2026, was $338,229. The Company also recognized other transaction expenses arising from the ELOC Facility of $1,177,223 during the three months ended March 31, 2026.

**Liquidity and Capital Resources**

Our principal liquidity requirements are for working capital to fund our operations and growth. To date, we have funded our liquidity requirements through a combination of cash on hand, cash flows from operations, and funding from various sources, including from the CEO. As of March 31, 2026, we had $1,415,566 cash and cash equivalents.

On April 7, 2026, the Company received a deficiency letter (the "Notice") from the Listing Qualifications Department of The Nasdaq Stock Market LLC ("Nasdaq") notifying the Company that it is not in compliance with Nasdaq Listing Rule 5550(b)(1), which requires the Company to maintain a minimum of $2,500,000 in stockholders' equity for continued listing on The Nasdaq Capital Market. The Notice has no immediate effect on the listing or trading of the Company's common stock; however, the Company must submit a plan to regain compliance by May 22, 2026, and there can be no assurance that Nasdaq will accept the plan or that the Company will be able to regain compliance within any period granted by Nasdaq.

---

| | | | |
|:---|:---|:---|:---|
|  | (Unaudited) | (Unaudited) | (Unaudited) |
|  | For three months Ended | For three months Ended | For three months Ended |
|  | March 31, | March 31, | March 31, |
|  | 2026 | 2025 | Change |
| Cash used in operating activities | $(1679880) | $(1561698) | $(118182) |
| Cash used in investing activities | (35312) | (15000) | (20312) |
| Cash provided by (used in) financing activities | 1000000 | 4698682 | (3698682) |
| Increase (decrease) in cash | $(715192) | $3121984 | $(3837176) |

---

*Cash provided by (used in) operating activities*

For the three months ended March 31, 2026, cash used in operating activities was $1,679,880 compared to cash used in operating activities of $1,561,698 during the three months ended March 31, 2025, an increase of $118,182. This increase in cash used in operating activities was primarily due to the higher net loss of $1,974,464, increased accounts receivable of $284,563 and increased other current assets of $183,054, partially offset by non-cash ELOC-related expenses of $1,092,222, a change in the fair value of derivative liability of $338,229, a favorable change in the right-of-use liability, net adjustment of $272,115, a favorable change in accounts payable and accrued expenses of $184,478, the absence of a $199,491 use of cash for prepaid insurance in the prior-year period, a decrease in inventory of $82,893, a favorable change in deferred revenue of $89,052 and an increase in stock-based compensation of $63,500.

*Cash provided by (used in) investing activities*

For the three months ended March 31, 2026, cash used in investing activities was $35,312 compared to cash used in investing activities of $15,000 for the three months ended March 31, 2025, an increase of $20,312. The increase is a result of additional expenses related to the corporate office build out recognized during the three months ended March 31, 2026.

*Cash provided by (used in) financing activities*

During the three months ended March 31, 2026, cash provided by financing activities was $1,000,000 compared to $4,698,682 during the three months ended March 31, 2025, a decrease of $3,698,682. Our financing activities for the three months ended March 31, 2026 compared to March 31, 2025 included an increase in proceeds from the offering of ELOC shares of $1,000,000, which is offset by prior year proceeds raised from IPO and overallotment of $4,680,013.

**Off-Balance Sheet Arrangements**

We have no off-balance sheet financing arrangements.

**ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

Under SEC rules and regulations, because we are considered to be a "smaller reporting company," we are not required to provide the information required by this item in this report.

**ITEM 4. CONTROLS AND PROCEDURES**

*<u>Evaluation of Disclosure Controls and Procedures</u>*

Our Chief Executive Officer and Chief Financial Officer conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "**Exchange Act**"), as of March 31, 2026, to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the SEC, including to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of March 31, 2026, our disclosure controls and procedures were not effective. Management identified this based on the timeliness and consistency of execution of oversight and governance impacting the performance of certain internal control activities, which affected the Company's ability to consistently achieve its control objectives. During the year ended December 31, 2025, the Company continued to develop and refine its disclosure controls and other procedures designed to ensure that information required to be disclosed in reports filed with the SEC is recorded, processed, summarized, and reported within the time periods specified by SEC rules and forms. In response to the identified ineffectiveness of controls, management has worked on enhancing oversight and governance processes, improving documentation of accounting policies and procedures, and engaged experienced third-party advisors to support GAAP compliance and financial reporting. While progress was made during the year ended December 31, 2025 and has continued through the three months ended March 31, 2026, remediation of the material weakness will not be considered complete until the redesigned controls have operated effectively for a sustained period and have been validated through testing.

(b) **Changes in Internal Controls Over Financial Reporting**

There were no changes in our internal controls over financial reporting that occurred during the last fiscal quarter covered by this report 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**

There currently is no material pending legal proceeding to which we are a party or to which any of our property is subject, and our management is not aware of any contemplated proceeding by any governmental authority against us. From time to time, we may become involved in legal proceedings or subject to claims incident to the ordinary course of business. Regardless of outcome, such proceedings or claims can have an adverse impact on us because of defense and settlement costs, diversion of resources, negative publicity, reputational harm, and other factors and there can be no assurances that favorable outcomes will be obtained.

**ITEM 1A. RISK FACTORS**

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and, as such, are not required to provide the information under this Item. Notwithstanding the foregoing, the following risk factor supplements the risk factors, if any, previously disclosed in our filings with the SEC.

***Our common stock may be delisted from The Nasdaq Capital Market if we do not regain compliance with Nasdaq's continued listing requirements.***

 ****

On April 7, 2026, we received a deficiency letter (the "Notice") from Nasdaq notifying us that we were not in compliance with Nasdaq Listing Rule 5550(b)(1), which requires a minimum of $2,500,000 in stockholders' equity for continued listing on The Nasdaq Capital Market. We have until May 22, 2026 to submit a plan to regain compliance, and if Nasdaq accepts the plan, Nasdaq may grant us up to 180 calendar days from the date of the Notice, or until October 4, 2026, to evidence compliance. The Notice does not have an immediate effect on the listing or trading of our common stock; however, if Nasdaq does not accept our plan or if we fail to regain compliance within the applicable period, our common stock could be delisted, which could adversely affect the liquidity and market price of our common stock and our ability to raise capital.

**ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS**

***Recent Sale of Unregistered Equity Securities***

During the quarter ended March 31, 2026, no unregistered sales of equity securities occurred.

**Item 3. Defaults Upon Senior Securities.**

None.

**Item 4. Mine Safety Disclosures.**

Not applicable.

**Item 5. Other Information.**

None.

**ITEM 6. EXHIBITS**

---

| | |
|:---|:---|
| **Exhibit**<br>**Number** | <br>**Description** |
| 3.1 | [Callan JMB Inc. Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Registrant's Registration Statement on Form S-1, as amended (File No. 333-282879), filed with the SEC on January 8, 2025)](https://www.sec.gov/Archives/edgar/data/2032545/000149315224050466/ex3-1.htm) |
| 3.2 | [Bylaws, adopted on February 2, 2024 (incorporated by reference to Exhibit 3.2 to the Registrant's Registration Statement on Form S-1, as amended (File No. 333-282879), filed with the SEC on January 8, 2025)](https://www.sec.gov/Archives/edgar/data/2032545/000149315224050466/ex3-2.htm) |
| 31.1\* | [Certification of Chief Executive Officer (Principal Executive Officer) Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.](ex31-1.htm) |
| 31.2\* | [Certification of Chief Financial Officer (Principal Financial and Accounting Officer) Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.](ex31-2.htm) |
| 32.1\*\* | [Certification of Chief Executive Officer (Principal Executive Officer) Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.](ex32-1.htm) |
| 32.2\*\* | [Certification of Chief Financial Officer (Principal Financial and Accounting Officer) Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.](ex32-2.htm) |
| 101.INS | Inline XBRL Instance Document |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
| 104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |

---

\* Filed herewith. <br> \*\* Furnished herewith.

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

---

| | |
|:---|:---|
| **CALLAN JMB INC.** | **CALLAN JMB INC.** |
| By: | */s/ Wayne Williams* |
|  | Wayne Williams |
|  | Chief Executive Officer, President, and Chairman of the Board |

---

---

| | | |
|:---|:---|:---|
| **SIGNATURE** | **TITLE** | **DATE** |
| */s/ Wayne Williams* | Chief Executive Officer, President (Principal Executive Officer) and Chairman of the Board | May 15, 2026 |
| Wayne Williams |  |  |
| */s/ Christopher Shields* | Interim Chief Financial Officer (Principal Financial and Accounting Officer) | May 15, 2026 |
| Christopher Shields |  |  |

---

## Exhibit 31.1

**Exhibit 31.1**

**CERTIFICATION PURSUANT TO RULES 13A-14(A) AND 15D-14(A) UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, Wayne Williams, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;1. I
 have reviewed this Quarterly Report on Form 10-Q for the period ended March 31, 2026 of Callan
 JMB Inc.;

&nbsp;&nbsp;&nbsp;&nbsp;2. Based
 on my knowledge, this report does not contain any untrue statement of a material fact or
 omit to state a material fact necessary to make the statements made, in light of the circumstances
 under which such statements were made, not misleading with respect to the period covered
 by this report;

&nbsp;&nbsp;&nbsp;&nbsp;3. Based
 on my knowledge, the financial statements, and other financial information included in this
 report, fairly present in all material respects the financial condition, results of operations
 and cash flows of the registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;4. The
 registrant's other certifying officer and I are responsible for establishing and maintaining
 disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and
 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act
 Rules 13a–15(f) and 15d–15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed
 such disclosure controls and procedures, or caused such disclosure controls and procedures
 to be designed under our supervision, to ensure that material information relating to the
 registrant, including its consolidated subsidiaries, is made known to us by others within
 those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed
 such internal control over financial reporting, or caused such internal control over financial
 reporting to be designed under our supervision, to provide reasonable assurance regarding
 the reliability of financial reporting and the preparation of financial statements for external
 purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated
 the effectiveness of the registrant's disclosure controls and procedures and presented
 in this report our conclusions about the effectiveness of the disclosure controls and procedures,
 as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed
 in this report any change in the registrant's internal control over financial reporting
 that occurred during the registrant's most recent fiscal quarter (the registrant's
 fourth fiscal quarter in the case of an annual report) that has materially affected, or is
 reasonably likely to materially affect, the registrant's internal control over financial
 reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;5. The
 registrant's other certifying officer(s) and I have disclosed, based on our most recent
 evaluation of internal control over financial reporting, to the registrant's auditors
 and the audit committee of the registrant's board of directors (or persons performing
 the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All
 significant deficiencies and material weaknesses in the design or operation of internal control
 over financial reporting which are reasonably likely to adversely affect the registrant's
 ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any
 fraud, whether or not material, that involves management or other employees who have a significant
 role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Date: May 15, 2026 | By | */s/ Wayne Williams* |
|  | Name: | Wayne Williams |
|  | Title: | Chief Executive Officer |
|  |  | (Principal Executive Officer) |

---

## Exhibit 31.2

**Exhibit 31.2**

**CERTIFICATION PURSUANT TO RULES 13A-14(A) AND 15D-14(A) UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, Christopher Shields, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;1. I
 have reviewed this Quarterly Report on Form 10-Q for the period ended March 31, 2026 of Callan
 JMB Inc.;

&nbsp;&nbsp;&nbsp;&nbsp;2. Based
 on my knowledge, this report does not contain any untrue statement of a material fact or
 omit to state a material fact necessary to make the statements made, in light of the circumstances
 under which such statements were made, not misleading with respect to the period covered
 by this report;

&nbsp;&nbsp;&nbsp;&nbsp;3. Based
 on my knowledge, the financial statements, and other financial information included in this
 report, fairly present in all material respects the financial condition, results of operations
 and cash flows of the registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;4. The
 registrant's other certifying officer and I are responsible for establishing and maintaining
 disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and
 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act
 Rules 13a–15(f) and 15d–15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed
 such disclosure controls and procedures, or caused such disclosure controls and procedures
 to be designed under our supervision, to ensure that material information relating to the
 registrant, including its consolidated subsidiaries, is made known to us by others within
 those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed
 such internal control over financial reporting, or caused such internal control over financial
 reporting to be designed under our supervision, to provide reasonable assurance regarding
 the reliability of financial reporting and the preparation of financial statements for external
 purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated
 the effectiveness of the registrant's disclosure controls and procedures and presented
 in this report our conclusions about the effectiveness of the disclosure controls and procedures,
 as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed
 in this report any change in the registrant's internal control over financial reporting
 that occurred during the registrant's most recent fiscal quarter (the registrant's
 fourth fiscal quarter in the case of an annual report) that has materially affected, or is
 reasonably likely to materially affect, the registrant's internal control over financial
 reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;5. The
 registrant's other certifying officer(s) and I have disclosed, based on our most recent
 evaluation of internal control over financial reporting, to the registrant's auditors
 and the audit committee of the registrant's board of directors (or persons performing
 the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All
 significant deficiencies and material weaknesses in the design or operation of internal control
 over financial reporting which are reasonably likely to adversely affect the registrant's
 ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any
 fraud, whether or not material, that involves management or other employees who have a significant
 role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Date: May 15, 2026 | By: | */s/ Christopher Shields* |
|  | Name: | Christopher Shields |
|  | Title: | Interim Chief Financial Officer |
|  |  | (Principal Financial and Accounting Officer) |

---

## Exhibit 32.1

**Exhibit 32.1**

**CERTIFICATION PURSUANT TO**

**18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Quarterly Report on Form 10-Q of Callan JMB Inc. (the "Company") for the period ended March 31, 2026 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1) The
 Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange
 Act of 1934; and

(2) The
 information contained in the Report fairly presents, in all material respects, the financial
 condition and results of operations of the Company.

---

| | | |
|:---|:---|:---|
| Date: May 15, 2026 | By: | */s/ Wayne Williams* |
|  | Name: | Wayne Williams |
|  | Title: | Chief Executive Officer |
|  |  | (Principal Executive Officer) |

---

## Exhibit 32.2

**Exhibit 32.2**

**CERTIFICATION PURSUANT TO**

**18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Quarterly Report on Form 10-Q of Callan JMB Inc. (the "Company") for the period ended March 31, 2026 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1) The
 Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange
 Act of 1934; and

(2) The
 information contained in the Report fairly presents, in all material respects, the financial
 condition and results of operations of the Company.

---

| | | |
|:---|:---|:---|
| Date: May 15, 2026 | By: | */s/ Christopher Shields* |
|  | Name: | Christopher Shields |
|  | Title: | Interim Chief Financial Officer |
|  |  | (Principal Financial and Accounting Officer) |

---