# EDGAR Filing Document

**Accession Number:** 0001683145
**File Stem:** 0001214659-26-005050
**Filing Date:** 2026-4
**Character Count:** 100830
**Document Hash:** b728e5800227957a53afd780a045c565
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001214659-26-005050.hdr.sgml**: 20260424

**ACCESSION NUMBER**: 0001214659-26-005050

**CONFORMED SUBMISSION TYPE**: 1-K

**PUBLIC DOCUMENT COUNT**: 2

**CONFORMED PERIOD OF REPORT**: 20251231

**FILED AS OF DATE**: 20260424

**DATE AS OF CHANGE**: 20260424

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** CNote Group, Inc.
- **CENTRAL INDEX KEY:** 0001683145
- **STANDARD INDUSTRIAL CLASSIFICATION:** LOAN BROKERS [6163]
- **ORGANIZATION NAME:** 02 Finance
- **EIN:** 812784287
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 1-K
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 24R-00110
- **FILM NUMBER:** 26891942

**BUSINESS ADDRESS:**
- **STREET 1:** 2323 BROADWAY
- **CITY:** OAKLAND
- **STATE:** CA
- **ZIP:** 94612
- **BUSINESS PHONE:** 424-262-6683

**MAIL ADDRESS:**
- **STREET 1:** 2323 BROADWAY
- **CITY:** OAKLAND
- **STATE:** CA
- **ZIP:** 94612

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Cnote Group, Inc.
- **DATE OF NAME CHANGE:** 20160825

## Part

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 1-K**

**ANNUAL REPORT**

**ANNUAL REPORT PURSUANT TO REGULATION A OF THE SECURITIES ACT OF 1933**

**For the fiscal year ended December 31, 2025**

**CNote Group, Inc.**

**(Exact name of issuer as specified in its charter)**

---

| | |
|:---|:---|
| **Delaware** | **81-2784287** |
| **State of other jurisdiction of**<br> **incorporation or organization** | **(I.R.S. Employer Identification No.)** |

---

**CNote Notes**

**(Title of each class of securities issued pursuant to Regulation A)**

**2323 Broadway, Oakland, California 94612**

**(Full mailing address of principal executive offices)**

510-431-2422

**(Issuer's telephone number, including area code)**

**PART II**

**Item 1.** **BUSINESS**

**Overview**

CNote Group, Inc. (hereafter also referred to as "Us", "We", "the Company", or "CNote") is a financial technology company operating an online impact investment platform at www.mycnote.com. CNote is a business on a mission to close the wealth gap through financial innovation. Using the power of technology and a community-first framework, CNote enables individuals and institutions to efficiently invest locally at scale in fixed income and use deposit solutions that advance economic opportunity, financial inclusion, and climate change initiatives. With the aim of closing the wealth gap, CNote's fixed income and depository solutions provide a diversified and scalable way to support job creation, small business growth, affordable housing development, and lasting economic growth in underserved communities across the United States, through relationships with community finance organizations ("CFOs"), including Community Development Financial Institutions certified by the U.S. Department of the Treasury's CDFI Fund ("CDFIs").

CNote business has two principal components:

&nbsp;&nbsp;&nbsp;&nbsp;· *Lending Business*: We lend money directly to CFOs, using the
capital we raise from investors. The Company has made loans to 48 CFOs since inception. The Company makes a profit on the difference
between the interest it charges to CFO borrowers and the interest it pays to investors.

&nbsp;&nbsp;&nbsp;&nbsp;· *Deposit Administration Business*: We provide proprietary data about CFOs to clients, which
rely on our data to open interest-bearing accounts at CFOs. The Company earns fees for providing this service.

As of December 31, 2025, we had 11 full-time employees and also rely on outside consultants for various technical and business functions. We are located in Oakland, California. CNote is a technology-driven platform that allows us to offer capital to CFOs. Since inception through December 31, 2025, we have offered approximately $168 million in loans to community finance organizations, and our clients have made approximately $549 million in deposits with CFOs.

**Lending Business**

To fund our loans to CFOs, we raise capital from investors under Regulation A ("Regulation A") and Regulation D ("Regulation D") of the Securities Act of 1933, as amended from time to time (the "Securities Act"). We offer fixed income investments to institutional, accredited, and non-accredited investors. Accredited investors can invest in offerings under Regulation D, while non-accredited investors can only invest in offerings under Regulation A. Currently, non-accredited investors can only purchase CNote Notes representing an offering as described in the Offering Statement filed with the SEC under Regulation A and qualified effective December 22, 2023 ("Regulation A CNote Notes"), SEC File No. 024-12344.

Under our business model for our loans, we generate revenue by retaining the difference between the interest rate we charge the CFO borrowers, and the interest paid to our investors. The interest rates we charge our CFO borrowers and the interest rates of CNote fixed income investments are reviewed by management, in view of a variety of macroeconomic and market conditions, including the federal interest rate environment, fluctuations in the cost of capital averages for CFOs, and the economics facing the Company. We also consider the competitiveness of CNote loans as compared to rates offered by other loan products in the marketplace.

Our credit policy targets potential CFO borrowers with high creditworthiness and a stable financial position. In order to borrow from CNote, potential CFO borrowers must display characteristics indicative of a healthy loan portfolio and a durable financial position. We review financial and portfolio variables like repayment rates, loan delinquencies, loan loss reserves, credit enhancements and guarantees, team and board composition, lending and operational policies, among others. Additionally, our CFO borrowers are required to provide audited financials and impact data about their operational and lending activities.

The loans we make to CFO borrowers are full recourse to the CFO borrowers and are not reliant on proceeds from the loans each CFO makes. The loans to CFO borrowers are not amortizing. CFO borrowers make payments through electronic bank payments. We are currently legally authorized to lend in 46 states plus the District of Columbia as a non-bank commercial lender.

**Deposit Administration Business**

With respect to cash deposits using CNote's technology platform, called Impact Cash<sup>®</sup>, the Company coordinates with a third-party custodial agent to assist clients with opening interest-bearing deposits at CFOs located in the United States. Generally, to be eligible for CNote's Impact Cash<sup>®</sup> network, CFO depository institutions are (1) classified as well-capitalized pursuant to federal statutory net worth categories, by the Federal Deposit Insurance Corporation ("FDIC") with respect to banks, and by the National Credit Union Administration ("NCUA") with respect to credit unions, as applicable, and (2) certified as a CDFI, hold a Low-Income Designation ("LID"), or otherwise act as a proven mission-driven depository institution that has a history of positively serving and supporting underserved communities, including communities designated as low- and moderate-income communities via U.S. Census Tract data and third-party data analysis.

Impact Cash<sup>®</sup> deposits include certificates of deposits, interest-bearing time deposit accounts, insured cash sweep accounts, and money market accounts, bearing interest at prevailing market interest rates or variable rates of interest. Balances are insured by the FDIC or the NCUA, as applicable, in an amount up to $250,000 per institution. Clients receive a quarterly report describing the positive social impact of their deposits at CFOs. Under our business model for Impact Cash<sup>®</sup>, we generate revenue by charging our clients a service fee. The service fee we charge varies based on the total amount to be deposited by the client and the level of customization requested by the client with respect to impact areas and geographic themes for the placement of their deposits.

**Regulation A CNote Notes**

We offer to the public up to $50,000,000 of our Regulation A CNote Notes pursuant to our Offering Circular qualified by the SEC, effective December 22, 2023, SEC File No. 024-12344. The principal terms of our Regulation A CNote Notes are as follows:

&nbsp;&nbsp;&nbsp;&nbsp;· *Interest Rate*: The Notes will be issued at annual interest rates between 1% and 7%. Currently,
Regulation A CNote Notes are issued at an annual interest rate of 4%.

&nbsp;&nbsp;&nbsp;&nbsp;· *Maturity*: All principal and accrued interest will be due on the date 30 months following
the date of issuance.

&nbsp;&nbsp;&nbsp;&nbsp;· *Required Payments*: The Company is not obligated to make any payments of principal or interest
until maturity.

&nbsp;&nbsp;&nbsp;&nbsp;· *Requests for Payment*: Each calendar quarter an investor may, by giving notice to the Company
30 days before the end of the calendar quarter, elect to receive a payment no greater than 10% of the outstanding principal. However,
the Company may limit such requests depending on available funds.

&nbsp;&nbsp;&nbsp;&nbsp;· *Permitted Prepayments*: The Company is permitted to pre-pay the Notes at any time. Payments
will first be applied to accrued interest, then to outstanding principal.

&nbsp;&nbsp;&nbsp;&nbsp;· *Transferability*: The Notes may not be transferred without the Company's written consent.

&nbsp;&nbsp;&nbsp;&nbsp;· *Security*: The Notes are not secured and are not guaranteed by any third party. Instead, they
represent general, unsecured obligations of the Company.

Only CNote is selling Regulation A CNote Notes. Proceeds from the sales of Regulation A CNote Notes are used to make loans to our CFO borrowers.

**CNote CFO Borrowers**

Leveraging our proprietary technology, we aggregate investor capital and make loans to CFOs. From inception through December 31, 2025, we have made loans to 48 CFO borrowers. We can lend in 46 states and the District of Columbia as a non-bank commercial lender.

**Underwriting Process**

We use technology, data analytics, and a proprietary liquidity algorithm to match investors' funds with the funding needs of our CFO borrowers. CNote conducts three stages of due diligence on prospective CFO borrowers, which include (1) internal due diligence following industry best practices, (2) reviewing, if available, opinions from Aeris<sup>®</sup>, the rating agency that specializes in CDFIs, and/or the opinion of Opportunity Finance Network, the national membership association of CDFIs, and (3) a third-party review by an investment committee, composed of CNote management as well as individuals with expertise in the CFO industry, and with no ties, financial or otherwise, either to us or to the potential CFO borrower, to provide tertiary, third-party assessments, including geography-specific and product-specific risks.

Our credit policy targets potential CFO borrowers with high creditworthiness, a stable financial outlook, and proven social impact. In order to borrow from CNote, CFOs must display characteristics indicative of a healthy loan portfolio and a durable financial condition. The factors we consider include repayment rates, loan delinquencies, loan loss reserves, availability of credit enhancements and guarantees, length of time in business, and other financial and credit variables. Additionally, our CFO borrowers are required to provide us with audited financial and social impact data about their operational and lending activities. Our due diligence process typically takes at least four to six weeks on average to complete.

We base our determination of what loan amount to approve, how the loan will be priced, and the length of the loan primarily on our due diligence analysis. We also may consider additional factors such as the financial products offered by potential CFO borrowers or the general economic environment. Our loans are typically issued to CFO borrowers in the form of a master promissory note, which allows them to make multiple requests for capital. If a CFO borrower makes additional requests for a loan, we will re-evaluate the CFO borrower in accordance with our underwriting process. In addition, we conduct these reviews on existing CFO borrowers on at least a quarterly basis. If the results of our subsequent analyses differ from our initial determination, a CFO borrower may receive different financial terms on subsequent drawdowns. Our loans to CFO borrowers are full recourse to the CFO and are not reliant on proceeds from the loans each CFO makes. The loans to CFO borrowers are not amortizing and CFO borrowers repay the loans monthly through electronic bank payments.

**Loan Servicing**

CNote has built a proprietary platform to manage in-house servicing with respect to CNote Notes as well as CFO loans. Investors can access and manage their account online at www.mycnote.com by entering their login credentials.

**Distinctive Characteristics and Risks**

The Company is subject to a number of regulatory requirements. Both the lending and investing industries are monitored by state and federal regulators, and as such, create an environment in which CNote operations can be directly influenced by various regulatory bodies. Changes in regulations, or in the way current or newly enacted state or federal regulations are applied to our business, or the increased cost due to compliance with these regulations, or inadvertent regulatory miscues, could all adversely affect our business. Ongoing compliance with Regulation A could be more costly than anticipated.

As part of its operations, CNote lends to CFOs and has yet to endure a major adverse phase in the credit cycle. Worsening economic conditions or a changing political climate may result in decreased demand for our loans, cause our CFO borrowers' default rates to increase, or harm our operating results.

CFOs may be negatively impacted by political or administrative actions, which could include decreased federal or state support for CFOs or rollback of supportive policies. Losing access to state or federal funding could make it more likely that CFO borrowers would default on their obligations to us in the event they are unable to collect on the loans they make to borrowers, who, as small businesses, may be more sensitive to macroeconomic factors.

In the current economic environment, there is a risk of recession due to factors such as increased tariffs, slowing economic growth, shifting inflation, declining consumer confidence, and global uncertainty. A recession can lead to increased market volatility, declining corporate earnings, falling asset values, and reduced liquidity across financial markets. Interest rate changes and heightened credit risk may also impact portfolio performance, particularly in equities and fixed-income investments.

Finally, CNote is an emerging company with a history of net operating losses. While building the business toward net profit with continuing increases in recurring operating revenue, we rely on outside capital to fund our operations. CNote expects these existing sources to be sufficient to meet anticipated near-term cash operating expenses and capital expenditure requirements. If those funds are insufficient to satisfy liquidity requirements, CNote intends to seek additional equity or debt financing. If we are unable to obtain or maintain profitability, we will not be able to attract investment, compete, or maintain operations. Holders of CNote Notes are exposed to the credit risk of the company.

Investors should read this report, our other filings with the SEC, and the Offering Statement filed with the SEC with respect to Regulation A CNote Notes for a full list of potential risks related to the industry, the Company, and Regulation A CNote Notes.

**Tax and Legal Treatment**

Investors in CNote Notes and Impact Cash<sup>®</sup> clients receive interest income. At the end of the calendar year, investors and clients with over $10 of realized interest receive a Form 1099-INT. The interest earned on CNote Notes and Impact Cash<sup>®</sup> deposit accounts is declared in accordance with the United States Internal Revenue Code of 1986, as amended. An investor's or a client's tax situation will likely vary greatly, and all tax and accounting questions should be directed towards a certified public accountant. CNote does not provide investment, accounting, tax, or legal advice to investors in CNote Notes or Impact Cash<sup>®</sup> clients and encourages investors and clients to seek out advice from their professional advisers to fully understand their particular tax situations.

We are not subject to any bankruptcy, receivership, or similar and other legal proceedings.

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

The following discussion and analysis of the Company's financial condition and results of its operations should be read together with the consolidated financial statements and the related notes and other financial information included elsewhere in this filing.

**Overview**

The Company operates an online impact investment platform that (1) using the capital raised from individual and institutional investors, offers loans to CFOs that in turn lend to under-resourced communities, and (2) assists its clients with opening interest-bearing deposits, called Impact Cash<sup>®</sup> at CFOs. As of December 31, 2025, the Company has approximately $65,268,000 outstanding in loans and interest with CFOs, and has commitments from clients for approximately $507,723,000 in deposits at CFOs. The Company generates revenue on loans by retaining the difference between the interest earned on loaned funds and the interest paid to its investors, and on its deposit services by charging service fees for clients' cash deposited into CFOs via CNote's proprietary technology.

**Operating Results**

Revenues represent interest earned from loans to CFOs and fees earned on client funds on deposit with CFOs. In addition, CNote earns servicing fees for consulting work on behalf of foundations and other institutions, and for customization of technology built for internal underwriting and monitoring of CFOs to institutional clients' needs.

Operating expenses represent the cost for platform development, sales and marketing (travel, advertising and collateral) and general and administrative expenses (personnel payroll and benefits, professional fees and insurance). Since its inception, the Company has focused on developing its proprietary technology, building up an industry database, setting up the legal framework for its products, and establishing industry partnerships.

*Revenues*

During the fiscal year ended December 31, 2025, the Company generated approximately $4,388,000 in revenue compared to $3,450,000 reported in the fiscal year ended December 31, 2024, due primarily to an increase in fees earned on expansion of our Impact Cash<sup>®</sup> service. In addition, despite gradual decreases in loan balances and cash in banks throughout the year ended December 31, 2025, interest income increased slightly as a result of a higher interest rate environment.

Under our business model for Impact Cash®, we generate revenue by charging our clients a service fee. Service fees earned from Impact Cash® clients was approximately $1,542,000 in the year ended December 31, 2025, compared to approximately $985,000 in the comparable period in the prior year. This increase was the result of an increase in the number of Impact Cash® clients.

We also earn servicing fees for consulting work, including grant administration activities, on behalf of foundations and other institutions. The consulting work leverages CNote's knowledge, expertise and technology in identifying and underwriting community finance organizations as well as monitoring and reporting on their financial and impact performance. Fees earned for such work in the years ended December 31, 2025 and 2024 was approximately $275,000 and approximately $208,000, respectively. Cash received by CNote as grants from foundations and other institutions is deferred and recognized as earned. The Company records grants received as revenue when all donor-imposed conditions on the grant have been satisfied and defers revenue which has not yet met the conditions for recognition. For grants that specify a service period or service requirements, including research studies or similar activities, revenues are recognized over the term of the arrangement as the underlying services are performed.

 

*Operating Expenses*

During the year ended December 31, 2025, the Company had operating expenses of approximately $3,812,000 compared to approximately $4,499,000 in the comparable period in the prior year. The largest line items of operating expenses were payroll and payroll taxes as well as professional services supporting continued business development and expansion.

Employee-related costs were approximately $2,543,000 and $3,001,000 in the years ended December 31, 2025 and 2024, respectively. The decrease in these costs reflects strategic efficiency measures enacted by Company management and utilizing artificial intelligence tools.

Professional services were approximately $924,000 and $971,000 in the years ended December 31, 2025 and 2024, respectively. The decrease in these costs resulted from refinement of the Company's use of such services.

Professional services include website hosting and security costs of approximately $81,000 and $78,000 for the years ended December 31, 2025 and 2024, respectively. These costs increased during the year ended December 31, 2025 due to growth in the number of customer accounts on our platform and data management needs.

General and administrative expenses were approximately $261,000 and $333,000 in the years ended December 31, 2025 and 2024, respectively. Despite overall platform growth, the slight decrease in these costs reflects continuing operational efficiencies realized as the organization matures.

Sales and marketing expenses were approximately $84,000 and $194,000 in the years ended December 31, 2025 and 2024, respectively. The decrease in these costs resulted from continued refinement of our customer acquisition strategy.

*Financial Condition*

At December 31, 2025, cash and cash equivalents and restricted cash totaled approximately $717,000. The balance of cash and cash equivalents and restricted cash at December 31, 2024 was approximately $952,000. The decrease reflects the planned use of the funds raised for continued business development. On February 4, 2025, the Company reopened its Series A Preferred Stock financing whereby the Company authorized additional shares of Preferred Stock, bringing the total authorized shares of Preferred Stock to 21,425,685, and designated and issued 1,238,952 shares of Series A Preferred Stock in exchange for cash consideration of $1,083,836.

**Liquidity and Capital Resources**

***Sources of Liquidity***

To date, the Company has funded operations primarily through Simple Agreements for Future Equity ("SAFEs") agreements, convertible promissory notes ("convertible notes") and issuance of Preferred Stock in its Series Seed and Series A financings, and has funded its lending activities through investments by accredited and non-accredited investors in CNote Notes.

*Equity and Convertible Debt Financing*

On August 25, 2020, the Company entered into a Series Seed Preferred Stock financing whereby the Company authorized 11,009,805 shares of Preferred Stock and designated and issued 10,851,841 shares of Series Seed Preferred Stock in exchange for conversion of the entirety of the Company's SAFEs in the amount of $1,619,500, conversion of the entirety of the outstanding amount of the Company's convertible notes in the principal amount of $1,725,660 plus accrued interest, and cash consideration of approximately $3,400,000.

On August 31, 2022, the Company entered into a Series A Preferred Stock financing whereby the Company authorized an additional 8,129,644 shares of Preferred Stock, bringing the total authorized shares of Preferred Stock to 19,139,449, and designated and issued 8,287,608 shares of Series A Preferred Stock in exchange for cash consideration of $7,250,000. As of December 31, 2024, the Company had sold and issued an aggregate total of 19,139,449 shares of Preferred Stock.

On February 4, 2025, the Company reopened its Series A Preferred Stock financing whereby the Company authorized additional shares of Preferred Stock, bringing the total authorized shares of Preferred Stock to 21,425,685, and designated and issued 1,238,952 shares of Series A Preferred Stock in exchange for cash consideration of $1,083,836. The Company anticipates additional financing rounds to raise capital for accelerated growth of the business and has received substantial interest from investors.

The capital raised has been used to date to develop and maintain the Company's platform, for expanding operations, and for other general corporate purposes.

*Operating and Capital Expenditure Requirements*

The Company expects existing funds, together with its recurring operating revenue, to be sufficient to meet anticipated near-term cash operating expenses and capital expenditure requirements. If those funds are insufficient to satisfy liquidity requirements, the Company intends to seek additional equity or debt financing. The sale of equity may result in dilution to our stockholders and those securities may have rights senior to those of our shares of Common Stock and Preferred Stock. If the Company raises additional funds through the issuance of debt, the agreements governing such debt could contain covenants that would restrict our operations and such debt would rank senior to shares of our Common Stock and Preferred Stock. The Company may require additional capital beyond currently anticipated amounts and additional capital may not be available on reasonable terms, or at all.

***Trends and Key Factors Affecting Our Performance***

*Investment in Long-Term Growth.*

The core elements of the Company's growth strategy include acquiring new customers, broadening distribution capabilities through strategic partnerships, extending customer lifetime value, and enhancing data, analytical and customization capabilities. The Company plans to continue to invest significant resources to accomplish these goals, and the Company anticipates that its operating expenses, particularly sales, marketing, and technology expenses, will continue to increase for the foreseeable future. These investments are intended to contribute to long-term growth, but they may affect near-term profitability.

*Originations.*

The Company's future growth will continue to depend, in part, on attracting additional investors and deposit account clients while entering into relationships with more CDFI borrowers and CFOs. The Company plans to seek to attract these investors and clients. We expect to rely on strategic distribution partners, affinity networks, and conference and public relations strategies for investor and client growth.

The Company expects our CFOs' need for capital to continue to remain elevated in the future. The extent to which the Company can satisfy that increased demand for liquidity will be an important factor in its continued revenue growth. Building relationships with membership industry networks and coalitions has proven to be a stable source of referrals to CFOs, and we expect this trend to continue.

***Summary of Critical Accounting Policies***

This management's discussion and analysis of the Company's financial condition and results of operations are based on its consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The preparation of these consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reported period. In accordance with U.S. GAAP, the Company bases estimates on historical experience and on various other assumptions that the Company believes are reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.

The Company's significant accounting policies are fully described in Note 2 to the consolidated financial statements appearing elsewhere in this filing. The Company believes those accounting policies are critical to the process of making significant judgments and estimates in the preparation of our consolidated financial statements.

***Forward-Looking Statements***

The following information contains certain forward-looking statements. Forward-looking statements are statements that estimate the happening of future events and are not based on historical fact. Forward-looking statements may be identified by the use of forward-looking terminology, such as "may," "could," "expect," "estimate," "anticipate," "plan," "predict," "probable," "possible," "should," "continue," or similar terms, variations of those terms or the negative of those terms. The forward-looking statements specified in the following information have been compiled by our management on the basis of assumptions made by management and considered by management to be reasonable. Our future operating results, however, are impossible to predict and no representation, guarantee, or warranty is to be inferred from those forward-looking statements.

**Item 3.** **DIRECTORS AND OFFICERS**

Our executive officers and directors, as of December 31, 2025, and ages, are as follows:

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| | | | |
|:---|:---|:---|:---|
| **Name** | **Age** | **Position** | **Term of Office** |
| **Executive officers:** |  |  |  |
| Catherine Berman | 51 | President, Chief Executive Officer, Co-founder, Director | Since June 17, 2016 |
| Yuliya Tarasava | 42 | Chief Operating Officer, Co-founder, Treasurer, Secretary, Director | Since April 22, 2016 |
| **Significant Employees:** |  |  |  |
| Aimeelene Gaspar | 52 | Chief Product Officer | Since January 18, 2022 |
| Candice Carr | 51 | Vice President Legal | Since May 22, 2023 |

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*Catherine Berman*

 

Ms. Berman co-founded CNote and has served as our President and Chief Executive Officer and a member of our Board of Directors since June 2016. Before launching CNote, Ms. Berman served as Managing Director of Charles Schwab, one of America's leading financial services businesses. At Schwab, Ms. Berman led a strategy division focusing on the future of financial services. Prior to Schwab, Ms. Berman maintained a host of management positions including Senior Vice President of Astia (venture capital), Strategy & Operations Manager at Deloitte Consulting, LLP (management consulting) and Vice President of Evins Communications, LLC. Her international work experience spans from India to Israel with extensive work in Central and South America. Her last startup, Global Brigades, grew into a multi-million dollar firm in less than four years and is now the world's largest student development firm. Ms. Berman graduated magna cum laude from Boston University and received her MBA from the University of Oxford where she founded the Oxford Women in Business Network.

*Yuliya Tarasava*

Ms. Tarasava co-founded CNote and has served as our Chief Operating Officer, Treasurer, Secretary and a member of our Board of Directors since the Company's inception. Ms. Tarasava began her career conducting intensive quantitative research on new market opportunities and designing investment solutions across asset classes for AMG Funds—a $75 billion asset firm providing access to boutique investment strategies. Ms. Tarasava then went on to Summit Rock Advisors, a $10 billion OCIO firm, where she developed and implemented the firm's proprietary analytics and risk management framework. Most recently, she worked with a high-growth financial services company in Kenya where she led both product development and scale strategy efforts working directly with the company's chief executive officer. Her prior experience also includes creating an investment education portal in Russia and providing pro-bono consulting for non-profits and startups around the world. Ms. Tarasava graduated magna cum laude from Belarusian State University and received her MS in Finance from Fairfield University.

*Aimeelene Gaspar*

Ms. Gaspar is a serial entrepreneur with deep domain expertise in financial services and technology. In addition, she offers her time and expertise to fellow founders through her work at Village Capital with their FinTech Forward program as an advisory board member. Her path from finance to technology culminated in becoming a product management executive with over 20 years of experience at large financial services companies, and startups such as Broadridge and Yodlee. Ms. Gaspar was listed as one of the NYC Fintech Women Inspiring Fintech Females of 2020 and is a current member of Professional Business Women of California. Ms. Gaspar graduated from the University of Illinois at Urbana-Champaign with a Bachelor of Science Degree in Finance and completed a Masters of Science Degree in Integrated Design, Business and Technology from the University of Southern California.

 *Candice Carr*

Ms. Carr has over 20 years of diversified experience providing expert counsel as a trusted advisor on a broad range of business and legal issues to principals, entrepreneurs, and executives, as well as early-stage and high-growth businesses. Ms. Carr's legal practice has focused primarily on corporate law and transactions, litigation management, intellectual property, mergers and acquisitions, and employment law. Ms. Carr received a J.D. from Golden Gate University School of Law, and a B.A. from San Francisco State University.

**Family Relationships**

None.

**Conflicts of Interest**

We do not believe that we are a party to any transactions that contain or give rise to a conflict of interest between any of our directors, officers, and major stockholders on the one hand, and CNote on the other hand. Two co-founders have invested $6,500 each through our platform, and Yuliya Tarasava has placed $5,000 in deposits through the Impact Cash program, but we do not believe these small investments present a conflict of interest.

**Involvement in Certain Legal Proceedings**

None.

**COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS**

The Company has two directors who also serve as executive officers. Their compensation for the 2025 fiscal year was as follows:

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| | | | | |
|:---|:---|:---|:---|:---|
| Executive <br> Officers | Position | Cash <br> Compensation | Other <br> Compensation | Total <br> Compensation |
| Catherine <br> Berman | President, Chief Executive Officer, Co-Founder, Director | $218875 | $0 | $218875 |
| Yuliya <br> Tarasava | Chief Operating Officer, Co-Founder, Treasurer, Secretary, Director | $218875 | $0 | $218875 |

---

Executive compensation is set annually, based on several factors including company and individual leadership, performance compensation of competitor peer group, and other factors. Travel expenses incurred by non-officer directors in connection with attendance at in-person meetings may be reimbursed. The Company does not otherwise provide compensation to non-officer directors for their services; however, in 2025, the sole independent director, who also serves as an advisor to the Company, was granted 92,089 stock options under the Company's Amended and Restated 2018 Equity Incentive Plan. The options have an exercise price of $0.25 per share, a term of ten years from the date of grant, and vest over a two-year period.

The total number of directors at December 31, 2025 is five.

**Item 4. SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITY HOLDERS**

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| | | | |
|:---|:---|:---|:---|
| Name and Address of <br> Beneficial Owner <sup>(1)</sup> | Amount and nature of beneficial <br> ownership as of December 31, 2025 | Amount and nature of beneficial <br> ownership acquirable as of December <br> 31, 2025 | Percent of <br> class <sup>(7)</sup> |
| Catherine Berman | 5,006,250 shares of common stock <sup>(2)</sup> | 5,109,375 shares of common stock <sup>(4)</sup> | 38.2% |
| Yuliya Tarasava | 4,606,250 shares of common stock <sup>(3)</sup> | 4,709,375 shares of common stock<sup>(5)</sup> | 35.2% |
| All executive officers and directors as a group (2 persons) | 9,612,500 shares of common stock | 9,818,750 shares of common stock | 73.4% |
| ManchesterStory Venture Fund, L.P. | 1,000,000 shares of common stock(6) | 1,000,000 shares of common stock<sup>(6)</sup> | 7.5% |
| ManchesterStory Venture Fund, L.P. | 2,946,369 shares of preferred stock | 2,946,369 shares of preferred stock | 14.5% |

---

<sup>(1)</sup> The address of each executive officer and director is CNote Group, Inc., 2323 Broadway, Oakland, CA 94612. The address of ManchesterStory Venture Fund, L.P. is 3001 Westown Parkway, Suite 102, West Des Moines, IA 50266.

<sup>(2)</sup> Includes 3,200,000 shares of common stock outstanding and 1,806,250 shares of common stock currently issuable pursuant to common stock options held. Does not reflect the unvested balance of a grant of an aggregate 1,650,000 shares of common stock, of which 79.2% (or 1,306,250 shares) were vested at December 31, 2025 and which will continue to vest in equal monthly installments of 1/48<sup>th</sup> of such grant thereafter.

<sup>(3)</sup> Includes 2,800,000 shares of common stock outstanding and 1,806,250 shares of common stock currently issuable pursuant to common stock options held. Does not reflect the unvested balance of a grant of an aggregate 1,650,000 shares of common stock, of which 79.2% (or 1,306,250 shares) were vested at December 31, 2025 and which will continue to vest in equal monthly installments of 1/48<sup>th</sup> of such grant thereafter.

<sup>(4)</sup> Reflects vesting of three monthly installments of 34,375 shares of common stock (or 103,125 shares total) through March 31, 2026.

<sup>(5)</sup> Reflects vesting of three monthly installments of 34,375 shares of common stock (or 103,125 shares total) through March 31, 2026.

<sup>(6)</sup> Represents the number of shares issuable on exercise of the holder's warrants.

<sup>(7)</sup> Calculated on basis of beneficial ownership acquirable as of December 31, 2025.

**Item 5.** **INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS**

We do not believe that we are a party to any transactions that contain or give rise to a conflict of interest between any of our directors, officers and major stockholders on the one hand, and CNote on the other hand. The two co-founders, Ms. Berman and Ms. Tarasava, have invested $6,500 each through our platform and Ms. Tarasava has placed $5,000 in deposits through the Impact Cash program, but we do not believe these small investments present a conflict of interest.

**Item 6.** **OTHER INFORMATION** 

None.

**Item 7.** **CNOTE GROUP, INC.**<br> **CONSOLIDATED FINANCIAL STATEMENTS**<br> **For the years ended December 31, 2025 and 2024**<br>

**Table of Contents**

---

| | |
|:---|:---|
|  | **Pages** |
| Independent Auditors' Report | F-1 |
| Consolidated Balance Sheets | F-3 |
| Consolidated Statements of Operations | F-4 |
| Consolidated Statements of Stockholders' Equity | F-5 |
| Consolidated Statements of Cash Flows | F-6 |
| Notes to the Consolidated Financial Statements | F-7 |

---

**INDEPENDENT AUDITORS' REPORT**

To the Board of Directors and Stockholders<br> CNote Group, Inc.

**Opinion**

We have audited the accompanying consolidated financial statements of CNote Group, Inc. and subsidiary (a Delaware corporation), which comprise the consolidated balance sheets as of December 31, 2025 and 2024, and the related consolidated statements of operations, stockholders' equity, and cash flows for the years then ended, and the related notes to the consolidated financial statements.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of CNote Group, Inc. as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

**Basis for Opinion**

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are required to be independent of CNote Group, Inc. and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

**Responsibilities of Management for the Financial Statements**

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about CNote Group, Inc.'s ability to continue as a going concern within one year after the date that the consolidated financial statements are available to be issued.

**Auditors' Responsibilities for the Audit of the Consolidated Financial Statements**

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements, including omissions, are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with generally accepted auditing standards, we:

● Exercise professional judgment and maintain professional skepticism throughout the audit.

● Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

● Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of CNote Group, Inc.'s internal control. Accordingly, no such opinion is expressed.

● Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the consolidated financial statements.

● Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about CNote Group, Inc.'s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.

/s/ dbbmckennon

Newport Beach, California

April 24, 2026

**CNOTE GROUP, INC.**

**CONSOLIDATED BALANCE SHEETS**

**DECEMBER 31, 2025 AND 2024**

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| Assets |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | $592350 | $834893 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restricted cash (Note 2) | 124893 | 116866 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest-bearing deposits in banks | 5519228 | 7972344 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued interest receivable | 1867833 | 1308414 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loans held for investment |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loans held for investment at amortized cost | 10645514 | 9000620 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loans held for investment at fair value | 52227570 | 59711734 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Allowance for loan losses | (106455) | (90006) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net loans held for investment | 62766629 | 68622348 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other assets | 264232 | 191594 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets | $71135165 | $79046459 |
| Liabilities and Stockholders' Equity |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notes payable held at amortized cost | $16298943 | $17087887 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notes payable held at fair value | 52227570 | 59711734 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued interest payable | 1399332 | 1131332 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred revenue | 236042 | 208333 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other liabilities | 153156 | 143694 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 70315043 | 78282980 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Commitments and contingencies (Note 5) |  |  |
| Stockholders' Equity |  |  |
| &nbsp;&nbsp;&nbsp;Preferred stock; par value of $0.00001 per share; 21,425,685 and 19,139,449 shares authorized, 20,378,401and 19,139,449 shares issued and outstanding as of December 31, 2025 and 2024, respectively (liquidation preference value of $15,149,575 and $14,065,739 as of December 31, 2025 and 2024, respectively) | 204 | 191 |
| &nbsp;&nbsp;&nbsp;Common stock; par value of $0.00001 per share; 40,400,000 and 38,000,000 shares authorized, 6,842,897 issued and outstanding as of December 31, 2025 and 2024, respectively | 68 | 68 |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 16356844 | 15138386 |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (15536994) | (14375166) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' equity | 820122 | 763479 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and stockholders' equity | $71135165 | $79046459 |

---

See accompanying notes to the consolidated financial statements.

**CNOTE GROUP, INC.**

**CONSOLIDATED STATEMENTS OF OPERATIONS**

**FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024**

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| Operating Revenues |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest income on loans | $2316891 | $2004262 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other interest income | 254503 | 252359 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total interest income | 2571394 | 2256621 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest expense | 1721145 | 1410043 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net interest income | 850249 | 846578 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provision for loan losses | 16449 | 8484 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net interest income after provision for loan losses | 833800 | 838094 |
| Other Income |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Service fees and other income | 1541699 | 985216 |
| &nbsp;&nbsp;&nbsp;&nbsp;Grants received | 275000 | 208333 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other income | 1816699 | 1193549 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net Revenue | 2650499 | 2031643 |
| Operating Expenses |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Payroll expense | 2542671 | 3000722 |
| &nbsp;&nbsp;&nbsp;&nbsp;Professional services | 924072 | 971371 |
| &nbsp;&nbsp;&nbsp;&nbsp;General and administrative | 260999 | 332686 |
| &nbsp;&nbsp;&nbsp;&nbsp;Sales and marketing | 83785 | 194499 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 3811527 | 4499278 |
| Net loss before taxes | (1161028) | (2467635) |
| Provision for income taxes | 800 | 1600 |
| Net loss | $(1161828) | $(2469235) |
| &nbsp;&nbsp;&nbsp;&nbsp;Weighted average common shares outstanding - basic and diluted | 6842897 | 6842897 |
| &nbsp;&nbsp;&nbsp;&nbsp;Basic and diluted net loss per share | $(0.17) | $(0.36) |

---

See accompanying notes to the consolidated financial statements.

**CNOTE GROUP, INC.**

**CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY**

**FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024**

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | 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 |
| December 31, 2023 | 19139449 | $191 | 6842897 | $68 | $15010162 | $(11905931) | $3104490 |
| Stock-based compensation |  |  |  |  | 128224 |  | 128224 |
| Net loss | - | - | - | - | - | (2469235) | (2469235) |
| December 31, 2024 | 19139449 | $191 | 6842897 | $68 | $15138386 | $(14375166) | $763479 |
| Issuance of series A preferred stock for cash, net of offering costs | 1238952 | 13 |  |  | 1083823 |  | 1083836 |
| Stock-based compensation |  |  |  |  | 134635 |  | 134635 |
| Net loss | - | - | - | - | - | (1161828) | (1161828) |
| December 31, 2025 | 20378401 | $204 | 6842897 | $68 | $16356844 | $(15536994) | $820122 |

---

See accompanying notes to the consolidated financial statements.

**CNOTE GROUP, INC.**

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

**FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024**

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| CASH FLOWS FROM OPERATING ACTIVITIES: |  |  |
| &nbsp;&nbsp;&nbsp;Net loss | $(1161828) | $(2469235) |
| &nbsp;&nbsp;&nbsp;Adjustments to reconcile net loss to net cash used in operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation | 134635 | 128224 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provision for loan losses | 16449 | 8484 |
| &nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued interest receivable | (863239) | (263373) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other assets | (72638) | 178941 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other liabilities | 9462 | 58883 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred revenues | 27709 | 41666 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued interest payable | 979966 | 914191 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in operating activities | (929484) | (1402219) |
| CASH FLOWS FROM INVESTING ACTIVITIES: |  |  |
| &nbsp;&nbsp;&nbsp;Lendings under loans receivable | (12347655) | (5454280) |
| &nbsp;&nbsp;&nbsp;Repayment of loans receivable | 18566343 | 7617112 |
| &nbsp;&nbsp;&nbsp;Investment in interest-bearing accounts | (5486736) |  |
| &nbsp;&nbsp;&nbsp;Liquidation of interest-bearing accounts | 7939852 | 1231188 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by investing activities | 8671804 | 3394020 |
| CASH FLOWS FROM FINANCING ACTIVITIES: |  |  |
| &nbsp;&nbsp;&nbsp;Borrowings on notes payable | 5412681 | 3959937 |
| &nbsp;&nbsp;&nbsp;Repayment of notes payable | (14473353) | (6806743) |
| &nbsp;&nbsp;&nbsp;Proceeds from issuance of series A preferred stock, net of costs | 1083836 | - |
| &nbsp;&nbsp;&nbsp;Net cash used in financing activities | (7976836) | (2846806) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Decrease in cash, cash equivalents, and restricted cash | (234516) | (855005) |
| &nbsp;&nbsp;&nbsp;Cash, cash equivalents, and restricted cash, beginning of year | 951759 | 1806764 |
| &nbsp;&nbsp;&nbsp;Cash, cash equivalents, and restricted cash, end of year | $717243 | $951759 |
| &nbsp;&nbsp;&nbsp;Supplemental disclosures of cash flow information: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash paid for interest | $741179 | $495852 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash paid for income taxes | $800 | $1600 |
| &nbsp;&nbsp;&nbsp;Non-cash investing and financing activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest receivable converted to loan principal | $303820 | $379477 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest payable converted to note principal | $711966 | $687731 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheets: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | 592350 | 834893 |
| &nbsp;&nbsp;&nbsp;Restricted cash | $124893 | $116866 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows | $717243 | $951759 |

---

See accompanying notes to the consolidated financial statements.

**CNOTE GROUP, INC**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 1 – NATURE OF OPERATIONS**

CNote Group, Inc. was incorporated on April 22, 2016 ("Inception") in the State of Delaware. The Company's headquarters are located in Oakland, California. The consolidated financial statements of CNote Group, Inc. (which may be referred to as "CNote", the "Company," "we," "us," or "our") are prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP").

Through its online platform and proprietary technology, CNote allows individuals and institutions to invest locally to further economic opportunity and address climate change. With the aim of closing the wealth gap, CNote's fixed income and depository solutions provide a diversified and scalable way to support job creation, small business growth, affordable housing development, and lasting economic growth in underserved communities primarily through partnerships with Community Development Financial Organizations and other community finance organizations (collectively "CFOs") dispersed across the United States. CFOs can be banks, credit unions, loan funds, microloan funds or venture capital providers that focus on providing loans to businesses in economically underdeveloped cities and neighborhoods in the United States.

The Company intends to offer investors competitive rates of return on their investments compared to more traditional lower risk investment vehicles such as cash alternatives and fixed income. The Company earns revenue in a few ways. In addition to the spread (the difference between the rates CNote earns from its CFO borrowers and the rates it pays to its investors), CNote charges servicing fees on cash deployed on behalf of its clients and earns consulting fees from foundations and other institutions that are interested in supporting underserved communities. The consulting work leverages CNote's knowledge, expertise, and technology in identifying and underwriting CFOs as well as monitoring and reporting on their financial and social impact performance. For corporate or institutional clients that invest in CFOs directly, CNote's internal CFO underwriting and monitoring technology can be customized to fit their needs.

In December 2018, the Company formed a wholly-owned subsidiary, CNote Lending, LLC, for the purpose of holding a California Finance Lenders license pursuant to the California Financing Law and to make loans to CDFIs. CNote Lending, LLC received its California Finance Lenders license in January 2020.

*Management Plans and Going Concern*

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

Fluctuations in market rates of return and other economic trends may impact investors' appetite for CNote's fixed income offerings.

On a regular basis, the Company evaluates the rates of return offered on its investments to maintain competitiveness with other instruments from a financial return and impact perspective.

In prior reporting periods, the Company disclosed substantial doubt about its ability to continue as a going concern within one year after the date the financial statements were issued. That doubt arose primarily from the Company's history of net losses and its ability to generate sufficient revenues. Management has evaluated the conditions and events that previously gave rise to substantial doubt and has concluded that substantial doubt no longer exists as of the date these financial statements are issued. This conclusion is based on management's assessment of the following factors and the probable near-term results of the Company's operations:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· The Company's consistent year-over-year revenue growth over its ten years of operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Recent contractual commitments from new and existing clients

Based on these factors, management believes it is probable that the Company will generate sufficient revenues and cash inflows from operations within the next twelve months to fund operations at current levels.

The Company may also pursue additional financing to support current operating requirements, and has received significant investor interest in connection with such potential financing. However, there can be no assurance that such financing will be available on acceptable terms, or at all.

**NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

*Use of Estimates*

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, and the reported amount of revenues and expenses during the reporting period. Actual results could materially differ from these estimates.

Significant estimates include but are not limited to the valuation of loan loss reserves and the valuation of stock-based compensation awards. It is reasonably possible that changes in estimates will occur in the near term.

*Cash and Cash Equivalents*

The Company maintains its cash with major financial institutions located in the United States of America which it believes to be creditworthy. Balances are insured by the Federal Deposit Insurance Corporation up to $250,000. At times, the Company may maintain balances in excess of the federally insured limits.

Cash equivalents include highly liquid debt instruments purchased with an original maturity of three months or less.

At December 31, 2025, the Company held $124,893 in cash received as grant funds, to be used for activities in support of the grant's stated goals. This cash is reported on the balance sheet as restricted.

*Interest-bearing Deposits in Banks*

In connection with its cash management product, the Company facilitates the creation of interest-bearing deposit accounts for the benefit of its clients in CFOs located in the United States of America. The Company also invests its own operating funds in such institutions in accordance with its treasury management policies. Deposits include certificates of deposits with initial terms of up to 24 months and money market accounts. Balances are insured by the Federal Deposit Insurance Corporation or the National Credit Union Administration up to $250,000. At times, the Company may maintain balances in excess of the insured limits. In the normal course of business, the Company expects to hold such instruments to maturity.

*Fair Value of Financial Instruments*

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants as of the measurement date. Applicable accounting guidance provides an established hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions about the factors that market participants would use in valuing the asset or liability. There are three levels of inputs that may be used to measure fair value:

Level 1 – Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 – Include other inputs that are directly or indirectly observable in the marketplace.

Level 3 – Unobservable inputs which are supported by little or no market activity.

The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

Fair-value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2025 and 2024. The respective carrying value of all financial instruments approximated their fair values. These financial instruments include loans held for investment and notes payable and interest receivable and payable.

The Company has adopted fair value presentation for payment-dependent notes issued under Regulation D of the Securities Act of 1933. These notes are available only to accredited and institutional investors and under the terms of the notes are dependent upon repayment of a portion of the Company's loans to CFOs. The amount and term to maturity of loans funded by these notes match the underlying loan. If the loan is repaid in accordance with its terms, the note will be repaid in full according to its terms. If the loan does not fully perform, investors in payment-dependent notes will receive payment of the pro-rata portion of any payments received on the loan. Accordingly, the Company has presented payment-dependent notes issued after the date of the fair-value election at their fair value as represented by the note amount less the amount of loan loss reserve recorded against the related loan receivable from CFOs. See Note 4.

The following tables present the fair value hierarchy for assets and liabilities measured at fair value at December 31, 2025 and 2024:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **December 31, 2025** | **Level 1 Inputs** | **Level 2 Inputs** | **Level 3 Inputs** | **Balance at Fair <br> Value** |
| **Assets:** |  |  |  |  |
| Loans held for investment | $- | $- | $52227570 | $52227570 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total assets | $- | $- | $52227570 | $52227570 |
| **Liabilities:** |  |  |  |  |
| Notes payable | $- | $- | $52227570 | $52227570 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | $- | $- | $52227570 | $52227570 |
| **December 31, 2024** | **Level 1 Inputs** | **Level 2 Inputs** | **Level 3 Inputs** | **Balance at Fair <br> Value** |
| **Assets:** |  |  |  |  |
| Loans held for investment | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- | $59711734 | $59711734 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total assets | $- | $- | $59711734 | $59711734 |
| **Liabilities:** |  |  |  |  |
| Notes payable | $- | $- | $59711734 | $59711734 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | $- | $- | $59711734 | $59711734 |

---

The following tables present additional information about Level 3 assets and liabilities measured at fair value at December 31, 2025 and 2024:

---

| | | | |
|:---|:---|:---|:---|
|  | **Outstanding <br> Principal <br> Balance** | **Valuation <br> Adjustments** | **Fair Value** |
| **Balance at December 31, 2023** | $61478626 | $(614787) | $60863839 |
| Loan originations and renewals | 11737817 | (117378) | 11620439 |
| Principal payments and retirements | (12901560) | 129016 | (12772544) |
| **Balance at December 31, 2024** | 60314883 | (603149) | 59711734 |
| Loan originations and renewals | 18076906 | (180769) | 17896137 |
| Principal payments and retirements | (25636668) | 256367 | (25380301) |
| **Balance at December 31, 2025** | $52755121 | $(527551) | $52227570 |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **Outstanding <br> Principal <br> Balance** | **Valuation <br> Adjustments** | **Fair Value** |
| **Balance at December 31, 2023** | $61478626 | $(614787) | $60863839 |
| Notes payable issued and renewed | 11737817 | (117378) | 11620439 |
| Principal payments and retirements | (12901560) | 129016 | (12772544) |
| **Balance at December 31, 2024** | 60314883 | (603149) | 59711734 |
| Notes payable issued and renewed | 18076906 | (180769) | 17896137 |
| Principal payments and retirements | (25636668) | 256367 | (25380301) |
| **Balance at December 31, 2025** | $52755121 | $(527551) | $52227570 |

---

*Loans Held for Investment and Related Notes Payable*

Management expects that the terms of the Company's loans held for investment and the notes payable used to fund the loans held for investment typically will be 30 months or 60 months based on the current operating structure. In the normal course of business, the Company expects to hold such instruments to maturity. However, provisions within the terms of such instruments having 30-month terms allow for liquidity on demand of 10% per quarter. Accordingly, should the need arise, 40% of such loans held for investment and related notes payable can be due on demand within one year.

*Stock Options and Warrants*

The Company has issued stock options and warrants to employees and to key advisors as compensation for services performed. The Company has accounted for these awards under Accounting Standards Codification ("ASC") section 718 and Accounting Standards Update ("ASU") 2018-07. Stock-based compensation cost is measured at the grant date based on the fair value of the award using an established option pricing model and is recognized as expense ratably over the requisite service period, which is generally the option or warrant vesting period. See Note 7.

*Revenue Recognition and Cost of Revenues*

CNote deploys capital from individuals and institutions to CFOs on behalf of its clients. The Company earns interest on its loan deployments, which are a significant source of its revenues. All such deployments are governed by signed contracts between the Company on the one hand and the CFOs on the other hand. Interest income is recorded based on the terms of the master promissory agreement with each CFO Loan Fund or the terms of Money Market or Certificate of Deposit agreements with CFOs. The interest is accrued monthly. If ninety (90) days pass without the interest being paid in accordance with normal disbursement practices per the agreement, then the Company will cease recording revenue until such time that the interest is collected.

CNote aggregates money from individuals and institutions through its online platform. The Company must pay interest on the capital to its clients. All such loans are governed by signed contracts between the Company and investors. The interest, which accrues according to the agreements' governing terms of the loans from clients, constitutes the major portion of the Company's direct cost of interest income. Other direct costs of interest income include the provision for loan loss reserve.

CNote also generates fees from consulting work performed on behalf of foundations and other institutions who as a part of their investment and programmatic mandates are interested in supporting underserved communities and promoting economic opportunity. This consulting work leverages CNote's knowledge, expertise and technology in identifying and underwriting CDFIs as well as monitoring and reporting on their financial and impact performance. For corporate or institutional clients that invest in CDFIs directly, CNote's internal CDFI underwriting and monitoring technology can be customized to fit their needs. Revenue for these activities is recognized over the period in which the work is performed and is deferred until recognizable.

CNote earns servicing fees on clients' cash deposited into CFOs via CNote's proprietary technology. These fees are accrued in accordance with signed agreements between the Company and its clients, and in accordance with those agreements are deducted from earnings disbursed to clients or paid by clients via invoice.

From time to time, CNote receives grants from foundations and other institutions. The Company records grants received as revenue when all donor-imposed conditions on the grant have been satisfied and defers revenue which has not yet met the conditions for recognition. For grants that specify a service period or service requirements, including research studies or similar activities, revenues are recognized over the term of the arrangement as the underlying services are performed.

The table below summarizes the changes in deferred grant revenues for the years ended December 31, 2025 and 2024:

---

| | |
|:---|:---|
|  | **Deferred Grant Revenue** |
| **Balance at December 31, 2023** | $166667 |
| Grant funds received | 250000 |
| Grant revenue recognized | (208334) |
| **Balance at December 31, 2024** | $208333 |
| Grant funds received | 250000 |
| Grant revenue recognized | (275000) |
| **Balance at December 31, 2025** | $183333 |

---

The balance at December 31, 2025 will be recognized as earned revenue in 2026.

Some users of CNote's Impact Cash<sup>®</sup> platform may pay an onboarding servicing fee in advance in accordance with the terms of their initial service agreement with CNote. Any such fees paid in advance are recognized over the period in which the service is provided. The table below summarizes the changes in deferred service fee revenues for the year ended December 31, 2025.

---

| | |
|:---|:---|
|  | **Deferred Service Fee <br> Revenue** |
| **Balance at December 31, 2024** | $- |
| Service fees received in advance | 97500 |
| Deferred service fee revenue recognized | (44791) |
| **Balance at December 31, 2025** | $52709 |

---

The balance at December 31, 2025 will be recognized as earned revenue as follows:

---

| | |
|:---|:---|
| Year Ending December 31, | Year Ending December 31, |
| 2026 | $39584 |
| 2027 | 13125 |
|  | $52709 |

---

*Loan Loss Reserve*

The Company establishes a reserve for potential losses on loans extended to CFOs, other than those funded by payment-dependent notes and measured at fair value. The amount of the loan loss reserve is determined based on industry norms and trends and expected future conditions, as well as the Company's historical experience. Since commencing operations, the Company has not experienced any delinquencies or charge-offs of loans to CFOs. Based on the factors described above, the Company has established the reserve at one percent of principal.

Other than adjustments for changes in estimates, reversals to the loan loss reserve will happen only when the loans mature. If no loss has occurred on a particular loan, the loss reserve will be reversed and recognized as a reduction of the loan loss reserve at maturity of the loan. On the other hand, if any loan becomes unrecoverable, the entire amount of the loan will be charged off against the loan loss reserve, when and if facts and circumstances indicate that such a write off is necessary.

In general, we do not record a loan loss reserve for accrued interest receivables. Uncollected accrued interest is reversed through interest income in a timely manner in line with our non-accrual and past due policies for loans.

The Company uses fair value presentation for payment-dependent notes issued under Regulation D. The Company has presented payment-dependent notes at their fair value as represented by the note amount less the amount of loan loss reserve recorded against the related loan receivable from CFOs. The amount recognized in expense by the Company as provision for loan losses is reduced by the portion of the loan loss reserve recorded against such notes. See Note 4.

*Nonaccrual Loans*

Loans that are 90 days past due as to principal or interest are placed on nonaccrual status, and accrued interest receivable on the loan is reversed. Loans are restored to accrual status when all principal and interest is current and full repayment of the remaining contractual principal and interest is expected.

*Advertising*

The Company expenses the cost of advertising and promotions as incurred. Advertising costs expensed totaled $30,256 and $36,848 for the years ended December 31, 2025 and 2024, respectively.

*Research and Development*

The Company incurs research and development costs during the process of researching and developing new technologies and future online offerings. Such costs are expensed as incurred.

*Income Taxes*

The Company applies ASC section 740. Deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial statement reported amounts at each period end, based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The provision for income taxes represents the tax expense for the period, if any, and the change during the period in deferred tax assets and liabilities. At December 31, 2025 and 2024 the Company has established a full reserve against all deferred tax assets.

ASC 740 also provides criteria for the recognition, measurement, presentation and disclosure of uncertain tax positions. A tax benefit from an uncertain position is recognized only if it is "more likely than not" that the position is sustainable upon examination by the relevant taxing authority based on its technical merit.

*Loss per Common and Common Equivalent Share*

The computation of basic earnings per common share is computed using the weighted average number of common shares outstanding during the year. The computation of diluted earnings per common share excludes Common Stock equivalents for the years ended December 31, 2025 and 2024 as they are anti-dilutive. The Common Stock equivalents, which include outstanding convertible Preferred Stock, options, and warrants, excluded from diluted loss per share total 27,425,177 and 26,328,635 share equivalents for the years ended December 31, 2025 and 2024, respectively.

*Segment Reporting*

The Company operates as a single reportable segment under Accounting Standards Update 2023-07 – Segment Reporting (Topic ASC 280) – Improvements to Reportable Segment Disclosures. The Company's two founders, who serve as Chief Executive Officer and Chief Operating Officer, collectively serve as the Company's Chief Operating Decision Maker ("CODM") and assess segment performance based on gross and net revenue, operating profit or loss, and operating expenses.

*Principles of Consolidation*

The accompanying consolidated financial statements include the accounts of CNote Group, Inc., its wholly-owned subsidiary, CNote Lending, LLC.

*Reclassifications*

Certain amounts in the accompanying consolidated financial statements have been reclassified for the year ended December 31, 2024 to conform to the presentation for the year ended December 31, 2025.

*Recent Accounting Pronouncements*

The Financial Accounting Standards Board issues Accounting Standards Updates to amend the authoritative literature in ASC. There have been a number of ASUs to date that amend the original text of ASC.

The Company will adopt ASU 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax" for presentation of financial statements as of and for the year ended December 31, 2026. The Company will adopt ASU 2025-05, "Financial Instruments- Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets" as of and for the year ended December 31, 2026. The Company will implement ASU 2024-03 "Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses" for presentation of financial statements as of and for the year ended December 31, 2027. The Company is determining the expected impacts of adoption of these updates.

The Company believes other pending ASUs issued to date either (i) provide supplemental guidance, (ii) are technical corrections, (iii) are not applicable to the Company or (iv) are not expected to have a significant impact on the Company.

**NOTE 3 – LOANS HELD FOR INVESTMENT AND INTEREST RECEIVABLE**

Loans held for investment represent the principal amounts of outstanding loans the Company has made to CFOs, less loan loss reserves as described below. Interest receivable represents the outstanding interest due from CFO borrowers.

As of December 31, 2025, the Company has outstanding loans and interest receivable from 39 CFO borrowers in the gross carrying amount of approximately $65,268,000. Under terms of the respective master promissory notes, the loans earn interest at rates ranging from 1.5% to 4.8% per annum. Interest on the loans is due according to each loan's contractual terms, which range from monthly payment of interest to interest due at maturity. The loans mature in 30 to 96 months and may be prepaid by the borrower at any time without penalty. For loans with 30-month terms, the Company has the option to request repayment of 10% of the original loan amount on a quarterly basis. These requests are based on the requests of note payable holders disclosed in Note 4.

During the year ended December 31, 2025, the Company was repaid approximately $18,566,000 on the principal of loans held for investment which were used to repay notes payable.

As of December 31, 2024, the Company had outstanding loans and interest receivable from 39 CFO borrowers totaling approximately $70,624,000. During the year ended December 31, 2024, the Company was repaid approximately $7,617,000 on the principal of loans held for investment which were used to repay notes payable.

Capital received from our investors funds loans to CFOs proportionally, and loan repayments received are used to repay notes payable using the same proportions, without preference to either accredited or non-accredited investors.

During the years ended December 31, 2025 and 2024, matured loan principal and interest totaling approximately $9,715,000 and $11,724,000, respectively, were renewed as new loans to the borrower at then-prevailing interest rates and in compliance with CNote's underwriting policies.

The Company has recorded a provision for loan losses, as described in Note 2. The loan loss reserve totaled $106,455 and $90,006 as of December 31, 2025 and 2024, respectively. As of December 31, 2025 and 2024, all loans were contractually current and no loans had been placed on nonaccrual status. No loans were modified during the years ended December 31, 2025 and 2024.

The table below summarizes the changes in the allowance for credit losses for the years ended December 31, 2025 and 2024:

---

| | |
|:---|:---|
| Allowance for loan losses, December 31, 2023 | $81522 |
| &nbsp;&nbsp;&nbsp;&nbsp;Loans charged off |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Recoveries of previously charged off loans | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net charge-offs |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Provision for loan losses | 8484 |
| Allowance for loan losses, December 31, 2024 | $90006 |
| &nbsp;&nbsp;&nbsp;&nbsp;Loans charged off |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Recoveries of previously charged off loans | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net charge-offs |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Provision for loan losses | 16449 |
| Allowance for loan losses, December 31, 2025 | $106455 |

---

As of December 31, 2025, loans held for investment have approximate contractual maturities as follows:

---

| | |
|:---|:---|
| Year Ending December 31, | Year Ending December 31, |
| 2026 | $31191000 |
| 2027 | 9625000 |
| 2028 | 16620000 |
| 2029 | 1450000 |
| 2030 | 4515000 |
| Total | $63401000 |

---

**NOTE 4 – NOTES PAYABLE AND INTEREST PAYABLE**

*Notes Payable*

Notes payable represent the principal amounts of outstanding borrowings from individual and institutional clients. Interest payable represents the outstanding interest the Company owes to the note holders. Notes payable from clients are not a source of financing for the Company's operations; rather, they are used to fund CFO loans held for investment (Note 3) and short-term investments in CFOs under the Company's cash management program.

As of December 31, 2025 and 2024, gross notes payable totaled approximately $69,054,000 and $77,403,000, respectively. Notes issued to investors in the Company's CFO loans mature in 30 to 96 months and earn interest at the rate of 1.0% to 4.0% per annum. Additionally, the interest rate may be adjusted to the extent rates earned from loans to CFOs vary in the future. Notes with original 30-month maturities issued under Regulation D may be rolled over for additional 30-month terms at the option of the holder. Certain notes provide the holder an option to call 10% of the original note balance each quarter.

The Company has adopted fair value presentation for payment-dependent notes payable issued under Regulation D. These notes are available only to accredited and institutional investors and under the terms of the notes are dependent upon repayment of a portion of the Company's loans to CFOs. The amount and term to maturity of loans funded by these notes match the underlying note. If the loan is repaid in accordance with its terms, the note will be repaid in full according to its terms. If the loan does not fully perform, investors in payment-dependent notes will receive payment of the pro-rata portion of any payments received on the loan. Accordingly, the Company has presented payment-dependent notes at their fair value as represented by the note amount less the amount of loan loss reserve recorded against the related loan receivable from CFOs, at a rate of one percent, as described in Note 2. At December 31, 2025 and 2024, the Company has recorded a valuation adjustment for notes subject to this presentation in the amount of $527,551 and $603,149, respectively.

As of December 31, 2025, notes payable mature approximately as follows:

---

| | |
|:---|:---|
| Year Ending December 31, | Year Ending December 31, |
| 2026 | $36730000 |
| 2027 | 9562000 |
| 2028 | 16742000 |
| 2029 | 1625000 |
| 2030 | 4395000 |
|  | $69054000 |

---

**NOTE 5 – COMMITMENTS AND CONTINGENCIES**

*Litigation*

The Company is not currently involved with, and does not know of, any pending or threatening litigation against the Company or any of its officers.

**NOTE 6 – INCOME TAXES**

The following table presents the current and deferred tax provision for federal and state income taxes for the years ended December 31, 2025 and 2024:

---

| | | |
|:---|:---|:---|
|  | 2025 | 2024 |
| Current tax provision |  |  |
| Federal | $- | $- |
| State | 800 | 1600 |
| Total | $800 | $1600 |
| Deferred tax provision (benefit) |  |  |
| Federal | $(215000) | $(490000) |
| State | (91000) | (207000) |
| Valuation allowance | 306000 | 697000 |
| Total | $- | $- |
| Total provision for income taxes | $800 | $1600 |

---

In assessing the potential realization of these deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the Company attaining future taxable income during the periods in which those temporary differences become deductible. As of December 31, 2025 and 2024, management was unable to determine if it is more likely than not that the Company's deferred tax assets will be realized, and has therefore recorded an appropriate valuation allowance against deferred tax assets at such dates.

The components of our deferred tax assets (liabilities) for federal and state income taxes consisted of the following as of December 31, 2025 and 2024:

---

| | | |
|:---|:---|:---|
|  | 2025 | 2024 |
| Deferred tax asset attributable to: |  |  |
| Net operating loss carryover | $4278000 | $3893000 |
| Temporary differences | (63000) | 16000 |
| Valuation allowance | (4215000) | (3909000) |
| Net deferred tax asset | $- | $- |

---

The valuation allowance for deferred tax assets increased to $4,215,000 and $3,909,000 during the years ended December 31, 2025 and 2024, respectively.

At December 31, 2025 and 2024, the deferred tax provision was calculated using the applicable Federal and State of California tax rates of 21.00% and 8.84%, respectively. The difference between the stated tax rates and the effective tax rate is primarily due to the establishment of a full valuation allowance on the deferred tax assets.

Based on federal tax returns filed, or to be filed, through December 31, 2025, the Company has available approximately $14,338,000 in U.S. tax net operating loss carryforwards, pursuant to the Tax Reform Act of 1986, which assesses the utilization of a Company's net operating loss carryforwards resulting from retaining continuity of its business operations and changes within its ownership structure. Net operating loss carryforwards of approximately $485,000 start to expire in 2036 or 20 years for federal income tax reporting purposes. Under the CARES Act, net operating loss carryforwards of approximately $13,853,000 arising from tax years beginning after 2017 can be carried forward indefinitely. The Company's net operating loss carryforwards will begin to expire in 2036 for state tax reporting purposes.

The Company is subject to tax in the United States ("U.S.") and files tax returns in the U.S. Federal jurisdiction and California state jurisdiction. The Company is subject to U.S. Federal, state and local income tax examinations by tax authorities starting in 2021. The Company currently is not under examination by any tax authority.

**NOTE 7 – STOCKHOLDERS' EQUITY**

*Preferred Stock*

As of December 31, 2025, the Company is authorized to issue 21,425,685 shares of Preferred Stock, each having a par value of $0.00001. Of such Preferred Stock, 10,573,844 shares are designated as "Series A Preferred Stock" with a liquidation preference of $0.8748, 4,857,827 shares are designated as "Series Seed-1 Preferred Stock" with a liquidation preference of $0.7062, 1,601,857 shares are designated as "Series Seed-2 Preferred Stock" with a liquidation preference of $0.60835, 3,948,339 shares are designated as "Series Seed-3 Preferred Stock" with a liquidation preference of $0.56496, and 443,818 shares are designated as "Series Seed-4 Preferred Stock" with a liquidation preference of $0.40557. The Preferred Stock is convertible to Common Stock at a one for one basis at the option of the holder, ranks pari passu with Common Stock with respect to dividends (other than dividends on shares of Common Stock payable in Common Stock) and payments in the event of any voluntary or involuntary dissolution or winding up of the Company. In the event of a Deemed Liquidation Event, as defined in the Company's Certificate of Incorporation, holders of Preferred Stock shall be entitled to receive preferential payment, before any distribution or payment is made to holders of Common Stock, of an amount defined as the Liquidation Amount in the Company's Certificate of Incorporation. Each holder of Preferred Stock has voting rights equal to the number of shares of Common Stock into which the holder's Preferred Stock is convertible as of the record date for determining voting eligibility.

As of December 31, 2025, 20,378,401 shares of Preferred Stock, comprised of 9,526,560 shares of Series A Preferred Stock, 4,857,827 shares of Series Seed-1 Preferred Stock, 1,601,857 shares of Series Seed-2 Preferred Stock, 3,948,339 shares of Series Seed-3 Preferred Stock, and 443,818 shares of Series Seed-4 Preferred Stock, are issued and outstanding.

As of December 31, 2024, 19,139,449 shares of Preferred Stock, comprised of 8,287,608 shares of Series A Preferred Stock, 4,857,827 shares of Series Seed-1 Preferred Stock, 1,601,857 shares of Series Seed-2 Preferred Stock, 3,948,339 shares of Series Seed-3 Preferred Stock, and 443,818 shares of Series Seed-4 Preferred Stock, were issued and outstanding.

*Common Stock*

The Company is authorized to issue 40,400,000 shares of Common Stock, each having a par value of $0.00001. As of December 31, 2025 and 2024, 6,842,897 shares of Common Stock are issued and outstanding, 6,000,000 of which are held by the Company's two co-founders who remain active in the daily operations of the Company.

*Stock Options*

In 2018, the Company's Board of Directors adopted the CNote Group, Inc. 2018 Equity Incentive Plan (the "2018 Equity Incentive Plan"). The 2018 Equity Incentive Plan was amended in 2020 and 2022 to increase the number of shares of Common Stock authorized thereunder. The 2018 Equity Incentive Plan, as amended, provides for the grant of equity awards to employees, and consultants, including stock options, stock appreciation rights and other stock or cash-based awards. Up to 9,012,207 shares of our Common Stock may be issued pursuant to awards granted under the 2018 Equity Incentive Plan, as amended. The 2018 Equity Incentive Plan, as amended, is administered by our Board of Directors, has no fixed expiration date, and may be amended, suspended, or terminated by the Board at any time.

In 2025, the Company granted 92,089 stock options under the 2018 Equity Incentive Plan, as amended, to an advisor. The granted options had an exercise price of $0.25, expire ten years from the date of the grant, and vest over two years.

The stock options were valued at a total grant date fair value of $12,892 using the Black-Scholes pricing model as indicated below:

---

| | |
|:---|:---|
| Expected life | 4.3 years |
| Risk-free interest rate | 4.0% |
| Expected volatility | 68.7% |
| Annual dividend yield | 0% |
| Fair value of common stock | $0.14 |

---

Options granted during 2025 had a weighted average grant date fair value of $0.14 per share and vesting period of 24 months.

In 2024, the Company granted 614,050 stock options under the 2018 Equity Incentive Plan, as amended, to various advisors and employees. The granted options had an exercise price of $0.12, expire ten years from the date of the grant, and vest over four years.

The stock options were valued at a total grant date fair value of $42,984 using the Black-Scholes pricing model as indicated below:

---

| | |
|:---|:---|
| Expected life (range) | 4.4-4.6 years |
| Risk-free interest rate (range) | 4.3-4.4% |
| Expected volatility (range) | 67.0-67.6% |
| Annual dividend yield | 0% |
| Fair value of common stock | $0.12 |

---

The expected life of stock options is calculated using the simplified method which takes into consideration the contractual life and vesting terms of the options.

The risk-free interest rate assumption for options granted is based upon observed interest rates on the United States government securities appropriate for the expected term of the Company's stock options.

The Company determined the expected volatility assumption for options granted using the historical volatility of comparable public companies' common stock. The Company will continue to monitor peer companies and other relevant factors used to measure expected volatility for future stock option grants, until such time that the Company's Common Stock has enough market history to use historical volatility.

The dividend yield assumption for options granted is based on the Company's history and expectation of dividend payouts. The Company has never declared or paid any cash dividends on its Common Stock, and the Company does not anticipate paying any cash dividends in the foreseeable future.

Management estimated the fair value of Common Stock by looking at a market approach which takes into consideration the value of development to date and subscriber base.

*Stock Purchase Warrants*

No Stock Purchase Warrants were granted in 2025 or 2024.

At December 31, 2025, Common Stock Purchase Warrants for the purchase of 1,555,000 shares were vested and outstanding. As of December 31, 2025, these warrants have a weighted average exercise price of $0.10 per share and a weighted average remaining life of 5.1 years.

*Share-Based Awards Available for Grant*

A summary of share-based awards available for grant under the Company's 2018 Equity Incentive Plan for the years ended December 31, 2025 and 2024 was as follows:

---

| | |
|:---|:---|
|  | Shares <br> Available for <br> Grant |
| Balance at December 31, 2023 | 3273451 |
| Options granted | (614050) |
| Options canceled or expired | 290197 |
| Balance at December 31, 2024 | 2949598 |
| Options granted | (92089) |
| Options canceled or expired | 234499 |
| Balance at December 31, 2025 | 3092008 |

---

*Stock Option Activity and Related Share-Based Compensation Expense*

A summary of stock option activity for the year ended December 31, 2025 was as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | Options Outstanding | Options Outstanding | Options Outstanding |
| | Number of <br> Shares | Weighted <br> Average <br> Exercise <br> Price Per <br> Share | Weighted <br> Average <br> Remaining <br> Contractual <br> Life (in <br> Years) |
| Balance at December 31, 2024 | 5634186 | $0.18 | 4.8 |
| Granted | 92089 | 0.25 |  |
| Canceled or expired | (234499) | 0.14 |  |
| Balance at December 31, 2025 | 5491776 | $0.18 | 3.7 |

---

At December 31, 2025, options for the purchase of 4,516,238 shares at a weighted average price of $0.18 per share and a weighted average remaining contractual life of approximately 3.7 years were vested and exercisable.

Expense for the issuance of stock options and warrants for the years ended December 31, 2025 and 2024 was $134,635 and $128,224, respectively. This expense was recorded in the Company's consolidated statements of operations as follows:

---

| | | |
|:---|:---|:---|
|  | 2025 | 2024 |
| Salaries and employee benefits | $118784 | $118866 |
| Professional services | 15851 | 9358 |
|  | $134635 | $128224 |

---

The Company will recognize the remaining value of the options through 2028 as follows:

---

| | |
|:---|:---|
| 2026 | $87022 |
| 2027 | 10178 |
| 2028 | 354 |
| Total | $97554 |

---

The Company recognizes stock option forfeitures as they occur, as there is insufficient historical data to accurately determine future forfeiture rates.

**NOTE 8 – SUBSEQUENT EVENTS**

The Company has evaluated subsequent events that occurred after December 31, 2025 through April 24, 2026, the issuance date of these consolidated financial statements.

There have been no events or transactions during this time which would have a material effect on these consolidated financial statements, other than those disclosed.

**Item 8.** **EXHIBITS**

---

| | |
|:---|:---|
| **Exhibit Number** | **Description** |
| 1A-2A | [Certificate of Incorporation.\*](https://www.sec.gov/Archives/edgar/data/1683145/000121465923013824/ex1a_2a.htm) |
| 1A-2A.2 | [Amended and Restated Certificate of Incorporation\*](https://www.sec.gov/Archives/edgar/data/1683145/000121465925005807/ex1a2a_2.htm) |
| 1A-2B | [Bylaws.\*](https://www.sec.gov/Archives/edgar/data/1683145/000121465923013824/ex1a_2b.htm) |
| 1A-6A | [Subscription Agreement.\*](https://www.sec.gov/Archives/edgar/data/1683145/000121465923013824/ex1a_6a.htm) |
| 1A-6B | [Form of Note.\*](https://www.sec.gov/Archives/edgar/data/1683145/000121465923013824/ex1a_6b.htm) |

---

\*Previously filed.

**SIGNATURES**

Pursuant to the requirements of Regulation A, the issuer has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Oakland, State of California, on the 24th day of April, 2026.

---

| |
|:---|
| CNOTE GROUP, INC. |
| By: /s/ Catherine Berman |
| Name: Catherine Berman |
| Title: President and Chief Executive Officer |

---

**KNOW ALL PERSONS BY THESE PRESENTS**, that each person whose signature appears below constitutes and appoints Catherine Berman and Yuliya Tarasava as his or her true and lawful attorney-in-fact and agent, with full powers of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign this Offering Statement and any and all amendments to this Offering Statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, and generally to do all such things in his or her name and behalf in his or her capacity as officer and/or director to enable the Company to comply with the provisions of the Securities Act of 1933, as amended, and all requirements of the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his or her substitutes or substitute, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of Regulation A, this report has been signed below by the following persons on behalf of the issuer and in the capacities and on the dates indicated.

---

| | | |
|:---|:---|:---|
| **Name and Signature** | **Title** | **Date** |
| /s/ Catherine Berman | President, Chief Executive Officer, | April 24, 2026 |
| Catherine Berman | Co-Founder, Director, Principal Executive Officer |  |
|  | Chief Operating Officer, Co-Founder, | April 24, 2026 |
| /s/ Yuliya Tarasava | Treasurer, Secretary, Director, Principal Financial and |  |
| Yuliya Tarasava | Accounting Officer |  |

---

## Form 1-K Filing Summary

### Filer Information

**Issuer CIK:** 0001683145

**Issuer CCC:** XXXXXXXX

**Is filer a shell company?:** No

**Is this filing by a successor company?:** No

### Submission Contact Information

**Is this a LIVE or TEST Filing?:** LIVE

**Period:** 12-31-2025

### Item 1: Issuer Information (Tab 1 Notification)

**Type of Report:** Annual Report

**Fiscal Year End:** 12-31-2025

**Exact Name of Issuer:** CNote Group, Inc.

**CIK:** 0001683145

**Jurisdiction of Incorporation:** DE

**IRS Number:** 81-2784287

**Address:** 2323 BROADWAY, OAKLAND, CA 94612

**Issuer Phone Number:** 510-431-2422

**Title of each class of securities issued pursuant to Regulation A:** CNote Notes

### Item 2: Ongoing Reporting Requirements

**Is the issuer relying on the relief provided by Rule 257(d) for this filing?** Yes