AMC Robotics Corp: Form 10-K for the period ended Dec 31, 2025

Overview

AMC’s mission is to make the world a safer place through the use of high-quality, affordable and accessible vision AI technology. The Company currently sells smart hardware products designed for residential and commercial use, including smart cameras, driving recorders, action cameras and Retina K cameras. As of the date of this report, AMC’s operations are primarily focused on the sale of hardware products, and it does not currently provide integrated security products or subscription-based services directly to end users.

In addition to its current product offerings, AMC is in the early stages of developing additional hardware products and technology capabilities, including IoT-enabled devices, AI-based features, wearable devices and AI robotics. These initiatives are intended to support potential future applications across commercial and industrial use cases; however, such products and capabilities remain under development and have not yet been commercialized. Our goal is to make the world a safer place. Through the use of high-quality, affordable and accessible vision AI technology, we strive to help save lives, empower businesses to succeed and ultimately make the world a safer place.

Products

As evidenced by the award-winning “YI” brand that we sell, we are seeking to be a leader in the research and development of video imaging and vision technologies for enterprise and consumer applications.

AMC’s primary products are security cameras sourced from suppliers in Asia and distributed through e-commerce platforms across the United States, Canada and Europe. AMC’s product portfolio includes cameras designed for residential homes and small businesses, such as the YI Dome Guard, Home Camera and Outdoor Camera.

AMC intends to expand its product offering in the future to include additional AI-based intelligent devices such as wearable devices, including AI glasses, drones and AI robots, as well as related functionality and features for these products.

Sales

AMC has two primary revenue streams: (1) product sales, including sales through e-commerce platforms and to related parties, and (2) revenue sharing arrangements with its related party, Kami, related to cloud-based services and intelligent information services, including video storage, image analysis and alert and detection functionalities.

With respect to its product sales, AMC historically sold its products through Amazon across the United States, Canada, and Europe. The Amazon online stores for the respective regions operated under the entities Ants, Shanghai Xiaoyun Technology Limited (“Xiaoyun”), and Kunshan Yishijue Technology Limited (“Yishijue”). These entities authorized AMC to utilize their Amazon accounts free of charge for a duration of five years, starting from October 21, 2021 and expiring on October 20, 2026 (hereinafter referred to as the “Authorization Agreement”).

Ants is 95% owned by Mr. Da. Until April 2022, revenues collected from Amazon customers were paid into Ants’ virtual bank account on PingPong, a cross-border payments platform. However, commencing in April 2022, AMC acquired control of the payments platform and revenues are now paid directly to AMC. Effective as of January 9, 2025, the ownership of Amazon store North America has been successfully transferred to AMC from Ants.

Yishijue has no business operations other than owning an Amazon online store in Europe. Xiaoyun was founded to provide services for patent applications and intellectual property management. There are two nominal individuals who hold shares of Yishijue and Xiaoyun on behalf of Mr. Da and Mr. Da controls the primary economic activities of Yishijue and Xiaoyun, such as the authorization or transfer of the Amazon stores to AMC.

Historically, Xiaoyun and Yishijue operated as variable interest entities (“VIEs”) and assumed the associated risks and rewards, making AMC the primary beneficiary. AMC did not own any equity interests in the VIEs. Instead, AMC was regarded as the primary beneficiary of the VIEs for accounting purposes and consolidated the financial results of the VIEs under U.S. GAAP. In August 2024, AMC and the two VIEs entered into separate business transfer agreements. Under these agreements, Xiaoyun and Yishijue agreed to transfer all of their ownership in the Amazon online stores to AMC, including, but not limited to, the ownership of the store, business operation rights, customer resources, operational data, technical data, brand usage rights, intellectual property rights (such as trademarks, patents, copyrights, if applicable), and other assets and rights related to the operation of the Amazon online stores in exchange for an aggregate payment of RMB30,000 for each entity. Once the stores were successfully transferred to AMC, Xiaoyun and Yishijue would no longer be VIEs. However, in December 2025, AMC determined that, based on limited transaction volume through these stores, it would transition its sales channel to its own or other third-party platforms and is no longer utilizing the stores from Xiaoyun and Yishijue.

AMC does not currently generate revenue from directly providing software solutions or subscription-based services. Instead, the Company earns revenue through (i) product sales and (ii) revenue-sharing arrangements with related-party service providers, including Kami, which provide cloud-based services such as video storage and related functionality to end users.

With respect to Kami, AMC has entered into a revenue-sharing agreement pursuant to which AMC receives a percentage of revenues generated from the services provided. The revenue-share schedule is as follows:

AMC recognizes its revenue share when Kami receives subscription payments from users acquired through AMC’s camera sales. The agreement includes standard commercial terms, service obligations, and confidentiality provisions. The agreement also contains provisions for termination by either party with a notice period of 30 days. For the fiscal years ended December 31, 2025 and 2024, Kami accounted for approximately 48% and 27% of AMC’s revenue, respectively, and represented 78 % and 68% of its accounts receivable at December 31, 2025 and 2024, respectively.

AMC recognizes revenue from its revenue-sharing arrangements when the underlying service provider earns and collects consideration from end users or third-party platforms associated with the Company’s products. For cloud-based subscription services, revenue is recognized when the service provider receives subscription payments from users referred by the Company. For intelligent information service arrangements, revenue is recognized when Kami generates monetization revenue from third-party platforms and reports the Company’s contractual share.

Platforms

The Company is in the early stages of developing next-generation technology platforms intended to enhance the functionality of its hardware products. These platforms are expected to incorporate AI-based capabilities, including data processing, application interfaces and improved user interaction features. However, these platforms are still under development and are not currently commercially available.

Technology Advantages

The Company is evaluating certain technologies that may differentiate its products from competing solutions, including:

• Dual Chip Design – A multi-processor architecture designed to enable switching between performance and low-power modes, which may improve power efficiency and battery life.
• Artificial Intelligence Capabilities – The use of machine learning, natural language processing, computer vision, and predictive analytics to support functionalities such as monitoring, automation, and data analysis. These capabilities are expected to be supported primarily by third-party technologies.
• Third-Party AI Integration – The integration of external AI components, such as pre-trained models and software libraries, to support system functionality and scalability.
• 22nm Semiconductor Design – A chip design based on a 22nm process that may provide cost efficiencies, improve thermal performance, and reduced current leakage.
• Edge Computing (Under Evaluation) – The Company is assessing technologies that enable data processing at or near the device level to potentially reduce latency; however, no active development initiatives are currently in place.
• Interface and System Enhancements – The Company is evaluating improvements in hardware and software interfaces, including compatibility with external systems and applications, to enhance usability.

2

Strategy & Positioning

We intend to maintain our market position and expand into new market opportunities by continuing to develop and deploy innovative technologies and by expanding our ecosystem of partners. Our key go-to-market strategies include:

Narrow Targeted Niche

The Company focuses on a targeted niche market characterized by specific application requirements, which allows it to tailor its hardware and software solutions to those use cases. By concentrating on defined customer segments and limited functionality, the Company seeks to differentiate its offerings through customization, cost efficiency, and integration with third-party technologies. Larger technology providers may prioritize broader, mass-market applications, and as a result may not focus on specialized use cases targeted by the Company.

Focus

We seek to solve only one or two core user needs within the niche using affordable hardware and scalable manufacturing. By focusing on these needs, we believe we can maximize our position in the market.

Invest in Our Platforms

The Company is evaluating the development of software functionality intended to enhance the performance and usability of its hardware products, including features related to video processing, data management and user interface improvements. At this time, the Company does not operate a standalone platform and any such capabilities remain in the early stages of assessment and development.

The Company may invest in expanding product features and related technology capabilities for its camera products in residential and commercial markets. As vision AI technologies continue to evolve and more devices become connected, the Company intends to explore opportunities to integrate its products with third-party systems and applications; however, these initiatives are preliminary and there can be no assurance as to their timing or successful implementation.

Channel Expansion

In addition to the existing channels we have built, we intend to continue to develop partnerships in areas such as shopping mall management, parking lots, senior care management, building construction and other related areas.

Pursue Selective Strategic Acquisitions

We may selectively pursue future acquisitions of businesses, technologies, or products that complement our platforms or align with our overall growth strategy. Such acquisitions could expand our team and/or technology portfolio to help us add new features to our platforms, accelerate the pace of our innovation or help us access attractive markets.

Manufacturing and Sourcing

AMC does not directly manufacture any of its products. Instead, all physical products are sourced from related party suppliers. AMC works closely with these suppliers to ensure key standards such as product quality, compliance and timely delivery.

AMC does not currently develop software or technology features internally. Any software functionality associated with its products is provided by third-party partners or service providers.

Research and Development

We invest resources in research and development to enhance our platforms and applications, support our technology infrastructure, develop new capabilities and conduct quality assurance testing. We expect to invest in continued research and development efforts to expand the capabilities of our technology. Our research and development of new products and services is a multidisciplinary effort across our product management, program management, software engineering, device engineering, quality engineering, configuration management and network operations teams.

AMC is evaluating research and development initiatives primarily focused on robotics-related technologies and enhancements to its hardware products. These efforts are at an early stage and are intended to support potential future product development and innovation.

The Company’s research and development activities are limited in scope and primarily consist of evaluating design concepts, engaging with third-party partners and assessing potential technologies. The Company has not yet committed to a definitive development timeline or commercialization plan, and there can be no assurance as to the timing or successful implementation of these initiatives.

Foreign Operations

To date, AMC’s business is mainly located in the United States. However, it sells products in the United Kingdom and certain European countries. Additionally, to a lesser extent, AMC conducts certain operations in China, including sourcing materials and providing services through its relationships with China-based suppliers and affiliates. AMC also historically benefited from its partnerships with Xiaoyun and Yishijue, which are headquartered and operated in China. However, in December 2025, AMC determined that, based on limited transaction volume through these stores, it would transition its sales channel to its own or other third-party platforms and is no longer utilizing the stores from Xiaoyun and Yishijue.

Competitive Environment

The market in which we operate is fragmented, competitive and constantly evolving. We expect competition to continue from existing competitors as well as potential new market entrants in the interactive security, video monitoring and intelligent automation markets. Our current competitors include providers of other technology platforms in interactive security, including Alarm.com, Google Nest, Blink by Amazon, Avigilon, Alula, Eagle Eye Networks Inc., Eufy by Anker and Honeywell International Inc.

Many of our competitors have long operating histories, greater name recognition and large customer bases. We expect to encounter new competitors as we enter new markets as well as increased competition. In addition, there may be new technologies that are introduced that reduce demand for our products or make them obsolete. Our current and potential competitors may also establish cooperative relationships among themselves or with third parties and rapidly acquire significant market share. Increased competition could also result in price reductions and loss of market share, any of which could result in lower revenue and negatively affect our ability to grow our business. We believe the principal competitive factors in the security surveillance market include the following:

• simplicity and ease of use;
• ability to offer persistent awareness, control, and intelligent automation;
• breadth of features and functionality provided;
• flexibility of the products and ability to personalize for the individual consumer;
• compatibility with a wide selection of third-party devices;
• pricing, affordability, and accessibility;
• sales reach and local installation and support capabilities; and
• brand awareness and reputation.

We believe we compete favorably with respect to these factors. Additionally, we believe our AI-based software platforms and edge computing products will help further differentiate us from competitors. Nevertheless, our competitors may have substantially greater financial, technical and other resources, greater brand recognition, larger sales and marketing budgets and broader distribution channels than we do. As a result, we may not compete effectively.

Our Intellectual Property

The Company has filed certain patent and trademark applications related to its technology and branding, which are in various stages of review and approval, and there can be no assurance that any such applications will be granted. The Company’s ability to compete depends in part on its ability to protect its proprietary technology and intellectual property rights, and it relies on a combination of patent, trademark, copyright and trade secret laws, as well as license agreements, confidentiality agreements and other contractual protections.

Our Human Capital Resources

The Company has a limited number of full-time employees and engages outsourced contractors to support its operations, including sales and marketing and general and administrative functions. The Company also engages consultants and temporary personnel from time to time. None of the Company’s employees is covered by collective bargaining agreements, and management considers its relationships with its personnel to be good.

We believe attracting, motivating and retaining talent at all levels is critical to continue our success. By improving employee retention and engagement, we believe we are also improving our ability to support our service provider partners and protect the long-term interests of our stockholders. We invest in our employees through benefits and various health and wellness initiatives and offer competitive compensation packages, ensuring fairness in internal compensation practices.

Government Regulations

Our business, operations and service provider partners are subject to various U.S. federal, state and local consumer protection laws, licensing regulation and other laws and regulations, and to similar laws and regulations in the other countries in which we operate. Compliance with these laws, rules, and regulations has not had a material effect upon our capital expenditures, results of operations or competitive position. Nevertheless, compliance with existing or future governmental regulations, including, but not limited to, those pertaining to global trade, business acquisitions, consumer protection, and taxes, could have a material impact on our business in subsequent periods.

In particular, we are subject to the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the U.S. Foreign Corrupt Practices Act of 1977, as amended, the U.S. Travel Act, and possibly other anti-bribery laws, including those that comply with the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and other international conventions. Anti-corruption laws are interpreted broadly and prohibit our company from authorizing, offering, or providing directly or indirectly improper payments or benefits to recipients in the public or private-sector. Certain laws could also prohibit us from soliciting or accepting bribes or kickbacks. Our company has direct government interactions and in several cases uses third-party representatives, including dealers, for regulatory compliance, sales and other purposes in a variety of countries. These factors increase our anti-corruption risk profile. We can be held liable for the corrupt activities of our employees, representatives, contractors, partners and agents, even if we did not explicitly authorize such activity.

We are also subject to data privacy and security laws, anti-money laundering laws (such as the USA PATRIOT Act), and import/export laws and regulations in the United States and in other jurisdictions.

We are also subject to certain foreign regulations based on the jurisdictions we operate in, including laws in the PRC such as the PRC Labor Contract Law.

Refer to “Risk Factors” for a discussion of the potential impacts related to the governmental regulations applicable to us.

Corporate Information

AMC Robotics Corporation (formerly known as AlphaVest Acquisition Corp) was incorporated in the Cayman Islands on January 14, 2022. AMC Washington was incorporated under the laws of the State of Washington on October 21, 2021. On December 9, 2025, the parties consummated the Business Combination, including the Domestication of the Company whereby the Company became a Delaware corporation.

Historically, AMC maintained contractual arrangements with Xiaoyun and Yishijue through VIEs, which enabled AMC to control and consolidate their financial results. Under the VIE structure, AMC held effective control over the VIE’s primary economic activities and assumed the associated risks and benefits from the economic rewards through contractual arrangements, making AMC the primary beneficiary for accounting purposes. Through authorization agreements, AMC was able to operate the Amazon store UK and Amazon store Europe free of charge for a duration of 5 years, starting from October 21, 2021, which are owned by Xiaoyun and Yishijue, respectively. Through these contractual arrangements, AMC bore all risks of loss and was entitled to all benefits derived from Yishijue and Xiaoyun. In December 2025, AMC determined that, based on limited transaction volume through these stores, it would transition its sales channel to its own or other third-party platforms and is no longer utilizing the stores from Xiaoyun and Yishijue.

Implications of Being an Emerging Growth Company and Smaller Reporting Company

We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), reduced disclosure obligations regarding executive compensation in their periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

The JOBS Act also provides that an emerging growth company does not need to comply with any new or revised financial accounting standards until such date that a private company is otherwise required to comply with such new or revised accounting standards. Pursuant to the JOBS Act, we have elected to take advantage of the benefits of this extended transition period for complying with new or revised accounting standards as required when they are adopted for public companies. As a result, our operating results and financial statements may not be comparable to the operating results and financial statements of other companies who have adopted the new or revised accounting standards.

The Company will remain an emerging growth company until the earlier of: (i) the last day of the fiscal year (a) following December 31, 2030, (b) in which it has total annual gross revenue of at least $1.235 billion, or (c) in which the combined company is deemed to be a large accelerated filer, which means the market value of the combined Company’s common equity that is held by non-affiliates exceeds $700 million as of the last business day of its most recently completed second fiscal quarter; and (ii) the date on which the Company has issued more than $1.00 billion in non-convertible debt securities during the prior three-year period. References herein to “emerging growth company” have the meaning associated with it in the JOBS Act.

We are also a “smaller reporting company,” and we will continue to be a “smaller reporting company” if either (i) the market value of our stock held by non-affiliates is less than $250.0 million as of the last business day of our second fiscal quarter or (ii) our annual revenue is less than $100.0 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700.0 million as of the last business day of our second fiscal quarter. If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company, we may choose to present only the two most recent fiscal years of audited financial statements and only two years of management’s discussion and analysis of financial condition and results of operations disclosures and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.

Market Price, Ticker Symbols and Dividend Information

Market Price and Ticker Symbols

Our Common Stock is currently listed on Nasdaq under the symbol “AMCI.” On April 10, 2026, the closing price of our Common Stock was $6.25.

Holders

As of April 20, 2026, there were 22,595,363 shares of Common Stock issued and outstanding held of record by 36 holders. The number of holders of record does not include a substantially greater number of “street name” holders or beneficial holders whose Common Stock are held of record by banks, brokers and other financial institutions.

Dividend Policy

We have not paid any cash dividends on our capital stock to date. We may retain future earnings, if any, for future operations, expansion and debt repayment and have no current plans to pay cash dividends for the foreseeable future. Any decision to declare and pay dividends in the future will be made at the discretion of the board of directors and will depend on, among other things, our results of operations, financial condition, cash requirements, contractual restrictions and other factors that the board of directors may deem relevant. In addition, our ability to pay dividends may be limited by any outstanding preferred stock and covenants of any existing and future outstanding indebtedness. We do not anticipate declaring any cash dividends to holders of Common Stock in the foreseeable future. As a result, you may not receive any return on an investment in our Common Stock unless you sell your Common Stock for a price greater than that which you paid for it.

You should carefully consider the following risk factors, together with all of the other information included elsewhere in this Annual Report on Form 10-K. The value of your investment in the Company will be subject to the significant risks affecting the Company and inherent to the industry in which it operates. The risk factors described below disclose material and other risks, are not intended to be exhaustive and are not the only risks faced by the Company. Additional risks not currently known to us or that we currently deem to be immaterial also may materially adversely affect the business, financial condition, results of operations and cash flows in future periods of the Company. The occurrence of any of these events could cause the trading price of our Common Stock to decline, perhaps significantly, and you therefore may lose all or part of your investment. The following discussion should be read in conjunction with the financial statements and notes to the financial statements included herein.

It may be difficult to evaluate our business prospects, and our operating results may fluctuate.

Our operating results may fluctuate because of a variety of factors, many of which are outside of our control. Fluctuations in our results of operations may be due to a number of factors, including:

• Fluctuations with respect to the portion of our revenue attributable to sharing agreement from related party, versus hardware and other sales;
• fluctuations in demand, including due to seasonality, for our products;
• changes in pricing by us in response to competitive pricing actions;
• the ability of our hardware vendors to continue to manufacture high-quality products and to supply sufficient products to meet our demands;
• the timing and success of introductions of new products, products or upgrades by us or our competitors;
• changes in our business and pricing policies or those of our competitors;
• our ability to control costs, including our operating expenses and the costs of the hardware we purchase;
• the impact of tariffs, trade restrictions, or changes in international trade policies, including increased import duties on components or finished goods, which may increase our cost of hardware, disrupt our supply chain, or require us to adjust pricing or sourcing strategies;
• competition, including entry into the industry by new competitors and new offerings by existing competitors;
• our ability to successfully manage any future acquisitions of businesses;
• issues related to introductions of new or improved products such as shortages of prior generation products or short-term decreased demand for next generation products;
• the amount and timing of expenditures, including those related to expanding our operations, increasing research and development, introducing new products or paying litigation expenses;
• the ability to effectively manage growth within existing and new markets domestically and abroad;
• the strength of regional, national and global economies; and
• the impact of natural disasters or manmade problems.

Our operating results may fluctuate due to seasonality.

Our quarterly and annual operating results have fluctuated in the past and likely will fluctuate in the future. The demand for our products is driven largely by the demand for the end-product applications that are powered by our products which can vary on seasonality. We expect high demand from our customers in holiday seasons such as the third and fourth quarters in a year compared to lower demand in the first and second quarters in a year.

We have a history of net losses.

We have a history of net losses. The Company incurred a net loss of $24,817,342 for the year ended December 31, 2025, and had net losses in 2024 and 2023. We have historically funded our operations and capital needs primarily through borrowings from a related party, Ants Technology (HK) Limited (“Ants”). There can be no assurance that AMC will be successful in achieving its strategic plans, that AMC’s future capital raises will be sufficient to support its ongoing operations, or that any additional financing will be available in a timely manner or with acceptable terms, if at all. If AMC is unable to raise sufficient financing or events or circumstances occur such that AMC does not meet its strategic plans, it would have a material adverse effect on AMC’s financial position, results of operations, cash flows, and ability to achieve its intended business objectives.

Failure to establish and maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on our business and stock price.

In connection with the audits of our consolidated financial statements as of and for the years ended December 31, 2025 and 2024, we and our independent registered public accounting firm identified four material weaknesses in our internal control over financial reporting. A material weakness is a deficiency, or combination of deficiencies, in internal controls, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

The material weaknesses that have been identified for AMC are as follows:

(1) Lack of Experienced Accounting Team — AMC lacks qualified in-house accounting staff and resources with adequate knowledge of U.S. GAAP. A third-party consulting firm has been engaged to prepare financial statements and footnote disclosures in accordance with U.S. GAAP.

(2) Lack of Duty Segregations — The Company separates the duties at certain areas, but there is only one person responsible for various functions of the Company, including processing payments and Human Resource functions. All other individuals involved in these processes are engaged through independent contractor roles.

(3) Lack of sufficient inventory management process and control system — AMC does not have a sufficient inventory management process or control system.

(4) Lack of proper approval for related party transactions — AMC lacks a formal approval process for related party transactions.

To remediate our material weaknesses, we have begun and will continue to: (1) hire additional qualified accounting staff with appropriate knowledge and experience in U.S. GAAP and SEC financial reporting requirements, while strengthening period-end financial reporting controls and procedures; (2) establish an ongoing program to provide adequate training for financial reporting and accounting personnel, particularly on U.S. GAAP and SEC requirements; (3) assign clear roles and responsibilities to accounting staff and the management team to establish segregation of duties and improve inventory processes; and (4) implement a thorough review and approval process for related party transactions.

However, we cannot assure that we will remediate our material weaknesses in a timely manner, or at all. If we fail to implement and maintain effective internal controls to remediate the material weaknesses over financial reporting, we may be unable to accurately report our results of operations, meet our reporting obligations or prevent fraud. As a result, investors may lose confidence in the accuracy and completeness of our financial reports and the price of our Common Stock could be negatively affected. We could also become subject to investigations by the SEC, Nasdaq or other regulatory authorities, which could require additional financial and management resources. In addition, if we fail to remedy any material weakness, our financial statements could be inaccurate and we could face restricted access to capital markets.

We are exposed to risks relating to price fluctuations of hardware cost.

Prices of hardware have a significant impact on our cost of sales. In 2025, costs of hardware accounted for 78% of the final price sold in the market for the period, as compared to 81% in 2024. Parts and accessories for our products primarily include lenses, lithium batteries, infrared sensors and integrated chips. The current or expected supply of our key hardware parts and accessories may fluctuate depending on a number of factors beyond our control, including but not limited to the availability of resources in the supplier market, market demand, market disruptions, natural disasters and other factors. Government tariffs that are imposed may also impact the availability and cost of our key hardware parts and accessories. We may not be able to obtain stable, high-quality parts and accessories at reasonable prices. If prices rise, it would have a material adverse effect on our operating results.

The markets in which we participate are highly competitive and many companies, including large technology companies, are actively targeting the home automation, security monitoring and video monitoring markets. If we are unable to compete effectively with these companies, our sales and profitability could be adversely affected.

We compete in several markets, including home automation, security monitoring and video monitoring. The markets in which we participate are highly competitive and competition may intensify in the future.

Our ability to compete depends on a number of factors, including:

• our platform and products’ functionality, performance, ease of use, reliability, availability and cost effectiveness relative to that of our competitors’ products;
• our success in utilizing new and proprietary technologies to offer products and features previously not available in the marketplace;
• our success in identifying new markets, applications and technologies;
• our ability to attract and retain partners;
• our name recognition and reputation;
• our ability to recruit software engineers and sales and marketing personnel; and
• our ability to protect our intellectual property.

Consumers may prefer to purchase from their existing suppliers rather than a new supplier regardless of product performance or features. In the event a consumer decides to evaluate a new product or a solution, the consumer may be more inclined to select one of our competitors whose product offerings are broader than those that we offer.

Aggressive business tactics by our competitors may reduce our revenue.

Increased competition in the markets in which we compete may result in aggressive business tactics by our competitors, including:

• selling at a discount;
• offering products similar to our platform and products on a bundled basis at lower prices;
• announcing competing products combined with extensive marketing efforts;
• providing financing incentives to consumers; and
• asserting intellectual property rights irrespective of the validity of the claims.

Our service providers may switch and offer the products and services of competing companies, which would adversely affect our sales and profitability. Competition from other companies may also adversely affect our negotiations with service providers and suppliers, including, in some cases, requiring us to lower our prices. Opportunities to take market share using innovative products, services and sales approaches may also attract new entrants to the field. We may not be able to compete successfully with the offerings and sales tactics of other companies, which could result in the loss of service providers offering our platform and products and, as a result, our revenue and profitability could be adversely affected.

If we fail to compete successfully against our current and future competitors, or if our current or future competitors employ aggressive business tactics, including those described above, demand for our platforms and products could decline, we could experience cancellations of our services to consumers, or we could be required to reduce our prices or increase our expenses.

We receive a substantial portion of our revenue from a limited number of service providers, and the loss of, or a significant reduction in, orders from one or more of our major service providers would result in decreased revenue and profitability.

Our success is highly dependent upon establishing and maintaining successful relationships with a variety of service providers. We generally enter into agreements with our service providers outlining the terms of our relationship, including service provider pricing commitments, maintenance and support requirements. These contracts typically have an initial term of three years, with subsequent renewal terms. While we have developed a network of service providers, we receive a substantial portion of our revenue from a limited number of service providers. For the fiscal year ended December 31, 2025, one customer, Kami Vision Incorporated (“Kami”), a related party to AMC, contributed approximately 52% of AMC’s revenue and accounted for 79% of AMC’s accounts receivable at December 31, 2025. The loss of one or more key service provider, a reduction in sales through any major service provider, the inability of any customer to fulfill its financial obligations or the inability or unwillingness of any of our major service provider to pay for our products reduce our revenue and could impair our profitability. Additionally, this concentration exposes AMC to potential collection risks and could increase its vulnerability to any economic downturns or operational disruptions affecting key customers.

Mergers or other strategic transactions involving our competitors could weaken our competitive position, which could adversely affect our ability to compete effectively and harm our results of operations.

Our industry is highly fragmented, and we believe it is likely that some of our existing competitors will consolidate or be acquired. In addition, some of our competitors may enter into new alliances with each other or may establish or strengthen cooperative relationships with systems integrators, third-party consulting firms or other parties. Any such consolidation, acquisition, alliance or cooperative relationship could adversely affect our ability to compete effectively and lead to pricing pressure and our loss of market share and could result in a competitor with greater financial, technical, marketing, service and other resources, all of which could harm our business, results of operations and financial condition.

A significant decline in subscriber retention, renewal rates, or usage of services provided by our business partners would have an adverse effect on our business, financial condition and operating results.

A significant portion of our revenue is derived from arrangements with related-party service providers, including SaaS and platform-based services offered by such provider. Our revenue is therefore dependent, in part, on the number of active subscribers to these services and their level of usage of platform features. Subscribers may elect to terminate or reduce their use of such services at any time. If the related party service provider is unable to attract, retain, or expand their subscriber base, or if subscriber engagement declines, our revenue and ability to grow could be adversely affected.

We do not control the contractual relationship between the related party service provider and their subscribers, and we do not independently determine renewal rates. As a result, we have limited visibility into, and ability to influence, subscriber retention and renewal trends. Accordingly, we may not be able to accurately predict future trends in renewals, usage, or churn associated with these services.

Subscribers may choose not to renew their contracts or may reduce usage for a variety of reasons, including dissatisfaction with the service, pricing considerations, reduced discretionary spending, or a belief that competing services provide better value. In addition, subscriber behavior may be affected by factors outside of our or our business partners’ control, such as changes in economic conditions, relocation, or the dissolution of a business.

A significant decline in subscriber retention, renewal rates, or usage levels associated with this related party services would have an adverse effect on our business, financial condition, and operating results.

If we are unable to develop new products, sell our platform and products into new markets or further penetrate our existing markets, our revenue may not grow as expected.

Our ability to increase sales will depend in large part on our ability to enhance and improve our platform and products, introduce new products in a timely manner, sell into new markets and further penetrate our existing markets. The success of any enhancement or new solution or service depends on several factors, including the timely completion, introduction and market acceptance of enhanced or new products, the ability to maintain and develop relationships with service providers, the ability to attract, retain and effectively train sales and marketing personnel and the effectiveness of our marketing programs. Any new product or service we develop or acquire may not be introduced in a timely or cost-effective manner, and may not achieve the broad market acceptance necessary to generate significant revenue. Any new markets into which we attempt to sell our platform and products, including new vertical markets and new countries or regions, may not be receptive. Our ability to further penetrate our existing markets depends on the quality of our platform and products and our ability to design our platform and products to meet consumer demand.

We rely on wireless carriers to provide access to wireless networks through which we provide our wireless alarm, notification and intelligent automation services, and any interruption of such access would impair our business.

We rely on wireless carriers to provide access to wireless networks for machine-to-machine data transmissions, which are an integral part of our services. Our wireless carriers may suspend wireless service to expand, maintain or improve their networks. Any suspension or other interruption of services would adversely affect our ability to provide our services to our service providers and subscribers and may adversely affect our reputation. In addition, the inability to maintain our existing contracts with our wireless carriers or enter into new contracts with such wireless carriers could have a material adverse effect on our business, financial condition and results of operations.

Any security incident, other technology disruption, or failure to comply with laws and regulations relating to privacy and processing of personal information could result in damage to AMC’s brand and reputation, material financial penalties, and legal liability, any of which could negatively impact our business, results of operations and financial condition.

AMC’s business involves the use of computers in substantially all aspects of its business operations. AMC also uses mobile devices, social networking and other online activities to connect with its employees, suppliers, manufacturers, distributors, customers and consumers. As AMC pursues new initiatives that grow its operations, including acquisitions, AMC may also be required to expand and improve its information technologies, resulting in a larger technological presence and corresponding exposure to cybersecurity risk. Security incidents can take a variety of forms and are constantly evolving due to the increasing sophistication of threat actors, each of which increases the difficulty of detecting and successfully defending against them. If AMC fails to assess, identify, and respond to cybersecurity risks associated with the expansion and evolution of its business or the increasing sophistication of hackers, AMC may become increasingly vulnerable to such risks.

While AMC believes that it has implemented reasonable measures to prevent security incidents, there can be no assurances that such measures will be effective to protect AMC’s information technology systems and/or the relevant personal or sensitive information it processes. As an early-stage company, AMC’s resources to invest in data security protection are limited, and AMC may not be sufficiently protected against security incidents. AMC may not have sufficient resources to adequately investigate and remediate any vulnerabilities related to security incidents, or to prevent them.

In addition to breach notification laws that may be triggered by security incidents or access or exfiltration of personal information by unauthorized persons, AMC may also be contractually required to notify customers or other counterparties of a security incident. Maintaining industry standard safeguards and, if needed, addressing a security incident may be costly. Complying with the numerous and complex regulations in the event of a data security breach would be potentially expensive, and resource-intensive and failure to comply could subject us to regulatory scrutiny and potential liability, including fines, penalties, or litigation. In addition, the theft, destruction, loss, misappropriation, or release of personal information or intellectual property, or interference with AMC’s information technology systems or the technology systems of third parties on which it relies, could result in business disruption, reputational harm, violation of privacy laws, loss of customers, potential liability and competitive disadvantage, all of which could have a material adverse impact on AMC’s business, financial condition or results of operations.

We may require additional capital to support business growth, and this capital might not be available on acceptable terms, or at all.

We intend to continue to make investments to support our business growth and may require additional funds to respond to business challenges, including the need to develop new features or enhance our products, improve our operating system or acquire complementary businesses and technologies. Our capital requirements will depend on many factors, including, but not limited to:

• technological advancements;
• market acceptance of our products and product enhancements, and the overall level of sales of our products;
• R&D expenses;
• our relationships with our customers and suppliers;
• our ability to control costs;
• sales and marketing expenses;
• enhancements to our infrastructure and systems and any capital improvements to our facilities;
• potential acquisitions of businesses and product lines; and

If we are unable to obtain adequate financing or financing on terms satisfactory to us, when we require it, our ability to continue to grow or support our business and to respond to business challenges could be limited.

The technology employed in our products may become obsolete, and we may need to incur significant capital expenditures to update our products for changes in technology.

Our industry is characterized by rapid technological innovation. Our platform and products interact with the hardware and software technology of systems and devices located at our subscribers’ properties. We may be required to modify or change our products or products to adapt to new technologies or changes in existing technologies in response to changing market conditions, consumer preferences or industry standards, which could require significant capital expenditures. For example, many of our products are currently working on platforms that rely on 3G/4G wireless technology. As 5G wireless technology becomes more prevalent, it may require changes to our products or products. It is also possible that one or more of our competitors could develop a significant technical advantage that allows them to provide additional or superior quality products or services, or to lower their price for similar products or services, which could put us at a competitive disadvantage. Our inability to adapt to changing technologies, market conditions or consumer preferences in a timely manner could materially and adversely affect our business, financial condition, cash flows or results of operations.

If we are unable to continue to utilize the “Yi” brand name, it could materially and adversely affect our business, financial condition and results of operations.

We currently utilize the “Yi” brand name in almost all of the products we sell. We have been granted permission by Shanghai Xiaoyi Technology Co., Ltd., the owner of the “Yi” brand name, to utilize such name in all of our products in our online sales through October 22, 2026. We cannot assure you that we will be able to extend this arrangement beyond such date. If we are unable to maintain this arrangement in the future and lose the ability to utilize the “Yi” brand name, it could materially and adversely affect our business, financial condition and results of operations.

We depend on our suppliers, and the loss of any key supplier could materially and adversely affect our business, financial condition and results of operations.

Our hardware products depend on the quality of components that we procure from related-party suppliers. Reliance on suppliers, as well as industry supply conditions, generally involves several risks, including the possibility of defective parts, which can adversely affect the reliability and reputation of our platform and products, and a shortage of components and reduced control over delivery schedules and increases in component costs, which can adversely affect our profitability. We have two related parties from which we procure hardware on a purchase order basis. If these suppliers are unable to continue to provide a timely and reliable supply, we could experience interruptions in delivery of our platform and products to service providers, which could have a material adverse effect on our business, financial condition and results of operations. If we were required to find alternative sources of supply, qualification of alternative suppliers and the establishment of reliable supplies could result in delays and a possible loss of sales, which could have a material adverse effect on our business, financial condition and results of operations.

Disruptions in the supply chain for AMC’s products could negatively impact AMC’s business.

AMC’s business has in the past been impacted by supply chain disruptions, particularly a short supply of security cameras. To address this challenge, AMC in the past purchased Ants’ remaining inventory of security cameras, which allowed it to meet customer demand without significant interruptions to its operations or revenue. While the disruption posed challenges, AMC’s proactive measures helped mitigate immediate risks to customer satisfaction and market position. AMC has implemented several strategies to address supply chain risks going forward, including diversifying its supplier base by expanding partnerships with multiple suppliers to reduce reliance on any single source, and seeking to better manage its inventory by increasing the amount of parts and accessories purchased when placing purchase orders. These mitigation efforts, while effective in addressing short-term supply chain disruptions, introduced certain other risks, including product quality and reliability risks dealing with new suppliers and higher costs to increase inventory levels. Although AMC will seek to mitigate these risks such as by conducting rigorous quality assurance processes, there can be no assurance that AMC will be successful in these efforts. If it is not, it could have a material adverse effect on AMC’s business.

AMC faces inflationary pressures which could negatively impact its business.

To date, recent inflationary pressures have not had a material impact on AMC’s business and operations. However, such pressures could increase over time and if they did, it could have a material impact on AMC’s business and operations. For instance, to date, the costs associated with procuring AMC’s hardware, raw materials and third-party services have not increased materially as AMC’s main suppliers are located in PRC where inflation has been controlled in the past year. If inflation were to increase in these locations, it could negatively impact AMC’s business.

Furthermore, inflationary pressures in the logistics sector, including higher fuel and transportation costs, could increase and further negatively impact the cost of delivering AMC’s products and products. The United States government has also recently imposed higher tariffs on products from the PRC, which could increase the prices of our products and services and could negatively impact our business. If AMC is unable to implement successful strategies to offset such inflationary pressures and/or tariffs, it could have a material adverse effect on its business and operations.

Growth of our business will depend on market awareness and a strong brand, and any failure to develop, maintain, protect and enhance our brand would hurt our ability to retain or attract subscribers.

We believe that building and maintaining market awareness, brand recognition and goodwill in a cost-effective manner is critical to our overall success in achieving widespread acceptance of our existing and future products and is an important element in attracting new service providers and subscribers. An important part of our business strategy is to increase service provider and consumer awareness of our brand and to provide marketing leadership, services and support to our service provider network. This will depend largely on our ability to continue to provide high-quality products, and we may not be able to do so effectively. While we may choose to engage in a broader marketing campaign to further promote our brand, this effort may not be successful. Our efforts in developing our brand may be hindered by the marketing efforts of our competitors and our reliance on our service providers and strategic partners to promote our brand. If we are unable to cost-effectively maintain and increase awareness of our brand, our business, results of operations and financial condition could be harmed.

Our strategy includes pursuing acquisitions, and our potential inability to successfully integrate newly-acquired technologies, assets or businesses may harm our financial results.

We believe part of our growth will be driven by acquisitions of other companies or their technologies, assets and businesses. Any acquisitions we complete will give rise to risks, including:

• incurring higher than anticipated capital expenditures and operating expenses;
• failing to assimilate the operations and personnel or failing to retain the key personnel of the acquired company or business;
• failing to integrate the acquired technologies, or incurring significant expense to integrate acquired technologies into our platform and products;
• diverting our management’s attention and other company resources;
• failing to maintain uniform standards, controls and policies;
• incurring significant accounting charges;
• impairing relationships with employees, service providers or subscribers;
• finding that the acquired technology, asset or business does not further our business strategy, that we overpaid for the technology, asset or business or that we may be required to write off acquired assets or investments partially or entirely;
• failing to realize the expected synergies of the transaction;
• being exposed to unforeseen liabilities and contingencies that were not identified prior to acquiring the company; and

Fully integrating an acquired technology, asset or business into our operations may take a significant amount of time. We may not be successful in overcoming these risks or any other problems encountered with acquisitions. To the extent we do not successfully avoid or overcome the risks or problems related to any such acquisitions, our results of operations and financial condition could be harmed. Acquisitions also could impact our financial position and capital requirements, or could cause fluctuations in our quarterly and annual results of operations. Acquisitions could include significant goodwill and intangible assets, which may result in future impairment charges that would reduce our stated earnings. We may incur significant costs in our efforts to engage in strategic transactions and these expenditures may not result in successful acquisitions.

To carry out our business plan, we may face the challenge that we are short of human capital resources.

In our business plan, we are planning to launch new products which require intensive investment of human capital resources. We currently employ only a small group of people and rely on the outsourced human capital that we work with. The lack of human resources has potential to impact the development of our business plan and delay the launch of our new products.

Evolving government and industry regulation and changes in applicable laws relating to the Internet and data privacy may increase our expenditures related to compliance efforts or otherwise limit the products we can offer, which may harm our business and adversely affect our financial condition.

As internet commerce continues to evolve, federal, state or foreign agencies have adopted and could in the future adopt regulations covering issues such as user privacy and content. We are particularly sensitive to these risks because the Internet is a critical component of our business model. In addition, taxation of products or services provided over the Internet or other charges imposed by government agencies or by private organizations for accessing the internet may be imposed. Any regulation imposing greater fees for Internet use or restricting information exchange over the Internet could result in a decline in the use of the Internet and the viability of Internet-based services, which could harm our business.

Changes in international trade policies, tariffs and treaties affecting imports and exports may have a material adverse effect on our operations.

There have recently been significant changes to international trade policies and tariffs affecting imports and exports. Any significant increases in tariffs on goods or materials or other changes in trade policy could negatively affect our operations.

Recently, the U.S. has implemented a range of new tariffs and increases to existing tariffs. In response to the tariffs announced by the U.S., other countries have imposed, are considering imposing, and may in the future impose new or increased tariffs on certain exports from the United States. There is currently significant uncertainty about the future relationship between the United States and other countries with respect to trade policies, taxes, government regulations and tariffs. We cannot predict whether, and to what extent, current tariffs will continue or trade policies will change in the future. Such changes could have a material adverse effect on our operations.

We rely on the performance of our senior management and highly skilled personnel, and if we are unable to attract, retain and motivate well-qualified employees, our business and results of operations could be harmed.

We believe our success depends on the efforts and talents of senior management and key personnel. Our future success depends on our continuing ability to attract, develop, motivate and retain highly qualified and skilled employees. Qualified individuals are in high demand, and we may incur significant costs to attract them. In addition, the loss of any of our senior management or key personnel could interrupt our ability to execute our business plan, as such individuals may be difficult to replace. If we do not succeed in attracting well-qualified employees or retaining and motivating existing employees, our business and results of operations could be harmed.

Our business is subject to the risks of earthquakes, fire, power outages, floods and other catastrophic events, and to interruption by manmade problems such as terrorism or global or regional economic, political and social conditions.

A significant natural disaster, such as an earthquake, fire or a flood, or a significant power outage could harm our business, results of operations and financial condition. Natural disasters could affect our hardware vendors. Further, if a natural disaster occurs in a region from which we derive a significant portion of our revenue, such as metropolitan areas in North America, consumers in that region may delay or forego purchases of our platform and products from service providers in the region, which may harm our results of operations for a particular period. In addition, terrorist acts or acts of war could cause disruptions in our business or the business of our hardware vendors, service providers, subscribers or the economy as a whole. More generally, these geopolitical, social and economic conditions could result in increased volatility in worldwide financial markets and economies that could harm our sales. Given our concentration of sales during the third and fourth quarters, any disruption in the business of our hardware vendors and service providers that impacts sales during the third or fourth quarter could have a greater impact on our annual results. All of the aforementioned risks may be augmented if the disaster recovery plans for us, our service providers and our suppliers prove to be inadequate. To the extent that any of the above results in delays or cancellations of orders, or delays in the manufacture, deployment or shipment of our platform and products, our business, financial condition and results of operations would be harmed.

Downturns in general economic and market conditions and reductions in spending may reduce demand for our platform and products, which could harm our revenue, results of operations and cash flows.

Our revenue, results of operations and cash flows depend on the overall demand for our platform and products. Concerns about the systemic impact of a potential widespread recession, energy costs, geopolitical issues, the availability and cost of credit and the global housing and mortgage markets have contributed to increased market volatility, decreased consumer confidence and diminished growth expectations in the U.S. economy. The current unstable general economic and market conditions have been characterized by a dramatic decline in consumer discretionary spending and have disproportionately affected providers of products that represent discretionary purchases. While the decline in consumer spending has recently moderated, these economic conditions could still lead to continued declines in consumer spending over the foreseeable future, and may have resulted in a resetting of consumer spending habits that may make it unlikely that such spending will return to prior levels for the foreseeable future.

During weak economic times, the available pool of service providers may decline as the prospects for home building and home renovation projects diminish, which may have a corresponding impact on our growth prospects. In addition, there is an increased risk during these periods that one of our service providers will file for bankruptcy protection, which may harm our reputation, revenue, profitability and results of operations. Likewise, consumer bankruptcies can detrimentally affect the business stability of our service providers. Prolonged economic slowdowns and reductions in new home construction and renovation projects may result in diminished sales of our platform and products. Further worsening, broadening or protracted extension of the economic downturn could have a negative impact on our business, revenue, results of operations and cash flows.

Failure to comply with laws and regulations could harm our business.

We conduct our principal business operations in the United States. We are subject to regulation by various federal, state and local agencies, including, but not limited to, agencies responsible for monitoring and enforcing employment and labor laws, workplace safety, product safety, environmental laws, consumer protection laws, federal securities laws and tax laws and regulations.

We are subject to the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the U.S. Foreign Corrupt Practices Act of 1977, as amended, the U.S. Travel Act, and possibly other anti-bribery laws, including those that comply with the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and other international conventions. Anti-corruption laws are interpreted broadly and prohibit our company from authorizing, offering, or providing directly or indirectly improper payments or benefits to recipients in the public or private-sector. Certain laws could also prohibit us from soliciting or accepting bribes or kickbacks. Our company has direct government interactions and in several cases uses third-party representatives, including dealers, for regulatory compliance, sales and other purposes in a variety of countries. These factors increase our anti-corruption risk profile. We can be held liable for the corrupt activities of our employees, representatives, contractors, partners and agents, even if we did not explicitly authorize such activity. Although we have implemented policies and procedures designed to ensure compliance with anti-corruption laws, there can be no assurance that all of our employees, representatives, contractors, partners, and agents will comply with these laws and policies.

We are also subject to data privacy and security laws, anti-money laundering laws (such as the USA PATRIOT Act), and import/export laws and regulations in the United States and in other jurisdictions.

Our business operates in a regulated industry.

Our business, operations and service providers are subject to various U.S. federal, state and local consumer protection laws, licensing regulation and other laws and regulations. Our advertising and sales practices and that of our service provider network are subject to regulation by the U.S. Federal Trade Commission, or the FTC, in addition to state consumer protection laws. The FTC and the Federal Communications Commission have issued regulations that place restrictions on, among other things, unsolicited automated telephone calls to residential and wireless telephone subscribers by means of automatic telephone dialing systems and the use of prerecorded or artificial voice messages. If our service providers were to take actions in violation of these regulations, such as telemarketing to individuals on the “Do Not Call” registry, we could be subject to fines, penalties, private actions or enforcement actions by government regulators. Although we have taken steps to insulate ourselves from any such wrongful conduct by our service providers, and to require our service providers to comply with these laws and regulations, no assurance can be given that we will not be exposed to liability as result of our service providers’ conduct. Further, to the extent that any changes in law or regulation further restrict the lead generation activity of our service providers, these restrictions could result in a material reduction in subscriber acquisition opportunities, reducing the growth prospects of our business and adversely affecting our financial condition and future cash flows. In addition, most states in which we operate have licensing laws directed specifically toward the monitored security services industry. Our business relies heavily upon cellular telephone service to communicate signals. Cellular telephone companies are currently regulated by both federal and state governments. Changes in laws or regulations could require us to change the way we operate, which could increase costs or otherwise disrupt operations. In addition, failure to comply with any such applicable laws or regulations could result in substantial fines or revocation of our operating permits and licenses, including in geographic areas where our services have substantial penetration, which could adversely affect our business and financial condition. Further, if these laws and regulations were to change or if we fail to comply with such laws and regulations as they exist today or in the future, our business, financial condition and results of operations could be materially and adversely affected.

If we fail to protect our intellectual property and proprietary rights adequately, our business could be harmed.

We believe that our proprietary technology is essential to establishing and maintaining our position in the market that we operate. We seek to protect our intellectual property through confidentiality, non-compete and non-disclosure agreements, domain names and other measures, some of which afford only limited protection. We also rely on patent, trademark, trade secret and copyright laws to protect our intellectual property. Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our technology or to obtain and use information that we regard as proprietary. Our means of protecting our proprietary rights may not be adequate or our competitors may independently develop similar or superior technology, or design around our intellectual property. In addition, the laws of some foreign countries do not protect our proprietary rights to as great an extent as the laws of the United States. Intellectual property protections may also be unavailable, limited or difficult to enforce in some countries, which could make it easier for competitors to capture market share. Our failure or inability to adequately protect our intellectual property and proprietary rights could harm our business, financial condition and results of operations.

Risks related to Foreign Operations

If AMC is deemed to be a China-based company, it could have a significant impact on AMC’s business operations and the value of its securities.

Based on AMC’s jurisdiction of incorporation, financial makeup and business operations, AMC is not considered a China-based company. However, because it conducts certain operations in the PRC, it is possible that the PRC government could seek to deem AMC as a China-based issuer. If AMC were to be deemed to be a China-based issuer and become subject to PRC regulation and oversight, it could have a material adverse effect on its business operations and the value of its securities.

The PRC legal system is based on written statutes. Unlike the common law system, prior court decisions may be cited for reference but do not have binding authority. As PRC legal system is evolving rapidly, the interpretations of many laws, regulations and rules may contain inconsistencies and enforcement of these laws, regulations and rules involve uncertainties, which may limit legal protections available to AMC. Furthermore, the PRC legal system is based in part on government policies and internal rules, some of which are not published on a timely basis or at all. As a result, AMC may not be aware of its violation of such policies and rules until sometime after the violation. AMC cannot predict the effect of future developments in the PRC legal system, including the promulgation of new laws, changes to existing laws or the interpretation or enforcement thereof, or the preemption of local regulations by national laws. These uncertainties, including any inability to enforce AMC’s contracts, together with any development or interpretation of PRC law that is adverse to AMC, could materially and adversely affect AMC’s business and operations and limit the legal protections available and other foreign investors, including you.

In the late 1970s, the PRC government began to promulgate a comprehensive system of laws and regulations governing economic matters in general. The overall effect of legislation over the past five decades has significantly increased the protections afforded to various forms of foreign or private-sector investment in China. However, many of these laws, regulations and legal requirements are relatively new and still evolving and uncertainties remain as to the interpretation and application of PRC laws and regulations including, but not limited to, the laws and regulations governing AMC’s business and the enforcement and performance of AMC’s business arrangements in certain circumstances. The laws and regulations are sometimes vague and may be subject to future changes, and their official interpretation and enforcement could be unpredictable. The effectiveness and interpretation of newly enacted laws or regulations, including amendments to existing laws and regulations, may be delayed, and AMC’s business may be affected if it relies on laws and regulations which are subsequently adopted or interpreted in a manner different from its current understanding of these laws and regulations. AMC cannot predict what effect the interpretation of existing or new PRC laws or regulations may have on its business. Although AMC has taken measures to comply with the laws and regulations applicable to its business operations and to avoid conducting any non-compliant activities under these laws and regulations, the PRC governmental authorities may promulgate new laws and regulations that may affect AMC’s operations. AMC cannot rule out the possibility that there might be future developments in the PRC legal system, including the promulgation of new laws, changes to existing laws or the interpretation or enforcement thereof, or the pre-emption of local regulations by national laws. Failure to comply with such evolving laws and regulations may subject AMC to material sanctions or penalties imposed by the governmental authorities.

The PRC government may exercise certain oversight over the conduct of AMC’s business, and may influence AMC’s operations, which could result in changes in AMC’s operations. Changes in China’s economic or social conditions or government policies could have a material adverse effect on AMC, and the surviving combined business after the combination, and their business, results of operations, financial condition, and the value of AMC securities.

Since AMC conducts certain of its operation in and some of its assets are located in PRC, the PRC government may seek to influence and exert control over AMCs operations which could result in a material change in its operations and/or the value of AMC’s securities. In addition, AMC’s results of operations and financial condition may be influenced to a significant degree by the economic and social conditions in the PRC.

The PRC government may be authorized by the laws and regulations to exercise significant control and take regulatory actions over the conduct of AMC’s business, and the regulations to which we are subject may change rapidly and with little advance notice. Like many other jurisdictions, new laws, regulations, and other government directives in the PRC may also be costly to comply with, and such compliance or any associated inquiries or investigations or any other government actions may:

• Delay or impede AMC’s development,
• Result in negative publicity or increase AMC’s product cost and operating costs,
• Require significant management time and attention, and
• Subject AMC to remedies, administrative penalties and even criminal liabilities that may adversely affect AMC’s business.

The promulgation of new laws or regulations, or the new interpretation of existing laws and regulations, in each case that restrict or otherwise unfavorably impact the ability or manner in which AMC conducts its business and could require AMC to change certain aspects of its business to ensure compliance, which could reduce revenues, increase costs, require AMC to obtain additional licenses, permits, approvals or certificates, or subject AMC to additional liabilities. To the extent any new or more stringent measures are required to be implemented, AMC’s business, financial condition and results of operations could be adversely affected.

AMC may experience delays and/or failures in obtaining and renewing relevant PRC governmental approvals, licenses, permits or others required for its operation conducted in PRC.

AMC is required to obtain various approvals, permits, licenses and certificates with respect to the portion of its operations in the PRC, including, for example, planning permits, certificates for passing environmental assessments, certificates for passing fire control assessments. Generally, such approvals, licenses, permits, certificates or inspections are only issued, renewed or completed after certain conditions have been satisfied. AMC cannot assure that it will not encounter obstacles that delay it in obtaining or completing, or result in its failure to obtain or complete, the required approvals or inspections. In the event that AMC encounters significant delays in obtaining or renewing the necessary government approvals or fails to timely complete the inspection, AMC will not be able to continue its normal operations and its business, financial condition and results of operations may be adversely affected.

The enforcement of the PRC Labor Contract Law and other labor-related regulations in the PRC may adversely affect AMC’s operations.

The Standing Committee of the National People’s Congress enacted the Labor Contract Law in 2008, and amended it on December 28, 2012. The Labor Contract Law introduced specific provisions related to fixed-term employment contracts, part-time employment, probationary periods, consultation with labor unions and employee assemblies, employment without a written contract, dismissal of employees, severance, and collective bargaining to enhance previous PRC labor laws. In the event that AMC decides to terminate the labor relationships with some of its employees or otherwise change its employment or labor practices, the Labor Contract Law and its implementation rules may limit its ability to effect those changes in a desirable or cost-effective manner, which could adversely affect its business and results of operations.

Additional Regulations under PRC Law Relating to Data Security and Confidentiality and Archives Management may subject us to additional compliance requirements in the future.

Recently, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council of the PRC (the “State Council”) jointly issued the Opinions on Severely Cracking Down on Illegal Securities Activities According to Law, or the Opinions, which were made available to the public on July 6, 2021. The Opinions emphasized the need to strengthen the administration over illegal securities activities, and the need to strengthen the supervision over overseas listings by Chinese companies. The Opinions proposed to take effective measures, such as promoting the construction of relevant regulatory systems, to deal with the risks and incidents facing China-based overseas-listed companies and the demand for cybersecurity and data privacy protection.

On February 24, 2023, the CSRC and several other administrations jointly released the revised Provisions on Strengthening Confidentiality and Archiving Administration of Overseas Securities Offering and Listing by Domestic Companies, or the Archives Rules, which came into effect on March 31, 2023. The Archives Rules apply to both overseas direct offerings and overseas indirect offerings. The Archives Rules provides that, among other things, (i) in relation to the overseas listing activities of PRC domestic enterprises, the PRC domestic enterprises are required to strictly comply with the relevant requirements on confidentiality and archives management, establish a sound confidentiality and archives system, and take necessary measures to discharge their confidentiality and archives management responsibilities; (ii) if a PRC domestic enterprise is required to publicly disclose or provide to any securities companies or other securities service providers or overseas regulators or individuals, any materials that contain state secrets or government work secrets (where there is ambiguity or dispute on whether it is state secret or government work secret, a request shall be submitted to the competent government authority for determination), during the course of its overseas offering or listing, the PRC domestic enterprise shall apply for approval from competent authorities and file with the secrecy administrative department at the same level; and (iii) working papers produced in China by securities companies and other securities service institutions, who provide such PRC domestic enterprises with securities services during their overseas issuance and listing, should be stored in the PRC, and the transmission of any such working papers to recipients outside China must be approved following the applicable PRC regulations.

Any failure or perceived failure by PRC domestic companies to comply with the above confidentiality and archives administration requirements under the revised Provisions and other PRC laws and regulations may result in the relevant entities being held legally liable by competent authorities, and referred to the judicial organ to be investigated for criminal liability if suspected of committing a crime.

Recent greater oversight by the CAC over data security, particularly for companies seeking to list on a foreign exchange, could adversely impact our business.

On December 28, 2021, the Cyberspace Administration of China, or the CAC and several other administrations jointly issued the revised Measures for Cybersecurity Review, or the Revised Review Measures, which became effective and replaced the existing Measures for Cybersecurity Review on February 15, 2022. According to the Revised Review Measures, if an “online platform operator” that is in possession of personal data of more than one million users intends to list in a foreign country, it must apply for a cybersecurity review. Based on a set of Q&A published on the official website of the CAC in connection with the issuance of the Revised Review Measures, an official of the CAC indicated that an online platform operator should apply for a cybersecurity review prior to the submission of its listing application with non-PRC securities regulators. After the receipt of all required application materials, the authorities must determine, within ten business days thereafter, whether a cybersecurity review will be initiated, and issue a written notice to the relevant applicant of its determination. If a review is initiated and the authorities conclude after such review that the listing will affect national security, the listing of the relevant applicant will be prohibited. Given the recency of the issuance of the Revised Review Measures, there is a general lack of guidance and substantial uncertainties exist with respect to its interpretation and implementation.

On December 28, 2021, 13 governmental departments of the PRC, including the CAC, jointly promulgated the Cybersecurity Review Measures, which became effective on February 15, 2022. The Cybersecurity Review Measures provide that, in addition to critical information infrastructure operators (the “CIIOs”) that intend to purchase Internet products and services, net platform operators engaging in data processing activities that affect or may affect national security must be subject to cybersecurity review by the Cybersecurity Review Office of the PRC. According to the Cybersecurity Review Measures, a cybersecurity review assesses potential national security risks that may be brought about by any procurement, data processing, or overseas listing. The Cybersecurity Review Measures require that an online platform operator which possesses the personal information of at least one million users must apply for a cybersecurity review by the CAC if it intends to be listed in foreign countries.

Additionally, the PRC Cybersecurity Law requires companies to implement certain organizational, technical and administrative measures and other necessary measures to ensure the security of their networks and data stored on their networks. Specifically, the Cybersecurity Law provides that China adopts a multi-level protection scheme (“MLPS”), under which network operators are required to perform obligations of security protection to ensure that the network is free from interference, disruption or unauthorized access, and prevent network data from being disclosed, stolen or tampered. Under the MLPS, entities operating information systems must have a thorough assessment of the risks and the conditions of their information and network systems to determine the level to which the entity’s information and network systems belong-from the lowest Level 1 to the highest Level 5 pursuant to a series of national standards on the grading and implementation of the classified protection of cybersecurity. The grading result will determine the set of security protection obligations that entities must comply with. Entities classified as Level 2 or above should report the grade to the relevant government authority for examination and approval.

On November 14, 2021, the CAC released the Regulations on Network Data Security Management (draft for public comments), which provide that if a data processor that processes personal data of more than one million users intends to list in a foreign country, it must apply for a cybersecurity review. Pending the finalization, adoption, enforcement and interpretation of these new measures and regulations, we cannot rule out the possibility that the measures and regulations may be enacted, interpreted or implemented in ways that will negatively affect us.

The PRC Data Security Law, which was promulgated by the Standing Committee of the National People’s Congress, or the SCNPC, on June 10, 2021 and took effect on September 1, 2021, imposes data security and privacy obligations on entities and individuals carrying out data activities. Further, the PRC Data Security Law introduces a data classification and hierarchical protection system based on the importance of data in economic and social development, and the degree of harm it will cause to national security, public interests, or legitimate rights and interests of individuals or organizations when such data is tampered with, destroyed, leaked, illegally acquired or used. The PRC Data Security Law also provides for a national security review procedure for data activities that may affect national security and imposes export restrictions on certain data and information. On July 30, 2021, the State Council promulgated the Regulations on the Protection of the Security of Critical Information Infrastructure, or the Regulations, which took effect on September 1, 2021. The Regulations supplement and specify the provisions on the security of critical information infrastructure as stated in the Cybersecurity Review Measures. The Regulations provide, among others, that protection department of certain industry or sector shall notify the operator of the critical information infrastructure in time after the identification of certain critical information infrastructure.

On August 20, 2021, the SCNPC promulgated the Personal Information Protection Law of the PRC, or the Personal Information Protection Law, which took effect on November 1, 2021. As the first systematic and comprehensive law specifically for the protection of personal information in the PRC, the Personal Information Protection Law provides, among others, that (i) an individual’s consent shall be obtained to use sensitive personal information, such as biometric characteristics and individual location tracking, (ii) personal information operators using sensitive personal information shall notify individuals of the necessity of such use and impact on the individual’s rights, and (iii) where personal information operators reject an individual’s request to exercise his or her rights, the individual may file a lawsuit with a People’s Court.

As of the date of this Annual Report on Form 10-K, AMC has not received any notice from any authorities identifying it as a critical information infrastructure operator or requiring it to go through cybersecurity review or network data security review by the CAC. AMC’s operations and listing are not expected to be affected by, or subject to, cybersecurity review by the CAC under the Cybersecurity Review Measures, given that it is not (i) a network platform operator engaging in data processing activities that affect or may affect national security; (ii) a critical information infrastructure operator purchasing cyber products or services that affect or may affect national security; or (iii) a network platform operator with personal information data of more than one million users. There remains uncertainty, however, as to how the Cybersecurity Review Measures and the Security Administration Draft will be interpreted or implemented and whether the PRC regulatory agencies, including the CAC, may adopt new laws, regulations, rules, or detailed implementation and interpretation related to the Cybersecurity Review Measures and the Security Administration Draft. If any such new laws, regulations, rules, or implementation and interpretation come into effect, AMC expects to take all reasonable measures and actions to comply and to minimize the adverse effect of such laws on it. AMC cannot guarantee, however, that it will not be subject to cybersecurity review and network data security review in the future. During such reviews, AMC may be required to suspend its operations or experience other disruptions to operations. Cybersecurity review and network data security review could also result in negative publicity with respect to AMC and diversion of its managerial and financial resources, which could materially and adversely affect its business, financial conditions, and results of operations.

Uncertainties exist with respect to how the PRC Foreign Investment Law may impact the viability of AMC’s current corporate structure and operations.

Laws regulating foreign investment in PRC include Foreign Investment Law of the People’s Republic of China, or the PRC Foreign Investment Law, effective from January 1, 2020, and the Regulation for Implementing the Foreign Investment Law of the People’s Republic of China, or the FIE Implementing Regulation, effective from January 1, 2020. The PRC Foreign Investment Law specifies that foreign investments shall be conducted in line with the “negative list” to be issued or approved to be issued by the State Council. While AMC does not operate in an industry that is currently subject to foreign investment restrictions or prohibition in PRC, it is uncertain whether its industry will be named in an updated “negative list” to be issued in the future. If its industry is added to the “negative list” or if the PRC regulatory authorities otherwise decide to limit foreign ownership in its industry, there could be a risk that AMC would be unable to do regular business with its suppliers in PRC. If any new laws and/or regulations on foreign investments in PRC are promulgated and implemented, such changes could have an impact on AMC’s current business and operations. In such event, despite its efforts to restructure to comply with the then applicable PRC laws and regulations in order to continue its operations in PRC, AMC may experience material changes in its operations.

There are procedural requirements for foreign regulatory bodies to conduct investigations or inspections of AMC’s operations in China.

According to Article 177 of the PRC Securities Law, which became effective in March 2020, no overseas securities regulator can directly conduct investigations or evidence collection activities within the PRC. Pursuant to the Data Security Law, no organization or individual within the territory of the PRC may provide foreign judicial or law enforcement authorities with data stored within the territory of the PRC without the approval of the competent authorities of the PRC. Accordingly, without Chinese government approval, no entity or individual in China may provide documents and information relating to securities business activities to overseas regulators when it is under direct investigation or evidence discovery conducted by overseas regulators which could present legal and other obstacles to obtaining information needed for investigations and litigation conducted outside of China. Furthermore, as of the date of this Annual Report on Form 10-K, there have not been implementing rules or regulations regarding the application of Article 177, and, accordingly, it cannot be concluded as to how it will be interpreted, implemented or applied by relevant government authorities. As such, there are also uncertainties as to the procedures and requisite timing for the overseas securities regulatory agencies to conduct investigations and collect evidence within the territory of the PRC.

Although the authorities in China may establish a regulatory cooperation mechanism with the securities regulatory authorities of another country or region, such as the United States, which could allow such authorities to conduct investigations or evidence discovery, there is no assurance that any such mechanism will be adopted or be effective. Accordingly, there is no guarantee that requests from U.S. federal or state regulators or agencies to investigate or inspect AMC’s operations will be honored. If the U.S. securities regulatory agencies are unable to conduct such investigations or evidence discovery processes, there exists a risk that such regulatory agencies may determine to suspend or de-register AMC’s registration with the SEC and may also delist AMC’s securities from trading markets within the United States.

Fluctuations in the value of the Renminbi may materially adversely affect your investment.

The value of the Renminbi against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in economic conditions in China and by China’s foreign exchange policies. With the development of the foreign exchange market and progress towards interest rate liberalization and Renminbi internationalization, the PRC government may announce further changes to the exchange rate system, and the Renminbi may appreciate or depreciate significantly against the U.S. dollar. It is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between the Renminbi and the U.S. dollar.

Significant revaluation of the Renminbi may materially adversely affect investors’ investment. For example, to the extent that AMC needs to convert U.S. dollars received from its business activities or financing activities in the U.S. market into Renminbi for the operations such as paying for its purchase of parts and accessories from its suppliers or its employees in China, appreciation of the Renminbi against the U.S. dollar would decrease the Renminbi amount that AMC would have received from the conversion.

The hedging options available in China may not be sufficient to reduce AMC’s exposure to exchange rate fluctuations. As of the date of this Annual Report on Form 10-K, AMC has not entered into any material hedging transactions to reduce its exposure to foreign currency exchange risk. While AMC may enter into hedging transactions in the future, the availability and effectiveness of these hedges may be limited, and AMC may not be able to adequately hedge their exposure.

General risks applicable to AMC

Our Charter provides, subject to limited exceptions, that the Court of Chancery of the State of Delaware is the sole and exclusive forum for certain stockholder litigation matters, which could limit stockholders’ ability to obtain a favorable judicial forum for disputes with AMC or its directors, officers, employees or stockholders.

The Charter provides that, unless AMC consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall to the fullest extent permitted by law be the sole and exclusive forum for any AMC stockholder (including a beneficial owner) to bring (i) any derivative action or proceeding brought on behalf of AMC, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee to AMC or AMC’s stockholders, (iii) any action asserting a claim against AMC, its directors, officers or employees arising pursuant to any provision of the DGCL or the Organizational Documents, or (iv) any action asserting a claim against AMC, its directors, officers or employees governed by the internal affairs doctrine. Notwithstanding the foregoing, the exclusive forum clause will not apply to any claim as to which the Court of Chancery determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, or for which the Court of Chancery does not have subject matter jurisdiction. Furthermore, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act or the Exchange Act. Any person or entity purchasing or otherwise acquiring any interest in shares of AMC’s capital stock shall be deemed to have notice of and consented to the forum provisions in the Charter. Notwithstanding the foregoing, investors cannot waive compliance with the U.S. federal securities laws and rules and regulations promulgated thereunder.

The choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with AMC or any of its directors, officers, other employees or stockholders, which may discourage lawsuits with respect to such claims. Alternatively, if a court were to find the choice of forum provision contained in the Charter to be inapplicable or unenforceable in an action, AMC may incur additional costs associated with resolving such action in other jurisdictions, which could harm its business, operating results and financial condition.

Geopolitical conditions, including international conflicts, trade disputes and direct or indirect acts of war or terrorism, could have an adverse effect on our operations and financial results.

Since we operate on a global basis, our operations could be disrupted by geopolitical conditions, including international conflicts such as the Russia-Ukraine, Israel-Hamas and US-Iran conflicts, trade disputes, international boycotts and sanctions, political and social instability, acts of war, terrorist activity or other similar events. From time to time, we could have a large investment in a particular asset type, a large revenue stream associated with a particular customer or industry, or a large number of customers located in a particular geographic region. A discrete event impacting a specific asset type, customer, industry, or region in which we have a concentrated exposure could negatively impact our results of operations.

Anti-takeover provisions in our organizational documents could make an acquisition of AMC more difficult.

The Organizational Documents contain provisions that may delay or prevent a change of control, discourage bids at a premium over the price of the Common Stock, adversely affect the price of the Common Stock, and adversely affect the voting and other rights of our stockholders. These provisions include: (i) advance notice procedures for seeking to bring business before each annual meetings of stockholders or for nominating candidates for director, (ii) permitting the board to issue additional shares of common stock and to issue shares of preferred stock without the approval of stockholders, with such rights, preferences and privileges as they may designate; (iii) dividing the board into classes; (iv) prohibiting actions by written consent of stockholders in lieu of a meeting; and (v) prohibiting stockholders from calling a special meeting. In addition, the board may adopt a stockholder rights plan upon such terms and conditions as it deems expedient in the interests of AMC.

The rights of holders of the Common Stock may be impaired by the possible future issuance of preferred stock.

The board has the right, without approval of the holders of the Common Stock, to issue preferred stock with voting, dividend, conversion, liquidation and other rights which could adversely affect the voting power and equity interest of the holders of the Common Stock, which could be issued with the right to more than one vote per share, and could be utilized as a method of discouraging, delaying or preventing a change-of-control. The possible negative impact on takeover attempts could adversely affect the price of the Common Stock. Although there is no present intention to issue any additional preferred stock, AMC may issue preferred stock in the future without further approval of the holders of the Common Stock.

We are a controlled company under Nasdaq rules.

Entities controlled by Sean Da own approximately 83% of the Common Stock. Accordingly, for the foreseeable future, Mr. Da controls AMC and its corporate affairs. As a result, Mr. Da, through such entities, has the ability to determine all matters requiring approval by stockholders, including the election of directors, amendments of organizational documents, and approval of major corporate transactions, such as a change in control, merger, consolidation, or sale of assets. Similarly, he has the ability to prevent the approval of any action submitted to the stockholders by other stockholders. If Mr. Da does not provide any requisite approval or consent allowing AMC to take any such action when requested, it will not be able to engage in the related activities and, as a result, its business and its operating results may be harmed.

Due to the ownership by Mr. Da of the Common Stock, AMC is currently considered a “controlled company” under the Nasdaq rules. This allows AMC to avoid complying with certain of the Nasdaq corporate governance rules, including the rules that require the company to have a board comprised of at least 50% independent directors, to have board nominations either selected, or recommended for the board’s selection, by either a nominating committee comprised solely of independent directors or by a majority of the independent directors and to have officer compensation determined, or recommended to the board for determination, either by a compensation committee comprised solely of independent directors or by a majority of the independent directors. As of the date of this Annual Report on Form 10-K, AMC has not taken advantage of any of these exemptions. If AMC determines to rely on any certain of these exemptions from the corporate governance requirements of Nasdaq in the future, investors may not have the same protections afforded to stockholders of companies that are subject to all of the Nasdaq corporate governance requirements.

AMC is an emerging growth company within the meaning of the Securities Act, and if AMC takes advantage of certain exemptions from disclosure requirements available to “emerging growth companies”, this could make AMC’s securities less attractive to investors and may make it more difficult to compare AMC’s performance with other public companies.

AMC is an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act. For as long as AMC continues to be an emerging growth company, AMC may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act. AMC could be an emerging growth company for up to five years, although AMC could lose that status sooner if its revenues exceed $1.235 billion, if AMC issues more than $1 billion in non-convertible debt in a three-year period, or if it becomes a large accelerated filer, as defined under the Exchange Act. We cannot predict if investors will find AMC securities less attractive because the company relies on these exemptions. If some investors find AMC securities less attractive as a result, there may be a less active trading market for AMC securities, and the price of AMC securities may be more volatile.

It is not expected that AMC will pay dividends in the foreseeable future after the Business Combination.

It is expected that AMC will retain most, if not all, of its available funds and any future earnings to fund the development and growth of its business. As a result, it is not expected that AMC will pay any cash dividends in the foreseeable future. The AMC Board has complete discretion as to whether to distribute dividends. Even if the AMC Board decides to declare and pay dividends, the timing, amount and form of future dividends, if any, will depend on the future results of operations and cash flow, capital requirements and surplus, AMC’s financial condition, contractual restrictions and other factors deemed relevant by the AMC Board.

AMC’s management team has limited experience managing a public company.

Most of the members of AMC’s management team have limited or no experience in managing a publicly traded company, interacting with public company investors, and complying with the increasingly complex laws and regulations pertaining to public companies. AMC’s management team may not successfully or efficiently manage AMC’s transition to being a public company subject to significant regulatory oversight and reporting obligations under the federal securities laws and the continuous scrutiny of securities analysts and investors. These new obligations and constituents will require significant attention from AMC’s senior management and may divert their attention away from the day-to-day management of its business, which could adversely affect AMC’s business, financial condition, and operating results.

AMC’s securities could be delisted, which could limit investors’ ability to make transactions in AMC’s securities and subject AMC to additional trading restrictions.

AMC’s Common Stock is listed on Nasdaq. If AMC fails in the future to meet the continued listing requirements and is subsequently delisted from such exchange, AMC could face significant material adverse consequences, including:

• a limited availability of market quotations for its securities;
• a limited amount of news and analyst coverage for AMC; and
• a decreased ability to issue additional securities or obtain additional financing in the future.

AMC may be involved in legal or other proceedings arising out of their operations from time to time and may face reputational risks and significant liabilities as a result.

AMC may be involved from time to time in disputes with various parties involved in its operations, including but not limited to its suppliers, employees, and logistics service providers. These disputes may lead to legal or other proceedings, including threatened proceedings, which may result in damages to its reputation, substantial costs and diversion of AMC’s resources and management’s attention.

In addition, AMC may encounter additional compliance issues in the course of operations, which may subject AMC to administrative proceedings and unfavorable results, and result in liabilities and delays relating to its production or product launch schedules. AMC cannot assure as to the outcome of such legal proceedings, and any negative outcome may materially and adversely affect its business, financial condition and results of operations.

We maintain processes for assessing, identifying and managing material risks from cybersecurity threats to our business. These processes apply to our internal information systems, connected products, software, data, third-party service providers and certain aspects of our supply chain and business operations. Our business involves the use of computers, mobile devices, online platforms and other information technologies in substantially all aspects of our operations, including communications with employees, suppliers, manufacturers, distributors, customers and consumers. As a result, cybersecurity risk is an important part of our overall risk management activities.

Our cybersecurity risk management processes are designed to address risks that may arise from unauthorized access to systems or data, theft, destruction, loss, misappropriation or release of personal information or intellectual property, ransomware and other malware, phishing and other social engineering, software vulnerabilities, misuse of credentials, failures of third-party hosted environments or applications, and disruptions affecting the information technology systems of third parties on which we rely. These processes also reflect that security incidents can take a variety of forms and continue to evolve as threat actors become more sophisticated.

As part of these processes, we use a combination of safeguards and procedures that may include user access controls, monitoring and logging, device and endpoint protections, vulnerability identification and remediation, incident response and escalation procedures, employee awareness measures, and third-party diligence and oversight, as appropriate for our size and operations. Because we are an early-stage company with limited personnel and resources, our cybersecurity processes are designed to be proportionate to our current business and organizational structure. At the same time, our limited resources may affect the scope and speed of our ability to investigate, remediate and prevent vulnerabilities and security incidents.

We also consider cybersecurity matters in connection with the development, deployment and support of our products and products. Our business depends in part on connected products, software functionality, wireless communications and evolving technologies, and we may be required to expand and improve our information technologies as our business grows. These factors may increase our technological presence and corresponding exposure to cybersecurity risk. In addition, because we rely on wireless carriers and other third-party service providers in aspects of our business, interruptions, failures or security issues affecting those parties could adversely affect our operations, services and reputation.

We rely on third parties in several aspects of our business, including technology, logistics, communications and product sourcing, and we consider third-party and supply-chain exposures as part of our cybersecurity risk management processes. Our dependence on suppliers and other external counterparties may increase our exposure to operational disruptions, technology failures and other incidents outside our direct control. We also consider broader business continuity risks that could affect us or the third parties on which we depend, including natural disasters, power outages, geopolitical events, trade disputes, terrorism and other disruptions.

Our business is also subject to privacy, data security and related laws and regulations in the United States and other jurisdictions. In addition to breach notification requirements that may be triggered by a security incident, we may be contractually required to notify customers or other counterparties of certain incidents. Maintaining safeguards and responding to an actual or suspected security incident may be costly and resource-intensive and could subject us to regulatory scrutiny, litigation, fines, penalties, remediation costs, reputational harm and business interruption. We therefore consider legal and regulatory developments relating to privacy, data security and the processing of personal information as part of our cybersecurity risk management processes.

Because we conduct certain operations in the PRC and have PRC-related suppliers, our cybersecurity and data-related risk management processes also take into account certain PRC laws, regulations and regulatory developments. These include the PRC Cybersecurity Law, the PRC Data Security Law, the Personal Information Protection Law, the Cybersecurity Review Measures and the multi-level protection scheme, or MLPS. These laws and regulations may impose obligations relating to network security, data handling, personal information protection, classification and protection of data, and potential cybersecurity review requirements. We monitor these developments as part of our overall compliance and risk management activities because changes in PRC laws, regulations, interpretations or enforcement practices could impose additional obligations on us, our subsidiaries, suppliers or business partners, or could disrupt our operations.

As of the date of this Annual Report on Form 10-K, we have not received any notice from PRC authorities identifying us as a critical information infrastructure operator or requiring us to undergo a cybersecurity review or network data security review by the CAC. However, the interpretation and enforcement of PRC laws and regulations remain uncertain, and future developments could affect our business, operations and compliance obligations.

Cybersecurity oversight is part of our overall risk oversight framework. Our board of directors oversees major business risks, including material cybersecurity risks, and management is responsible for the day-to-day assessment and management of those risks. Management’s oversight involves coordination among personnel responsible for information technology, operations, product development, finance and legal or compliance matters, as appropriate. Material cybersecurity matters are escalated to senior management and, where appropriate, to the board of directors. This framework reflects our size, organizational structure and stage of development.

As of the date of this Annual Report on Form 10-K, we are not aware of any cybersecurity incident that has materially affected, or is reasonably likely to materially affect, the Company, including our business strategy, results of operations or financial condition. However, there can be no assurance that our processes and measures will be effective to prevent all cybersecurity threats or incidents. Any security incident, other technology disruption, or failure to comply with privacy, data security or related laws and regulations could harm our brand and reputation, disrupt our operations, subject us to regulatory scrutiny or legal liability, and materially adversely affect our business, results of operations and financial condition.

We do not currently own any material real property. We lease office space in New York City under a non-cancellable 39-month lease agreement that expires in 2027. In addition to our leased office space, we rely on third parties for important aspects of our operations, including suppliers, manufacturers, distributors and online sales channels. AMC has disclosed that suppliers of its products and certain operations are located in China, and that it sells products through Amazon across the United States, Canada and Europe. As a result, our business is not dependent on owned manufacturing facilities, and our operational footprint includes third-party facilities and infrastructure used in sourcing, distribution and fulfillment. We believe our existing office space and the third-party facilities and infrastructure on which we rely are adequate for our current needs. We expect to evaluate our property needs on an ongoing basis in light of the growth of our business and operations.

From time to time, the Company may become involved in claims, suits, investigations or other proceedings arising in the ordinary course of business. As of the date of this Annual Report on Form 10-K, the Company is not a party to any material pending legal proceedings, and, to the Company’s knowledge, no such material proceedings are threatened against it.

The Company may in the future be subject to litigation or regulatory proceedings, including in connection with its business, intellectual property, commercial relationships, product activities, privacy and data matters, employment matters, securities matters or other disputes.

Forward-Looking Statements

References to the “Company,” “our,” “us” or “we” refer to AMC Robotics Corporation. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the audited financial statements and the related notes included in “Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.

Certain information contained in the discussion and analysis set forth below includes forward-looking statements. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those set forth under “Cautionary Note Regarding Forward-Looking Statements and Risk Factor Summary,” “Item 1A. Risk Factors,” and elsewhere in this Annual Report on Form 10-K.

Overview

Our Company and our Business Overview

AMC Robotics Corporation became publicly listed through the Business Combination with AlphaVest Acquisition Corp. in December 2025. Prior to the Business Combination, AMC Corporation, which was incorporated in the State of Washington on October 21, 2021, was the predecessor operating entity and conducted substantially all of the Company’s business activities. As the Business Combination was accounted for as a reverse recapitalization, AMC Corporation is considered the accounting acquirer, and its historical financial statements form the basis of the Company’s consolidated financial statements.

The Company distributes security cameras through e-commerce platforms across the United States, Canada, and Europe. Its product portfolio includes cameras designed for residential homes and small businesses, such as the YI dome guard, home camera, and outdoor camera.

The online stores on these e-commerce platforms in the aforementioned regions were owned by Ants, Xiaoyun, and Yishijue. Pursuant to the Authorization Agreements, these entities have authorized the Company to utilize their e-commerce platform accounts free of charge until October 20, 2026. The Authorization Agreements with Xiaoyun and Yishijue will continue until the existing inventory of the Company’s products has been sold, at which time the agreements will be terminated.

Xiaoyun and Yishijue are variable interest entities (VIEs), through contractual arrangements, holds effective control over their primary economic activities, assumes the associated risks and benefits from the economic rewards, making AMC Corporation the primary beneficiary. On December 1, 2025, AMAC Corporation terminated its contractual arrangements with Xiaoyun and Yishijue, which resulted in the loss of control over the VIE and, accordingly, the deconsolidation of the VIEs.

Recent Development and Future Objectives

Business Combination

AMC Corporation entered into the Business Combination Agreement with SPAC on August 16, 2024. In December 2025, the Company completed a business combination with AlphaVest Acquisition Corp. (the “Business Combination”), as a result of which AMC Corporation became a wholly owned subsidiary of AMC Robotics Corporation. The transaction was accounted for as a reverse recapitalization, with AMC Corporation deemed the accounting acquirer for financial reporting purposes.

Private Investment in Public Equity (“PIPE”) Financing

In connection with the Business Combination, the Company consummated a PIPE financing that generated gross proceeds of $8,000,000, which closed concurrently with the Business Combination. As part of the PIPE financing, the Company issued 2,240,000 PIPE warrants to investors.

Update of Revenue Stream

In 2025, the Company’s revenue composition changed, with a decrease in product sales and the introduction of a new revenue stream derived from a revenue-sharing arrangement with its related party, Kami Vision. Under this arrangement, the Company is entitled to 30% of the revenue generated from intelligent information services provided by Kami Vision.

Outlook of the business models

The Company intends to maintain its recurring revenue streams from existing product sales while gradually transitioning its business focus toward the development and deployment of autonomous robotic systems and intelligent security solutions. Management expects that this shift in business model will result in improved revenue margins and support the long-term growth and success of the Company’s operations.

Executive Summary of Financial Performance

The Company’s financial performance for the year ended December 31, 2025 reflects a fundamental shift in operating strategy and financial profile, transitioning from a revenue-driven model to a margin and efficiency driven model.

The 41% decline in revenue was primarily attributable to a deliberate reduction in lower-margin product sales and a contraction in e-commerce volume. While this decline reduced top-line growth, it was accompanied by a disproportionately larger reduction in cost of revenue (67%), indicating improved cost discipline and reduced exposure to inventory-related inefficiencies.

As a result, gross profit increased by approximately $2.2 million, and gross margin expanded significantly from 6% in 2024 to 48% in 2025. This margin expansion reflects a combination of (i) reduced inventory impairment, (ii) improved procurement and cost controls, and (iii) a higher contribution from revenue-sharing and service-based revenue streams.

Operating losses decreased by approximately $2.0 million, driven primarily by improved gross profitability and reduced discretionary spending, particularly in sales and marketing. Despite modest increases in general and administrative expenses associated with public company readiness, overall cost structure improved.

For the year ended December 31, 2025, the Company reported a net loss of $24,817,342, compared to a net loss of $776,960 for the year ended December 31, 2024. The increase in net loss was primarily attributable to a non-cash loss of $25,549,272 recognized from the change in fair value of the PIPE warrant liability. This loss resulted from the remeasurement of the warrant liability at fair value in accordance with ASC 815 and was significantly impacted by changes in the Company’s stock price and the contractual terms of the warrants, including reset and anti-dilution features that increased the number of underlying shares. Excluding the impact of this non-cash fair value adjustment, the Company’s operating results improved compared to the prior year, driven by higher gross margins and reduced operating losses.

Liquidity improved significantly, with cash increasing by approximately $6.6 million, primarily due to proceeds from the SPAC transaction and related financing activities. This enhanced liquidity enabled the Company to reduce outstanding obligations and improve its working capital position.

Overall, 2025 represents a transition year in which the Company prioritized profitability, cost efficiency, and balance sheet strength over revenue growth.

Results of Operations

The Company’s results of operations for 2025 were characterized by declining revenue but significantly improved profitability, driven by changes in revenue composition, cost structure, and operational discipline.

The most significant drivers of the year-over-year changes include:

• A shift away from inventory-intensive product sales toward higher-margin revenue-sharing arrangements
• A substantial reduction in inventory impairment and excess stock
• Improved cost alignment with revenue levels, particularly in logistics and marketing
• Continued reliance on related-party transactions as a key component of both revenue and profitability

These changes reflect a broader strategic repositioning of the Company toward a more sustainable and capital-efficient operating model.

Revenue

The decline in total revenue was primarily driven by a $5.1 million decrease in product revenue, reflecting reduced sales volume and a strategic decision to scale back lower-margin product lines. This reduction indicates a shift away from revenue generated through high inventory turnover toward a more selective and margin-focused sales approach.

Product revenue from related parties increased significantly, although it remains a relatively small component of total revenue. This increase reflects expanded transactions within affiliated entities and may indicate evolving commercial arrangements.

Revenue from related parties includes amounts derived from revenue-sharing arrangements associated with cloud services and intelligent information services, which were introduced in 2025. Revenue from these arrangements increased significantly during the period and became the largest contributor to total revenue. This shift reflects the Company’s increasing reliance on collaborative revenue models, which generally involve lower cost structures and reduced working capital requirements.

The introduction of intelligent information services in 2025 represents a strategic diversification into service-based revenue streams. Although this revenue stream is currently not material relative to total revenue, management expects it to provide higher margins and recurring revenue potential over the long term.

Overall, the change in revenue composition reflects a transition toward lower-volume but higher-quality revenue streams, which is consistent with the Company’s focus on improving profitability.

Cost of Revenue and Gross Profit

The $6.4 million reduction in cost of revenue significantly exceeded the decline in revenue, resulting in a substantial increase in gross profit and margin.

A key driver of this improvement was the reduction in inventory impairment losses, which declined from approximately $1.3 million in 2024 to approximately $0.16 million in 2025. This change reflects improved inventory management practices, including better alignment of procurement with demand and reduced exposure to obsolete inventory.

In addition, lower product sales volume resulted in reduced product cost, E-commerce platform expenses, and logistics and fulfillment costs were more effectively aligned with sales activity.

The resulting increase in gross margin from 6% to 48% reflects a structural improvement in the Company’s cost profile, driven by both operational efficiencies and a higher proportion of revenue from higher-margin activities.

This margin expansion is a critical indicator of improved business sustainability and profitability.

Operating Expenses

General and administrative expenses increased by approximately $0.5 million, primarily due to incremental costs associated with becoming a public company. These include audit fees, legal expenses, compliance costs, and corporate governance infrastructure. These costs are expected to remain elevated as the Company continues to operate as a public entity.

Sales and marketing expenses decreased significantly by approximately $1.4 million, reflecting a reduction in promotional activities and a more disciplined approach to customer acquisition. This decrease suggests improved efficiency in marketing spend and a strategic shift toward profitability rather than growth.

Research and development expenses declined as the Company reduced investment in new product development and focused on optimizing existing offerings. While this supports short-term cost control, it may impact long-term innovation.

The absence of the prior-year credit loss reversal of $1.3 million contributed to the increase in operating expenses on a comparative basis. Excluding this non-recurring item, operating expenses would have decreased year over year.

Overall, the Company demonstrated improved cost discipline, with operating expenses more closely aligned with revenue levels, contributing to a significant reduction in operating losses.

Other Income (Expense)

For the year ended December 31, 2025, total other income (loss) was a loss of $24,307,524, compared to total other income of $1,784,838 for the year ended December 31, 2024. The change was primarily attributable to the recognition of a non-cash loss of $25,549,272 from the change in fair value of the PIPE warrant liability, which is presented as a separate line item in other income (loss) in the current year. This loss arose from the remeasurement of the warrant liability at fair value in accordance with ASC 815 and was significantly impacted by changes in the Company’s stock price and the contractual terms of the warrants, including reset and anti-dilution features that increased the number of underlying shares.

Excluding the impact of the fair value adjustment on the warrant liability, other income remained relatively consistent period over period, primarily consisting of other income from related parties of $1,217,586 in 2025 compared to $1,779,528 in 2024, as well as other miscellaneous income and interest income. Interest expense was $24,616 for the year ended December 31, 2025, compared to $26,942 (including related party interest) for the prior year. The Company also recognized a nominal loss on deconsolidation of $5,310 in 2025.

Liquidity and Capital Resources

Liquidity Overview

As of December 31, 2025, the Company had cash and cash equivalents of approximately $7.0 million, compared to approximately $0.4 million as of December 31, 2024, representing an increase of approximately $6.6 million. This significant improvement in liquidity was primarily attributable to proceeds received from the Business Combination with AlphaVest Acquisition Corp. and related PIPE financing, as discussed in Note 1 – Organization and Nature of Business.

Working capital improved materially during 2025, driven by both increased cash balances and a reduction in outstanding liabilities, particularly related-party obligations (see Note 8 – Related Party Transactions). The Company used a portion of financing proceeds to settle historical payables and strengthen its balance sheet.

The Company’s liquidity position is influenced by several key factors:

• Operating performance, including gross margin and expense management
• Working capital dynamics, particularly receivables and payables involving related parties
• Access to external financing, including equity financing and capital markets transactions
• Inventory management, which affects cash tied up in operations

Despite achieving net income in 2025, the Company generated negative operating cash flows due to significant working capital outflows, primarily related to settlement of prior obligations and timing of related-party transactions.

Management believes that the Company’s current cash position, together with expected operating cash flows, will be sufficient to meet its working capital requirements and capital expenditure needs for at least the next twelve months. However, the Company’s future liquidity will depend on its ability to sustain profitability, manage working capital efficiently, and maintain access to capital markets if needed.

Cash Flow Analysis

Operating Activities

Net cash used in operating activities was approximately $5.5 million for the year ended December 31, 2025, compared to net cash provided by operating activities of approximately $0.6 million for the year ended December 31, 2024.

The Company reported a net loss of $24,817,342 for the year ended December 31, 2025, which was primarily attributable to a non-cash loss of $25,549,272 from the change in fair value of the PIPE warrant liability. This non-cash charge, recorded in accordance with ASC 815, did not impact operating cash flows and therefore is added back in the reconciliation from net loss to net cash used in operating activities.

Excluding the impact of this non-cash fair value adjustment, operating cash flows were primarily affected by changes in working capital, including the following:

• Reduction in accounts payable to related parties (~$8.5 million) This represents a significant use of cash and reflects the settlement of historical obligations. While this reduced liquidity in the current period, it strengthened the Company’s balance sheet and reduced future obligations.
• Increase in accounts receivable from related parties (~$1.9 million) This increase reflects timing differences between revenue recognition and cash collection, particularly for revenue-sharing arrangements. This represents a temporary use of cash and introduces credit and concentration risk.
• Decrease in inventory (~$2.5 million) This reduction provided a source of cash and reflects improved inventory management, reduced procurement, and lower exposure to excess stock.
• Changes in other working capital accounts, including prepaid expenses and accrued liabilities, which partially offset the above impacts.

Overall, the negative operating cash flow in 2025 should be viewed in the context of balance sheet restructuring and normalization of working capital, rather than deterioration in underlying operating performance.

Investing Activities

Net cash provided by investing activities was approximately $16,000 in 2025, compared to net cash used of approximately $0.2 million in 2024.

Investing activities primarily consisted of transactions related to promissory notes and other financial assets, including issuance, repayment, or collection of notes receivable. These transactions are not indicative of the Company’s core operating activities but reflect capital allocation decisions and financing arrangements.

The increase in cash provided by investing activities in 2025 suggests a net recovery or liquidation of financial assets, which contributed positively to liquidity.

The Company did not incur significant capital expenditures during the period, reflecting its asset-light business model.

Financing Activities

Net cash provided by financing activities was approximately $12.2 million in 2025, compared to net cash used of approximately $0.1 million in 2024.

The primary drivers of financing cash inflows in 2025 include:

• Proceeds from the SPAC trust account
• PIPE financing and equity issuances
• Capital contributions and recapitalization adjustments

These inflows significantly enhanced the Company’s liquidity and enabled:

• Repayment of related-party liabilities
• Strengthening of working capital
• Reduction of financial risk associated with prior obligations

In contrast, financing activities in 2024 were minimal and primarily consisted of small-scale debt repayments or related-party financing.

The Company’s reliance on equity financing in 2025 reflects its transition to a public company and reduced dependence on related-party funding.

Capital Resources

The Company’s capital resources consist primarily of cash generated from financing activities and, to a lesser extent, operating cash flows.

As of December 31, 2025, the Company had limited third-party debt obligations, resulting in minimal exposure to interest rate risk and no significant near-term debt maturities. Historically, the Company relied on related-party financing to support operations; however, this reliance has decreased significantly following the Business Combination.

The Company’s capital structure improved materially during 2025 as a result of:

• Increased equity capitalization
• Reduction of related-party liabilities
• Improved liquidity and working capital

The Company’s capital requirements are driven primarily by:

• Working capital needs (inventory, receivables, payables)
• Operating expenses, including public company costs
• Potential investments in product development and service expansion

Management expects that future capital requirements will be met through a combination of existing cash, operating cash flows, and, if necessary, additional financing.

The Company currently does not maintain a revolving credit facility or other committed borrowing arrangements. While this reduces financial leverage, it may limit flexibility in managing short-term liquidity needs.

Contractual Obligations and Commitments

The Company’s contractual obligations consist primarily of lease obligations, and other operating liabilities, as disclosed in Note 12 - Lease and Note 17 – Commitments and Contingencies.

Lease Obligations (ASC 842)

The Company has operating lease arrangements for office space and facilities. As of December 31, 2025, lease liabilities totaled approximately $110,000, representing future minimum lease payments. These obligations are relatively modest and do not represent a significant liquidity burden.

Purchase Commitments

The Company may enter into purchase commitments with suppliers in the normal course of business. These commitments are generally short-term in nature and are aligned with expected sales demand. The Company has reduced its reliance on large inventory purchases, thereby limiting exposure to long-term procurement commitments.

Related Party Obligations

Historically, the Company had significant obligations to related parties; however, during 2025, these obligations were substantially reduced through settlement using proceeds from financing activities (see Note 8). As a result, outstanding related-party obligations are no longer a significant component of contractual commitments.

Other Commitments and Contingencies

The Company may be subject to contingencies, including legal or contractual matters, in the ordinary course of business. Management does not believe that any such matters will have a material adverse effect on the Company’s financial position.

Overall Liquidity Assessment

The Company’s liquidity position improved significantly in 2025 as a result of financing activities and balance sheet restructuring. While operating cash flows were negative due to working capital adjustments, these outflows were largely non-recurring and associated with the settlement of prior obligations.

The Company’s current liquidity, combined with improved profitability and reduced leverage, provides a stronger financial foundation. However, future liquidity will depend on the Company’s ability to:

• Sustain positive operating performance
• Effectively manage working capital
• Maintain access to external financing, if needed

Management believes the Company is well-positioned to meet its near-term obligations and support its ongoing operations and strategic initiatives.

Critical Accounting Policies and Estimates

The preparation of the Company’s consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses, as well as related disclosures. These estimates are based on historical experience, current conditions, and various other assumptions that management believes are reasonable under the circumstances.

Because of the inherent uncertainty involved in making these estimates, actual results could differ materially from those estimates. The Company’s most critical accounting policies are those that involve significant judgment and have a material impact on the financial statements.

Revenue Recognition (ASC 606)

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers, when control of goods or services is transferred to customers in an amount that reflects the consideration to which the Company expects to be entitled.

A significant area of judgment involves determining whether the Company acts as a principal or an agent in its revenue arrangements, particularly in transactions involving:

• E-commerce platform sales
• Related-party revenue-sharing arrangements (see Note 8 – Related Party Transactions)

This assessment requires evaluation of factors such as control over goods or services, inventory risk, pricing discretion, and responsibility for fulfillment.

If the Company is determined to be the principal, revenue is recognized on a gross basis; if the Company is an agent, revenue is recognized on a net basis. Changes in this assessment could materially affect reported revenue and cost of revenue.

In addition, revenue-sharing arrangements require judgment in identifying performance obligations and determining the appropriate allocation of transaction price. Variability in contract terms or interpretation could impact the timing and amount of revenue recognized.

Inventory Valuation (ASC 330)

Inventory is stated at the lower of cost or net realizable value. Cost is determined using standard costing methods, which approximate actual costs.

The Company evaluates inventory for excess quantities, obsolescence, and slow-moving items. This evaluation requires significant judgment regarding:

• Forecasted demand
• Product lifecycle and technological obsolescence
• Pricing trends and competitive conditions

In 2024, the Company recorded significant inventory impairment charges due to excess and slow-moving inventory. In 2025, improved inventory management practices resulted in substantially lower impairment.

However, future changes in demand patterns, product innovation cycles, or market conditions could result in additional write-downs. Inventory valuation remains a highly sensitive estimate that directly impacts gross margin.

Allowance for Expected Credit Losses (ASC 326)

The Company accounts for expected credit losses under ASC 326, Current Expected Credit Losses (CECL). The allowance is estimated using a loss-rate methodology based on:

• Historical credit loss experience
• Current economic conditions
• Forward-looking information

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A significant portion of the Company’s accounts receivable is due from related parties (see Note 8), which introduces concentration risk.

Management evaluates collectability on an ongoing basis and considers factors such as:

• Financial condition of counterparties
• Payment history
• Contractual terms

Although historical losses have been limited, any deterioration in the financial condition of related parties or changes in business relationships could result in increased credit loss provisions.

Warranty Liabilities

The Company provides warranties on certain products and recognizes a liability for estimated warranty costs at the time of sale.

Warranty liabilities are estimated based on:

• Historical claim rates
• Product failure trends
• Estimated repair or replacement costs

These estimates require judgment and may be affected by changes in product design, manufacturing quality, or customer usage patterns. Actual warranty costs may differ from estimates, resulting in adjustments to warranty expense in future periods.

Variable Interest Entity (VIE) Consolidation (ASC 810)

The Company evaluates its involvement with variable interest entities in accordance with ASC 810, Consolidation. A VIE is consolidated if the Company is determined to be the primary beneficiary, which requires:

1. Power to direct the activities that most significantly impact the VIE’s economic performance, and

2. Exposure to potentially significant economic benefits or losses

This evaluation requires significant judgment, particularly in assessing contractual arrangements and decision-making authority.

Historically, the Company consolidated certain VIEs that held e-commerce platform accounts. In December 2025, the Company terminated the underlying contractual arrangements and deconsolidated these entities (see Note 1).

Changes in contractual arrangements, ownership structure, or operational control could result in future consolidation or deconsolidation events, which may materially impact the Company’s financial statements.

Related Party Transactions (ASC 850)

The Company engages in significant transactions with related parties, including revenue-sharing arrangements, product sourcing, and financing activities (see Note 8 – Related Party Transactions).

Accounting for related-party transactions requires judgment in determining:

• Appropriate revenue recognition treatment
• Classification of transactions
• Measurement and presentation

Because these transactions may not be conducted on an arm’s-length basis, there is an increased risk of misstatement if terms are not properly evaluated.

The Company monitors related-party balances and transactions to ensure proper recognition and disclosure.

Forward Purchase Agreement

Prior to the Business Combination, AlphaVest entered into a Forward Purchase Agreement (“FPA”) with Harraden Circle Investments and its affiliated entities (“Harraden”) to support post-closing liquidity and capital structure stability. Under this arrangement, Harraden agreed to acquire shares from existing shareholders at the redemption price and may subsequently sell such shares in the open market over a defined period.

At closing, the Company funded an aggregate prepayment of approximately $6.68 million to facilitate Harraden’s participation in the arrangement. The structure of the FPA allows Harraden to retain certain economic benefits from the resale of shares, subject to contractual pricing mechanisms, including volume-weighted average price and reset provisions. Importantly, Harraden is not required to return the full proceeds from share sales, and any unsold shares are expected to be returned to the Company at maturity.

During 2025, Harraden completed partial settlements and early terminations under the FPA, resulting in cash proceeds to the Company of approximately $4.3 million. As of December 31, 2025, a portion of the arrangement remains outstanding, with Harraden continuing to hold shares associated with the FPA.

From a liquidity perspective, the FPA provided near-term funding at the time of the Business Combination but also introduced variability in future cash flows due to its settlement mechanics and linkage to market prices. The remaining balance associated with the FPA is reflected as a reduction of stockholders’ equity, consistent with its financing nature and the Company’s assessment of the arrangement.

Management continues to monitor the impact of the FPA on the Company’s capital structure and liquidity, including potential future settlements, share returns, and market-related adjustments. While the arrangement supported the completion of the Business Combination, its complex terms and market-dependent outcomes may affect period-to-period comparability of equity and cash flows.

Income Taxes (ASC 740)

The Company accounts for income taxes under ASC 740, Income Taxes, which requires recognition of deferred tax assets and liabilities for temporary differences between financial reporting and tax bases.

Management evaluates the realizability of deferred tax assets, including net operating loss carryforwards, and establishes a valuation allowance when it is more likely than not that such assets will not be realized.

This assessment requires judgment regarding:

• Future taxable income
• Timing of reversals of temporary differences
• Tax planning strategies

Changes in these assumptions could result in adjustments to valuation allowances and income tax expense.

Sensitivity of Estimates and Judgments

The Company’s financial results are particularly sensitive to changes in estimates related to:

• Revenue recognition (principal vs. agent)
• Inventory valuation and impairment
• Collectability of related-party receivables
• VIE consolidation conclusions

A change in any of these assumptions could materially affect reported revenue, gross profit, net income, and financial position.

For example:

• A change in principal vs. agent conclusion could significantly alter reported revenue and cost of revenue
• A modest increase in inventory obsolescence assumptions could materially reduce gross margin
• Delays in collection of related-party receivables could increase credit loss provisions

Management continuously reviews these estimates and assumptions and adjusts them as necessary based on evolving business conditions.

Recently Issued Accounting Pronouncements

For a discussion of our new or recently adopted accounting pronouncements, see Note 2, Recent issued accounting pronouncements, to our consolidated financial statements included elsewhere in this annual report.

Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the consolidated financial statements and notes thereto included elsewhere in this annual report.

Non-GAAP Financial Measures

EBITDA is a non-GAAP financial measure defined as net income (loss) before interest expense, income taxes, depreciation, and amortization. The Company uses EBITDA as a supplemental measure to evaluate its operating performance and to facilitate period-to-period comparisons by excluding items that are not directly related to core operations.

Adjusted EBITDA is defined as EBITDA further adjusted to exclude non-cash and non-recurring items that management believes are not indicative of the Company’s core operating performance. For the year ended December 31, 2025, such adjustments primarily include the loss from the change in fair value of the PIPE warrant liability of $25,549,272 and the loss related to deconsolidation. The change in fair value of the PIPE warrant liability is a non-cash item arising from the remeasurement of derivative liabilities in accordance with ASC 815 and is significantly impacted by changes in the Company’s stock price and warrant terms, including reset features.

Management believes that EBITDA and Adjusted EBITDA provide useful supplemental information to investors regarding the Company’s operating performance; however, these measures have limitations and should not be considered in isolation or as a substitute for net income (loss) or other financial measures prepared in accordance with U.S. GAAP.

Off-Balance Sheet Arrangements

As of December 31, 2025, the Company does not have any material off-balance sheet arrangements as defined under Item 303 of Regulation S-K.

Historically, the Company utilized variable interest entities (VIEs) to conduct certain e-commerce operations. These VIEs were consolidated in prior periods; however, following the termination of contractual arrangements in December 2025, the Company deconsolidated these entities. As a result, the Company no longer has exposure to the assets, liabilities, or operations of these entities beyond any residual contractual relationships.

The Company does not have any material guarantees, retained interests in transferred assets, special purpose entities, or undisclosed commitments that would be considered off-balance sheet arrangements.

Management believes that the absence of significant off-balance sheet arrangements reduces the Company’s exposure to contingent liabilities and enhances transparency in its financial reporting.

Quantitative and Qualitative Disclosures About Market Risk

The Company is exposed to certain market risks in the normal course of business, including foreign currency risk, interest rate risk, and general economic risk.

Foreign Currency Risk

A portion of the Company’s transactions are denominated in currencies other than the U.S. dollar, particularly Renminbi (RMB). As a result, fluctuations in exchange rates may affect revenue, cost of revenue, and operating expenses when translated into U.S. dollars.

A strengthening of the U.S. dollar relative to foreign currencies may reduce reported revenue and margins, while a weakening of the U.S. dollar may have the opposite effect. The Company does not currently use derivative instruments to hedge foreign currency risk.

Interest Rate Risk

The Company’s exposure to interest rate risk is limited due to the absence of significant interest-bearing debt. Interest income is earned on cash balances, and changes in interest rates may affect the amount of interest income recognized. However, this exposure is not considered material.

Concentration Risk

The Company is exposed to concentration risk due to its reliance on related-party transactions for both revenue and procurement. Changes in the financial condition or operating performance of these related parties could materially affect the Company’s results.

Sensitivity Analysis

A hypothetical 10% change in foreign exchange rates would not have a material impact on the Company’s financial position based on current exposure levels; however, this may change as the Company expands its international operations.

Inflation and Economic Conditions

The Company’s operations are subject to the impact of inflation and broader economic conditions, which may affect both costs and demand.

Cost Impacts

Inflation may increase the cost of components, manufacturing, logistics, and labor. These cost increases may not be fully recoverable through price adjustments, particularly in a competitive market environment where pricing pressure is significant.

Demand Impacts

The Company’s products are generally considered discretionary consumer purchases. As a result, economic downturns, reduced consumer confidence, or higher interest rates may negatively impact demand for the Company’s products.

Supply Chain Considerations

Global supply chain conditions, including component availability and shipping costs, may also affect the Company’s ability to procure inventory and maintain margins.

The Company actively monitors these factors and seeks to mitigate their impact through pricing strategies, cost management initiatives, and supply chain optimization.

Conclusion

The Company’s results for the year ended December 31, 2025 reflect a significant transformation in its business model and financial profile.

While total revenue declined compared to the prior year, the Company achieved substantial improvements in gross margin and operating efficiency. This improvement was driven by a strategic shift away from lower-margin, inventory-intensive operations toward higher-margin revenue streams, including revenue-sharing arrangements and service-based offerings.

The Company also strengthened its liquidity position through the completion of the SPAC transaction and related financing activities, enabling it to reduce reliance on related-party financing and improve its overall capital structure.

Despite these improvements, the Company continues to face risks and uncertainties, including reliance on related-party transactions, exposure to e-commerce platform dynamics, and sensitivity to macroeconomic conditions. Future performance will depend on the Company’s ability to sustain margin improvements, diversify revenue streams, and manage working capital efficiently.

Management believes that the Company is well-positioned to pursue its strategic objectives, supported by improved financial flexibility, a more efficient operating model, and opportunities for growth in higher-margin service offerings.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Principal Executive Officer and Principal Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2025, as required by Rules 13a-15(b) and 15d-15(b) under the Securities Exchange Act of 1934, as amended. Disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to management, including our Principal Executive Officer and Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Based on this evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were not effective as of December 31, 2025 because of the material weaknesses in internal control over financial reporting described below.

Management’s Annual Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is a process designed by, or under the supervision of, our Principal Executive Officer and Principal Financial Officer and effected by our board of directors, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP.

Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2025 using the criteria set forth in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management concluded that our internal control over financial reporting was not effective as of December 31, 2025 because material weaknesses existed.

The material weaknesses that have been identified for AMC are as follows:

• Lack of Experienced Accounting Team — AMC lacks qualified in-house accounting staff and resources with adequate knowledge of U.S. GAAP. A third-party consulting firm has been engaged to prepare financial statements and footnote disclosures in accordance with U.S. GAAP.
• Lack of Duty Segregations — The Company separates the duties at certain areas, but there is only one person responsible for various functions of the Company, including processing payments and Human Resource functions. All other individuals involved in these processes are engaged through independent contractor roles.
• Lack of sufficient inventory management process and control system — AMC does not have a sufficient inventory management process or control system.
• Lack of proper approval for related party transactions — AMC lacks a formal approval process for related party transactions.

AMC also disclosed that, as a private company, it did not have an internal audit function, which contributed to the overall assessment of its control environment.

These material weaknesses could result in misstatements of account balances or disclosures that would not be prevented or detected on a timely basis. Accordingly, management concluded that the Company did not maintain effective internal control over financial reporting as of December 31, 2025.

Remediation Plan

We have begun to take, and intend to continue taking, steps to remediate the material weaknesses described above. Our remediation efforts include strengthening our finance and accounting function, enhancing review and approval procedures, formalizing policies and procedures, and improving the design and documentation of controls over financial reporting and related party transactions. However, the material weaknesses cannot be considered remediated until the applicable controls have been designed, implemented, operated for a sufficient period of time, and management has concluded, through testing, that such controls are operating effectively. This remediation process will require additional time and expense.

Changes in Internal Control over Financial Reporting

Except for the remediation efforts described above, there were no changes in our internal control over financial reporting during the quarter ended December 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Attestation Report of the Registered Public Accounting Firm

This Annual Report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting because we are an emerging growth company and a smaller reporting company, and therefore are exempt from the requirement to include such report.