# Powerus Corp: Form 10-Q for the period ended Jun 30, 2026

- Company: [Powerus Corp](/companies/pusa.md) (CIK 2009312)
- Form: 10-Q
- Filed: 2026-08-13
- Accepted by EDGAR: Aug 13, 2026, 17:28 ET
- Period: 2026-06-30
- Accession: 0001493152-26-037874
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/2009312/000149315226037874/form10-q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/2009312/000149315226037874/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2026-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2026-04-01 to 2026-06-30 | $708.5k | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 6 months, 2026-01-01 to 2026-06-30 | $2.2m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Operating income | 3 months, 2026-04-01 to 2026-06-30 | −$763.5k | us-gaap:OperatingIncomeLoss |
| Operating income | 6 months, 2026-01-01 to 2026-06-30 | −$2.2m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2026-04-01 to 2026-06-30 | −$76.0k | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 6 months, 2026-01-01 to 2026-06-30 | $15.1k | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2026-04-01 to 2026-06-30 | −$39.3k | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2026-01-01 to 2026-06-30 | −$1.3m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2026-04-01 to 2026-06-30 | −$0.00 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2026-01-01 to 2026-06-30 | −$0.03 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2026-04-01 to 2026-06-30 | −$0.00 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2026-01-01 to 2026-06-30 | −$0.03 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2026-04-01 to 2026-06-30 | 49,855,303 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months, 2026-01-01 to 2026-06-30 | 47,393,195 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months, 2026-01-01 to 2026-06-30 | $91.8k | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 6 months, 2026-01-01 to 2026-06-30 | $33.0k | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2026-06-30 | $22.2m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2026-06-30 | $43.1m | us-gaap:AssetsCurrent |
| Total assets | at 2026-06-30 | $48.1m | us-gaap:Assets |
| Current liabilities | at 2026-06-30 | $821.6k | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2026-06-30 | $1.5m | us-gaap:Liabilities |
| Shareholders' equity | at 2026-06-30 | $46.6m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 61,507 characters.

### Introductory Note

*Except as otherwise indicated by the context, references in this Quarterly Report on Form 10-Q (this “Form 10-Q”) to the “Company,” “we,” “us” or “our” are references to the combined business Aureus Greenway Holdings Inc. and its subsidiaries. The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) summarizes the significant factors affecting our results of operations, liquidity, capital resources and contractual obligations. The following discussion and analysis should be read in conjunction with the Company’s unaudited condensed consolidated financial statements and related notes included elsewhere herein.*

### General Overview of Operations

We own and operate two public golf country clubs in Florida that we acquired in 2014. Our golf country clubs include two golf-courses with over 13,000 yards of combined fairways, clubhouses boasting food and beverage options, aquatic golf ranges, and pro shops to assist any level of golfers. Our two golf country clubs are situated on over 289 acres of multi-service recreational property.

Each of our golf country clubs is organized into four revenue streams: (i) golf operations, (ii) sales of food and beverage; (iii) sales of merchandise; and (iv) ancillary income.

### Management’s Plans

Over the next twelve months, we plan to continue to promote, market, manage and operate our golf country clubs with the intent to (i) attract and retain customers across a number of demographic groups to further develop customer loyalty and capture a greater share of customers in the greater Orlando Florida region and (ii) increase revenue from managing and operating our golf country clubs.

We believe attracting and retaining customers while increasing customer engagement and loyalty by providing what we believe to be a high quality golfing experience will drive our revenue. Drivers of our revenue growth will require continued efforts in maintaining and improving upon the quality of our customers’ experiences at our golf country clubs. To that end, we have successfully completed the following major renovations during Q3 of 2025:

- Installing 19 brand new TiffEagle greens at Remington Golf Club;
- Extensively renovated the interior and exterior of the Clubhouse at Kissimmee Bay Country Club

### Key Factors Affecting our Results of Operations

a. Seasonality and weather

Our businesses are subject to seasonality and typically the first quarter of each year is our busiest season of the year. Then, even during our busy season, our business activities are affected by weather conditions. For the six months ended June 30, 2026, (i) we did not experience an unusual number of rainy days, and (ii) due to the fact that Remington was closed for renovation starting May 2025 and that in May and June 2026 Remington was in full operations, as a result our total revenue increased by 13% compared to the same period in 2025, driven by higher customer demand as well as higher prices across all revenue streams.

b. Cost of maintenance due to inflation

The DTE Agreement was renewed in November 2025 and the renewed contractual price has been fully reflected during the six months ended June 30, 2026. The 10% higher contractual price is a reflection of the inflationary environment that has subsequently negatively impacted the labor, fertilizer and chemical markets.

### Basis of Presentation

The financial statements and related disclosures have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The financial statements have been prepared using the accrual basis of accounting in accordance with Generally Accepted Accounting Principles (“GAAP”) of the United States. They include the financial statements of the Company and its subsidiaries. All transactions and balances among these entities have been eliminated upon consolidation.

The unaudited condensed consolidated financial statements do not include all the information and footnotes required by the U.S. GAAP for complete financial statements. Certain information and note disclosures normally included in the annual financial statements prepared in accordance with the U.S. GAAP have been condensed or omitted in accordance with SEC rules and regulations. In the opinion of the Company’s management, the unaudited condensed consolidated financial statements have been prepared on the same basis as the audited financial statements and include all adjustments, in normal recurring nature, as necessary for the fair statement of the Company’s financial position as of June 30, 2026, and results of operations and cash flows for the six months ended June 30, 2026 and 2025. The unaudited condensed consolidated balance sheet as of December 31, 2025 has been derived from the audited financial statements at that date but does not include all the information and footnotes required by the U.S. GAAP. Interim results of operations are not necessarily indicative of the results expected for the full fiscal year or for any future period. These financial statements should be read in conjunction with the audited consolidated financial statements as of and for the years ended December 31, 2025 and 2024, and related notes included in the Company’s audited consolidated financial statements.

### Critical Accounting Policies, Judgments and Estimates

We have identified certain accounting policies that are significant to the preparation of our Group’s financial information. Some of our accounting policies involve subjective assumptions and estimates, as well as complex judgements relating to accounting items. In each case, the determination of these items requires management judgements based on information and financial data that may change in future periods. When reviewing our financial statements, you should consider: (i) our selection of accounting policies; and (ii) the results to changes in conditions and assumptions. We set forth below those accounting policies that we believe are of critical importance to us or involve the most significant estimates and judgements used in the preparation of our Group’s financial statements.

### Accounts Receivable, net

Accounts receivable mainly represent amounts due from customers paid by credit cards for provision of golf operations services and sales of merchandise and food and beverages which are recorded net of allowance for expected credit losses. The credit cards payment is to be settled either within few days after the year end date due to the timing difference for the payment transfer from credit card center to the bank accounts of the Company or within one month after the services were utilized by the customers who have authorized the Company to make the payment through their credit cards. The Company reviews accounts receivable periodically for collectability and establishes an allowance for expected credit losses and records provision for allowance for expected credit losses expense when deemed necessary. The Company records an allowance for expected credit losses that is based on historical trends, customer knowledge, any known disputes, future expectation, future economic situation consideration and considers the aging of the accounts receivable balances combined with management’s estimate of future potential recoverability. Accounts receivable are written off against the allowance after all attempts to collect a receivable have failed. As of June 30, 2026 and December 31, 2025, the Company recognized $5,277 and $5,277 as an allowance for expected credit losses on accounts receivable, respectively.

### Investment in convertible note

The Company accounts for its investment in convertible note at amortized cost because the Company did not elect the fair value option under ASC 825. The carrying amount includes principal and accrued interest, less any allowance for expected credit losses under ASC 326. Interest income is recognized over the contractual term of the note using the effective interest method. The Company evaluates the note for expected credit losses at each reporting date based on historical experience, current conditions, and reasonable and supportable forecasts, including the issuer’s credit profile, repayment capacity, contractual terms, and other relevant information.

### Impairment for Long-Lived Assets

Long-lived assets, representing property and equipment with finite lives, are reviewed for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be recoverable. In evaluating long-lived assets for recoverability, the Company uses its best estimate of future cash flows expected to result from the use of the asset and eventual disposition in accordance with FASB ASC 360-10-15. To the extent that estimated future, undiscounted cash inflows attributable to the asset, less estimated future, undiscounted cash outflows, are less than the carrying amount, an impairment loss is recognized in an amount equal to the difference between the carrying value of such asset and its fair value. Assets to be disposed of and for which there is a committed plan of disposal, whether through sale or abandonment, are reported at the lower of carrying value or fair value less costs to sell. If an impairment is identified, The Company would reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable market values. As of June 30, 2026 and December 31, 2025, no impairment of long-lived assets was recognized.

### Leases

ASC 842 supersedes the lease requirements in ASC 840 “Leases”, and generally requires lessees to recognize operating and finance lease liabilities and corresponding right-of-use (“ROU”) assets on the balance sheet and to provide enhanced disclosures surrounding the amount, timing and uncertainty of cash flows arising from leasing arrangements. All leases in the Group as of June 30, 2026 and December 31, 2025 are accounted for as operating leases.

ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we generally use our incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option.

Any lease with a term of 12 months or less is considered short-term. As permitted by ASC 842, short-term leases are excluded from the ROU assets and lease liabilities on the consolidated balance sheets. Consistent with all other operating leases, short-term lease expense is recorded on a straight-line basis over the lease term.

The Company determines the present value of minimum future lease payments for operating leases by estimating a rate of interest that it would have to pay to borrow on a collateralized basis over a similar term, an amount equal to the lease payments and a similar economic environment (the “incremental borrowing rate” or “IBR”).The Company determines the appropriate IBR by identifying a reference rate and making adjustments that take into consideration financing options and certain lease-specific circumstances.

### Revenue Recognition

All revenue recognized in the consolidated statements of operations is considered to be revenue from contracts with customers in accordance with Accounting Standards Codification (“ASC”) 606 in a manner that reasonably reflects the delivery of its services and products to customers in return for expected consideration and includes the following elements:

- executed contracts with the Company’s customers that it believes are legally enforceable;
- identification of performance obligations in the respective contract;
- determination of the transaction price for each performance obligation in the respective contract;
- allocation the transaction price to each performance obligation; and
- recognition of revenue only when the Company satisfies each performance obligation.

35

The Company recognizes revenue when, or as, performance obligations under the terms of a contract are satisfied, which generally occurs when, or as, control of promised goods or services are transferred to customers. Revenue is measured as the amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services (“transaction price”). To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing the most likely amount to which the Company expects to be entitled. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. Estimates of variable consideration and the determination of whether to include such estimated amounts in the transaction price are based largely on an assessment of the Company’s anticipated performance and all information that is reasonably available. The Company accounts for taxes collected from customers and remitted to governmental authorities on a net basis and excludes these amounts from revenues.

In addition, the Company defers certain costs to fulfill the Company’s contracts with customers to the extent such costs relate directly to the contracts, are expected to generate resources that will be used to satisfy the Company’s performance obligations under the contracts, and are expected to be recovered through revenue generated under the contracts. Contract fulfillment costs are incurred as the Company satisfies the related performance obligations.

#### Revenue from golf operations

There are two types of service charges maintained by the Company, the players can either (1) subscribe to the entertainment services for a period of time of one year at a discount (i.e. annual subscription green fees); or (2) purchase the services at the counter by one-time payment (i.e. one-time green fees). The golf courses are open to public and hence our customers include both local and overseas citizens. The charges comprise of both the cart fee and fees for playing in the golf course, which is fixed without variable consideration, and the customers either pay via cash or credit card. The entire service fee from customers is non-refundable and required to be paid in advance.

The Company sells annual green fee subscriptions to local patrons. The performance obligation of the annual subscription is for the Company to provide a patron with access to the golf course and cart, subject to availability of a tee time for a patron to play a single round on the 18-hole course; the round of golf is expected to be completed before sunset of the day of the booking of that tee time. The Company recognizes revenue from these annual subscriptions on a monthly basis over twelve months. The annual subscriptions are non-refundable. Payments for subscriptions in the form of cash or credit card are received in advance, and are recorded as contract liabilities-deferred revenue, and recognized to revenue at the end of each month. Management believes that the services provided each month are substantially similar and result in the transfer of substantially similar services to the customers each month. That is, the benefit consumed by the customers is substantially similar for each month, even though the exact volume of services may vary. The Company concludes that the annual green fees subscription satisfies the requirements of ASC 606-10-25-14(b) to be accounted for as a single performance obligation. The annual subscriptions fees are fixed and there is no variable consideration, significant financing components or noncash consideration. There is no contract asset related to these annual green fee subscriptions. As of June 30, 2026 and December 31, 2025, the Company recorded contract liabilities - deferred revenue of $190,959 and $145,980, respectively.

One-time green fees require the Company to provide to a patron access to a designated 18-hole golf course and cart to play a single round of golf subject to non-hazardous weather conditions that is expected to be completed before sunset of the day of booking of that tee time. Management believes access to the golf course and the card constitute a single performance obligation as either service is not available to be purchased separately. Payments for tee times are non-refundable and are received via cash or credit card immediately prior to the initiation of the patron playing the round of 18-hole golf; therefore, and one-time green fees are not refundable. Typically, in the event that weather is not expected to permit the patron to play and complete the single round of golf, the Company will not undertake the transaction and take payment from the patron. The one-time green fees are fixed and there is no variable consideration.

#### Sales of merchandise, food and beverage

Golf course patrons regularly buy golf balls, clothing, paraphernalia, and gloves, or will enjoy food and beverage offered at the clubhouses. Patrons make orders at the counter. The price is fixed without variable consideration. The Company recognizes revenue when the merchandise or food and beverage are delivered, net of discounts, if any and control of the product has been passed to the customer. If the clothing or wearables have product defects, they are subject to exchange, but all sales are final and not subject to return. Product delivery is evidenced by a payment receipt record. Payments are settled via cash or credit card. The respective revenue is recognized at a point in time. There are no warranties, sales returns and refunds after the orders are delivered to the customers at the counter.

#### Ancillary revenue

Ancillary revenue represented the lease of its clubhouse for several hours for events held by associations or individuals such as golf tournaments and lease of golf club to individuals for one day playing golf in the Company’s golf course. The revenue was recognized upon services were rendered (i.e. on daily basis when the venue or golf club was used that day). Deposit was received in advance for booking of clubhouse and recognized as contract liabilities – deferred income upon receipt and recognized as revenue in the statements of income when service was rendered or no show after booking. Deposit received is non-refundable.

### Results of Operations

| Revenue | For the three months ended June 30, 2026 | 2025 | For the six months ended June 30, 2026 | 2025 |
| --- | ---: | ---: | ---: | ---: |
| Golf operations | $493,400 | $415,868 | $1,622,973 | $1,444,808 |
| Sales of food and beverage | 162,405 | 147,587 | 407,210 | 373,390 |
| Sales of merchandise | 28,368 | 20,904 | 86,656 | 65,408 |
| Ancillary revenue | 24,285 | 17,873 | 60,997 | 46,997 |
| **Total revenue** | 708,458 | 602,232 | 2,177,836 | 1,930,603 |
| **Operating costs:** |  |  |  |  |
| Golf operating costs (exclusive of depreciation and salaries and benefits shown separately below) | 381,023 | 326,232 | 776,831 | 649,491 |
| Cost of food and beverage sales (exclusive of depreciation and salaries and benefits shown separately below) | 47,434 | 59,162 | 114,906 | 125,044 |
| Cost of merchandise sales (exclusive of depreciation and salaries and benefits shown separately below) | 14,634 | 12,671 | 44,507 | 35,969 |
| Salaries and benefits | 266,603 | 248,953 | 1,582,778 | 522,940 |
| Depreciation | 63,836 | 52,013 | 127,586 | 102,797 |
| Other general and administration expenses | 698,397 | 329,704 | 1,753,683 | 567,828 |
| Total operating costs | 1,471,927 | 1,028,735 | 4,400,291 | 2,004,069 |
| **(Loss) income from operations** | (763,469) | (426,503) | (2,222,455) | (73,466) |
| **Other income (expense)** |  |  |  |  |
| Interest expense | - | - | - | (4,491) |
| Interest income from investment in convertible note | 498,630 |  | 547,945 | - |
| Other income | 149,613 | 83,724 | 390,420 | 145,719 |
| Total other income, net | 648,243 | 83,724 | 938,365 | 141,228 |
| **(Loss) income before income tax** | (115,226) | (342,779) | (1,284,090) | 67,762 |
| Income tax (benefits) expenses | (75,964) | (53,518) | 15,071 | 90,811 |
| **Net Loss** | **$(39,262)** | **$(289,261)** | **$(1,299,161)** | **$(23,049)** |

37

### Revenue

Revenues disaggregated by major revenue streams for the three months and six months ended June 30, 2026 and 2025 are disclosed in the table below:

| Golf operations | For the three months ended June 30, 2026 | 2025 | Changes $% |  | For the six months ended June 30, 2026 | 2025 | Changes $% |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| – annual membership dues | 72,573 | 111,052 | (38,479) | (35)% | $143,340 | $145,218 | $(1,878) | (1)% |
| – one-time green fees | 420,827 | 304,816 | 116,011 | 38% | 1,479,633 | 1,299,590 | 180,043 | 14% |
| Sales of food and beverage | 162,405 | 147,587 | 14,818 | 10% | 407,210 | 373,390 | 33,820 | 9% |
| Sales of merchandise | 28,368 | 20,904 | 7,464 | 36% | 86,656 | 65,408 | 21,248 | 32% |
| Ancillary revenue | 24,285 | 17,873 | 6,412 | 36% | 60,997 | 46,997 | 14,000 | 30% |
|  | 708,458 | 602,232 | 106,226 | 18% | $2,177,836 | $1,930,603 | $247,233 | 13% |

### Comparison for the six months ended June 30, 2026 and 2025

Our revenue is primarily comprised of golf operations, sales of food and beverage and sales of merchandise. Overall increase in revenue period over period by $247,233 or 13% was mainly due to the increase in one-time green fees, sales of food and beverage, sales of merchandise and ancillary revenue.

Revenue from golf operations increased by $178,165 or 12% from $1,444,808 for the six months ended June 30, 2025 to $1,622,973 for the six months ended June 30, 2026, which was driven by the increase in one-time green fees from golf operations by $180,043 or 14%.

Revenue from annual membership dues accounted for 7% and 8% of total revenue for the six months ended June 30, 2026 and 2025. It remained stable for the six months ended June 30, 2026 and 2025.

One-time green fees from golf operations accounted for 68% and 67% of total revenue for the six months ended June 30, 2026 and 2025, respectively. Increase in one-time green fees by 14% resulted from the increase in average price per round by 5% from $40 per round for the six months ended June 30, 2025 to $42 per round for the six months ended June 30, 2026 and the total number of rounds increased from approximately 32,000 rounds during the six months ended June 30, 2025 to approximately 35,000 rounds during the six months ended June 30, 2026. The increase in revenue was also due to one of our golf courses, Remington Golf Club, was closed for renovation since mid-May in 2025, in which the number of rounds for Remington Golf Club increased by 89% in the second quarter.

Increase in revenue from sales of food and beverage by $33,820 or 9% from $373,390 for the six months ended June 30, 2025 to $407,210 for the six months ended June 30, 2026, which was contributed by the increase in quantities sold by 8% from approximately 59,000 for the six months ended June 30, 2025 to approximately 64,000 for the six months ended June 30, 2026 and the average unit price remained stable at $6 per unit for the six months ended June 30, 2026 and 2025. The increase in quantity sold was in line with increase in golf operations.

Increase in revenue from sales of merchandise by $21,248 or 32% from $65,408 for the six months ended June 30, 2025 to $86,656 for the six months ended June 30, 2026, which was contributed by the increase in sales of golf balls, men’s wear, gloves and headwear by 32% as a result of the increase in sales to customers playing golf during the six months ended June 30, 2026.

Ancillary revenue mainly represented the equipment and facilities rental, including the lease of our clubhouse and lease of golf club to our customers. The increase by $14,000 or 30% was mainly due to the increase in demand for rental services for activities and events during the six months ended June 30, 2026.

### Comparison for the three months ended June 30, 2026 and 2025

Our revenue is primarily comprised of golf operations, sales of food and beverage and sales of merchandise. Overall increase in revenue period over period by $106,226 or 18% was mainly due to the increase in one-time green fees, sales of food and beverage, sales of merchandise and ancillary revenue.

Revenue from golf operations increased by $77,532 or 19% from $415,868 for the three months ended June 30, 2025 to $493,400 for the three months ended June 30, 2026, which was driven by the increase in one-time green fees from golf operations by $116,011 or 38% and offset by a decrease in annual membership dues from golf operations by $38,479 or 35%.

Revenue from annual membership dues accounted for 10% and 18% of total revenue for the three months ended June 30, 2026 and 2025. It decreased by $38,479 or 35% mainly due to the decrease in demand from customers who paid annual membership dues for the three months ended June 30, 2026.

One-time green fees from golf operations accounted for 59% and 51% of total revenue for the three months ended June 30, 2026 and 2025, respectively. Increase in one-time green fees by 38% resulted from the increase in total number of rounds by 30% from approximately 10,000 rounds during the three months ended June 30, 2025 to approximately 13,000 rounds during the three months ended June 30, 2026 and the average price per round increased from $30 per round for the three months ended June 30, 2025 to $32 per round for the three months ended June 30, 2026. The increase in revenue was also due to one of our golf courses, Remington Golf Club, was closed for renovation since mid-May in 2025, in which the number of rounds for Remington Golf Club increased by 89% in the second quarter.

Increase in revenue from sales of food and beverage by $14,818 or 10% from $147,587 for the three months ended June 30, 2025 to $162,405 for the three months ended June 30, 2026, which was contributed by the increase in quantities sold by 14% from approximately 22,000 for the three months ended June 30, 2025 to approximately 25,000 for the three months ended June 30, 2026, being offset by the decrease in average unit price by 14% from $7 per unit for the three months ended June 30, 2025 to $6 for the three months ended June 30, 2026. The increase in quantity sold was in line with increase in golf operations.

Increase in revenue from sales of merchandise by $7,464 or 36% from $20,904 for the three months ended June 30, 2025 to $28,368 for the three months ended June 30, 2026, which was contributed by the increase in sales of golf balls, men’s wear and gloves by 34% as a result of the increase in sales to customers playing golf during the three months ended June 30, 2026.

Ancillary revenue mainly represented the equipment and facilities rental, including the lease of our clubhouse and lease of golf club to our customers. The increase by $6,412 or 36% was mainly due to the increase in demand for rental services for activities and events during the three months ended June 30, 2026.

### Operating expenses

Operating expenses consisted of the following:

|  | For the three months ended June 30, 2026 | 2025 | Changes% |  | For the six months ended June 30, 2026 | 2025 | Changes% |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Golf operating costs(1) | 381,023 | 326,232 | 54,791 | 17% | $776,831 | $649,491 | $127,340 | 20% |
| Cost of food and beverage sales(1) | 47,434 | 59,162 | (11,728) | (20)% | 114,906 | 125,044 | (10,138) | (8)% |
| Cost of merchandise sales(1) | 14,634 | 12,671 | 1,963 | 15% | 44,507 | 35,969 | 8,538 | 24% |
| Salaries and benefits | 266,603 | 248,953 | 17,650 | 7% | 1,582,778 | 522,940 | 1,059,838 | 203% |
| Depreciation | 63,836 | 52,013 | 11,823 | 23% | 127,586 | 102,797 | 24,789 | 24% |
| Other general and administrative expenses | 698,397 | 329,704 | 368,693 | 112% | 1,753,683 | 567,828 | 1,185,855 | 209% |
|  | 1,471,927 | 1,028,735 | 443,192 | 43% | $4,400,291 | $2,004,069 | $2,396,222 | 120% |

(1) Exclusive of depreciation and salaries and benefits shown separately above.

### Comparison for the six months ended June 30, 2026 and 2025

The operating expenses of the Company mainly consist of costs related to golf operations, costs related to sales of food and beverage and merchandise, salaries and benefits, depreciation and other miscellaneous administrative expenses. The overall operating expenses increased from $2,004,069 for the six months ended June 30, 2025 to $4,400,291 for the six months ended June 30, 2026, which was primarily due to the increase in golf operating costs, salaries and benefits and other general and administrative expenses and during the current period with details discussed below.

Golf operating costs consisted of course upkeep expenses including the regular repair and maintenance of the golf courses and landscaping. Increase in golf operating expenses by $127,340 or 20% from $649,491 for the six months ended June 30, 2025 to $776,831 for the six months ended June 30, 2026 which was attributable to the contractual price for the maintenance contract with Down-to-Earth, which increased as a result of the contract renewal as well as an increase in operating lease costs due to leasing additional golf carts and equipment.

The decrease in cost of food and beverage by $10,138 or 8% from $125,044 for the six months ended June 30, 2025 to $114,906 for the six months ended June 30, 2026 was due to improved procurement pricing and operational efficiency.

Our cost of merchandise sales consisted of mainly the purchase cost of golf balls, men’s and ladies’ wears and gloves. Increase in cost of merchandise sales by $8,538 or 24% was in line with the increase in revenue from sales of merchandise.

Our salaries and benefits mainly consisted of the director’s remuneration, the staff costs and welfare of management team, operating team, cashier and administrative personnel. The increase in salaries and benefits by $1,059,838 or 203% was primarily due to the recognition of stock-based compensation of $996,000 in relation to the restricted stocks issued to directors as direct compensation for their services and the increase in directors fee and compensation paid to existing and former directors for services provided during the period, including transition and operational support services, by approximately $90,000.

Our depreciation is mainly derived from the recreational building, golf carts, pump stations and other operating equipment. The increase in depreciation was primarily attributable to the depreciation of significant capital additions made during 2025, including the installation of new greens and major clubhouse renovations.

Other general and administrative expenses mainly consisted of professional fees, repair and maintenance of restaurant machineries and equipment, utilities, liability insurance, personal property tax and real estate tax, credit card charges and other miscellaneous administrative expenses. Increase in other general and administrative expenses by $1,185,855 or 209% from $567,828 for the six months ended June 30, 2025 to $1,753,683 for the six months ended June 30, 2026 was mainly attributable to the recognition of stock-based compensation of $540,000 to the consultant of the Company as part of their compensation, the increase in legal, professional and consulting fees by approximately $318,000, travelling expenses by approximately $90,000, director’s and officer’s liability insurance by approximately $43,000 and advertising and marketing expenses by approximately $10,000.

### Comparison for the three months ended June 30, 2026 and 2025

The operating expenses of the Company mainly consist of costs related to golf operations, costs related to sales of food and beverage and merchandise, salaries and benefits, depreciation and other miscellaneous administrative expenses. The overall operating expenses increased from $1,028,735 for the three months ended June 30, 2025 to $1,471,927 for the three months ended June 30, 2026, which was primarily due to the increases in golf operating costs, salaries and benefits and other general and administrative expenses during the current period with details discussed below.

Golf operating costs consisted of course upkeep expenses including the regular repair and maintenance of the golf courses and landscaping. Increase in golf operating costs by $54,791 or 17% from $326,232 for the three months ended June 30, 2025 to $381,023 for the three months ended June 30, 2026 which was attributable to the contractual price for the maintenance contract with Down-to-Earth, which increased as a result of the contract renewal as well as an increase in operating lease costs due to leasing additional golf carts and equipment.

The decrease in cost of food and beverage by $11,728 or 20% from $59,162 for the three months ended June 30, 2025 to $47,434 for the three months ended June 30, 2026 was due to improved procurement pricing and operational efficiency.

Our cost of merchandise sales consisted of mainly the purchase cost of golf balls, men’s and ladies’ wears and gloves. Increase in cost of merchandise sales was in line with the increase in revenue from sales of merchandise.

Our salaries and benefits mainly consisted of the director’s remuneration, the staff costs and welfare of management team, operating team, cashier and administrative personnel. The increase in salaries and benefits by $17,650 or 7% was primarily due to the increase in directors fee and an increase in compensation paid to existing and former directors for services provided during the period, including transition and operational support services, by approximately $15,000.

Our depreciation is mainly derived from the recreational building, golf carts, pump stations and other operating equipment. The increase in depreciation was primarily attributable to the depreciation of significant capital additions made during 2025, including the installation of new greens and major clubhouse renovations.

Other general and administrative expenses mainly consisted of professional fees, repair and maintenance of restaurant machineries and equipment, utilities, liability insurance, personal property tax and real estate tax, credit card charges and other miscellaneous administrative expenses. Increase in other general and administrative expenses by $368,693 or 112% from $329,704 for the three months ended June 30, 2025 to $698,397 for the three months ended June 30, 2026 was mainly attributable to the increase in legal and professional fees by approximately $152,000, travelling expenses by approximately $14,000 and director’s and officer’s liability insurance by approximately $18,000.

### Comparison for the three and six months ended June 30, 2026 and 2025

### Other income (expense)

Other income (expense) mainly includes interest expenses regarding the bank and other borrowings incurred, bank interest income, dividend from money market accounts and additional service charges from customers who paid by credit cards. The increase in other income (expense) by $797,137 for the six months ended June 30, 2026 was mainly due to the increase in (i) interest income from investment in convertible note; (ii) dividend income generated from cash deposit in money market accounts; and (iii) bank interest income.

### Income tax expenses

The Company provides for income tax under ASC 740, “Income Taxes” under the asset and liability method of ASC 740, deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax basis of assets and liabilities and the tax rates in effect when these differences are expected to reverse. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations.

The components of the Company’s deferred tax asset and reconciliation of income taxes computed at the new federal statutory rate of 21% to the income tax amount recorded for the three and six months ended June 30, 2026 and 2025.

The Group evaluated the recoverable amounts of deferred tax assets to the extent that future taxable profits will be available against which the NOLs and temporary difference can be utilized.

As of June 30, 2026, the Company had $1,087,981 of net operating losses (“NOLs”) which can be carried forward indefinitely.

The NOLs carry forwards are subject to certain limitations due to the change in control of the Company pursuant to Internal Revenue Code Section 382.

The Company recorded income tax expenses of $15,071 and $90,811 for the six months ended June 30, 2026 and 2025, respectively.

Company recorded income tax benefits of $75,964 and $53,518 for the three months ended June 30, 2026 and 2025, respectively.

Please refer to Note 12 – Income Tax to the Unaudited Condensed Consolidated Financial Statements for more details.

### Net loss

Our net loss for the six months ended June 30, 2026 and 2025 was $1,299,161 and $23,049, respectively. The increase in net loss by $1,276,112 or 5,537% was mainly due to the increase in our operating costs was higher than the increase in our revenue and our other income during the six months ended June 30, 2026.

Our net loss for the three months ended June 30, 2026 and 2025, was $39,262 and $289,261, respectively. The decrease in net loss by $249,999 or 86% was driven primarily by $498,630 of interest income from investment in convertible note and higher other income, which more than offset by the increase in our operating costs during the three months ended June 30, 2026.

### Liquidity and Capital Resources

The following table sets forth a breakdown of our current assets and current liabilities as of dates indicated:

### Working Capital

The following table summarizes our cash and working capital as of June 30, 2026 and December 31, 2025:

| Current assets | June 30, 2026 | December 31, 2025 | Changes% |  |
| --- | ---: | ---: | ---: | ---: |
| Cash and cash equivalents | $22,200,258 | $28,668,169 | $(6,467,911) | (23)% |
| Accounts receivable – net | 68,029 | 44,751 | 23,278 | 52% |
| Investment in convertible note | 20,547,945 | - | 20,547,945 | 100% |
| Inventories, net | 31,361 | 34,415 | (3,054) | (9)% |
| Prepaid expenses | 203,770 | 314,602 | (110,832) | (35)% |
| Other current assets | 1,364 | 20,124 | (18,760) | (93)% |
| Total current assets | $43,052,727 | $29,082,061 | $13,970,666 | 48% |
| **Current liabilities** |  |  |  |  |
| Accounts payable, other payables and accrued liabilities | $412,262 | $688,927 | $(276,665) | (40)% |
| Contract liabilities – deferred revenue | 190,959 | 145,980 | 44,979 | 31% |
| Operating lease liabilities – current | 218,343 | 242,256 | (23,913) | (10)% |
| Due to related parties | - | 216,598 | (216,598) | (100)% |
| Total current liabilities | $821,564 | $1,293,761 | $(472,197) | (36)% |
| Net Working Capital | $42,231,163 | $27,788,300 | $14,442,863 | 52% |

42

### Accounts receivable

Accounts receivable mainly represent credit cards or cash deposits in transit, amounts due from customers paid by credit cards for provision of golf operations services and sales of merchandise and food and beverages which are recorded net of allowance for expected credit loss. Increase in balance was mainly due to the more customers who paid by credit cards near the period end.

### Investment in convertible note

On March 23, 2026, the Company received a convertible promissory note from Autonomous Power Corporation (the “Issuer”) with an original principal amount of $20,000,000. The investment in convertible note matures on March 23, 2027 and bears simple interest at a rate of 10% per annum. Interest is payable at maturity or upon earlier conversion, prepayment, or acceleration.

The Issuer may prepay the investment in convertible note at any time prior to maturity at an amount equal to the outstanding principal plus accrued interest and any other amounts due (the “Payment Amount”).

The investment in convertible note is not convertible at the holder’s option except upon the occurrence of an event of default. Upon an event of default, the holder may convert all or any portion of the Payment Amount into shares of the Issuer’s common stock at a fixed conversion price of $1,979 per share. If no event of default occurs, the investment in convertible note will be settled in cash at maturity.

The Company has not elected the fair value option under ASC 825 for this investment in convertible note. Accordingly, the investment in convertible note is measured at amortized cost, which equals the outstanding principal plus accrued but unpaid interest, less any allowance for expected credit losses as required under ASC 326. The Company evaluates the collectability of the investment in convertible note at each reporting period, considering historical information and current conditions. As of June 30, 2026, management has determined that no allowance for expected credit losses is necessary as no event of default has occurred, and the Issuer is expected to perform under the contractual terms. Interest income is recognized on an accrual basis using the effective interest method.

The conversion feature is contingent upon an event of default and is not exercisable by the holder absent such an event. As a result, separate derivative accounting under ASC 815 is not required unless and until the contingency is triggered.

As of June 30, 2026, the carrying amount of the investment in convertible note was $20,547,945. No event of default had occurred, and the Company has not triggered the conversion feature.

### Inventories

Our inventories consist of merchandise goods such as golf balls, gloves, men’s wear and women’s wears. The Company keeps low inventories since the turnaround time is short.

### Prepaid expenses

Prepaid expenses represent the prepayment for (i) the consultancy service of $256,250; (ii) the prepaid annual listing fee to Nasdaq of $44,890; and (iii) the director’s and officer’s liability insurance premium of $8,879. These prepaid amounts are recognized as expenses over the respective service periods as the related benefits are received.

On March 17, 2025, the Company entered into a Strategic Services Agreement with Cross Border Capital Limited (“CBCL”), a Hong Kong-based advisory firm, pursuant to which CBCL agreed to provide the Company with business development leads for the acquisition of golf properties in Asia, golf property management contracts, and strategic corporate relationships in China, Japan, South Korea, Taiwan, and Singapore, for a period of 36 months ending March 14, 2028. The total fee under the agreement is $450,000, all of which was paid during fiscal year 2025. The agreement also provides for a success fee equal to 10% of the total contract value or profits of any transaction completed in connection with CBCL’s services. The total amount in the contract will be amortized ratably to the service period since the services are expected to be provided evenly throughout the contract period. During the six months ended June 30, 2026, $75,000 of consultancy service fee was recognized in statement of operations and the remaining prepaid amount was recognized as prepaid expenses with current portion of $150,000 and non-current portion of $106,250.

Regarding the annual listing fee starting from February 12, 2026 with gross payment of $72,500 and prepaid obligation insurance for directors and officers starting from July 25, 2025 with gross payment of $129,994, the service contract has one year term and the prepaid amount was amortized throughout the contract period starting from the date of contract and the amortization costs were recognized as other general and administration expenses while the remaining balance amounting to $53,769 in aggregate was recognized as current portion of prepaid expenses.

### Accounts payable, other payables and accrued liabilities

Accounts payable and accrued liabilities represented the payable to the vendors for the course upkeep costs, credit cards charge payables, sales tax payables and property tax payable. Decrease in accounts payable and accrued liabilities balance by $276,665 or 40% from $688,927 as of December 31, 2025 to $412,262 as of June 30, 2026 was mainly due to the decrease in accrued expenses by approximately $88,000, decrease in accrued salaries of approximately $60,000, decrease in property tax payable by approximately $52,000 and decrease in accounts payable of approximately $43,000 during the current period.

### Contract liabilities – deferred revenue

Contract liabilities – deferred revenue represented the annual membership dues received in advance before the usage of golf course by the customers. The increase in this balance by $44,979 or 31% was mainly due to the annual membership dues being received in advance outweighed the revenue recognized during the six months ended June 30, 2026.

### Operating lease liabilities

The operating leases liabilities represented the leases for golf cars and golf equipment for terms of four to five years. The operating leases – current remained stable at $218,343 and $242,256 as of June 30, 2026 and December 31, 2025, respectively.

### Amounts due to related parties

Amounts due to related parties consist of the following:

| Name | Relationship | Nature | June 30, 2026 | December 31, 2025 |
| --- | --- | --- | ---: | ---: |
| Mr. Cheung Ching Ping\* | Shareholder and former Director of the Company | Director’s remuneration(1) | - | 100,000 |
| Mr. Cheung Ching Ping\* | Shareholder and former Director of the Company | Payment of operating costs on behalf of the Company | - | 12,789 |
| Mr. Cheung Chi Ping\*\* | Shareholder and former Director of the Company | Director’s remunerations(2) | - | 100,000 |
| Mr. Cheung Chi Ping\*\* | Shareholder and former Director of the Company | Repayment of borrowings on behalf of the Company | - | 3,809 |
|  |  |  | $- | $216,598 |

\*On January 28, 2026, Mr. Cheung Ching Ping resigned as Chairman of the Board and a Director of the Board, effective as of January 29, 2026.

\*\* On January 28, 2026, Mr. Cheung Chi Ping resigned as a Director of the Board, effective as of January 29, 2026.

Notes:

(1) For the six months ended June 30, 2026 and 2025, the Company charged $75,000 and $30,000, respectively, as director’s remuneration/ salaries to Mr. Cheung Ching Ping and recognized under salaries and benefits on the statements of operations. The balance is interest-free, unsecured and repayable on demand. As of December 31, 2025, the director’s remuneration payable to Mr. Cheung Ching Ping of $100,000 was fully settled in January 2026.

(2) For the sake of compensating Mr. Cheung Chi Ping’s involvement in the daily operations and management of golf operations of the Company, director’s remuneration/ salaries was granted by the Company every year based on the performance of the Company. For the six months ended June 30, 2026 and 2025, the Company charged $75,000 and $30,000, respectively, as director’s remuneration/ salaries to Mr. Cheung Chi Ping and recognized under salaries and benefits on the statements of operations. The balance is interest-free, unsecured and repayable on demand. As of December 31, 2025, the director’s remuneration payable to Mr. Cheung Chi Ping of $100,000 was fully settled in January 2026.

### Cash Flows

The following table summarizes our cash flows from operating, investing and financing activities:

|  | For the six months ended June 30, 2026 | 2025 | Changes |
| --- | ---: | ---: | ---: |
| Cash provided (used in) by Operating Activities | $91,804 | $(337,364) | $429,168 |
| Cash used in Investing Activities | $(20,033,040) | $(448,740) | $(19,584,300) |
| Cash provided by Financing Activities | $13,473,325 | $7,954,375 | $5,518,950 |
| Net change in cash and cash equivalents | $(6,467,911) | $7,168,271 | $(13,636,182) |

### Cash Flow from Operating Activities

During the six months ended June 30, 2026, our net cash provided by operating activities was approximately $91,804, primarily arising from net loss of $1,299,161, and adjusted for non-cash items and changes in operating assets and liabilities. Adjustment for non-cash item mainly consisted of depreciation of $127,586, stock-based compensation of $1,536,000, interest income receivable from investment in convertible note of $547,945 and gain on disposal of club memberships of $2,502. Changes in operating assets and liabilities mainly include (i) a decrease in prepaid expenses of $495,905 mainly due to the disposal of three club membership with carrying amount of $378,834; (ii) a decrease in accounts payable, other payables and accrued liabilities of $276,665 due to decrease in accrued expenses and property tax payable; (iii) a decrease in deferred tax assets of $20,932; and (iv) an increase in contract liabilities of $44,979 due to the annual membership dues being received in advance outweighed the revenue recognized during the six months ended June 30, 2026.

During the six months ended June 30, 2025, our net cash used in operating activities was approximately $337,364, primarily arising from net loss of $23,049, and adjusted for non-cash items and changes in operating assets and liabilities. Adjustment for non-cash items mainly consisted of depreciation of $102,797 and unpaid director’s remuneration of $60,000. Changes in operating assets and liabilities mainly include (i) an increase in prepaid expenses of $490,560 due to the prepaid consultancy fee, prepaid annual listing fee to Nasdaq and prepaid director’s and officer’s liability insurance premium during the current period as mentioned above; (ii) a decrease in accounts payable and accrued liabilities of $64,846 due to the decrease in property tax payable by approximately $52,000; and (iii) a decrease in deferred tax assets of $95,059 due to the utilization of NOLs in the current period.

### Cash Flows from Investing Activities

During the six months ended June 30, 2026, cash flows used in investing activities were mainly for the investment in convertible note of $20,000,000 and purchase of property and equipment of $33,040 for the building improvements.

During the six months ended June 30, 2025, cash flows used in investing activities were for the purchase of property and equipment and advances for property of $330,816 and $124,702, respectively. The purchase and payment for acquisition of property and equipment was due to payments for the renovation and upgrading of our golf courses, clubhouse and facilities, greens renovation and roof replacement.

### Cash Flows from Financing Activities

During the six months ended June 30, 2026, cash provided by financing activities was the result of net proceeds from issue of common stocks and pre-funded warrants of $8,073,933, proceeds from the exercise of pre-funded warrants, common A warrants and placing agent warrants of $5,615,990, and was partially offset by net repayments of related party loans of $216,598.

During the six months ended June 30, 2025, cash provided by financing activities was the result of net proceeds from issue of common stocks of $10,654,093 and partially offset by net repayments of related party loans of $2,336,160, repayments of bank and other borrowings of $192,378 and payment of deferred offering costs of $171,180 during the period right before the successful listing.

### Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

### Capital Expenditures

We incurred capital expenditures of $33,040 and $455,518 for the six months ended June 30, 2026 and 2025, respectively, which mainly related to the clubhouse improvements and purchase of pump station, respectively.

### Contractual Obligations

### Lease Agreements

The Company has eight leases classified as right of use operating leases for golf cars and golf equipment.

Future minimum lease payments under operating leases at June 30, 2026 were as follows:

| Year ending December 31, | Total |
| --- | ---: |
| 2026 (excluding six months ended June 30, 2026) | $132,057 |
| 2027 | 247,495 |
| 2028 | 247,495 |
| 2029 | 193,535 |
| 2030 | 63,250 |
|  | $883,832 |
| Less imputed interest | (80,411) |
| Operating lease liabilities | $803,421 |

46

Future minimum lease payments under operating leases as of December 31, 2025 were as follows:

| Year ending December 31, | Total |
| --- | ---: |
| 2026 | $285,740 |
| 2027 | 247,495 |
| 2028 | 247,495 |
| 2029 | 193,535 |
| 2030 | 63,250 |
|  | $1,037,515 |
| Less imputed interest | (103,737) |
| Operating lease liabilities | $933,778 |

### Cash Flow Sufficiency

In order to meet the debt obligations and operating needs of our business, our management expects to satisfy the cash flow needs and through (i) closely monitoring the collection status of accounts receivable and actively following up with our customers for settlements; (ii) diversifying and broadening our customer base to avoid reliance on particular customers and to expand our sources of revenue and cash flow; (iii) effectively managing accounts payable and negotiating for longer credit periods from suppliers, when necessary; and (iv) continuing to focusing on improving operational efficiency and cost reductions and enhancing efficiency.

The Company successfully raised a total net proceed of $10.65 million, after deducting underwriting discounts and commission and other offering expenses, from its initial public offering on February 13, 2025.

On July 23, 2025, the Company has entered into definitive securities purchase agreements with accredited and institutional investors for the issuance and sale of units consisting of common stock (each a share of “Common Stock”) (or pre-funded warrants (“Pre-funded Warrants”) to purchase in lieu thereof) together with common A warrants and common B warrants (each of the common A and common B warrants a “Common Warrant”) to purchase the same number of shares of common stock (or Pre-funded Warrants) of the Company at a price of $0.87 per unit, on a brokered private placement basis, for aggregate net proceeds of approximately $23.52 million, after deducting fees and offering expenses.

As of June 30, 2026, the Company held $22.2 million cash and cash equivalents and $20.5 million investment in convertible note. This investment in convertible note is not a cash equivalent. It matures on March 23, 2027, bears interest at 10% per annum, and is not convertible at the holder’s option unless an event of default occurs. Accordingly, the note does not contribute to the Company’s short-term liquidity for working capital or operating needs. Management expects the note to be settled in cash at maturity (or earlier prepayment) and does not rely on it to fund ongoing operations.

Taking into consideration the successful IPO listing on the Nasdaq Capital Market in February 2025, the private placement in July 2025, the Company’s existing cash and cash equivalents of $22.2 million, expected cash flows from operations, and the measures described above, management believes that the Company has sufficient liquidity to meet its anticipated cash needs for at least the next twelve months from the date of this report. The investment in convertible note does not impair liquidity, as it is separate from the Company’s cash resources and will not require any cash outlay by the Company prior to its maturity.

### Material Weaknesses

During the six months ended June 30, 2026, management identified material weaknesses in the Company ‘s internal control over financial reporting related to (i) inadequate segregation of duties for certain key functions due to limited staff and resources; and (ii) a lack of sufficient financial reporting and accounting personnel with appropriate knowledge of U.S. GAAP and SEC reporting requirements to formalize key controls over financial reporting. As of June 30, 2026, these material weaknesses had not been fully remediated. The Company intends to implement measures designed to improve its internal control over financial reporting, including hiring additional qualified accounting and financial reporting personnel and enhancing the formal documentation of polices and controls.

### Quantitative and Qualitative Disclosure About Market Risk

### Credit Risk

The Company’s principal financial assets are cash and cash equivalents, accounts and other receivables. The Company’s credit risk is primarily concentrated in its cash which is held with institutions with a high credit worthiness. The Company has not experienced losses on their accounts and management believes, based upon the quality of the financial institutions, that the credit risk with regard to these deposits is not significant.

Management believes that the Company is not exposed to any significant credit risk with respect to its cash.

The Company mitigates its credit risk on receivables by actively managing and monitoring its receivables. The Company mitigates credit risk by evaluating the creditworthiness of customers prior to conducting business with them and monitoring its exposure for credit losses with existing customers. Since all accounts receivable as at June 30, 2026 and December 31, 2025 are aged within one year and collected all receivables subsequent to year end, minimum credit risk was noted for accounts receivable.

### Vendor concentration risk

As of June 30, 2026 and December 31, 2025, the Company owed 95% and 87% of accounts payable to a key supplier, respectively.

For the six months ended June 30, 2026 and 2025, one vendor accounted for 14% and 26% of our total operating costs, respectively. No other vendor accounts for more than 10% of our total operating costs for the six months ended June 30, 2026 and 2025, respectively.

For the three months ended June 30, 2026 and 2025, one vendor accounted for 19% and 25% of our total operating costs, respectively. No other vendor accounts for more than 10% of our total operating costs for the three months ended June 30, 2026 and 2025, respectively.

### Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is not exposed to interest rate risk as its financial liabilities carry interest at fixed rates.

The Company is not materially exposed to interest rate risk on the investment in convertible note because the note is measured at amortized cost, not fair value. Changes in market interest rates do not affect the carrying amount or interest income recognized, provided no impairment occurs. Additionally, the fixed 10% rate is locked in until maturity, and the Company intends to hold the note to maturity.

### Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.

Typically, the Company ensures that it has sufficient cash on demand to meet expected operational expenses for a period of twelve months, including through operations and financial support from our stockholders and financial institutions. We are continuing to focus on improving operational efficiency and cost reductions and enhancing efficiency, as well as servicing of financial obligations: this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters. Management believes that the Company’s existing cash and cash equivalents, together with cash flows from operations, are sufficient to meet its liquidity needs for the next twelve months, and the Company does not have any going concern uncertainties.

### Market Risk

Market risk is the risk of loss arising from adverse changes in market rates and prices. Our market risk exposure is generally limited to those risks that arise in the normal course of business, as we do not engage in speculative, non-operating transactions, nor do we utilize financial instruments or derivative instruments for trading purposes.

## Market risk

As filed, 209 characters.

As a smaller reporting company as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Company is not required to provide the information required by this item.

## Controls and procedures

As filed, 2,808 characters.

### Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Interim Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act at the end of the period covered by this quarterly report.

Based on this evaluation, the Interim Chief Executive Officer and Chief Financial Officer concluded that, as of end of the period covered by this Quarterly Report, our disclosure controls and procedures (as defined in § 240.13a-15(e) or 240.15d-15(e) of Regulation S-K) were effective to provide reasonable assurance that the information required to be disclosed by us in the reports 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 (i) is accumulated and communicated to management, including our Interim Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures and (ii) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

We recognize that any controls system, no matter how well designed and operated, can provide only reasonable assurance of achieving its objectives, and our management necessarily applies its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

### Internal Control over Financial Reporting

As disclosed in Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations, management has identified material weaknesses in our internal control over financial reporting as of June 30, 2026, related to (i) inadequate segregation of duties for certain key functions due to limited staff and resources, and (ii) a lack of sufficient financial reporting and accounting personnel with appropriate knowledge of U.S. GAAP and SEC reporting requirements to formalize key controls over financial reporting. As of June 30, 2026, these material weaknesses had not been fully remediated. The Company intends to implement measures designed to improve its internal control over financial reporting, including hiring additional qualified accounting and financial reporting personnel and enhancing the formal documentation of policies and controls.

### Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the period covered by this Quarterly Report that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act).

Filed Aug 13, 2026.
Source: SEC EDGAR, the filing index for accession 0001493152-26-037874. Last ingested by Listed: Nov 5, 2026, 20:40 ET. No prices; not investment advice.