AMC Robotics Corp: Form 10-Q for the period ended Jun 30, 2026

References to the “Company,” “our,” “us,” or “we” refer to AMC Robotics Corporation. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the accompanying unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q. The discussion below contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from those anticipated in these forward-looking statements due to various factors, including those discussed under “Risk Factors” in our Annual Report on Form 10-K and other filings with the Securities and Exchange Commission.

Overview

Our Company and our Business Overview

AMC Robotics Corporation became a publicly traded company upon the completion of its business combination with AlphaVest Acquisition Corp. on December 9, 2025. The transaction was accounted for as a reverse recapitalization, with AMC Corporation deemed the accounting acquirer. Accordingly, the historical financial statements of AMC Corporation became those of the combined company.

The Company primarily distributes intelligent security camera products through e-commerce platforms serving customers in the United States, Canada, and Europe. In addition to product sales, the Company generates recurring revenue through cloud-based intelligent information services, artificial intelligence service-sharing arrangements, intelligent information services, and revenue-sharing arrangements with strategic business partners. During 2026, the Company continued to expand its emphasis on higher-margin service-based revenue while maintaining a more disciplined approach to inventory management and operating expenses.

Prior to December 2025, certain e-commerce platform accounts were operated through contractual arrangements with third-party entities, including Ants, Xiaoyun, and Yishijue. Effective December 1, 2025, the Company terminated the contractual arrangements with Xiaoyun and Yishijue and deconsolidated those variable interest entities (“VIEs”). Since that time, the Company has conducted its operations without reliance on VIE structures. Limited transitional transactions associated with certain former VIE marketplace accounts continued during 2026 and were accounted for as related-party transactions.

Recent Development and Future Objectives

Business Combination

In December 2025, the Company completed its business combination with AlphaVest Acquisition Corp., pursuant to which AMC Corporation became a wholly owned subsidiary of AMC Robotics Corporation. The transaction significantly strengthened the Company’s capital structure and provided access to the public capital markets.

Private Investment in Public Equity Financing

Concurrently with the Business Combination, the Company completed a private investment in public equity (“PIPE”) financing that generated gross proceeds of approximately $8.0 million. The financing enhanced the Company’s liquidity and financial flexibility to support working capital requirements, strategic initiatives, and future growth opportunities.

Strategic Investment

During the second quarter of 2026, the Company invested an aggregate of $1.0 million in Etronium AI Inc. through two Simple Agreements for Future Equity (“SAFEs”). The investment reflects management’s strategy of pursuing opportunities in artificial intelligence technologies that may complement the Company’s long-term robotics and intelligent security solutions. The investment is accounted for as a long-term investment under the applicable provisions of U.S. GAAP.

Revenue Strategy

The Company’s revenue mix has continued to evolve from traditional product sales toward higher-margin recurring revenue generated through cloud-based intelligent information services, artificial intelligence service offerings, and revenue-sharing arrangements with strategic partners, including Kami Vision Inc. Management believes this transition reduces working capital requirements associated with inventory-intensive product sales while supporting improved gross margins and more predictable recurring revenue.

During the six months ended June 30, 2026, the Company continued to generate a significant portion of its revenue from cloud-service revenue sharing, AI service sharing, and intelligent information service arrangements with Kami. The Company also continued to generate product revenue through sales to related and unrelated customers.

Business Outlook

Management remains focused on expanding the Company’s intelligent security and robotics business while continuing to improve operating efficiency and profitability. Key strategic priorities include:

• expanding recurring service-based revenue and artificial intelligence solutions;
• strengthening strategic relationships with technology partners;
• maintaining disciplined inventory and working capital management;
• pursuing selective investments that complement the Company’s long-term growth strategy; and
• evaluating additional financing and strategic opportunities that enhance shareholder value.

The Company may evaluate financing alternatives from time to time to support its working capital requirements, strategic investments, and long-term growth objectives. There can be no assurance that additional financing will be available on acceptable terms or at all.

While management believes the Company is well positioned to execute its long-term strategy, future operating results will continue to depend on customer demand, technological innovation, competitive market conditions, the successful execution of strategic initiatives, and general economic conditions.

Executive Summary of Financial Performance

The Company’s financial performance during the three and six months ended June 30, 2026 reflected a continued shift toward higher-margin revenue streams and improved operating efficiency. Although total revenues declined compared with the corresponding periods in 2025, gross profit increased significantly as a result of a more favorable revenue mix and substantially lower product-related costs.

For the three months ended June 30, 2026, total revenues decreased by $460,098, or 33%, to $937,177, compared with $1,397,275 for the corresponding period in 2025. The decrease was primarily attributable to lower product revenue, partially offset by an increase in revenue share and other service-based revenue included within revenue share.

Cost of revenues decreased by $944,124, or 83%, to $186,570, compared with $1,130,694 for the corresponding period in 2025. The decrease primarily reflected lower product costs, e-commerce platform expenses, delivery and freight costs, and inventory impairment losses associated with the reduction in product sales.

As a result, gross profit increased by $484,026, or 182%, to $750,607, compared with $266,581 for the prior-year period. Gross margin increased to approximately 80% for the three months ended June 30, 2026, from approximately 19% for the corresponding period in 2025. The improvement was primarily attributable to a greater contribution from higher-margin revenue-sharing and service-based activities and lower product-related costs.

The Company reported a loss from operations of $156,500 for the three months ended June 30, 2026, compared with a loss from operations of $735,036 for the corresponding period in 2025, representing an improvement of $578,536. The improvement was primarily attributable to increased gross profit and lower sales and marketing expenses, partially offset by higher general and administrative expenses.

The Company reported a net loss of $175,730 for the three months ended June 30, 2026, compared with a net loss of $228,913 for the corresponding period in 2025, representing an improvement of $53,183. The current-year period included an income tax benefit of approximately $1,655, compared with income tax expense of approximately $1,751 in the prior-year period. The improvement in operating results was partially offset by total other expense, net, of $20,885 during the current-year quarter, compared with total other income, net, of $507,874 during the prior-year quarter. The prior-year quarter included $533,688 of other income from a related party.

For the six months ended June 30, 2026, total revenues decreased by $1,068,007, or 33%, to $2,121,793, compared with $3,189,800 for the corresponding period in 2025. The decrease was primarily attributable to lower product revenue, partially offset by increased revenue share and service-based revenue.

Cost of revenues decreased by $2,084,358, or 86%, to $350,530, compared with $2,434,888 for the corresponding period in 2025. Consequently, gross profit increased by $1,016,351, or 135%, to $1,771,263, compared with $754,912 in the prior-year period. Gross margin increased to approximately 83% for the six months ended June 30, 2026, from approximately 24% for the corresponding period in 2025.

The Company reported a loss from operations of $27,961 for the six months ended June 30, 2026, compared with a loss from operations of $1,482,788 for the corresponding period in 2025, representing an improvement of $1,454,827. The improvement primarily reflected increased gross profit and significantly lower sales and marketing expenses, partially offset by higher general and administrative and research and development expenses.

The Company reported a net loss of $30,129 for the six months ended June 30, 2026, compared with a net loss of $306,090 for the corresponding period in 2025, representing an improvement of $275,961. Total other expense, net, was $1,724 for the first six months of 2026, compared with total other income, net, of $1,182,772 for the corresponding period in 2025. The prior-year period included $1,217,586 of other income from a related party. The Company recorded income tax expense of approximately $444 and $6,074 for the six months ended June 30, 2026 and 2025, respectively.

During the second quarter of 2026, the Company invested an aggregate of $1.0 million in Etronium AI Inc. through two Simple Agreements for Future Equity. The investment supports the Company’s long-term strategy of pursuing artificial intelligence technologies that may complement its robotics and intelligent security solutions.

Overall, the results for the first six months of 2026 reflected significantly improved gross margins, reduced sales and marketing expenditures, and a substantial reduction in operating loss, despite lower total revenues.

Revision of Previously Issued Financial Statements

During the preparation of the Company’s unaudited condensed consolidated financial statements for the three months ended March 31, 2026, management identified certain immaterial errors in the Company’s previously issued consolidated financial statements as of and for the year ended December 31, 2025. The errors primarily related to the omission of accrued professional service fees.

Management evaluated the errors in accordance with applicable accounting guidance and concluded that they were not material, individually or in the aggregate, to the Company’s previously issued consolidated financial statements as of and for the year ended December 31, 2025. Accordingly, an amendment or restatement of those financial statements was not required.

Management also concluded that correcting the errors entirely in the three months ended March 31, 2026 would have materially misstated the Company’s results of operations for that interim period. Therefore, the Company revised the December 31, 2025 comparative balance sheet included in the unaudited condensed consolidated financial statements to reflect the correction of the immaterial prior-period errors.

The revisions increased accrued expenses and other current liabilities and accumulated deficit by approximately $109,000 as of December 31, 2025. The revisions had no effect on the Company’s cash flows for the year ended December 31, 2025.

Results of Operations

The Company’s results of operations for the three and six months ended June 30, 2026 reflected continued progress in its transition toward a higher-margin, more capital-efficient business model. Although total revenues declined compared with the corresponding periods in 2025, the Company achieved significant improvements in gross profit and operating results through changes in revenue composition, disciplined cost management, and reduced product-related expenses.

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

• A continued shift away from traditional inventory-intensive product sales toward higher-margin revenue-sharing arrangements;
• Continued growth in recurring revenue generated through revenue-sharing and related-party service arrangements;
• A substantial reduction in product costs, e-commerce platform expenses, freight costs, and inventory impairment losses resulting from lower inventory-related activities;
• Significantly lower sales and marketing expenditures while maintaining disciplined operating cost management; and
• Continued strategic collaboration with related parties, which remained an important source of revenue during the periods presented.

Management believes these changes reflect its long-term strategy of improving profitability, reducing working capital requirements, and expanding recurring revenue streams.

Revenue

Total revenues for the three months ended June 30, 2026 were $937,177, a decrease of $460,098, or 33%, compared with $1,397,275 for the same period in 2025. Total revenues for the six months ended June 30, 2026 were $2,121,793, a decrease of $1,068,007, or 33%, compared with $3,189,800 for the corresponding period in 2025.

The decrease in revenues during both periods was primarily attributable to lower third-party product sales as the Company continued to reduce its emphasis on inventory-intensive product distribution. This decline was partially offset by continued growth in revenue generated through revenue-sharing arrangements with related parties.

Product revenue decreased by $591,366, or 79%, during the second quarter and by $1,711,151, or 87%, during the first six months of 2026 compared with the corresponding periods in 2025. The decrease primarily reflected lower sales volumes as management continued to shift its business strategy away from lower-margin product sales toward higher-margin service-based activities.

Product revenue from related parties totaled $5,143 for the three months ended June 30, 2026, compared with $146,655 for the corresponding period in 2025. For the six months ended June 30, 2026, product revenue from related parties totaled $141,691, compared with $146,789 for the corresponding period in 2025.

Revenue share from related parties increased by $272,780, or 54%, during the second quarter and by $648,242, or 60%, during the first six months of 2026. Revenue-sharing arrangements represented approximately 83% and 81% of total revenues during the three- and six-month periods ended June 30, 2026, respectively, compared with approximately 36% and 34%, respectively, during the corresponding periods in 2025.

The Company’s revenue mix continued to evolve during 2026, with revenue-sharing arrangements becoming the primary source of revenues. Management believes these arrangements generally require substantially less working capital, involve lower direct costs than traditional product sales, and support higher gross margins. The Company expects to continue pursuing opportunities that expand recurring and service-based revenue while maintaining a disciplined approach to inventory investment.

Cost of Revenue and Gross Profit

Cost of revenues for the three months ended June 30, 2026 was $186,570, compared with $1,130,694 for the corresponding period in 2025, representing a decrease of $944,124, or 83%. Cost of revenues for the six months ended June 30, 2026 was $350,530, compared with $2,434,888 for the corresponding period in 2025, representing a decrease of $2,084,358, or 86%.

The decrease in cost of revenues during both periods was primarily attributable to lower product-related costs resulting from reduced product sales volumes, together with significant reductions in e-commerce platform expenses, product procurement costs, delivery and freight costs, and inventory impairment losses. These reductions reflect management’s continued efforts to reduce inventory-intensive operations and improve operating efficiency.

Gross profit increased to $750,607 for the three months ended June 30, 2026 from $266,581 for the corresponding period in 2025, representing an increase of $484,026, or 182%. For the six months ended June 30, 2026, gross profit increased to $1,771,263 from $754,912 for the corresponding period in 2025, representing an increase of $1,016,351, or 135%.

Gross margin improved to approximately 80% and 83% for the three- and six-month periods ended June 30, 2026, respectively, compared with approximately 19% and 24%, respectively, for the corresponding periods in 2025. The increase primarily reflected a significant change in revenue mix. Revenue-sharing and service-based arrangements, which generally have limited direct costs and are recognized on a net basis, represented approximately 83% and 81% of total revenue for the three and six months ended June 30, 2026, respectively. By comparison, product revenue declined substantially and represented a smaller portion of total revenue. Accordingly, the improvement in consolidated gross margin was primarily attributable to the increased proportion of revenue generated from higher-margin revenue-sharing and service-based activities, together with lower product-related costs and inventory impairment charges.

Management believes the continued shift toward service-based and recurring revenue, together with disciplined inventory and cost management, has strengthened the Company’s gross profitability and positioned the business for more capital-efficient growth.

Operating Expenses

Total operating expenses for the three months ended June 30, 2026 were $907,107, compared with $1,001,617 for the corresponding period in 2025, representing a decrease of $94,510 or 9%. For the six months ended June 30, 2026, total operating expenses were $1,799,224, compared with $2,237,700 for the corresponding period in 2025, representing a decrease of $438,476, or 20%. The overall decrease during both periods was primarily attributable to significantly lower sales and marketing expenditures, partially offset by higher general and administrative expenses.

General and Administrative Expenses

General and administrative expenses were $884,349 for the three months ended June 30, 2026, compared with $784,236 for the corresponding period in 2025, representing an increase of $100,113, or 13%. For the six months ended June 30, 2026, general and administrative expenses were $1,739,135, compared with $1,601,648 for the corresponding period in 2025, representing an increase of $137,487, or 9%. The increases primarily reflected higher professional fees, public company compliance costs, legal and accounting fees, and other administrative expenses incurred following the Company’s Business Combination and continued operation as a publicly traded company.

Sales and Marketing Expenses

Sales and marketing expenses decreased to $19,758 for the three months ended June 30, 2026 from $208,107 for the corresponding period in 2025, representing a decrease of $188,349, or 91%. For the six months ended June 30, 2026, sales and marketing expenses decreased to $34,090 from $612,219, representing a decrease of $578,129, or 94%. The decreases primarily reflected substantially reduced advertising, promotional, and customer acquisition activities as the Company continued to emphasize higher-margin revenue-sharing arrangements rather than expanding traditional product sales.

Research and Development Expenses

Research and development expenses were $3,000 for the three months ended June 30, 2026, compared with $9,274 for the corresponding period in 2025, representing a decrease of $6,274, or 68%. For the six months ended June 30, 2026, research and development expenses were $25,999, compared with $23,833 for the corresponding period in 2025, representing an increase of $2,166, or 9%. The year-to-date increase primarily reflected continued investment in product development and technology initiatives, while quarterly expenditures may fluctuate depending on the timing of development activities.

Overall, the Company’s operating expense profile reflects management’s continued emphasis on cost discipline. The substantial reduction in sales and marketing expenditures, together with disciplined management of operating costs, partially offset the increase in public company compliance and administrative expenses and contributed to the Company’s improved operating results during the three- and six-month periods ended June 30, 2026.

Other Income (Expense)

Total other loss, net was $20,885 for the three months ended June 30, 2026, compared with total other income, net of $507,874 for the corresponding period in 2025. For the six months ended June 30, 2026, total other loss, net was $1,724, compared with total other income, net of $1,182,772 for the corresponding period in 2025.

The most significant factor affecting the year-over-year comparison was the absence of other income from related parties during the 2026 periods. During the three and six months ended June 30, 2025, the Company recognized $533,688 and $1,217,586, respectively, of other income from related parties, while no comparable income was recognized during the corresponding periods in 2026. As a result, total other income declined significantly despite improvements in other components.

Other income (expense), net decreased by $36,064 during the three months ended June 30, 2026 and by $52,739 during the six months ended June 30, 2026, compared with the corresponding periods in 2025, primarily reflecting higher non-operating expenses.

Interest income increased to $33,042 for the three months ended June 30, 2026 from $131 for the corresponding period in 2025, and increased to $61,693 for the six months ended June 30, 2026 from $448 for the corresponding period in 2025. The increases primarily reflected higher average cash balances following the Company’s Business Combination and PIPE financing completed in December 2025.

No interest expense was recognized during the three or six months ended June 30, 2026, compared with $8,082 and $24,584, respectively, during the corresponding periods in 2025, reflecting the repayment or settlement of interest-bearing obligations.

Liquidity and Capital Resources

Liquidity Overview

As of June 30, 2026, the Company had cash and cash equivalents of approximately $4.5 million, compared with approximately $7.0 million as of December 31, 2025, representing a decrease of approximately $2.5 million during the first six months of 2026. The decrease primarily reflected approximately $1.5 million of net cash used in operating activities and the Company’s $1.0 million investment in Etronium AI Inc., partially offset by approximately $20,000 of proceeds from the exercise of warrants.

Compared to June 30, 2025, the Company’s cash and cash equivalents increased significantly, primarily reflecting the proceeds received from the Business Combination and the related PIPE financing completed in December 2025, which substantially strengthened the Company’s liquidity position.

The Company’s liquidity continues to be influenced by several key factors, including:

• operating performance, particularly revenue growth, gross margins, and expense management;
• working capital management, including the collection of trade receivables and the timing of payments to vendors and related parties;
• inventory management and the Company’s continued transition toward a less inventory-intensive business model;
• strategic investments that support the Company’s long-term growth objectives; and
• access to external financing through equity or debt capital markets, if additional capital is required.

During the second quarter of 2026, the Company invested an aggregate of $1.0 million in Etronium AI Inc. through two SAFEs. Management believes this strategic investment complements the Company’s long-term strategy of expanding its artificial intelligence and robotics capabilities while maintaining sufficient liquidity to support its ongoing operations.

Management believes that the Company’s existing cash and cash equivalents, together with anticipated cash flows from operations, will be sufficient to meet its expected working capital requirements, planned operating activities, and capital expenditure needs for at least the next twelve months from the date these unaudited condensed consolidated financial statements are issued. However, the Company’s future liquidity will continue to depend on its ability to generate positive operating cash flows, effectively manage working capital, successfully execute its strategic initiatives, and, if necessary, obtain additional financing on acceptable terms. There can be no assurance that any financing will be completed on acceptable terms or at all.

Cash Flow Analysis

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Operating Activities

Net cash used in operating activities was $1.5 million for the six months ended June 30, 2026, compared to net cash provided by operating activities of $675,160 for the corresponding period in 2025, representing a decrease of approximately $2.2 million.

The use of cash during the 2026 period was primarily attributable to changes in working capital. Accounts receivable—related party increased by approximately $1.2 million, primarily reflecting amounts due under the Company’s revenue-sharing arrangements and product sales to related parties. Advances to suppliers—related party increased by approximately $1.1 million, primarily reflecting advance payments for inventory and other anticipated operating requirements. These uses of cash were partially offset by an approximately $259,000 decrease in other receivables—related party, an approximately $248,000 decrease in inventories, and an approximately $116,000 decrease in prepaid expenses.

Investing Activities

Net cash used in investing activities was $1.0 million for the six months ended June 30, 2026, compared to $529,432 during the corresponding period in 2025.

The cash used in investing activities during 2026 consisted primarily of the Company’s $1.0 million strategic investment in Etronium AI Inc. through two SAFEs. During the corresponding period in 2025, investing activities primarily consisted of the issuance of a promissory note, partially offset by collections on a note receivable from a stockholder.

Financing Activities

Net cash provided by financing activities was $20,085 for the six months ended June 30, 2026, compared to net cash used in financing activities of $321,982 during the corresponding period in 2025.

Financing activities during 2026 primarily reflected proceeds received from the exercise of warrants. Financing activities during the corresponding period in 2025 primarily reflected a $500,000 capital contribution from a shareholder, partially offset by the repayment of a short-term loan of $821,982.

As a result of the foregoing activities, cash and cash equivalents decreased by $2.5 million during the first six months of 2026, from $7.0 million at December 31, 2025 to $4.5 million at June 30, 2026. The decrease primarily reflected cash used in operating activities and the $1.0 million strategic investment, partially offset by warrant exercise proceeds.

Capital Resources

The Company’s principal sources of capital are its cash and cash equivalents, cash generated from operations, and, when appropriate, access to equity and other financing sources. Following the Business Combination completed in December 2025, the Company significantly strengthened its capital structure through the receipt of trust proceeds and PIPE financing. During the six months ended June 30, 2026, the Company also received proceeds of approximately $20 thousand from the exercise of warrants.

The Company’s capital requirements are primarily driven by working capital needs, operating expenses associated with its business and public company reporting obligations, strategic investments, and the continued development of its products and technology offerings. During the second quarter of 2026, the Company invested $1.0 million in Etronium AI Inc. through two SAFEs, which management believes support the Company’s long-term artificial intelligence and robotics strategy.

The Company does not maintain a revolving credit facility or other committed borrowing arrangements. Although the Company may continue to evaluate additional financing opportunities to support future growth initiatives, management believes that its existing cash resources and anticipated operating cash flows will be sufficient to fund its operating requirements, capital expenditures, and other contractual obligations for at least the next twelve months from the date these unaudited condensed consolidated financial statements are issued. However, the Company’s future capital requirements will depend on its operating performance, working capital needs, strategic initiatives, and ability to obtain additional financing on acceptable terms. There can be no assurance that any financing will be completed on acceptable terms or at all.

Contractual Obligations and Commitments

The Company’s contractual obligations consist primarily of operating lease obligations and other operating liabilities, as disclosed in Note 9 – Leases and Note 15 – Commitments and Contingencies to the unaudited condensed consolidated financial statements.

Lease Obligations (ASC 842)

As of June 30, 2026, the Company had operating lease liabilities of approximately $81,800, consisting of $58,900 classified as current and $22,900 classified as non-current. The Company had approximately $84,700 of undiscounted future minimum lease payments remaining under its operating lease agreements. Management believes these obligations do not represent a significant liquidity burden.

Purchase Commitments

The Company enters into purchase commitments with suppliers in the ordinary course of business. These commitments are generally short-term in nature and are intended to support anticipated customer demand. Management continues to monitor inventory levels and procurement activities to efficiently manage working capital and minimize exposure to long-term purchase commitments.

Related Party Obligations

The Company continues to conduct transactions with related parties in the ordinary course of business. As of June 30, 2026, accounts receivable—related party were approximately $3.3 million, compared with approximately $2.1 million as of December 31, 2025. Advances to suppliers—related party were approximately $1.1 million as of June 30, 2026, compared with approximately $21,000 as of December 31, 2025. Other receivables—related party decreased to approximately $217,000 from approximately $476,000 during the same period. These balances affected the Company’s operating cash flows during the first six months of 2026. Management continues to monitor the collection, settlement and realization of these balances. Additional information regarding related-party balances and transactions is included in Note 6 - Related Party Balances and Transactions.

Other Commitments and Contingencies

The Company may be involved in legal proceedings, claims, and other contingencies arising in the ordinary course of business. Management does not believe that any currently pending matters, individually or in the aggregate, will have a material adverse effect on the Company’s financial position, results of operations, or cash flows.

Overall Liquidity Assessment

As of June 30, 2026, the Company had $4.5 million of cash and cash equivalents and believes its liquidity position remains sufficient to support its ongoing operations. During the first six months of 2026, cash decreased primarily as a result of the Company’s $1.0 million strategic investment in Etronium AI Inc. and changes in working capital, partially offset by proceeds received from the exercise of warrants.

Management believes that the Company’s current cash resources, together with anticipated cash flows from operations, provide a solid financial foundation to meet its near-term operating requirements and execute its strategic initiatives. Nevertheless, the Company will continue to monitor its liquidity and capital requirements and may pursue additional financing opportunities as market conditions and business needs warrant.

Critical Accounting Policies and Estimates

The preparation of the Company’s unaudited condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and 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 estimates, actual results could differ materially from those estimates. Management continually evaluates its accounting estimates and assumptions as facts and circumstances change.

There have been no material changes to the Company’s critical accounting policies or significant estimates during the six months ended June 30, 2026 from those disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

Revenue Recognition (ASC 606)

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

The Company generates revenue primarily from product sales, revenue-sharing arrangements, and related services. A significant area of judgment involves determining whether the Company acts as a principal or an agent in certain revenue arrangements, particularly those involving:

• E-commerce platform sales
• Revenue-sharing arrangements; and
• Transactions with related parties (see Note 6 – Related Party Balances and Transactions).

This assessment requires management to evaluate a number of factors, including control over the specified goods or services before transfer to the customer, inventory risk, discretion in establishing pricing, and primary responsibility for fulfilling contractual obligations.

When the Company concludes that it is the principal in an arrangement, revenue is recognized on a gross basis. When the Company concludes that it acts as an agent, revenue is recognized on a net basis. Changes in these judgments could materially affect the amount of revenue and cost of revenue reported in the Company’s condensed consolidated financial statements.

Revenue-sharing arrangements also require significant judgment in identifying performance obligations, determining the transaction price, and assessing the timing of revenue recognition. Differences in contractual terms or changes in the underlying facts and circumstances could affect 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 the moving-average cost method, which approximates actual cost.

Management evaluates inventory for excess quantities, obsolescence, slow-moving items, and expected future demand. These assessments require significant judgment regarding forecasted customer demand, product life cycles, technological developments, pricing trends, and competitive market conditions.

During the six months ended June 30, 2026, the Company recorded inventory impairment charges of $49,929. Nevertheless, inventory valuation continues to be sensitive to changes in customer demand, product innovation cycles, and market conditions, which could result in additional write-downs in future periods.

Allowance for Expected Credit Losses (ASC 326)

The Company measures expected credit losses in accordance with ASC 326, Financial Instruments—Credit Losses, using a methodology that considers historical loss experience, current economic conditions, and reasonable and supportable forecasts.

A significant portion of the Company’s accounts receivable and other receivables relates to transactions with related parties (see Note 6 – Related Party Balances and Transactions), resulting in concentrations of credit risk. Management evaluates the collectability of these balances on an ongoing basis by considering the financial condition of counterparties, historical payment experience, contractual terms, and other relevant information.

Although the Company has experienced limited historical credit losses, deterioration in the financial condition of customers or related parties, changes in business relationships, or adverse economic conditions could require the Company to record additional allowances for expected credit losses in future periods.

Warranty Liabilities

The Company provides limited warranties on certain products and records an estimated warranty liability at the time the related revenue is recognized.

Warranty liabilities are estimated based on historical claims experience, product failure trends, expected repair or replacement costs, and other relevant factors. These estimates require significant judgment and are subject to change as additional information becomes available. Actual warranty costs may differ from management’s estimates due to changes in product design, manufacturing quality, customer usage patterns, or other factors, and such differences are recognized in the period in which they become known.

During the six months ended June 30, 2026, the Company continued to experience relatively low warranty claims, and management believes that the recorded warranty liability appropriately reflects its estimated future warranty obligations. However, actual warranty experience could differ from current estimates, which may require adjustments to warranty expense and the related liability in future periods.

Variable Interest Entity (VIE) Consolidation (ASC 810)

The Company evaluates its involvement with VIEs in accordance with ASC 810, Consolidation. A VIE is consolidated when the Company determines that it is the primary beneficiary because it has both (i) the power to direct the activities that most significantly affect the VIE’s economic performance and (ii) the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE.

Historically, the Company consolidated certain VIEs that operated e-commerce platform accounts. In December 2025, the Company terminated the contractual arrangements that established its controlling financial interest in those entities and deconsolidated the VIEs. As of June 30, 2026, the Company no longer consolidates those entities, and management has concluded that no additional entities require consolidation under ASC 810.

The evaluation of VIE relationships requires significant judgment, particularly in assessing contractual arrangements, decision-making authority, and the Company’s economic interests in an entity. Changes in contractual arrangements, ownership interests, or the Company’s level of involvement could require a reassessment of consolidation conclusions in future reporting periods.

Related Party Transactions (ASC 850)

The Company engages in transactions with related parties in the ordinary course of business, including product sales, procurement activities, revenue-sharing arrangements, and other operating transactions (see Note 6 – Related Party Balances and Transactions).

Accounting for related-party transactions requires management to exercise judgment in determining the appropriate recognition, measurement, classification, and disclosure of such transactions. Because these arrangements are not necessarily negotiated on terms equivalent to those that prevail in arm’s-length transactions, management evaluates the underlying contractual terms and economic substance of each arrangement to ensure appropriate accounting treatment under U.S. GAAP.

The Company monitors related-party transactions and outstanding balances on an ongoing basis and believes that all material related-party transactions have been appropriately recognized and disclosed in the accompanying unaudited condensed consolidated financial statements.

Forward Purchase Agreement

In connection with the Business Combination completed in December 2025, the Company entered into a Forward Purchase Agreement (“FPA”) with Harraden Circle Investments. Under the terms of the arrangement, the Company funded prepayments in exchange for the future settlement of shares of its common stock.

As of June 30, 2026, the FPA subscription receivable remained $1,678,678, unchanged from December 31, 2025. The Company continues to account for the FPA as an equity transaction. Accordingly, the outstanding subscription receivable is presented as a reduction of additional paid-in capital within stockholders’ equity.

There were no material changes to the terms or accounting treatment of the FPA during the six months ended June 30, 2026.

Income Taxes (ASC 740)

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

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

This evaluation requires significant judgment regarding:

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

Changes in these assumptions could result in adjustments to deferred tax assets, valuation allowances, and income tax expense in future reporting periods.

Sensitivity of Estimates and Judgments

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

• Revenue recognition, including principal-versus-agent assessments;
• Inventory valuation and impairment;
• Collectability of accounts receivable and related-party receivables;
• Warranty liabilities;
• VIE consolidation conclusions; and
• The recoverability of deferred tax assets.

Changes in these assumptions could materially affect the Company’s reported revenue, gross profit, operating results, net income, financial position, and cash flows. For example, changes in principal-versus-agent conclusions could significantly affect reported revenue and cost of revenue, while changes in assumptions regarding inventory obsolescence or the collectability of related-party receivables could materially affect operating results.

Management continually evaluates these estimates and assumptions and updates them as facts and circumstances change.

Recently Issued Accounting Pronouncements

For a discussion of recently adopted accounting standards and accounting standards issued but not yet adopted, see Note 2 – Recent Accounting Pronouncements to the accompanying unaudited condensed consolidated financial statements.

Management does not expect that any accounting standards issued but not yet effective will have a material impact on the Company’s condensed consolidated financial statements upon adoption.

Off-Balance Sheet Arrangements

As of June 30, 2026, the Company did not have any material off-balance sheet arrangements, as defined in Item 303(b)(1) of Regulation S-K.

Historically, the Company consolidated certain VIEs used in connection with its e-commerce operations. Following the termination of the underlying contractual arrangements in December 2025, the Company deconsolidated those entities. As of June 30, 2026, the Company has no material exposure to the assets, liabilities, or operations of those former VIEs other than ordinary-course contractual relationships, which management does not consider material.

The Company has no material guarantees, retained interests in transferred assets, unconsolidated special-purpose entities, or other off-balance sheet arrangements that are reasonably likely to have a material effect on its financial condition, results of operations, or liquidity.

Quantitative and Qualitative Disclosures About Market Risk

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

Foreign Currency Risk

A portion of the Company’s operations is conducted in currencies other than the U.S. dollar, primarily the VND. The Company may also have limited exposure to other currencies through ordinary-course transactions with international counterparties. Accordingly, fluctuations in foreign currency exchange rates may affect the translation of revenues, costs of revenues, operating expenses, assets, and liabilities into U.S. dollars.

The Company does not currently use derivative financial instruments to hedge its foreign currency exposure.

Interest Rate Risk

The Company’s exposure to interest rate risk is limited because it has no significant interest-bearing debt outstanding. Interest income is earned on cash and cash equivalents balances, and changes in market interest rates may affect future interest income. Management does not believe that interest rate risk is material to the Company’s financial position or results of operations.

Concentration Risk

The Company has concentrations of credit and business risk arising from its relationships with certain customers, suppliers, and related parties. During the six months ended June 30, 2026, a substantial portion of the Company’s revenue continued to be generated through revenue-sharing arrangements and transactions involving related parties. As a result, changes in the financial condition or operating performance of these counterparties could materially affect the Company’s operating results and cash flows.

Sensitivity Analysis

Management believes that a hypothetical 10% change in foreign currency exchange rates would not have a material impact on the Company’s financial position, results of operations, or cash flows based on its current level of foreign currency exposure.

Inflation and Economic Conditions

The Company’s business is subject to the effects of inflation and broader macroeconomic conditions, which may affect both operating costs and customer demand.

Inflationary pressures may increase the costs of components, manufacturing, logistics, labor, and other operating expenses. Although the Company continually evaluates pricing strategies and cost-control initiatives, it may not be able to fully offset increases in operating costs through price increases.

Economic uncertainty, inflation, higher interest rates, or reduced consumer spending could adversely affect demand for the Company’s products and services. In addition, global supply chain disruptions, changes in component availability, and fluctuations in freight costs could adversely affect the Company’s ability to procure inventory and maintain operating margins.

Management continues to monitor these risks and seeks to mitigate their impact through disciplined cost management, strategic sourcing, pricing initiatives, and ongoing supply chain optimization.

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.

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 June 30, 2026, pursuant to 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 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 June 30, 2026 due to the material weaknesses in our internal control over financial reporting described below.

The material weaknesses identified by management include the following:

• Lack of Experienced Accounting Team - AMC lacks qualified in-house accounting staff and resources with adequate knowledge of U.S. GAAP, and proper period-end financial closing and accrual processes. A third-party consulting firm has been engaged to prepare financial statements and footnote disclosures in accordance with U.S. GAAP.
• Lack of Segregation of Duties - 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.

In addition, the Company does not currently maintain an internal audit function. Management considered this factor in evaluating the overall effectiveness of the Company’s internal control environment.

These material weaknesses could result in material misstatements of the Company’s annual or interim financial statements that would not be prevented or detected on a timely basis. Accordingly, management concluded that the Company did not maintain effective disclosure controls and procedures as of June 30, 2026.

Remediation Plan

Management has continued to implement measures designed to remediate the material weaknesses described above. These remediation efforts include strengthening the Company’s finance and accounting organization, enhancing review and approval procedures, formalizing accounting policies and internal control documentation, improving inventory management processes, and establishing more formal controls over related-party transactions.

The Company also continues to utilize qualified external accounting professionals to assist with its financial reporting process while management works to strengthen its internal accounting function.

Although management believes these remediation efforts will improve the Company’s internal control environment, the material weaknesses will not be considered remediated until the applicable controls have been appropriately designed, implemented, operated for a sufficient period of time, and management has concluded, through testing, that the controls are operating effectively.

Changes in Internal Control over Financial Reporting

There were no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended June 30, 2026 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.