What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-04-20 compared with 2025-04-14 · 516 added, 164 removed, 6 unchanged (99% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

to the “Company,” “our,” “us” or “we” refer to AlphaVest Acquisition Corp.

Forward-Looking

to the “Company,” “our,” “us” or “we” refer to AMC Robotics Corporation.

The following

discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the audited

financial statements and the notes related thereto which are included in “Item 8.

Financial Statements and Supplementary Data”

of this Annual Report on Form 10-K.

Certain information contained in the discussion and analysis set forth below includes forward-looking

Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors.

Certain information contained in the discussion and analysis set forth below includes forward-looking statements.

Our actual results

may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those set forth

under “Cautionary Note Regarding Forward-Looking Statements and Risk Factor Summary,” “Item 1A.

Risk Factors”

and elsewhere in this Annual Report on Form 10-K.

were incorporated in the Cayman Islands on January 14, 2022 for the purpose of effecting a merger, capital stock exchange, asset acquisition,

stock purchase, reorganization or similar business combination with one or more businesses.

While we intend to focus our search on businesses

in Asia, we are not limited to a particular industry or geographic region for purposes of consummating an initial business combination.

We have not selected any specific business combination target and we have not, nor has anyone on our behalf, initiated any substantive

discussions, directly or indirectly, with any business combination target.

We intend to effectuate our initial business combination using

cash from the proceeds of this offering and the private placement of the private units, the proceeds of the sale of our securities in

connection with our initial business combination, our shares, debt or a combination of cash, stock and debt.

expect to continue to incur significant costs in the pursuit of our acquisition plans.

We cannot assure you that our plans to complete

a Business Combination will be successful.

financial statements and the related notes included in “Item 8.

Financial Statements and Supplementary Data” of this Annual

Report on Form 10-K.

information contained in the discussion and analysis set forth below includes forward-looking statements.

Our actual results may differ

materially from those anticipated in these forward-looking statements as a result of many factors, including those set forth under “Cautionary

Note Regarding Forward-Looking Statements and Risk Factor Summary,” “Item 1A.

Risk Factors,” and elsewhere in this

Annual Report on Form 10-K.

Company and our Business Overview

Robotics Corporation became publicly listed through the Business Combination with AlphaVest Acquisition Corp.

in December 2025.

Prior to the Business Combination, AMC Corporation, which was incorporated in the State of

Washington on October 21, 2021, was the predecessor operating entity and conducted substantially all of the Company’s business

As the Business Combination was accounted for as a reverse recapitalization, AMC Corporation is considered the

accounting acquirer, and its historical financial statements form the basis of the Company’s consolidated financial

Company distributes security cameras through e-commerce platforms across the United States, Canada, and Europe.

Its product portfolio

includes cameras designed for residential homes and small businesses, such as the YI dome guard, home camera, and outdoor camera.

online stores on these e-commerce platforms in the aforementioned regions were owned by Ants, Xiaoyun, and Yishijue.

Pursuant to the Authorization

Agreements, these entities have authorized the Company to utilize their e-commerce platform accounts free of charge until October 20,

The Authorization Agreements with Xiaoyun and Yishijue will continue until the existing inventory of the Company’s products

has been sold, at which time the agreements will be terminated.

and Yishijue are variable interest entities (VIEs), through contractual arrangements, holds effective control over their primary economic

activities, assumes the associated risks and benefits from the economic rewards, making AMC Corporation the primary beneficiary.

1, 2025, AMAC Corporation terminated its contractual arrangements with Xiaoyun and Yishijue, which resulted in the loss of control over

the VIE and, accordingly, the deconsolidation of the VIEs.

Development and Future Objectives

Corporation entered into the Business Combination Agreement with SPAC on August 16, 2024.

In December 2025, the Company completed a business

combination with AlphaVest Acquisition Corp.

(the “Business Combination”), as a result of which AMC Corporation became a

wholly owned subsidiary of AMC Robotics Corporation.

The transaction was accounted for as a reverse recapitalization, with AMC Corporation

deemed the accounting acquirer for financial reporting purposes.

Investment in Public Equity (“PIPE”) Financing

connection with the Business Combination, the Company consummated a PIPE financing that generated gross proceeds of $8,000,000, which

closed concurrently with the Business Combination.

As part of the PIPE financing, the Company issued 2,240,000 PIPE warrants to investors.

of Revenue Stream

2025, the Company’s revenue composition changed, with a decrease in product sales and the introduction of a new revenue stream

derived from a revenue-sharing arrangement with its related party, Kami Vision.

Under this arrangement, the Company is entitled to 30%

of the revenue generated from intelligent information services provided by Kami Vision.

of the business models

Company intends to maintain its recurring revenue streams from existing product sales while gradually transitioning its business focus

toward the development and deployment of autonomous robotic systems and intelligent security solutions.

Management expects that this

shift in business model will result in improved revenue margins and support the long-term growth and success of the Company’s operations.

Summary of Financial Performance

Total Revenue

Cost of Revenue

Operating Loss

Net Income (Loss)

(24,817,342 )

Cash and Cash Equivalents

Company’s financial performance for the year ended December 31, 2025 reflects a fundamental shift in operating strategy and financial

profile, transitioning from a revenue-driven model to a margin and efficiency driven model.

41% decline in revenue was primarily attributable to a deliberate reduction in lower-margin product sales and a contraction in e-commerce

While this decline reduced top-line growth, it was accompanied by a disproportionately larger reduction in cost of revenue (67%),

indicating improved cost discipline and reduced exposure to inventory-related inefficiencies.

a result, gross profit increased by approximately $2.2 million, and gross margin expanded significantly from 6% in 2024 to 48% in 2025.

This margin expansion reflects a combination of (i) reduced inventory impairment, (ii) improved procurement and cost controls, and (iii)

a higher contribution from revenue-sharing and service-based revenue streams.

losses decreased by approximately $2.0 million, driven primarily by improved gross profitability and reduced discretionary spending,

particularly in sales and marketing.

Despite modest increases in general and administrative expenses associated with public company readiness,

overall cost structure improved.

For the year ended December 31, 2025, the Company reported a net loss of $24,817,342, compared to a net loss of $776,960

for the year ended December 31, 2024.

The increase in net loss was primarily attributable to a non-cash loss of $25,549,272 recognized

from the change in fair value of the PIPE warrant liability.

This loss resulted from the remeasurement of the warrant liability at fair

value in accordance with ASC 815 and was significantly impacted by changes in the Company’s stock price and the contractual terms

of the warrants, including reset and anti-dilution features that increased the number of underlying shares.

Excluding the impact of this

non-cash fair value adjustment, the Company’s operating results improved compared to the prior year, driven by higher gross margins

and reduced operating losses.

improved significantly, with cash increasing by approximately $6.6 million, primarily due to proceeds from the SPAC transaction and related

financing activities.

This enhanced liquidity enabled the Company to reduce outstanding obligations and improve its working capital position.

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

of Operations

have not generated any revenues to date, and we will not be generating any operating revenues until the closing and completion of our

initial Business Combination.

Our entire activity up to December 31, 2024 has been related to our formation, the Initial Public Offering

and, since the closing of the Initial Public Offering, and a search for a Business Combination target.

We have, and expect to continue

to generate income in the form of interest income and unrealized gains on investments held in the Trust Account.

We expect to continue

to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance),

as well as for due diligence expenses in connection with the search for a Business Combination target.

have neither engaged in any operations nor generated any revenues to date.

Following the IPO, we will not generate any operating revenues

until after completion of our initial business combination.

We generate income in the form of interest income on cash and cash equivalents

after the IPO.

After the IPO, we expect to incur increased expenses as a result of being a public company (for legal, financial reporting,

accounting and auditing compliance), as well as expenses as we conduct due diligence on prospective business combination candidates.

We expect our expenses to increase substantially in connection with the search for a Business Combination target.

the year ended December 31, 2024, we had a net income of $1,710,959, which consists of interest earned on marketable securities held

in Trust Account and bank interest income of $2,674,096, offset by formation and operating costs of $870,821 and unrealized loss on the

investment of $92,316.

the year ended December 31, 2023, we had a net income of $2,904,174, which consists of interest earned on marketable securities held

in Trust Account and bank interest income of $3,580,492, offset by formation and operating costs of $676,318.

Capital Resources, and Going Concern

December 22, 2022, we consummated the Initial Public Offering of 6,000,000 Units and, with respect to the ordinary shares included in

the Units sold, the Public Shares at $10.00 per Unit, generating gross proceeds of $60,000,000.

Simultaneously with the closing of the

Initial Public Offering, we consummated the sale of 390,000 Private Units at a price of $10.00 per Private Unit in a private placement

to the Sponsor and EBC (365,000 private units to Sponsor and 25,000 private units to EBC), generating gross proceeds of $3,900,000.

December 29, 2022, EBC fully exercised their over-allotment option, resulting in an additional 900,000 Units issued for an aggregate

amount of $9,000,000.

In connection with the EBC’s full exercise of their over-allotment option, the Company also consummated the

sale of an additional 40,500 Private Units at $10.00 per Private Unit, generating total proceeds of $405,000.

the full exercise of over-allotment option, and the sale of the Private Units, an amount of $70,380,000 ($10.20 per Unit) was placed

in the trust account.

The funds held in the Trust Account may be invested in U.S.

government securities with a maturity of 185 days or

less or in any open-ended investment company that holds itself out as a money market fund selected by us.

We intend to use substantially

all of the funds held in the trust account, including any amounts representing interest earned on the trust account, to complete our

initial business combination.

To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete

our initial business combination, the remaining proceeds held in the trust account will be used as working capital to finance the operations

of the target business or businesses, make other acquisitions and pursue our growth strategies.

of December 31, 2024, we had marketable securities held in the trust account of $18,000,701 consisting of U.S.

government securities with a maturity of 185 days or less.

Interest income on the balance

in the trust account may be used by us to pay taxes.

Through December 31, 2024, we have not withdrawn any interest earned from the trust

of December 31, 2024, we had cash of $4,215.

We will use these funds primarily to complete the business combination.

This includes conducting

ongoing due diligence, obtaining necessary regulatory and shareholder approvals, preparing required filings and disclosures, structuring

and negotiating transaction terms, and covering costs related to legal, financial, and other advisory services.

order to fund working capital deficiencies or finance transaction costs in connection with an intended initial business combination,

our Sponsor or an affiliate of our Sponsor or certain of our officers and directors may, but are not obligated to, loan us funds on a

non-interest bearing basis as may be required.

If we complete our initial business combination, we would repay such loaned amounts.

the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account

to repay such loaned amounts but no proceeds from our trust account would be used for such repayment.

Other than as described above,

the terms of such loans by our officers and directors, if any, have not been determined and no written agreements exist with respect

to such loans.

our estimates of the costs of identifying a target business, undertaking in-depth due diligence and negotiating an initial business combination

are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our initial

business combination.

Moreover, we may need to obtain additional financing either to complete our initial business combination or because

we become obligated to redeem a significant number of our Public Shares upon completion of our initial business combination, in which

case we may issue additional securities or incur debt in connection with such business combination.

In addition, we are targeting businesses

larger than we could acquire with the net proceeds of the IPO and the sale of the Private Units, and may as a result be required to seek

additional financing to complete such proposed initial business combination.

Subject to compliance with applicable securities laws, we

would only complete such financing simultaneously with the completion of our initial business combination.

If we are unable to complete

our initial business combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate

the trust account.

In addition, following our initial business combination, if cash on hand is insufficient, we may need to obtain additional

financing in order to meet our obligations.

is no assurance that our plans to consummate a business combination will be successful within the combination period.

As a result, there

is substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial

statements are issued or are available to be issued.

of December 31, 2024, we had cash of $4,215 and a working capital deficit of $1,745,636.

We have incurred and expect to continue to incur

significant professional costs to remain as a public traded company and to incur transaction costs in pursuit of a Business Combination.

In connection with our assessment of going concern considerations in accordance with Accounting Standards Update (“ASU”)

2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” we believe that these

conditions raise substantial doubt about our ability to continue as a going concern.

In addition, if we are unable to complete a Business

Combination within the Combination Period and such period is not extended, there will be a liquidation and subsequent dissolution.

a result, we have determined that such additional condition also raises substantial doubt about our ability to continue as a going concern.

The consolidated financial statements do not include any adjustments that might result from the outcome of the uncertainty.

Sheet Financing Arrangements

have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of December 31, 2024.

participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable

interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements.

We have not entered

into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other

entities, or purchased any non-financial assets.

Party Transactions

refer to Financial Statement Note 5 - Related Parties.

Contractual Obligations

do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities reflected on our balance

holders of the Founder Shares, EBC founder shares, Private Placement Units will be entitled to registration rights pursuant to a registration

rights agreement dated July 11, 2023 requiring the Company to register such securities for resale.

Subject to certain limitations set

forth in such agreement, the holders of these securities will be entitled to make up to three demands, excluding short form registration

demands, that the Company register such securities.

In addition, the holders have certain “piggy-back” registration rights

with respect to registration statements filed subsequent to completion of a Business Combination and rights to require the Company to

However, the registration rights agreement provides

that the Company will not be required to effect or permit any registration or cause any registration statement to become effective until

the securities covered thereby are released from their lock-up restrictions.

The Company will bear the expenses incurred in connection

with the filing of any such registration statements.

Combination Marketing Agreement

have engaged EBC as an advisor in connection with its Business Combination to assist in holding meetings with the Company stockholders

to discuss the potential Business Combination and the target business’ attributes, introduce the Company to potential investors

that are interested in purchasing its securities in connection with its initial Business Combination and assist with press releases and

public filings in connection with the Business Combination.

The Company will pay EBC a service fee for such services upon the consummation

of its initial Business Combination in an amount equal to 3.5% of the gross proceeds of the IPO.

In addition, the Company will pay EBC

a service fee in an amount equal to 1.0% of the total consideration payable in the initial Business Combination if it introduces the

Company to the target business with whom it completes an initial Business Combination and the amount will be payable in cash and is due

at the closing date of the initial Business Combination.

Accounting Estimates

preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United

States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure

of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported.

results could materially differ from those estimates.

We have not identified any critical accounting policies or estimates.

Accounting Standards

Company’s results of operations for 2025 were characterized by declining revenue but significantly improved profitability, driven

by changes in revenue composition, cost structure, and operational discipline.

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

shift away from inventory-intensive product sales toward higher-margin revenue-sharing arrangements

substantial reduction in inventory impairment and excess stock

cost alignment with revenue levels, particularly in logistics and marketing

reliance on related-party transactions as a key component of both revenue and profitability

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

Revenue Component

Product revenue

Product revenue – related party

Revenue share – related party

Total Revenue

decline in total revenue was primarily driven by a $5.1 million decrease in product revenue, reflecting reduced sales volume and a strategic

decision to scale back lower-margin product lines.

This reduction indicates a shift away from revenue generated through high inventory

turnover toward a more selective and margin-focused sales approach.

revenue from related parties increased significantly, although it remains a relatively small component of total revenue.

This increase

reflects expanded transactions within affiliated entities and may indicate evolving commercial arrangements.

from related parties includes amounts derived from revenue-sharing arrangements associated with cloud services and intelligent information

services, which were introduced in 2025.

Revenue from these arrangements increased significantly during the period and became the largest

contributor to total revenue.

This shift reflects the Company’s increasing reliance on collaborative revenue models, which generally

involve lower cost structures and reduced working capital requirements.

introduction of intelligent information services in 2025 represents a strategic diversification into service-based revenue streams.

this revenue stream is currently not material relative to total revenue, management expects it to provide higher margins and recurring

revenue potential over the long term.

the change in revenue composition reflects a transition toward lower-volume but higher-quality revenue streams, which is consistent with

the Company’s focus on improving profitability.

of Revenue and Gross Profit

Cost of Revenue

$6.4 million reduction in cost of revenue significantly exceeded the decline in revenue, resulting in a substantial increase in gross

profit and margin.

key driver of this improvement was the reduction in inventory impairment losses, which declined from approximately $1.3 million in 2024

to approximately $0.16 million in 2025.

This change reflects improved inventory management practices, including better alignment of procurement

with demand and reduced exposure to obsolete inventory.

addition, lower product sales volume resulted in reduced product cost, E-commerce platform expenses, and logistics and fulfillment costs

were more effectively aligned with sales activity.

resulting increase in gross margin from 6% to 48% reflects a structural improvement in the Company’s cost profile, driven by both

operational efficiencies and a higher proportion of revenue from higher-margin activities.

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

Expense Category

General & Administrative

Sales & Marketing

Research & Development

Credit Loss (Reversal)

Total Operating Expenses

and administrative expenses increased by approximately $0.5 million, primarily due to incremental costs associated with becoming a public

These include audit fees, legal expenses, compliance costs, and corporate governance infrastructure.

These costs are expected

to remain elevated as the Company continues to operate as a public entity.

and marketing expenses decreased significantly by approximately $1.4 million, reflecting a reduction in promotional activities and a

more disciplined approach to customer acquisition.

This decrease suggests improved efficiency in marketing spend and a strategic shift

toward profitability rather than growth.

and development expenses declined as the Company reduced investment in new product development and focused on optimizing existing offerings.

While this supports short-term cost control, it may impact long-term innovation.

absence of the prior-year credit loss reversal of $1.3 million contributed to the increase in operating expenses on a comparative basis.

Excluding this non-recurring item, operating expenses would have decreased year over year.

the Company demonstrated improved cost discipline, with operating expenses more closely aligned with revenue levels, contributing to

a significant reduction in operating losses.

Income (Expense)

Other income – related party

Other income (expense), net

Interest income

Interest expense – related party

Loss from the change of the FV of Warrant Liability

(25,549,272 )

Interest expense

Loss on deconsolidation

Total Other Income (loss), Net

(24,307,524 )

(26,092,362 )

the year ended December 31, 2025, total other income (loss) was a loss of $24,307,524, compared to total other income of $1,784,838 for

the year ended December 31, 2024.

The change was primarily attributable to the recognition of a non-cash loss of $25,549,272 from the

change in fair value of the PIPE warrant liability, which is presented as a separate line item in other income (loss) in the current

This loss arose from the remeasurement of the warrant liability at fair value in accordance with ASC 815 and was significantly

impacted by changes in the Company’s stock price and the contractual terms of the warrants, including reset and anti-dilution features

that increased the number of underlying shares.

the impact of the fair value adjustment on the warrant liability, other income remained relatively consistent period over period, primarily

consisting of other income from related parties of $1,217,586 in 2025 compared to $1,779,528 in 2024, as well as other miscellaneous

income and interest income.

Interest expense was $24,616 for the year ended December 31, 2025, compared to $26,942 (including related

party interest) for the prior year.

The Company also recognized a nominal loss on deconsolidation of $5,310 in 2025.

and Capital Resources

of December 31, 2025, the Company had cash and cash equivalents of approximately $7.0 million, compared to approximately $0.4 million

as of December 31, 2024, representing an increase of approximately $6.6 million.

This significant improvement in liquidity was primarily

attributable to proceeds received from the Business Combination with AlphaVest Acquisition Corp.

and related PIPE financing, as discussed

in Note 1 – Organization and Nature of Business.

capital improved materially during 2025, driven by both increased cash balances and a reduction in outstanding liabilities, particularly

related-party obligations (see Note 8 – Related Party Transactions).

The Company used a portion of financing proceeds to settle

historical payables and strengthen its balance sheet.

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

performance, including gross margin and expense management

capital dynamics, particularly receivables and payables involving related parties

to external financing, including equity financing and capital markets transactions

management, which affects cash tied up in operations

achieving net income in 2025, the Company generated negative operating cash flows due to significant working capital outflows, primarily

related to settlement of prior obligations and timing of related-party transactions.

believes that the Company’s current cash position, together with expected operating cash flows, will be sufficient to meet its

working capital requirements and capital expenditure needs for at least the next twelve months.

However, the Company’s future liquidity

will depend on its ability to sustain profitability, manage working capital efficiently, and maintain access to capital markets if needed.

Flow Analysis

Net cash (used in)/provided by operating activities

Net cash provided by (used in) investing activities

Net cash provided by (used in) financing activities

Net cash used in operating activities was approximately $5.5 million for the year ended December 31, 2025, compared

to net cash provided by operating activities of approximately $0.6 million for the year ended December 31, 2024.

The Company reported a net loss of $24,817,342 for the year ended December 31, 2025, which was primarily attributable

to a non-cash loss of $25,549,272 from the change in fair value of the PIPE warrant liability.

This non-cash charge, recorded in accordance

with ASC 815, did not impact operating cash flows and therefore is added back in the reconciliation from net loss to net cash used in

operating activities.

Excluding the impact of this non-cash fair value adjustment, operating cash flows were primarily affected by changes

in working capital, including the following:

in accounts payable to related parties (~$8.5 million)

This represents a significant use of cash and reflects the settlement of historical obligations.

While this reduced liquidity in the current period, it strengthened the Company’s balance

sheet and reduced future obligations.

in accounts receivable from related parties (~$1.9 million)

This increase reflects timing differences between revenue recognition and cash collection,

particularly for revenue-sharing arrangements.

This represents a temporary use of cash and

introduces credit and concentration risk.

in inventory (~$2.5 million)

This reduction provided a source of cash and reflects improved inventory management, reduced

procurement, and lower exposure to excess stock.

in other working capital accounts, including prepaid expenses and accrued liabilities, which

partially offset the above impacts.

the negative operating cash flow in 2025 should be viewed in the context of balance sheet restructuring and normalization of working

capital, rather than deterioration in underlying operating performance.

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

activities primarily consisted of transactions related to promissory notes and other financial assets, including issuance, repayment,

or collection of notes receivable.

These transactions are not indicative of the Company’s core operating activities but reflect

capital allocation decisions and financing arrangements.

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

positively to liquidity.

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

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

primary drivers of financing cash inflows in 2025 include:

from the SPAC trust account

financing and equity issuances

contributions and recapitalization adjustments

inflows significantly enhanced the Company’s liquidity and enabled:

of related-party liabilities

● Strengthening

of working capital

of financial risk associated with prior obligations

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

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

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

of December 31, 2025, the Company had limited third-party debt obligations, resulting in minimal exposure to interest rate risk and no

significant near-term debt maturities.

Historically, the Company relied on related-party financing to support operations;

however, this

reliance has decreased significantly following the Business Combination.

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

equity capitalization

of related-party liabilities

liquidity and working capital

Company’s capital requirements are driven primarily by:

capital needs (inventory, receivables, payables)

expenses, including public company costs

investments in product development and service expansion

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

additional financing.

Company currently does not maintain a revolving credit facility or other committed borrowing arrangements.

While this reduces financial

leverage, it may limit flexibility in managing short-term liquidity needs.

Obligations and Commitments

Company’s contractual obligations consist primarily of lease obligations, and other operating liabilities,

as disclosed in Note 12 - Lease and Note 17 – Commitments and Contingencies.

Obligations (ASC 842)

Company has operating lease arrangements for office space and facilities.

As of December 31, 2025, lease liabilities totaled approximately

$110,000, representing future minimum lease payments.

These obligations are relatively modest and do not represent a significant liquidity

Company may enter into purchase commitments with suppliers in the normal course of business.

These commitments are generally short-term

in nature and are aligned with expected sales demand.

The Company has reduced its reliance on large inventory purchases, thereby limiting

exposure to long-term procurement commitments.

Party Obligations

Historically,

the Company had significant obligations to related parties;

however, during 2025, these obligations were substantially reduced through

settlement using proceeds from financing activities (see Note 8).

As a result, outstanding related-party obligations are no longer a

significant component of contractual commitments.

Commitments and Contingencies

Company may be subject to contingencies, including legal or contractual matters, in the ordinary course of business.

Management does

not believe that any such matters will have a material adverse effect on the Company’s financial position.

Liquidity Assessment

Company’s liquidity position improved significantly in 2025 as a result of financing activities and balance sheet restructuring.

While operating cash flows were negative due to working capital adjustments, these outflows were largely non-recurring and associated

with the settlement of prior obligations.

Company’s current liquidity, combined with improved profitability and reduced leverage, provides a stronger financial foundation.

However, future liquidity will depend on the Company’s ability to:

positive operating performance

● Effectively

manage working capital

access to external financing, if needed

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

Accounting Policies and Estimates

preparation of the Company’s consolidated financial statements in conformity with U.S.

GAAP requires management to make estimates

and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses, as well as related disclosures.

estimates are based on historical experience, current conditions, and various other assumptions that management believes are reasonable

under the circumstances.

of the inherent uncertainty involved in making these estimates, actual results could differ materially from those estimates.

The Company’s

most critical accounting policies are those that involve significant judgment and have a material impact on the financial statements.

Recognition (ASC 606)

Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers , when control of goods or services

is transferred to customers in an amount that reflects the consideration to which the Company expects to be entitled.

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

in transactions involving:

platform sales

● Related-party

revenue-sharing arrangements (see Note 8 – Related Party Transactions)

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

for fulfillment.

the Company is determined to be the principal, revenue is recognized on a gross basis;

if the Company is an agent, revenue is recognized

on a net basis.

Changes in this assessment could materially affect reported revenue and cost of revenue.

addition, revenue-sharing arrangements require judgment in identifying performance obligations and determining the appropriate allocation

of transaction price.

Variability in contract terms or interpretation could impact the timing and amount of revenue recognized.

Valuation (ASC 330)

is stated at the lower of cost or net realizable value.

Cost is determined using standard costing methods, which approximate actual costs.

Company evaluates inventory for excess quantities, obsolescence, and slow-moving items.

This evaluation requires significant judgment

lifecycle and technological obsolescence

trends and competitive conditions

2024, the Company recorded significant inventory impairment charges due to excess and slow-moving inventory.

In 2025, improved inventory

management practices resulted in substantially lower impairment.

future changes in demand patterns, product innovation cycles, or market conditions could result in additional write-downs.

valuation remains a highly sensitive estimate that directly impacts gross margin.

for Expected Credit Losses (ASC 326)

Company accounts for expected credit losses under ASC 326, Current Expected Credit Losses (CECL) .

The allowance is estimated using

a loss-rate methodology based on:

credit loss experience

economic conditions

● Forward-looking

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

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

condition of counterparties

● Contractual

historical losses have been limited, any deterioration in the financial condition of related parties or changes in business relationships

could result in increased credit loss provisions.

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

liabilities are estimated based on:

failure trends

repair or replacement costs

estimates require judgment and may be affected by changes in product design, manufacturing quality, or customer usage patterns.

warranty costs may differ from estimates, resulting in adjustments to warranty expense in future periods.

Interest Entity (VIE) Consolidation (ASC 810)

Company evaluates its involvement with variable interest entities in accordance with ASC 810, Consolidation .

A VIE is consolidated

if the Company is determined to be the primary beneficiary, which requires:

to direct the activities that most significantly impact the VIE’s economic performance,

to potentially significant economic benefits or losses

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

Historically,

the Company consolidated certain VIEs that held e-commerce platform accounts.

In December 2025, the Company terminated the underlying

contractual arrangements and deconsolidated these entities (see Note 1).

in contractual arrangements, ownership structure, or operational control could result in future consolidation or deconsolidation events,

which may materially impact the Company’s financial statements.

Party Transactions (ASC 850)

Company engages in significant transactions with related parties, including revenue-sharing arrangements, product sourcing, and financing

activities (see Note 8 – Related Party Transactions).

for related-party transactions requires judgment in determining:

● Appropriate

revenue recognition treatment

● Classification

of transactions

● Measurement

and presentation

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

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

Purchase Agreement

to the Business Combination, AlphaVest entered into a Forward Purchase Agreement (“FPA”) with Harraden Circle Investments

and its affiliated entities (“Harraden”) to support post-closing liquidity and capital structure stability.

Under this arrangement,

Harraden agreed to acquire shares from existing shareholders at the redemption price and may subsequently sell such shares in the open

market over a defined period.

closing, the Company funded an aggregate prepayment of approximately $6.68 million to facilitate Harraden’s participation in the

The structure of the FPA allows Harraden to retain certain economic benefits from the resale of shares, subject to contractual

pricing mechanisms, including volume-weighted average price and reset provisions.

Importantly, Harraden is not required to return the

full proceeds from share sales, and any unsold shares are expected to be returned to the Company at maturity.

2025, Harraden completed partial settlements and early terminations under the FPA, resulting in cash proceeds to the Company of approximately

$4.3 million.

As of December 31, 2025, a portion of the arrangement remains outstanding, with Harraden continuing to hold shares associated

with the FPA.

a liquidity perspective, the FPA provided near-term funding at the time of the Business Combination but also introduced variability in

future cash flows due to its settlement mechanics and linkage to market prices.

The remaining balance associated with the FPA is reflected

as a reduction of stockholders’ equity, consistent with its financing nature and the Company’s assessment of the arrangement.

continues to monitor the impact of the FPA on the Company’s capital structure and liquidity, including potential future settlements,

share returns, and market-related adjustments.

While the arrangement supported the completion of the Business Combination, its complex

terms and market-dependent outcomes may affect period-to-period comparability of equity and cash flows.

Taxes (ASC 740)

Company accounts for income taxes under ASC 740, Income Taxes , which requires recognition of deferred tax assets and liabilities

for temporary differences between financial reporting and tax bases.

evaluates the realizability of deferred tax assets, including net operating loss carryforwards, and establishes a valuation allowance

when it is more likely than not that such assets will not be realized.

assessment requires judgment regarding:

taxable income

of reversals of temporary differences

planning strategies

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

of Estimates and Judgments

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

recognition (principal vs.

valuation and impairment

● Collectability

of related-party receivables

consolidation conclusions

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

change in principal vs.

agent conclusion could significantly alter reported revenue and cost

modest increase in inventory obsolescence assumptions could materially reduce gross margin

in collection of related-party receivables could increase credit loss provisions

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

Issued Accounting Pronouncements

a discussion of our new or recently adopted accounting pronouncements, see Note 2, Recent issued accounting pronouncements, to our consolidated

financial statements included elsewhere in this annual report.

does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect

on our consolidated financial statements.

on the consolidated financial statements and notes thereto included elsewhere in this annual report.

Financial Measures

is a non-GAAP financial measure defined as net income (loss) before interest expense, income taxes, depreciation, and amortization.

Company uses EBITDA as a supplemental measure to evaluate its operating performance and to facilitate period-to-period comparisons by

excluding items that are not directly related to core operations.

EBITDA is defined as EBITDA further adjusted to exclude non-cash and non-recurring items that management believes are not indicative

of the Company’s core operating performance.

For the year ended December 31, 2025, such adjustments primarily include the loss

from the change in fair value of the PIPE warrant liability of $25,549,272 and the loss related to deconsolidation.

The change in fair

value of the PIPE warrant liability is a non-cash item arising from the remeasurement of derivative liabilities in accordance with ASC

815 and is significantly impacted by changes in the Company’s stock price and warrant terms, including reset features.

believes that EBITDA and Adjusted EBITDA provide useful supplemental information to investors regarding the Company’s operating

however, these measures have limitations and should not be considered in isolation or as a substitute for net income (loss)

or other financial measures prepared in accordance with U.S.

For the years ended December 31

Net income (loss)

(24,817,342 )

Interest expense

Income tax expense

Depreciation and amortization

(24,788,075 )

Loss from change in fair value of PIPE warrant liability

Loss on deconsolidation

Adjusted EBITDA

Sheet Arrangements

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

Historically,

the Company utilized variable interest entities (VIEs) to conduct certain e-commerce operations.

These VIEs were consolidated in prior

however, following the termination of contractual arrangements in December 2025, the Company deconsolidated these entities.

As a result, the Company no longer has exposure to the assets, liabilities, or operations of these entities beyond any residual contractual

relationships.

Company does not have any material guarantees, retained interests in transferred assets, special purpose entities, or undisclosed commitments

that would be considered off-balance sheet arrangements.

believes that the absence of significant off-balance sheet arrangements reduces the Company’s exposure to contingent liabilities

and enhances transparency in its financial reporting.

and Qualitative Disclosures About Market Risk

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

general economic risk.

Currency Risk

portion of the Company’s transactions are denominated in currencies other than the U.S.

dollar, particularly Renminbi (RMB).

a result, fluctuations in exchange rates may affect revenue, cost of revenue, and operating expenses when translated into U.S.

strengthening of the U.S.

dollar relative to foreign currencies may reduce reported revenue and margins, while a weakening of the U.S.

dollar may have the opposite effect.

The Company does not currently use derivative instruments to hedge foreign currency risk.

Company’s exposure to interest rate risk is limited due to the absence of significant interest-bearing debt.

Interest income is

earned on cash balances, and changes in interest rates may affect the amount of interest income recognized.

However, this exposure is

not considered material.

Concentration

Company is exposed to concentration risk due to its reliance on related-party transactions for both revenue and procurement.

in the financial condition or operating performance of these related parties could materially affect the Company’s results.

hypothetical 10% change in foreign exchange rates would not have a material impact on the Company’s financial position based on

current exposure levels;

however, this may change as the Company expands its international operations.

and Economic Conditions

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

may increase the cost of components, manufacturing, logistics, and labor.

These cost increases may not be fully recoverable through price

adjustments, particularly in a competitive market environment where pricing pressure is significant.

Company’s products are generally considered discretionary consumer purchases.

As a result, economic downturns, reduced consumer

confidence, or higher interest rates may negatively impact demand for the Company’s products.

Chain Considerations

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

inventory and maintain margins.

Company actively monitors these factors and seeks to mitigate their impact through pricing strategies, cost management initiatives, and

supply chain optimization.

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

total revenue declined compared to the prior year, the Company achieved substantial improvements in gross margin and operating efficiency.

This improvement was driven by a strategic shift away from lower-margin, inventory-intensive operations toward higher-margin revenue

streams, including revenue-sharing arrangements and service-based offerings.

Company also strengthened its liquidity position through the completion of the SPAC transaction and related financing activities, enabling

it to reduce reliance on related-party financing and improve its overall capital structure.

these improvements, the Company continues to face risks and uncertainties, including reliance on related-party transactions, exposure

to e-commerce platform dynamics, and sensitivity to macroeconomic conditions.

Future performance will depend on the Company’s ability

to sustain margin improvements, diversify revenue streams, and manage working capital efficiently.

believes that the Company is well-positioned to pursue its strategic objectives, supported by improved financial flexibility, a more

efficient operating model, and opportunities for growth in higher-margin service offerings.

Quantitative and Qualitative Disclosures about Market Risk

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.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

information appears following Item 15 of this Report and is incorporated herein by reference.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

required for smaller reporting companies.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis