What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-19 compared with 2025-11-19 · 396 added, 160 removed, 13 unchanged (98% of the section changed)

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

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

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

The following

5 unchanged sentences

result of many factors.

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.

Company and our Business Overview

Robotics Corporation became publicly listed through its business combination with AlphaVest Acquisition Corp.

in December 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 form the basis of the Company’s consolidated financial statements.

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

Its product offerings

are primarily focused on residential and small business applications, including indoor and outdoor smart cameras.

to December 2025, certain e-commerce platform accounts were operated through arrangements with third-party entities, including Ants,

Xiaoyun, and Yishijue, pursuant to authorization agreements.

As of December 1, 2025, the Company terminated the contractual arrangements

with Xiaoyun and Yishijue, resulting in the deconsolidation of these variable interest entities.

Following such termination, the Company

operates its business without reliance on VIE structures.

Development and Future Objectives

December 2025, the Company completed its business combination with AlphaVest Acquisition Corp., 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 completed a PIPE financing that generated gross proceeds of $8.0 million.

financing closed concurrently with the Business Combination, and the Company issued warrants to investors as part of the transaction.

2025, the Company’s revenue mix shifted, with a decline in product sales and the introduction of a revenue-sharing arrangement

with its related party, Kami Vision Inc..

Under this arrangement, the Company is entitled to a percentage of revenue generated from intelligent

information services.

This revenue stream continued during the three months ended March 31, 2026.

Company intends to continue generating revenue from its existing product lines while advancing its strategy to develop and deploy autonomous

robotic systems and intelligent security solutions.

Management expects that continued execution of this strategy may improve margins

and support long-term growth, although the timing and extent of such improvements remain subject to market conditions and execution risks.

Summary of Financial Performance

Three months ended March 31,

Total Revenue

Cost of Revenue

Operating Income (Loss)

Net Income (Loss)

Company’s financial performance for the three months ended March 31, 2026 reflects a shift in operating focus toward profitability,

cost efficiency, and higher-margin revenue streams.

revenue decreased by $607,909, or 34%, to $1,184,616 for the three months ended March 31, 2026, compared to $1,792,525 for the same period

The decline was primarily attributable to a reduction in lower-margin product sales and decreased e-commerce volume.

Correspondingly,

cost of revenue decreased by $1,140,235, or 87%, to $163,960, reflecting improved cost discipline, reduced inventory-related inefficiencies,

and a shift in revenue mix.

a result, gross profit increased by $532,326, or 109%, to $1,020,656, compared to $488,330 in the prior-year period.

Gross margin expanded

significantly from approximately 27% for the three months ended March 31, 2025 to approximately 86% for the three months ended March

This improvement was primarily driven by reduced inventory impairment, improved procurement and cost controls, and a higher

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

results improved from a loss of $747,753 for the three months ended March 31, 2025 to operating loss of $128,539 for the three months

ended March 31, 2026, representing an improvement of approximately $876,292.

This improvement was primarily attributable to higher gross

profitability and significantly reduced discretionary spending, particularly in sales and marketing expenses, while general and administrative

expenses remained relatively consistent between periods.

For the three months ended March 31, 2026, the Company reported net income

of $145,601, compared to a net loss of $77,177 for the three months ended March 31, 2025, representing an improvement of approximately

The improvement in net results reflects enhanced cost efficiency and improved gross margins, partially offset by changes in

other income and expense items.

remained strong, with cash and cash equivalents of $6,632,619 as of March 31, 2026, compared to $7,004,601 as of December 31, 2025, a

decrease of $371,982.

The decrease was primarily attributable to operating cash outflows during the period, partially offset by proceeds

from warrant exercises.

to March 31, 2025, cash and cash equivalents increased $6.4 million, reflecting proceeds received in connection with the Business Combination

and related financing activities completed in December 2025.

The Company’s strengthened liquidity position has enhanced its ability

to support working capital needs and execute its operational strategy.

the three months ended March 31, 2026, the Company continued to focus on improving profitability, enhancing cost efficiency, and maintaining

a disciplined approach to managing its balance sheet.

Revision of Previously Issued Financial Statements

During the preparation of the Company’s unaudited

condensed consolidated financial statements for the quarter ended March 31, 2026, management identified certain immaterial prior period

errors primarily related to omitted accruals for professional service fees in the Company’s previously issued consolidated financial

statements for the year ended December 31, 2025.

Management concluded that the errors were not material to the previously issued annual

financial statements for the year ended December 31, 2025 and, therefore, restatement of the previously issued financial statements was

not required.

However, management further concluded that recording the correction entirely within the quarter ended March 31, 2026 would

materially misstate the Company’s results for the interim period.

Accordingly, the Company revised the comparative balance sheet

as of December 31, 2025 included in the unaudited condensed financial statements to correct such immaterial prior period errors.

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.

All of our activity up to September 30, 2025 has been related to our formation, the Initial Public Offering

and, since the closing of the Initial Public Offering, identifying a target company for our initial Business Combination, and professional

costs related with the initial Business Combination.

We have, and expect to continue to generate income in the form of interest income.

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.

three months ended September 30, 2025, we had a net loss of $2,651,350, which consists of interest earned on marketable securities held

in Trust Account and bank interest income of $165,169, offset by formation and operating costs of $2,816,519.

three months ended September 30, 2024, we had a net income of $502,021, which consists of interest earned on marketable securities held

in Trust Account and bank interest income of $684,601, offset by formation and operating costs of $182,580.

nine months ended September 30, 2025, we had a net loss of $2,619,286, which consists of interest earned on marketable securities held

in Trust Account and bank interest income of $543,990, offset by formation and operating costs of $3,163,276.

nine months ended September 30, 2024, we had a net income of $1,234,008, which consists of interest earned on marketable securities held

in Trust Account and bank interest income of $1,893,227, offset by formation and operating costs of $566,903 and unrealized loss on the

investment of $92,316.

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 September 30, 2025, we had marketable securities held in the trust escrow account of $18,929,689 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 September

30, 2025, we have not withdrawn any interest earned from the trust account.

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 September 30, 2025, we had cash of $3,713 and a working capital deficit of $5,238,909.

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 September 30, 2025.

not 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.

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 4 - 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.

As of September 30, 2025, such fee was incurred as the underwriter had completed substantially all services stated in the marketing agreement.

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.

As of the filing date, no such service has been provided by EBC.

Accounting Estimates

preparation of consolidated 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.

Actual results could materially differ from those estimates.

We have not identified any critical accounting policies

or estimates.

Income (Loss) per Share

Company complies with accounting and disclosure requirements of FASB ASC 260, Earnings Per Share.

In order to determine the net income

(loss) attributable to both the redeemable shares and non-redeemable shares, the Company first considered the undistributed income (loss)

allocable to both the redeemable shares and non-redeemable shares and the undistributed income (loss) is calculated using the total net

loss less interest income and unrealized gain or loss on investments in trust account less any dividends paid.

We then allocated the

undistributed income (loss) ratably based on the weighted average number of shares outstanding between the redeemable and non-redeemable

Any remeasurement of the accretion to redemption value of the ordinary shares subject to possible redemption was considered to

be dividends paid to the public shareholders.

Accounting Standards

Company’s results of operations for the three months ended March 31, 2026 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.

Three months ended March 31,

Revenue Component

Product revenue

Product revenue – related party

Revenue share – related party

Total Revenue

revenue for the three months ended March 31, 2026 was $1,184,616, a decrease of $607,909, or 34%, compared to $1,792,525 for the same

period in 2025.

The decline was primarily attributable to a significant reduction in third-party product revenue, partially offset by

increases in revenue derived from related party arrangements.

revenue decreased by $1,119,785, or 92%, to $102,018 for the three months ended March 31, 2026, compared to $1,221,803 in the prior-year

The decrease reflects reduced sales volume and a strategic shift away from lower-margin product lines, resulting in a contraction

of traditional inventory-based sales activities.

revenue from related parties increased by $136,414 to $136,548 for the three months ended March 31, 2026, compared to $134 in the prior-year

While the increase is significant on a percentage basis, related party product revenue remains a relatively small portion of

total revenue.

The increase reflects expanded transactions with affiliated entities as part of the Company’s evolving commercial

relationships.

share from related parties increased by $375,462, or 66%, to $946,050 for the three months ended March 31, 2026, compared to $570,588

in the prior-year period.

This category represents the Company’s participation in revenue-sharing arrangements, including cloud-based

services and intelligent information services introduced in 2025.

Revenue share has become the largest contributor to total revenue in

the current period, reflecting continued growth in these collaborative arrangements.

overall change in revenue composition reflects a shift from traditional product sales toward revenue-sharing and service-based models.

These arrangements generally involve lower direct costs and reduced working capital requirements compared to inventory-based sales.

believes this transition supports a more scalable and potentially higher-margin revenue structure over time, although total revenue declined

in the current period due to the reduction in product sales.

of Revenue and Gross Profit

Three months ended March 31,

Cost of Revenue

of revenue for the three months ended March 31, 2026 was $163,960, compared to $1,304,195 in the prior-year period, a decrease of $1,140,235.

Gross profit increased to $1,020,656 from $488,330, resulting in gross margin improving to 86% from 27%.

decrease in cost of revenue was primarily driven by significantly lower product-related costs, including reduced inventory-related charges

and lower sales volume.

In addition, logistics, fulfillment, and platform costs declined in line with reduced inventory-based sales activity.

improvement in gross margin also reflects a shift in revenue mix toward revenue-sharing and service-based arrangements, which generally

carry lower direct costs compared to product sales.

Overall, the results indicate a more favorable cost structure in the current period.

Three months ended March 31,

Expense Category

General & Administrative

Sales & Marketing

Research & Development

Total Operating Expenses

operating expenses for the period were $892,117, compared to $1,236,083 in the prior-year period, representing a decrease of $343,966,

The overall reduction was primarily driven by a significant decrease in sales and marketing expenses.

and administrative expenses were $854,786, compared to $817,412 in the prior-year period, an increase of $37,374, or 5%.

was primarily attributable to higher professional fees and other administrative costs associated with operating as a public company following

the Business Combination.

and marketing expenses decreased to $14,332 from $404,112, a decline of $389,780, or 96%, primarily due to reduced promotional activities.

and development expenses increased to $22,999 from $14,559, an increase of $8,400, or 58%, reflecting continued investment in product

and technology development.

the decrease in total operating expenses was mainly attributable to lower sales and marketing spending, partially offset by increased

general and administrative expenses and continued investment in research and development.

Income (Expense)

Three months ended March 31,

Other income – related party

Other income (expense), net

Interest income

Interest expense – related party

Total Other Income (loss), Net

other income, net was $19,161 for the three months ended March 31, 2026, compared to $674,899 in the prior-year period, a decrease of

The decrease was primarily due to the absence of other income from related parties in the current period, compared to $683,898

recognized in the prior-year period.

income increased to $28,651 from $318, reflecting higher cash balances during the period.

Other income (expense), net decreased by $16,675,

and no related party interest expense was recognized in the current period compared to $16,502 in the prior-year period.

and Capital Resources

of March 31, 2026, the Company had cash and cash equivalents of approximately $6.6 million, compared to approximately $7.0 million as

of December 31, 2025, representing a decrease of approximately $0.4 million.

The decrease was primarily attributable to operating cash

outflows during the period, partially offset by proceeds from warrant exercises.

to March 31, 2025, cash and cash equivalents increased significantly, primarily reflecting proceeds received in connection with the Business

Combination and related financing activities completed in December 2025.

Company’s liquidity position continues to be influenced by several key factors:

Operating performance, including gross margin and expense management

● Working capital dynamics, particularly receivables and payables, including those with related parties

● Access to external financing, including equity financing and capital markets transactions

● Inventory management, which affects cash utilized in operations

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 from the issuance date of these financial

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

Three months ended March 31,

Net cash (used in)/provided by operating activities

Net cash provided by (used in) investing activities

Net cash provided by (used in) financing activities

cash used in operating activities was $391,580 for the three months ended March 31, 2026, compared to net cash provided by operating

activities of $203,985 in the prior-year period, representing a decrease of $595,565.

The use of cash in the current period was primarily

driven by changes in working capital, including the timing of collections and payments.

cash provided by investing activities was nil for the three months ended March 31, 2026, compared to net cash used of $305,624 in the

prior-year period.

The prior-year activity primarily related to transactions involving financial assets, while there were no significant

investing activities in the current period.

cash provided by financing activities was $20,085 for the three months ended March 31, 2026, compared to no financing activity in the

prior-year period.

The current period activity primarily reflects proceeds from financing-related transactions.

Company’s capital resources consist primarily of cash on hand and, to a lesser extent, cash generated from operations.

the Business Combination completed in December 2025, the Company significantly improved its liquidity and capital structure through the

receipt of trust proceeds and PIPE financing.

The Company may continue to rely on related-party transactions and financing arrangements,

as well as external financing sources, to support its working capital needs and growth initiatives as necessary.

Company’s capital requirements are driven primarily by working capital needs, operating expenses (including public company costs),

and potential investments in product development and service offerings.

The Company currently does not maintain a revolving credit facility

or other committed borrowing arrangements.

expects that the Company’s current cash position and anticipated operating cash flows will be sufficient to meet its short-term

liquidity needs.

However, the Company may seek additional financing to support future growth initiatives or respond to changing market

Obligations and Commitments

Company’s contractual obligations consist primarily of lease obligations, and other operating liabilities, as disclosed in Note

9 - Lease and Note 14 – Commitments and Contingencies.

Obligations (ASC 842)

Company has operating lease arrangements for office space and facilities.

As of March 31, 2026, lease liabilities totaled $96,051, representing

the present value of future lease payments.

The Company’s undiscounted future minimum lease payments total approximately $100,060.

These obligations are not considered a significant liquidity burden.

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

These commitments are generally short-term

in nature and aligned with expected sales demand.

The Company continues to manage inventory levels conservatively, limiting exposure

to long-term procurement commitments.

Party Obligations

Historically,

the Company had obligations to related parties, which were reduced during 2025 through settlement using proceeds from financing activities

(see Note 6).

As of March 31, 2026, the Company continues to have transactions and balances with related parties in the ordinary course

however, outstanding related-party obligations are not material to the Company’s consolidated financial statements.

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 as of March 31, 2026.

Liquidity Assessment

of March 31, 2026, the Company’s liquidity position remains strong following the financing activities completed in December 2025.

While operating cash flows for the three months ended March 31, 2026 were negative, such usage was primarily driven by working capital

timing and does not necessarily reflect a deterioration in underlying operating performance.

Company’s current liquidity, combined with improved operating performance and reduced reliance on related-party financing, provides

a solid financial foundation.

However, future liquidity will depend on the Company’s ability to sustain operating performance,

effectively manage working capital, and access 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 unaudited condensed 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

These 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.

There have been no material changes to the Company’s critical accounting policies and estimates from those disclosed in the Company’s

Annual Report on Form 10-K for the year ended December 31, 2025.

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 6 – 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

regarding forecasted demand, product lifecycle and technological obsolescence, and pricing trends and competitive conditions.

2025, the Company improved its inventory management practices, resulting in reduced inventory levels and lower impairment charges compared

to prior periods.

These practices continued during the three months ended March 31, 2026.

However, inventory valuation remains sensitive

to changes in demand patterns, product innovation cycles, and market conditions, which could result in additional write-downs in future

for Expected Credit Losses (ASC 326)

Company accounts for expected credit losses under ASC 326 using a loss-rate methodology based on historical credit loss experience, current

economic conditions, and forward-looking information.

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

Management evaluates collectability on an ongoing basis, considering factors such as the financial condition of counterparties,

payment history, and contractual terms.

historical credit losses have been limited, changes in the financial condition of related parties or business relationships could result

in increased credit loss provisions in future periods.

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

liabilities are estimated based on historical claim rates, product failure trends, and estimated repair or replacement costs.

These estimates

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

Actual warranty

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

Interest Entity (VIE) Consolidation (ASC 810)

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

A VIE is consolidated if the Company is

determined to be the primary beneficiary.

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).

As of March 31, 2026, the Company does not consolidate these

evaluation of VIE relationships requires judgment, particularly in assessing contractual arrangements and decision-making authority.

Changes in such arrangements or in the Company’s level of involvement could result in future consolidation or deconsolidation.

Party Transactions (ASC 850)

Company engages in transactions with related parties, including revenue-sharing arrangements and product sourcing (see Note 6).

for related-party transactions requires judgment in determining the appropriate revenue recognition treatment, classification, and presentation.

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

not properly evaluated.

Company monitors related-party balances and transactions on an ongoing basis to ensure appropriate recognition and disclosure.

Purchase Agreement

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.

2025, the Company funded prepayments under the arrangement and received partial settlements.

As of December 31, 2025 and March 31, 2026,

an FPA subscription receivable of $1,678,678 remained outstanding.

Company evaluated the FPA and determined that it is appropriately accounted for as an equity transaction.

Accordingly, the outstanding

balance is presented as a reduction to additional paid-in capital within stockholders’ equity.

were no material changes to the terms of the FPA during the three months ended March 31, 2026.

Refer to the Company’s Annual Report

on Form 10-K for the year ended December 31, 2025 for additional details regarding the FPA.

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 of revenue

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.

Sheet Arrangements

of March 31, 2026, the Company does not have any material off-balance sheet arrangements as defined under Item 303 of Regulation S-K.

Historically,

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

These VIEs were consolidated

in prior periods;

however, following the termination of the underlying contractual arrangements in December 2025, the Company deconsolidated

these entities.

As a result, the Company does not have exposure to the assets, liabilities, or operations of these entities, other than

any residual contractual relationships, which are not material.

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

commitments that would be considered off-balance sheet arrangements.

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

supports 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.

3 – Quantitative and Qualitative Disclosures About Market Risk

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What changed 10-Q

Item 2. Management’s Discussion and Analysis