Bio Green Med Solution, Inc. 10-K

Item 1. Business The following Business Section contains forward-looking statements. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain risks, uncertainties and other factors including the risk factors set forth in Part I, Item 1A of this Annual Report on Form 10-K. In this report, “Bio Green Med Solution,” “BGMS,” the “Company,” “we,” “us,” and “our” refer to Bio Green Med Solution, Inc. ( fka Cyclacel Pharmaceuticals, Inc.). Recent Developments Equity Transactions In December 2024, Bio Green Med Solution, Inc. (“BGMS” or the “Company”), a Delaware corporation formerly known as Cyclacel Pharmaceuticals, Inc., announced that it was in the process of exploring and reviewing strategic alternatives on an expedited basis in order to preserve the Company’s cash, including a potential transaction with investor, David E. Lazar of Activist Investing, LLC (“Lazar”). On January 2, 2025, the Company entered into a securities purchase agreement with Lazar, pursuant to which he agreed to purchase from the Company, 1,000,000 shares of Series C Convertible Preferred Stock and 2,100,000 shares of Series D Convertible Preferred Stock of Cyclacel at a purchase price of $1.00 per share for aggregate gross proceeds of $3.1 million, subject to the terms and conditions of the securities purchase agreement (together, the Series C Convertible Preferred Stock and Series D Convertible Preferred Stock are the “Securities”). The proceeds of the transaction were used to settle outstanding liabilities of the Company and other general corporate and operating purposes. On February 11, 2025, investor Lazar, who was serving as the Company’s interim Chief Executive Officer and Secretary, entered into a securities purchase agreement (the “Purchase Agreement”) with an investor, Datuk Dr. Doris Wong Sing Ee (the “Investor”) pursuant to which the Investor agreed to purchase all 1,000,000 shares of Series C Convertible Preferred Stock, and 1,745,262 of the 2,100,000 shares of Series D Convertible Preferred Stock, currently held by Lazar, so that Purchaser would hold seventy percent (70%) of the fully diluted issued and outstanding shares of the Company. The Purchase Agreement closed on February 26, 2025 (the “Closing Date”). Additionally, the Investor succeeded to all of Lazar’s rights and interests under that certain securities purchase agreement between the Lazar and the Company dated January 2, 2025. The Securities were convertible into shares of the common stock, par value $0.001 per share (the “Common Stock”) of the Company at the election of the Investor as follows: (i) the 1,000,000 shares of the Series C were convertible into 11,042 shares of Common Stock, and (ii) 1,745,262 of the Series D were convertible into 799,911 shares of Common Stock. On the Closing Date, the Investor exercised the conversion rights related to the Series C and Series D shares into Common Stock in full resulting in the Investor owning 810,952 shares of Common Stock. On May 12, 2025, the Company effected a one-for-sixteen reverse stock split of its Common Stock and subsequently on July 7, 2025, effected a further one-for-fifteen reverse stock split of its Common Stock. All share and per share data for all periods presented in the consolidated financial statements have been retrospectively adjusted to give effect to these reverse stock splits, consistent with the treatment followed by other public companies in similar circumstances. Disposal of Cyclacel Limited Historically, the Company’s clinical research programs were conducted through Cyclacel Limited, a wholly owned subsidiary of the Company, and all intellectual property and rights to those programs were owned by that subsidiary. On January 31, 2025, the creditors’ voluntary liquidation of Cyclacel Limited was announced in the London Gazette, one of the official public records of the government of the United Kingdom. Upon the commencement of the liquidation of the Cyclacel Limited, the Company lost operational and strategic control over the Cyclacel Limited and its financial results have been deconsolidated from Company as of January 31, 2025. On the date of deconsolidation, stockholders’ equity increased by approximately $4.9 million. 5 Table of Contents Following the creditors’ voluntary liquidation of Cyclacel Limited, the Company intended to focus on the development of the plogosertib (“Plogo”) clinical program only. Accordingly, on March 10, 2025, the Company repurchased certain assets related to Plogo from Cyclacel Limited with the approval of the joint liquidator in exchange for approximately $0.3 million in cash. On October 6, 2025, the Company entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Tethra Biosciences Inc., a Delaware corporation (the “Buyer”). Under the terms of the Purchase Agreement, the Company agreed to sell, and the Buyer agreed to purchase, certain assets, including all patent rights of the Company related to Plogo for a purchase price of $300,000, plus a further potential Milestone payment (as defined in the Purchase Agreement) of $170,000. Cyclacel Limited’s other drug development program, fadraciclib, continues to be marketed for sale by the joint liquidator. The Company has no plans at this time to repurchase any rights to or assets of the fadraciclib program. Acquisition of FITTERS Diversified Berhad On May 6, 2025, and as amended on July 7, 2025, the Company entered into an Exchange Agreement (collectively, the “Exchange Agreement”) with FITTERS Diversified Berhad (9318.KL; “FITTERS”), an investment holding company engaged, through its subsidiaries, in the business of the sale of fire safety materials, equipment and fire prevention systems, “Waste-To-Resource” services and real estate development and construction. Pursuant to the Exchange Agreement, all of the ordinary shares owned by FITTERS of its wholly-owned subsidiary, Fitters Sdn. Bhd., a Malaysia-based private limited company (“Fitters Sub”) were to be exchanged for common stock, par value $0.001, of the Company (the “Purchaser Stock”), and Fitters Sub would continue as a wholly-owned subsidiary of the Company (the “Transaction”). As part of the Transaction, BGMS would issue an amount of Purchaser Stock equal to 19.99% percent, or 699,158 of its common shares and BGMS stockholders would own approximately 80.01% of the combined company. Following the closing of the Transaction on September 12, 2025, the Company’s common shares continued to be listed on the Nasdaq Capital Market under a new ticker symbol (BGMS) and Cyclacel Pharmaceuticals Inc. was renamed Bio Green Med Solution, Inc. General Following our sale of Plogo and the closing of the Transaction on September 12, 2025, we now specialize in the supply and trading of protective and fire safety equipment providing a wide range of fire safety products, including fire extinguishers, foam system, fire-resistant doors, personal protective equipment, and fire safety apparel. Our mission is to deliver high-quality, certified safety solutions that enhance protection across commercial, industrial, healthcare, and residential sectors with a focus on trading and distribution to position us as a key player in Malaysia’s fire safety market, with a reputation for reliability and compliance with stringent regulatory standards. Our Products We provide a wide range of fire safety products, including fire extinguishers, foam system, fire-resistant doors, personal protective equipment (“PPE”). Over the past four decades, we have expanded our product portfolio to include advanced fire-fighting equipment, foam system, PPE, and safety apparel, establishing a strong presence in the industry. Our history of consistent growth reflects our commitment to quality and customer-centric innovation, positioning us as a trusted name in fire safety equipment distribution. We provide the following categories of product offerings and solutions to our customers: 6 Table of Contents Fire Safety Equipment We distribute fire extinguishers, such as the FITTERS FIRE-X, designed for home and vehicle use, and other fire-fighting tools like foam systems. Our products are approved by BOMBA and certified by SIRIM to ensure full compliance with safety regulations. Taking the necessary fire safety precautions to protect any investment is a crucial factor in any business. Unexpected fires can end any livelihood in just a matter of seconds. We offer a complete range of fire safety systems. With more than 30-years of experience in fire safety, we pride ourselves as the “One-stop” fire protection specialist for businesses and individuals. Our range of Fire Safety Systems include: ◌ Fire Sprinkler System ■ Sprinkler head ■ Flow Switch ■ Pressure Switch ■ Alarm Valve ■ Butterfly Valve ◌ Wet System Valve ■ Pre-action valve ■ Deluge valve ■ Gate Valve ◌ CO² System ■ CO² cylinder complete with accessories ◌ Fire Alarm System ■ Smoke detector ■ Heat detector Our Wet Chemical System / Kitchen Hood includes: ◌ Wet chemical cylinder complete with accessories PYRODOR Fire Door We supply fire-resistant doors under the “PYRODOR” brand, offering one-hour and two-hour fire resistance, along with components like PYROFRAME and PYROBOARD. These are critical for commercial and industrial buildings, meeting strict safety codes. In line with today’s stringent fire safety standards, PYRODOR offers high quality fire resistant door-sets – tested by SIRIM in accordance with the latest MS1073 Part 2 & 3 and approved by Fire & Rescue Department, Malaysia. PYRODOR door-sets are custom-made to accommodate stringent customer requirements. Our total commitment to the protection of life and property is hard to match. We maintain a well-planned program for continuous improvement to meet customers’ requirements. We have the one of the widest ranges of: ● Approved and tested one-hour fire rated metal frame and wooden frame door-sets, single leaf and double leaf doors with various locksets. 7 Table of Contents ● Approved and tested two-hour fire rated metal frame door-sets, single leaf and double leaf doors with various locksets. A sampling of PYRODOR references include these commercial, governmental and residential developments: Safety Apparel Our PPE portfolio includes fire-retardant apparel and workwear uniform designed to serve clients in oil and gas industry as well as other industrial sectors. We ensure that all products meet occupational safety standards. We provide fire-retardant uniforms and reflective materials, such as Scotchlite, for workers in high-risk environments, enhancing visibility and protection. 8 Table of Contents For protective and safety garments, we understand the importance and need for fitted safety apparels. That is why we proudly offer custom-tailoring services for our wide selection of apparels to meet the discerning demands of corporate or individual clients. Each garment is tailored with inherently Flame Retardant fabric (Nomex or Daletec brand), FR thread and accessories, the leading fabric for high risk heat and flame protection that can withstand hazardous working conditions such as extreme heat, fires and corrosive chemicals. The advantages of PYROSUIT ® and SAFEFITT ® Brand tailoring includes: ● Permanent, dependable protection ● Self-extinguishing and does not burn ● Non-break-open protection ● Outstanding chemical resistance ● Long-wear life and lower cost ● Reduces static ● Comfort 9 Table of Contents We are also the distributors of the following personal protection equipment (PPE) products: Foam Systems Our foam blending facility allows for the manufacture of multiple foam concentrate products. Marketing all types of foam ancillary equipment and valves, we are able to provide the designing, installation, testing and commissioning of all foam systems. We have a synergistic agreement between Fitters Sdn. Bhd. and CHEMGUARD (USA) to operate its sole foam blending facility for supply to the entire Southeast Asia region. CHEMGUARD’s leadership in the fire protection field is especially evident through the complete line of properly engineered foam system foam products. All of CHEMGUARD foam concentrate products are earth-friendly. 10 Table of Contents Fire-X Fire Extinguishers Our Big Extinguisher in a small can – more effective than a traditional fire extinguisher on most common fires. Our Fitters Fire-X fire extinguishers are simple to use can and spray nozzle design makes fighting fires fast and easy. Our extinguishers serve commercial, industrial, residential and government clients. Our Big Extinguisher is recommended for all daily fire suppression needs including: Key Market Drivers The Malaysian fire safety and protection industry plays a crucial role in safeguarding lives and property. This sector encompasses a wide range of services, including fire detection, suppression, and prevention, as well as the manufacturing and maintenance of fire protection equipment. The fire safety and protection industry in Malaysia operates within a robust economic and regulatory framework, driven by global and regional market trends. Below, we outline key factors shaping the industry, as informed by analyses of the Malaysian economy, fire protection systems, passive fire protection, and emerging fire safety challenges related to electric vehicles (EVs). 11 Table of Contents The fire safety segment in Malaysia is currently experiencing solid growth, with a projected compound annual growth rate (CAGR) of approximately 7% to 8% through 2030. Key drivers for this market are centered around regulatory evolution, rapid infrastructure expansion, increasing safety awareness, and a significant shift toward digital and eco-friendly technologies. There are several key market drivers for our business in the fire safety segment: 1. Stricter Regulatory Frameworks The regulatory framework for fire safety in Malaysia is anchored in the Fire Services Act 1988 and related by-laws, under which the Fire and Rescue Department of Malaysia (“BOMBA”) enforces requirements for fire alarms, detection, suppression systems, extinguishers, and means of escape in designated building types. In parallel, the Uniform Building By-Laws under the Street, Drainage and Building Act mandate the provision, installation, and periodic inspection of fire safety equipment in commercial, industrial, high-rise residential, and public buildings as a condition for building plan approval and occupancy certification, thereby structurally supporting demand for fire safety equipment across sectors. ● Mandatory Compliance : The Fire Services Act 1988 and Uniform Building By-Laws (UBBL) serve as the primary legal anchors, mandating fire alarms, detection, and suppression systems for building plan approvals. ● BOMBA Enforcement : Stricter enforcement by the BOMBA now requires specialized certifications, such as the Sijil Perakuan Bahan BOMBA for fire doors, ensuring only compliant products are used. ● Insurance Requirements : Many insurance providers in Malaysia now offer lower premiums or mandate high-standard fire suppression systems as a prerequisite for coverage, particularly in commercial and industrial sectors. 2. Infrastructure & Urban Development ● Construction Growth: Malaysia’s construction sector is projected to reach RM 220 billion. Rapid urbanization in the Klang Valley, Johor, and Penang is driving demand for high-rise residential and mixed-use commercial protection. ● Industrial Specialization: The rise of data centers, electronics manufacturing, and logistics hubs (e-commerce) is creating a surge in demand for specialized fire stopping and clean-agent suppression systems to protect high-value assets. ● Retrofit Market: Aging urban infrastructure presents a major opportunity for wireless fire alarm systems and retrofit fire stopping, as they are easier to install in existing buildings without major disruption. 3. Increased Safety Awareness ● Public/Private Awareness: High-profile fire incidents have led to increased budgetary allocations for fire prevention from both the government and private entities. ● Employee Safety: Growing corporate emphasis on workplace safety and adherence to international standards like NFPA or ISO is driving the installation of high-performance systems in the manufacturing sector. 4. Technological Innovations (Fire Safety 4.0) ● Internet of Things (“IoT”) & Smart Systems: There is a 35% increase in the adoption of IoT-enabled fire safety solutions. Real-time monitoring and integration with Building Management Systems (“BMS”) are becoming standard for modern office complexes. ● Advanced Detection: Shift toward addressable/intelligent panels and AI-powered fire detection that minimizes false alarms while providing faster response times. ● Eco-Friendly Solutions: Growing demand for sustainable fire safety, including fluorine-free suppression agents and low-VOC firestop products, aligned with Malaysia’s Green Building Index (“GBI”). 12 Table of Contents Industry Overview The Malaysian fire safety and protection industry plays a crucial role in safeguarding lives and property. This sector encompasses a wide range of services, including fire detection, suppression, and prevention, as well as the manufacturing and maintenance of fire protection equipment. The fire safety and protection industry in Malaysia operates within a robust economic and regulatory framework, driven by global and regional market trends. Below, we outline key factors shaping the industry, as informed by analyses of the Malaysian economy, fire protection systems, passive fire protection, and emerging fire safety challenges related to electric vehicles (EVs). Malaysian Economy The Malaysian economy performed strongly in 2025, exceeding most initial projections despite a challenging global trade environment. ● Annual Growth: The economy expanded by 4.9% for the full year 2025. This surpassed the official government and central bank (Bank Negara Malaysia) forecast range of 4.0% to 4.8%. ● Quarterly Momentum: Growth peaked in the fourth quarter (Q4 2025) with a 5.7% year-on-year expansion, driven by robust performance in services, manufacturing, and a surge in construction. Key Sectors: ● Services: Advanced by 5.4%, remaining the largest contributor. ● Construction: Grew by 11.9%, fueled by major infrastructure and private projects. ● Manufacturing: Expanded by 6.0%, supported by a rebound in the electrical and electronics (E&E) sector. Trade and Investment ● Record Trade: Total trade hit a historic high of RM3.1 trillion in 2025, the first time it has crossed the RM3 trillion mark. ● Exports: Rose 6.5% for the year, with a significant 49% surge in shipments to the U.S. in December, primarily in E&E and scientific equipment. ● Foreign Direct Investment (FDI): Malaysia remained a key destination for supply chain realignments, particularly in semiconductor manufacturing and data centers. Inflation and Monetary Policy ● Inflation: Headline inflation remained moderate, averaging 1.4% for the year, the lowest since 2020. ● Interest Rates: Bank Negara Malaysia maintained the Overnight Policy Rate (OPR) at 2.75% for much of the year, though a preemptive cut occurred in July to head off external uncertainties. ● Currency: The Ringgit held steady against the US dollar (ending near RM4.2070) and was among Asia’s top-performing currencies in 2025. Fiscal and Structural Reforms ● Subsidy Rationalization: A major milestone was the rationalization of RON95 fuel subsidies (the BUDI95 program) starting September 30, 2025, which is expected to save the government RM2.5 billion to RM4 billion annually. ● Fiscal Deficit: The government met its target of reducing the fiscal deficit to 3.8% of GDP. ● Labor Market: Unemployment fell to 2.9% by late 2025, the lowest level in 11 years. For 2026, the government projects a slightly moderated growth range of 4.0% to 4.5% as global trade normalization and potential tariff impacts take effect. 13 Table of Contents Fire Protection System Market The global fire protection system market is experiencing steady expansion, valued at approximately USD 85.06 billion to USD 86.46 billion in 2025. It is projected to reach between USD 93.83 billion and USD 134.37 billion by 2030, growing at a compound annual growth rate (CAGR) of 6.6% to 9.4%. The key market drivers for the global fire protection system include: ● Regulatory Rigor: Stringent government mandates and building codes (e.g., NFPA and ISO standards) are the primary force driving system installations in new and existing structures. ● Infrastructure Growth: Massive global urbanization and the rise of high-density residential and commercial projects, especially in emerging economies, are creating high demand. ● Technological Integration: The shift toward “Fire Safety 4.0” involves integrating IoT-enabled sensors, AI-driven monitoring, and wireless detection systems into Smart Building Management Systems. The Malaysia Fire Safety Equipment Market is valued at USD 1.1 billion, based on a five-year historical analysis, in line with the size of the Malaysia fire protection system market which is driven by similar product categories and demand drivers. This growth is primarily driven by increasing urbanization, stringent safety regulations, and rising awareness of fire safety among businesses and consumers, as highlighted by strong uptake of fire protection systems across commercial, industrial, and high-rise residential sectors. The market has seen a surge in demand for advanced fire safety solutions, including smart technologies and integrated systems, as organizations prioritize safety, insurance requirements, and compliance with building by-laws through adoption of IoT-enabled and integrated building management-linked fire systems. 1 Key cities such as Kuala Lumpur, Penang, and Johor Bahru dominate the market due to their rapid industrialization and urban development, consistent with broader trends where major urban and industrial corridors lead demand for fire protection solutions. These urban centers are experiencing significant growth in commercial and residential construction, leading to heightened demand for fire safety equipment, including detection, suppression, and passive protection products for high-rise, mixed-use, and industrial developments. Additionally, the presence of major corporations and government institutions in these areas further drives the market’s expansion, supported by compliance with national building by-laws and insurance-driven fire protection requirements in offices, logistics hubs, healthcare, education, and public infrastructure. Market Segmentation ● By Product: Fire suppression systems (sprinklers, gas, and foam) are the largest segment due to their critical role in protecting high-value industrial and data center assets. ● By Vertical: The commercial sector (healthcare, retail, and offices) holds the largest revenue share, while the industrial sector (oil & gas, manufacturing) is expected to grow the fastest due to high operational risks. ● By Service: Maintenance and inspection services are growing rapidly as building owners must validate system performance to remain compliant with insurance and safety regulations. Regional Outlook for the Fire Protection System Market ● North America: Currently the largest market by revenue, driven by mature fire safety codes and a high volume of smart building retrofits. ● Asia-Pacific: Set to be the fastest-growing region, particularly in China, India, and Japan, due to rapid industrialization and ambitious infrastructure development. 1 See https://www.kenresearch.com/malaysia-fire-safety-equipment-market. 14 Table of Contents Malaysia Passive Fire Protection Market The Malaysia passive fire protection (PFP) market is entering a pivotal year in 2026, characterized by a major shift toward self-regulation and full enforcement of fire safety standards. The market is projected to grow at a CAGR of 3.3% through 2033, driven by infrastructure projects and stricter building mandates. The market performance and projections for Malaysia include: ● Revenue Growth: The market generated approximately USD 48.76 million in 2025 and is expected to reach USD 62.8 million by 2033. ● Dominant Segment: Cementitious materials (fireproofing sprays and plasters) remain the largest product segment, accounting for over 45% of market revenue. ● Fastest Growing Segment: Intumescent coatings are the fastest-growing category, driven by demand for aesthetic and lightweight fire protection in modern high-rise and commercial architecture. Malaysian Key 2026 Market Drivers & Regulatory Shifts The Malaysian landscape is being redefined by two major regulatory milestones taking effect in 2026: 1. Full Fire Certificate (FC) Enforcement: Starting in the first quarter of 2026, the Malaysian Fire and Rescue Department (JBPM/BOMBA) will begin full enforcement of Fire Certificate requirements for designated premises, including hospitals, hotels, and factories. Non-compliant owners face fines up to RM 50,000 or imprisonment. 2. Mandatory Fire Drills: Beginning January 1, 2026, buildings in nine designated categories must conduct mandatory fire drills to renew their fire certification. 3. New Self-Regulation Framework: In a significant policy shift effective January 1, 2026, certified Fire Safety Managers and Officers will be granted authority to perform internal inspections and issue technical reports, moving away from mandatory annual physical inspections by BOMBA to a periodic audit system every 2–3 years. Malaysian Emerging Trends and Industry Focus ● Construction Expansion: The continuation of major transport and logistics projects under the 12th Malaysia Plan is a primary driver for industrial fireproofing demand. ● Technological Integration: Leading players like Hilti Malaysia have launched 2026 initiatives focused on “Safety First” and productivity through innovative fire-stopping systems and digital tools. 15 Table of Contents ● Sustainability: There is a growing preference for eco-friendly, low-toxicity fire-stopping products to align with Malaysia’s green building policies. ● Data Center Growth: Rapid development of data centers in the Klang Valley and Johor is creating niche demand for high-performance fire-stopping and cable protection systems. Fire Safety Implications of Electric Vehicles (EVs) in Malaysia The rise of EVs in Malaysia presents new fire safety challenges, as outlined by the Malaysian Fire Protection Association on February 17, 2025. In 2025, Malaysia ’s EV market experienced a historic surge, with registrations more than doubling to reach 44,813 units, a 105.7% increase from 21,789 units in 2024. Lithium-ion battery systems in EVs pose unique fire hazards, burning at higher temperatures than conventional vehicle fires and risking structural damage to steel and concrete. The growing EV infrastructure in Malaysia adds complexity to the fire risk landscape. As of year-end 2025, the country has installed approximately 5,624 EV charging units, spanning all states and federal territories except Labuan. These include 1,791 direct current (DC) fast chargers and 3,569 alternating current (AC) chargers. Selangor leads with approximately 1,912 chargers, followed by Kuala Lumpur (1,462), Penang (600+), and Johor (550+). With the number of EV charging points steadily increasing, fire safety at these stations becomes a critical issue. The Ministry of Investment, Trade and Industry (MITI) has projected that Malaysia will reach 10,000 public EV charging points by the end of 2026 comprised of 8,500 AC chargers and 1,500 DC chargers, a key part of the Low Carbon Mobility Blueprint 2021-2030. Industry associations like the Malaysia Zero Emission Vehicle Association (MyZEVA) estimate the remaining 8,500 AC chargers will be in place by Q3 2026. However, as the EV fleet grows, ensuring these charging points are equipped to handle potential fire hazards is essential. From 2023 to July 2025, the Malaysian Fire and Rescue Department (JBPM) recorded 27 fire incidents involving EVs and hybrids, averaging roughly 10 cases annually. Notable incidents, such as the December 2025 fire caused by two EVs at a home in Section 19, Petaling Jaya , causing damage to the vehicles and part of the house structure, an October 2025 EV fire in front of the Temoh Police Station in Perak, and a December 31, 2023, EV fire in Johor, Malaysia that destroyed 90% of a vehicle and damaged a showroom, underscore these risks, particularly in enclosed spaces like urban parking lots. These developments necessitate advanced fire suppression systems and specialized training for first responders to mitigate EV-related fire risks, creating opportunities for our fire safety products. The rise of EVs in Malaysia is an important step toward sustainability, but it also presents new fire safety challenges. As more EVs hit the roads and charging infrastructure expands, fire safety professionals must stay ahead of these developments. Adopting advanced suppression systems, improving building designs, and promoting safe charging practices are essential steps to ensure that the benefits of EV adoption do not come at the cost of safety. Malaysia’s evolving infrastructure must be equipped to handle the growing presence of EVs. With proactive measures in place, the fire safety community can help mitigate the risks and ensure a safer future as we transition to cleaner, greener transportation solutions. To better prepare for these challenges, fire safety professionals must also receive specialized training. Fire safety training services are designed to help first responders, building managers, and safety personnel understand the nuances of lithium-ion battery fires and EV-specific risks. ( Source: Malaysian Fire Protection Association: The Rise of EVs and Its Fire Safety Implications for Malaysia, posted on 17 February 2025 ). Beyond the immediate threat to life, EV fires pose serious risks to infrastructure. Lithium-ion battery fires burn at higher temperatures than conventional vehicle fires, potentially compromising the structural integrity of surrounding materials, including steel and concrete. Other structural risks include: ● Heat Intensity: The extreme heat from these fires can weaken load-bearing elements in buildings, particularly in enclosed spaces like underground parking lots. ● Toxic Smoke: Fires involving lithium-ion batteries release hazardous gases, such as hydrogen fluoride, which can quickly fill confined areas and pose health risks to both building occupants and first responders. ● Re-Ignition Potential: One of the most dangerous aspects of lithium-ion battery fires is their tendency to reignite even after they appear to have been extinguished. This makes them particularly hazardous in enclosed or difficult-to-access spaces, where containment is challenging. 16 Table of Contents In dense urban areas or facilities with limited ventilation, such as underground garages, these risks are amplified. Poor ventilation and inadequate fire suppression systems can lead to catastrophic outcomes. For fire safety professionals, adapting current protocols to address the specific hazards of EV fires is critical. Existing systems designed for traditional vehicle fires may not be sufficient to combat the unique risks of lithium-ion batteries. Key mitigation strategies include fire detection and suppression systems in high- risk areas, such as underground parking lots, must be upgraded. Specialized equipment, such as water mist systems are required to effectively penetrate battery casings and cool the cells, preventing thermal runaway from escalating. Industry Relevance to Fitters Sdn. Bhd. Malaysia’s economic growth and infrastructure expansion drive demand for our fire safety equipment, particularly in construction and commercial sectors. The global and Malaysian fire protection markets’ growth supports our distribution of certified products like fire extinguishers and PPE, while the EV trend highlights the need for innovative solutions, aligning with our strategic focus. However, price competition and regulatory compliance remain challenges, which we address through quality certifications and supplier relationships. Competitive Strengths The rapid growth of the construction industry is one of the major drivers of the fire protection systems market. The increasing demand for new and innovative buildings is resulting in an increase in the number of fire incidents. Additionally, the increasing trend of green building and the growing awareness of the importance of fire safety are also contributing to the growth of this market. Investment in research and development (R&D) is also a key factor driving the growth of this market. Various new technologies are being developed to improve the performance of fire protection systems. This is resulting in increased innovation and adoption of new fire protection systems. The increasing popularity of retrofitting fire protection systems is also contributing to the growth of this market. The retrofitting option allows existing buildings to be upgraded without having to replace all of the existing infrastructure. This is resulting in significant cost savings for businesses and governments. The market for fire protection systems is growing rapidly, as businesses and homeowners become increasingly aware of the importance of protecting themselves and their property from fire. This is due to the increasing prevalence of fires in commercial and residential buildings, as well as the increasing awareness of the dangers of fire. The market for fire protection systems is expected to grow rapidly over the next few years, as businesses and homeowners become increasingly aware of the importance of protecting themselves and their property from fire. This is due to the increasing prevalence of fires in commercial and residential buildings, as well as the increasing awareness of the dangers of fire. 17 Table of Contents We believe the following strengths differentiate Fitters Sdn. Bhd. in the fire safety market include top quality products and excellent customer service as well as: ● Established Industry Presence: Since 1982, we have built a strong reputation as a reliable supplier of fire safety equipment, supported by our parent company’s market leadership. ● Certified Product Offerings: Our product range—including top quality products such as PYRODOR doors and FITTERS FIRE-X—is approved by BOMBA and certified by SIRIM, while our safety apparel hold certifications from both SIRIM and DOSH. These certifications ensure compliance with regulatory standards and foster customer trust. ● Broad Distribution Network: Our use of e-commerce platforms, combined with partnerships with wholesalers and authorized distributors, expands market access, distinguishing us from traditional distributors. ● Strategic Supplier Relationships: Long-term agreements with reputable manufacturers ensure consistent product availability and quality, mitigating supply chain risks. ● Customer-Centric Approach: Our focus on meeting diverse customer needs, including fire safety apparel and industrial fire systems, supports loyalty and repeat business. ● Strong Reputation: We have built up a strong brand reputation. Growth Strategy Our growth strategy focuses on expanding market share and enhancing profitability. In order to expand company revenue and market share, we will focus on the following growth strategies: ● Market penetration - improving sales within existing markets by expanding reach and improving customer retention. ● Product development - developing new products and services to cater for existing and new customers’ needs. ● Market Development - pursuing new geographic markets. ● Diversification- expanding our product categories. ● Strategic partnerships - collaboration with other companies to leverage their strengths and resources. Market Drivers and Opportunities Our operations are influenced by several market drivers: ● Regulatory Compliance: BOMBA’s and SIRIM’s stringent standards drive demand for certified fire equipment, ensuring steady orders for our products. ● Urban Development: Malaysia’s construction boom, particularly in Kuala Lumpur, increases the need for fire-resistant doors and extinguishers in new buildings. ● Industry Growth: The expansion of industrial sectors, such as oil and gas, construction, manufacturing, mining, and utilities, is driving significant growth in demand for fire safety apparel, particularly flame-retardant and fire-resistant clothing. ● E-Commerce Trends: Growing online shopping in Malaysia supports our digital distribution strategy, enabling broader customer reach. ● Safety Awareness: Increased focus on workplace and residential safety fuels demand for our fire safety apparel and equipment. 18 Table of Contents Our Facilities We operate from leased facilities in Malaysia to support our supply and trading activities: ● Head Office: Wisma FITTERS, No. 1, Jalan Tembaga SD 5/2, Bandar Sri Damansara, 52200 Kuala Lumpur, Malaysia, serving as our operational and administrative hub. ● Registered Office: Third Floor, No. 77, 79 & 81, Jalan SS21/60, Damansara Utama, 47400 Petaling Jaya, Selangor, Malaysia. ● Distribution Network: We utilize regional warehouses and logistics partners across Malaysia, coordinated from our Kuala Lumpur head office, to ensure efficient product delivery. Specific warehouse locations are managed by FITTERS Diversified Berhad’s broader infrastructure. These facilities support our ability to source, store, and distribute products effectively. Intellectual Property We do not own patents or have pending applications, relying on certifications and supplier agreements for competitive positioning. Human Capital As of December 31, 2025, the Company had a total of 19 full-time employees worldwide, distributed across departments as follows: NO DEPARTMENT NUMBER OF STAFF MEMBERS 1 FINANCE 4 2 APPAREL 3 3 WAREHOUSE 4 4 TRADING 1 5 PROJECT 3 6 ADMIN 3 7 PENANG 1 TOTAL 19 Customers We serve a diverse customer base including the following types: ● Commercial and Industrial: Developers and facility managers procure our fire extinguishers and PYRODOR doors for projects like offices and factories. Industrial clients in sectors like oil & gas, construction, and manufacturing rely on our fire safety apparel to protect workers and meet regulatory requirements. ● Government Agencies: Public sector clients source certified fire equipment for compliance with BOMBA and SIRIM/SOH standards. ● Retail Consumers: Individual buyers access our safety apparel via e-commerce platforms like Shopee for home and vehicle use. Our broad customer mix ensures revenue stability, with strong demand from healthcare and construction sectors. 19 Table of Contents Competitors We face competition in a crowded market: ● Local Distributors: Malaysian suppliers of BOMBA-certified fire equipment and SIRIM/DOSH-certified PPE compete on price and availability, challenging our margins. ● International Brands: Global manufacturers with established names in fire safety and PPE, such as 3M, Dupont and Daletec, compete in Malaysia, requiring us to emphasize local expertise. ● E-Commerce Rivals: Online distributors on platforms like Shopee offer low-cost alternatives, increasing price pressure due to low entry barriers. We counter competition through certified products, reliable supply chains, and e-commerce accessibility, though pricing remains a challenge. Government Regulation Our operations are subject to Malaysian regulations: ● Product Standards: Fire equipment and PPE must comply with BOMBA and SIRIM standards, requiring regular certification. Non-compliance risks product bans or fines. ● Occupational Safety: PPE distribution adheres to regulations enforced by Malaysia’s Department of Occupational Safety and Health, ensuring end-user safety. ● Labor Policies: Foreign worker hiring for logistics is governed by immigration rules, which may raise costs or limit availability. ● Trade Regulations: Import duties and supplier compliance affect the sourcing of international products, impacting pricing. We maintain strict compliance to avoid operational or reputational risks. Legal Proceedings As of the date of this report, we are not involved in any material legal proceedings that, individually or in the aggregate, are expected to significantly impact our business, financial condition, or results of operations. Routine disputes, such as supplier or customer contract issues, may arise but are managed promptly with no anticipated material liabilities. Government Regulation Regulation of fire protection companies in Malaysia is primarily governed by the Fire and Rescue Department of Malaysia (BOMBA) under the Fire Services Act 1988 (Act 341). In 2026, the regulatory landscape is shifting toward a self-regulation framework aimed at increasing industry accountability. To operate legally as a fire protection service provider, a company must hold multiple specific registrations: ● BOMBA Competent Organization: Only authorized “Competent Organizations” that have completed specified inspection courses can service fire extinguishers and issue the mandatory Electronic Fire Extinguisher Inspection System (eFEIS) barcode certificates. ● CIDB Registration: Companies undertaking fire system installation or maintenance must register with the Construction Industry Development Board (CIDB). o Mandatory Category: ME02 (Fire Fighting System). 20 Table of Contents o Grades: Ranging from G1 (projects up to RM200,000) to G7 (unlimited value) based on financial strength and technical expertise. ● Sijil Perakuan Bahan (SPB): Any products or materials used (e.g., fire doors, detectors) must have BOMBA certification via recognized laboratories like SIRIM Berhad. The Malaysian government is modernizing fire safety enforcement through several new mandates for 2026–2027: ● Certified Fire Safety Managers (FSM): Starting in 2026, certified FSMs and Fire Safety Officers (FSO) will have authority to conduct internal fire safety inspections. ● Self-Regulation Transition: These certified managers will submit technical reports directly to BOMBA for Fire Certificate (FC) renewals, reducing the need for annual physical inspections by BOMBA officials to once every 2–3 years. ● Mandatory Fire Drills: Beginning in 2026, all buildings classified as “designated premises” must hold mandatory fire drills to qualify for certification renewal. ● Enforcement Deadline: Full enforcement for designated premises to hold a Fire Certificate (FC) is expected in the first quarter of 2026; however, some mandatory role requirements (FSM/FSO) have been revised toward 2027 to allow for industry training. Malaysia’s regulatory compliance standards require that companies must design and install systems according to recognized Malaysian Standards (“MS”): ● MS 1910: Design and installation of automatic sprinkler systems. ● MS 1539: Portable fire extinguisher installation and maintenance. ● MS 2616: Fire pumps for fixed firefighting systems. Environmental Social and Government (“ESG”) Matters We recognize the importance of ESG matters, with a specific focus on Human Capital Management, as integral to creating a sustainable foundation for our long-term business strategy. We support professional development at all levels. We also take reports of suspected violations of our codes of conduct and take seriously appropriate action. As we do not operate manufacturing facilities or manufacture products, we believe that our environmental impact is relatively small. We are involved in office waste reduction practices. We strive to offer excellent benefits and long-term incentives to help retain our workforce. Our human capital resources and objectives include identifying, recruiting, retaining and incentivizing our existing and additional employees. The principal purposes of our equity incentive plans are to attract, retain and reward personnel through the granting of equity-based compensation awards in order to increase shareholder value and our success by motivating such individuals to perform to the best of their abilities to achieve our objectives. We consider our employees to be our most valuable asset. The development, attraction and retention of employees is a critical success factor. To support the advancement of our employees, we offer training and development programs encouraging advancement from within and continue to fill our team with strong and experienced management talent. We recognize that our industry is specialized and dynamic and a significant aspect of our success is our continued ability to execute our human capital strategy of attracting, engaging, developing and retaining highly skilled talent. There is fierce competition both within our industry and in the geographic locations in which we have offices for highly skilled talent, and we offer a robust set of benefits, career-enhancing learning experiences and initiatives aligned with our mission, vision, and values in order to attract qualified prospective employees and to retain and motivate our employees. We offer competitive compensation for our employees and strongly embrace a pay for performance philosophy in setting and adjusting compensation. 21 Table of Contents Our codes of conduct clearly outline our commitment to diversity and inclusion, where all employees are welcomed in an environment designed to make them feel comfortable, respected, and accepted regardless of their age, race, national origin, gender, religion, disability or sexual orientation. We have a set of policies explicitly setting forth our expectations for nondiscrimination and a harassment-free work environment. We are also a proud equal opportunity employer and cultivate a highly collaborative and entrepreneurial culture. Non-Discrimination We do not tolerate discrimination and are committed to high ethical standards and equal employment opportunities in all personnel actions without regard to race, color, religion, gender, national origin, citizenship status, age, marital status, gender identity or expression, sexual orientation, physical or mental disability, or veteran status. Available Information We file or furnish annual, quarterly and current reports and other documents with the SEC. The annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, including any amendments, will be made available free of charge on our website, www.bgmsglobal.com, as soon as reasonably practicable, following the filing of the reports with the SEC. In addition, our website allows investors and other interested persons to sign up to automatically receive e-mail alerts when news releases and financial information is posted on the website. The SEC also maintains a website, www.sec.gov, that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC. The information on or obtainable through our website is not incorporated into this Annual Report.